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Analysis: U.S. Seizing Initiative in Pushing Trade Liberalization

U.S. Seizing Initiative in Pushing Trade Liberalization

By Paul L. Quintos

October 5-11, 2003

Writing in the Financial Times (Sept. 22, 2003) after the collapse of the fifth WTO Ministerial Conference, U.S. Trade Representative Robert Zoellick lamented the “broader culture of protest” that characterized negotiations at Cancun, correctly (if sarcastically) noting that “countries that feel victimized are unlikely to agree to anything.”

Consistent with the Bush doctrine that the U.S. respects multilateralism when possible, and acts unilaterally when it deems necessary, Zoellick closes his post-mortem on Cancun thus: “As WTO members ponder the future, the U.S. will not wait: we will move towards free trade with can-do countries.”

This officially signals the shift in the momentum of trade liberalization as pushed by the advanced capitalist countries away from the multilateral forum of the WTO toward regional and bilateral trade negotiations.

Indeed, even before the Cancun debacle, there had already been a proliferation of regional trade agreements in recent years, with an average of one per month being concluded. The 172 regional trade agreements currently in force are expected to rise to about 250 by 2005.[i] Bilateral trade treaties are likewise on the rise, with the US seizing the global initiative.

Fast-track trade negotiations

The U.S. Congress granted Trade Promotion Authority (TPA) to President Bush in 2002 in order to fast-track trade negotiations with other countries. In the months following the Congressional grant of TPA, the Bush Administration finalized free-trade agreements (FTA) with Chile and Singapore. In November 2002, the U.S. also began FTA negotiations with Australia, which it considers “an important center in the network of American companies doing business in the Asia-Pacific region.”[ii] Last year, the U.S. also signed Trade and Investment Framework Agreements (TIFA) with Sri Lanka, Brunei, the West African Monetary Union, Tunisia, Bahrain, and Thailand as well as a comprehensive trade package with Hungary.[iii]

In the western hemisphere, the U.S. is clearing the way for a Free Trade Area that extends well beyond the borders of the North American Free Trade Area (NAFTA). FTA negotiations are ongoing between the U.S. and the five nations of the Central American Common Market (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). Its more ambitious project, however, is the creation of a much wider “Free Trade Area of the Americas” covering 34 nations.

The U.S. has also announced FTA negotiations with the five countries of the Southern African Customs Union (Botswana, Lesotho, Namibia, South Africa, and Swaziland), which will be America’s first “free trade” agreement in the Sub-Saharan region. The U.S. Government’s 2003 Trade Policy Agenda sums up the rationale for pursuing an FTA in the region (and across the globe more generally): “The 48 countries of sub-Saharan Africa represent a largely untapped market for American business. As these countries progress economically, they will require substantial new infrastructure in sectors as diverse as energy, agriculture, and telecommunications-areas in which U.S. firms lead the world.”[iv]

In the Asia-Pacific, President Bush launched his “Enterprise for ASEAN Initiative” in October 2002. Described as a “roadmap to FTAs” in the region, the EAI dangles the prospect of bilateral FTAs with ASEAN countries that are “committed to the economic reforms and openness inherent in an FTA with the United States.”[v] These, of course, refer to “neoliberal” or market-oriented reforms that have been exposed and opposed by social movements (and now to some extent, by third-world governments), for impoverishing millions and devastating the environment throughout the world.

APEC forum

Through the EAI, the U.S. intends to provide additional impetus to the realization of the Bogor goals of the Asia Pacific Economic Cooperation (APEC) Forum, i.e. free trade and investment by 2010 for industrialized economies, and 2020 for APEC’s poorer members. EAI ensures that the US will have the opportunity for greater access to a market of 500 million (in terms of population) and a region with economic growth rates outpacing the world average.

The U.S. requires WTO membership and a TIFA before formally negotiating a FTA with another country. The U.S. already has TIFAs with Indonesia and the Philippines and signed TIFAs with Thailand in October and with Brunei in December of last year. Through TIFAs, the U.S. establishes the ground rules for negotiating a FTA, particularly in the areas of competition policy and intellectual property.

It is vital to note that these bilateral and regional FTAs concluded by the U.S. generally cover even non-trade issues such as investment liberalization, competition policy, government procurement and services, and other highly contentious policy areas that were at the core of people’s resistance to a new round of multilateral negotiations in the WTO. By resorting to bilateral or regional trade negotiations, the U.S. acquires much greater bargaining power vis-à-vis individual countries or even groupings of third-world economies. It also hopes to dissipate the concerted actions of the burgeoning global justice (anti-globalization) movement.

It is clear therefore that with or without the WTO, U.S. imperialism is bent on securing its global economic hegemony by pushing its regional and bilateral free-trade agenda across the globe.

[i] These are based on the count of the WTO and include some that have not, or not yet, been notified to the WTO. Economic Report of the President 2002, Washington D.C.

[ii] ibid.

[iii] The 2003 Trade Policy Agenda accessed at

[iv] ibid.

[v] ibid.