*EPF411 06/26/2003
Expanding Trade and Investment Top U.S. Economic Priorities In Asia
(Lawmakers call for clarity in FTA decisionmaking, demand fair trade) (920)

By Anthony Kujawa
Washington File Staff Writer

Washington -- Senior U.S. officials outlined U.S. trade and commercial priorities in Southeast Asia at a June 25 hearing before the House International Relations subcommittee on Asia and the Pacific, while lawmakers called for clarity in the criteria used to select partners for free trade agreements.

In opening remarks Committee Chairman James Leach said, "No region in the world holds out greater promise for U.S. food and agricultural trade than Asia." But he warned, "normal trade relations are all about reciprocity."

Testifying at the hearing on "U.S. Trade and Commercial Policy in Southeast Asia and Oceania," Assistant U.S. Trade Representative for Asia-Pacific and APEC Affairs, Ralph Ives, described U.S. trade strategy as "competitive liberalization" -- the pursuit of trade liberalization strategies on multiple fronts to achieve open markets.

"Countries that resist trade liberalization," he said, "risk being left behind as more and more countries, including the United States, keep the pressure on by opening markets through bilateral or regional trade agreements."

Also speaking before the subcommittee, James Kelly, the State Department's assistant secretary for East Asia and Pacific Affairs, said that the United States' "number one economic objective in Southeast Asia is to promote growth through expanded trade and investment and accelerated structural reform."

Kelly described the U.S. push for greater liberalization in the region using a variety of strategies -- through negotiating Free Trade Agreements (FTA), Trade and Investment Framework Agreements (TIFAs), pursuing the Enterprise for ASEAN Initiative to create a network of bilateral ASEAN FTAs, working toward a successful conclusion of the World Trade Organization's (WTO) Doha Development Agenda, and continued engagement at the multilateral level through APEC and ASEAN.

"APEC remains a powerful vehicle for liberalization," said Kelly, noting that members have committed themselves to free and open trade and investment in the Asia-Pacific no later than the year 2010 for industrialized economies and 2020 for developing economies.

The assistant trade representative said that about 150 FTAs are currently in operation around the world, but that the United States is party to only three -- with Canada and Mexico in NAFTA, and with Israel and Jordan.

Ives said the Bush administration has worked to "regain" U.S. leadership on global trade issues, and has successfully negotiated FTAs with Chile and Singapore [currently awaiting Congressional approval], but said the U.S. "has some catching up to do."

Yet Representative Dana Rohrabacher, a Republican from California, questioned the U.S. pursuit of an FTA with Singapore before seeking agreements with more democratic nations such as Australia and New Zealand. Rohrabacher called for use of a "freedom index" criterion when considering nations for FTA candidacy.

"My motto is free trade between free people, and when you don't have freedom on one side of the equation it's not really free trade," said Rohrabacher.

Representative Sherrod Brown, a democrat from Ohio, also criticized the U.S.-Singapore FTA, calling its labor provisions "completely and intentionally unenforceable." Brown charged that under the agreement violations of labor standards cannot be taken to dispute resolution and that commitment to enforce domestic labor laws is subject to remedies weaker than those available for commercial disputes. "This violates a negotiating objectives of fast track that equivalent remedies should exist for all parts of an agreement," he said.

"I have a feeling our corporate commander in chief and our U.S. trade representative negotiators are all too often recalling the faces of the wealthiest men they have seen and contemplating how they can exploit poorer countries in ways that will be of use to themselves," added Brown.

Brown said the debate is not "a choice between free trade and no trade," but that protections of labor, the environment and economic benefits must be considered when formulating trade policy.

Lawmakers asked about the criteria used by the administration in selecting potential FTA partners, and urged the Bush administration to consider early negotiation of a FTA with New Zealand.

A comprehensive free trade between the United States, Australia and New Zealand, said chairman Leach, would "act as a catalyst for further ambitious liberalization in both APEC and the WTO."

Pressed to discuss whether the United States was planning definitively to negotiate a FTA with New Zealand after concluding negotiations with Australia, Ives said, "New Zealand remains a possibility."

"There is no institutional reason that New Zealand cannot receive or undergo negotiations for a free trade agreement," added Kelly.

But Ives told the lawmakers that while the U.S. and New Zealand share a strong bilateral relationship, common interests in the agricultural sector and close ties under TIFA, the USTR is currently pursuing trade agreements on multiple fronts and the U.S. trade relationship with Australia is roughly ten times that of New Zealand.

Discussing negotiations in the World Trade Organization (WTO), Kelly said Southeast Asia would be a "major beneficiary" of the successful conclusion of WTO negotiations on the Doha Development Agenda.

Ives said the United States is focusing on market access for goods, services and agriculture in order to reach successful conclusion of the Doha development agenda and has proposed to substantially reduce barriers in agriculture in the WTO.

"But we need our trading partners to do the same," he added, noting the European Union common agricultural policy as an impediment to trade with developing countries.

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

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