*EPF209 02/04/2003
U.S. Business Group Urges More Free Trade Agreements
(Cautions that reaching them will not be easy) (680)

By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- A senior executive of the largest U.S. business federation says his organization strongly supports World Trade Organization (WTO) negotiations on trade liberalization, efforts to establish a free trade area of the Americas (FTAA) and proposals to begin talks aimed at reaching bilateral free trade agreements (FTA) with a host of U.S. trading partners.

But while the U.S. Chamber of Commerce backs in principle the U.S. position on WTO- and FTAA-related issues, it would like to see a broader and somewhat different set of candidates for bilateral FTAs than those specified by the Bush administration, Chamber Vice President Willard Workman said February 4.

The Chamber's international policy objectives, he said, include starting FTA negotiations with 12 countries and regions including Argentina, Australia, Egypt, the European Union, Central America, India and Japan. U.S. businesses are very interested in a free trade agreement with India, which would give the largest boost to U.S. trade, Workman said. And although the chamber supports the strengthening of trade relations with an Islamic country through an FTA to advance broader U.S. foreign policy goals, he said, Turkey makes a better candidate than Morocco based on market potential and economic freedoms in both countries. The United States and Morocco launched negotiations for a bilateral free trade agreement in January.

Workman said the chamber would use FTA and other arrangements to achieve free and open trade in the Asia-Pacific region by 2020. However, he said his organization would not recommend an FTA with China before Chamber members are certain that the country is implementing its WTO obligations. Workman said that so far China's performance in this respect has not been "stellar."

Workman cautioned, however, that achieving a great number of bilateral FTAs will not be easy, not only because the resources of U.S. trade negotiators are "spread thin" but also because FTA negotiations involve complex and sometimes controversial issues and often conflicting interests.

"Anybody who thinks these agreements are going to just sail through Congress is kidding himself," he said.

Workman also cited as one the chamber's top priorities establishing normal trade relations with Russia, Ukraine, Kazakhstan, Belarus and the former Yugoslavia by "graduating" them from the Cold War-era Jackson-Vanik amendment. The Jackson-Vanik amendment to the 1974 trade law denied normal trade relations to countries that restricted their citizens' emigration rights.

The Chamber of Commerce executive commented on several key goals his organization is pursing in Congress. He said it is pressing for amending certain provisions of the Sarbanes-Oxley act, which introduced stricter government oversight of the audit process for public companies. These provisions, Workman said, require foreign companies, including German and French, to break their home countries' laws in order to be listed on U.S. stock exchanges.

Workman said his organization would propose changes to U.S. international tax law necessitated by WTO rulings against the Foreign Sales Corporation (FSC) and its successor Extraterritorial Income (ETI) Act. Under both regimes U.S. exporters disadvantaged by the worldwide tax system receive special tax breaks. As a consequence of the WTO adverse ruling on these regimes, the United States faces the possibility of European Union (EU) sanctions on more than $4,000 million worth of U.S. exports a year. Without giving details of the proposal, Workman said EU officials expressed an initial interest in it but wanted to study the measure more because of its "novel" approach.

But "we are getting closer to a solution, we have a path," Workman said.

Commenting on another WTO ruling against the United States on the so called Byrd amendment, he said that while the chamber has no position on the provision passed in 2000, it believes the amendment has not helped U.S. business in international trade circles. Byrd's provision directs payment of any antidumping duties to the companies that pursued the antidumping case rather than to the U.S. Treasury as before.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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