23 January 2006
United States Planning More Free-Trade Negotiations in 2006
USTR Portman mentions Korea, Malaysia, U.A.E. as likely candidates
By Bruce Odessey
Washington File Staff Writer
Washington — The Bush administration hopes to initiate more free-trade agreement (FTA) negotiations in 2006, possibly with South Korea and Malaysia, U.S. Trade Representative Rob Portman says.
He briefed reporters in Washington January 20 ahead of his trip to the World Economic Forum in Davos, Switzerland, which 30-35 trade ministers are likely to attend. Informal sessions at the January 25-29 Davos meeting could give them a chance to make incremental progress in long-stalled World Trade Organization (WTO) negotiations.
"We’ll be announcing some additional FTA partners soon," Portman said. "As I think you will notice, they will not be with small economies because I do think we need to move on to some larger economies."
South Korea, the seventh largest U.S. trading partner, has worked on resolving a number of bilateral trade issues to lay the groundwork for FTA negotiations, he said. An FTA with South Korea would be the largest for the United States since the North American Free Trade Agreement (NAFTA) with Canada and Mexico.
"I’m very encouraged by the talks and I’m very hopeful that we can deepen our economic relationship with Korea through an FTA," Portman said, "but we’re not quite there yet."
He said he was scheduled to meet in Davos with the trade minister of Malaysia, another fast-growing Asian economy.
"I’m hopeful we can make an announcement on Malaysia before long as well," he said.
UNITED ARAB EMIRATES NEXT FOCUS IN MIDDLE EAST
The next FTA negotiation in the Middle East likely would be with the United Arab Emirates, he said. A day earlier, in line with the Bush administration’s goal of a Middle East Free Trade Area, the United States signed an FTA with Oman. Earlier, adding to the existing FTAs with Israel and Jordan, the administration implemented FTAs with Morocco and Bahrain.
Both political and economic issues present obstacles to an FTA with Egypt, the largest Arab country, he said. Without elaborating on the political issues, Portman said the United States continues to work with Egypt on resolving the market problems.
"They are beginning to reform and liberalize their economy," Portman said. "But we’re not quite there yet in terms of the economic or commercial side."
At Davos, Portman also plans to meet with the trade minister of Switzerland, a country eager for an FTA that has substantial trade with and investment in the United States but also has one of the most protected agricultural sectors, he said.
"I’m not as optimistic there because I’m not sure that the agriculture issues can be resolved," Portman said.
Reviewing ongoing FTA negotiations, he described conclusion of those with Panama as "very close." Intensive negotiations continue with Ecuador, Colombia and Thailand, he said. He rebutted published reports describing negotiations a week earlier with Thailand as going poorly.
"We’ve made great progress with Thailand last week despite the Thai press accounts about the protests and so on," Portman said. "We found them [the Thais] to be quite interested in making progress on the key issues that divided us."
Although 2006, a U.S. election year, likely will have an abbreviated legislative schedule, he said he hoped Congress would take time to approve FTAs signed with Peru and Oman, as well as any WTO accession agreements that might be signed with Kazakhstan, Russia, Ukraine and Vietnam.
EXPIRATION OF “FAST TRACK” A FACTOR IN ADMINISTRATION PLANS
The president’s authority to negotiate trade agreements, called trade promotion authority (TPA) or fast track, expires in mid-2007. Under TPA, Congress restricts itself to approve or reject a negotiated trade agreement, within strict time limits and without amendments.
Expiration of TPA is part of Portman’s calculations on submitting bilateral agreements to Congress as well as on completing the WTO negotiations, formally called the Doha Development Agenda.
"Now we’re really up against a time crunch ... [and] the reality that our trade promotion authority expires in 2007, Portman said. "In order to avoid the significant risk of not having presidential authority to move a trade agreement without amendment, we need to move now."
He said WTO negotiators need to establish modalities — broad approaches such as tariff formulas — by April 30 and submit final proposed tariff schedules by July 31 for the WTO to complete negotiations and for the United States to submit an agreement to Congress by the end of 2006.
"I think the most important thing to come ... out of Davos would be to reaffirm those dates and to make some incremental progress in the core negotiating areas" of market access for agriculture, industrial tariffs and services, Portman said.
The big obstacle remains agriculture, just as it has been since the Doha negotiations were launched in 2001. Portman criticized the European Union (EU) for refusing to budge from its latest offer, which he said would result in little or no real increase in market access.
"The EU has still not meaningfully embraced the commitment we all made in July 2004, which was for substantial improvements in market access," Portman said. "The European position had been that their proposal is a take it or leave it proposal ... And that’s not the basis for an agreement."
A transcript of Portman’s briefing can be accessed at the Web site of the U.S. mission in Geneva.
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