House Approves FTAs With Chile And Singapore

by Mike Godfrey, Tax-News.com, Washington

29 July 2003

The House of Representatives showed its approval for the Bush adminstration's policy of creating a series of free trade agreements as lawmakers voted to approve FTAs with Chile and Singapore, which will eliminate tariffs and barriers on most goods and services.

The FTA with Chile is the first such agreement between the United States and a South American nation, and is widely seen as the first move in the process of persuading the continent's larger economies, such as Brazil, to sign FTAs with the US.

Should the trade deals win the approval of the Senate, Chile and Singapore will become the fifth and sixth nations to sign up to an FTA with the US. Whilst trade in goods between Singapore and the US is already 99% tariff free, the new deal will seek to eliminate tariffs on services and investments. Meanwhile, some 85% of tariffs between the US and Chile will be dropped immediately, with the remaining barriers removed in the next four years. It has been estimated in one study that the FTA with Chile will boost America's GDP by $4 billion, whilst trade with Singapore, the United State's 12th largest trading partner, was worth almost $40 billion last year.

"We are delighted that the House of Representatives has marked the one-year anniversary of passage of the Trade Act of 2002 by passing free trade agreements with Chile and Singapore by comfortable margins," US trade negotiator Rober Zoellik commented in a statement, adding:

"These cutting-edge agreements eliminate tariffs, tackle non-tariff barriers, open services markets, strengthen the intellectual property protections for our knowledge industries, and enhance labor and environmental protections. They level the playing field for U.S. businesses, increase choice and value for American consumers, and provide fresh momentum for open markets as we approach the Doha Agenda's mid-point meeting in Cancun."

Mr Zoellick continued:

"The Singapore FTA passed by a vote of 272 to 155, and the Chile FTA passed 270 to 156. These votes show that when real agreements with concrete benefits for businesses and consumers are on the line, Congress supports the expansion of free trade. These votes are a tribute both to the hard work of key Members of Congress from both parties — and to President Bush's strong commitment to get America moving again on trade."

"The free trade agreements approved today by the House are an important part of the Administration's efforts to expand trade globally, regionally, and bilaterally. According to a recent Cato Institute study, taken together as a group, the Chile and Singapore FTAs, the ongoing FTA negotiations with Morocco, Central America (CAFTA), the South African Customs Union (SACU), and Australia, and the proposed Bahrain FTA would constitute the 4th largest U.S. export market and the world's 9th largest economy in terms of purchasing power."

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