Multinational Heavyweights Urge Obama To Consider Trans-Pacific Trade Agreement

by Mike Godfrey, Tax-News.com, Washington

26 March 2009

A large coalition of US multinationals with business interests in Asia Pacific and South America is calling on US President Obama to take the United States into the Trans-Pacific Strategic Economic Partnership negotiations, which are seeking to liberalize trade for the economies around the Pacific Rim.

In a letter to Obama signed by several large multinationals and agricultural associations, including Boeing, Caterpillar, General Electric, Intel and the American Meat Institute, it is argued that the negotiations would lead to "a new type of agreement" that would facilitate trade and investment, promote the interests of the participating countries in the areas of intellectual property rights, lower technical barriers to trade and provide improved transparency in trade regulations.

"Mr. President, you have made it clear that your administration will attach a high priority to enforcing existing trade agreements. This is, without question, an essential undertaking. However, unless the United States continues to pursue its leadership role in trade negotiations, these enforcement efforts will not achieve the benefits for US trade interests that we might otherwise expect," the letter stated.

Concluded by the four Pacific states of Brunei, Chile, New Zealand and Singapore in late 2005, the Trans-Pacific Strategic Economic Partnership is an agreement intended to serve as a pathway to broader Asia-Pacific wide trade liberalization and integration. In September 2008, further negotiations for the United States to join the group were launched, but, with the pro-free trade Bush administration having been replaced with the more sceptical President Obama, America's involvement in the development of the partnership now looks far from certain. The coalition warns, however, that the US economy has much to lose by staying on the fence.

"This is so because our trading partners, and particularly those in the Asia-Pacific area, have been negotiating bilateral and regional trade deals that will, individually and collectively, put our products at a debilitating competitive disadvantage around the world," the letter states.

With its current trade policy, the United States risks isolating itself as the world trade agenda moves rapidly onwards. The World Trade Organization has been notified of 421 bilateral and regional trade agreements through the end of 2008. Another 400 or so are scheduled to be notified and implemented by 2010. Of these the United States is a party to just 20. The letter points out that, furthermore, while the United States continues its long deliberations over the free trade agreement with South Korea, that country has concluded, or is in the process of concluding 25 trade agreements. In the Asia-Pacific area, there are 152 agreements in force, 21 are completed and awaiting implementation, 72 are being negotiated and 81 are in an exploratory phase.

"The TPP is such an opportunity," the letter continues. "These negotiations present the opportunity to strengthen the existing P-4 agreement into a high-standard TPP agreement that can potentially serve as a vehicle for advancing trade and investment liberalization and integration across the Trans-Pacific region and perhaps beyond."

"What we do or fail to do with respect to trade agreements with countries in the Asia-Pacific area could well determine whether the United States will remain the driving force in how future trade agreements are negotiated and whether they will serve both our interests and the broader global interest," the coalition warned Obama.

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