By Phillip Kurata
IIP Staff Writer
February 3, 2012
The United States wants to shore up its trade and investment ties with its partners in the Western Hemisphere as part of a broader strategy to liberalize trade with the Asia-Pacific region.
“I’ve long felt that the Western Hemisphere should work more closely together to advance a common agenda. Our geography, mutual interests and common values make for a natural partnership. We’ve got to leverage this partnership to strengthen our trade relations with each other and with the fastest growing area of the world: the Asia-Pacific region,” Under Secretary of Commerce for International Trade Francisco Sánchez said.
Sánchez made this appeal at the Inter-American Development Bank in Washington January 31, as the nine members of the Trans-Pacific Partnership (TPP) prepare for their next round of talks in Australia in March.
The TPP was founded by Brunei, Chile, New Zealand and Singapore in 2006. Since then, Australia, Malaysia, Peru, the United States and Vietnam have joined, while Canada, Japan and Mexico are engaged in membership talks. The founding members set the goal of eliminating 90 percent of tariffs among themselves by 2006 and of getting rid of the remaining 10 percent by 2015. The founders negotiated the partnership independently of the Asia-Pacific Economic Cooperation (APEC) forum. The U.S. government joined the TPP after realizing its usefulness in creating the Free Trade Area of the Asia-Pacific, which is an APEC goal.
In his speech to the bank, Sánchez recommended that the Western Hemisphere partners build their trading relations around what he called the five “E’s”:
• Expanding market access by removing all tariffs and other barriers to trade.
• Enacting a fully regional approach to maximize the development of production and supply chains across the region.
• Easing the regulatory challenges facing businesses — especially for small and medium enterprises, which he said are the main engine for job creation.
• Ensuring that new industries, such as clean technology and the digital economy, are fostered.
• Establishing a living agreement that allows its signatories to address developments that arise in the future.
The under secretary pointed to U.S. trade agreements with Chile and Peru as models for trade relations with other partners in the hemisphere.
“Since the U.S.-Chile Free Trade Agreement went into effect in 2004, total bilateral trade has more than doubled, reaching more than $18 billion in 2010,” Sánchez said.
The U.S.-Peru Trade Promotion Agreement, which went into effect in 2009, has enabled the two countries to maintain a “strong and resilient” trading relationship despite the global economic crisis, Sánchez said. “Bilateral trade bounced back to pre-crisis levels of nearly $12 billion in 2010. These economic ties are supporting jobs and businesses in all our countries,” he added.
The United States will present economic initiatives at the Summit of the Americas, scheduled for Colombia in April, with the goal of expanding hemispheric trade based on the shared values of fairness and opportunity, Sánchez said.
At the same time that government leaders participate in the summit, the Inter-American Development Bank and Colombia’s business community will host a gathering of business executives from throughout the hemisphere to “ensure that the private sector’s voice is heard and conveyed to our hemisphere’s senior policymakers,” Sánchez said.
“We want all of our trading partners to be innovators and to experience the growth that results from strong legal systems, robust intellectual property rights and open-market economies,” Sánchez said. “And we want a strong TPP that strengthens the economy within the Western Hemisphere, which in turn enhances the region’s presence in the Asia-Pacific.”