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Business Group Welcomes Obama's Trade Signals

by Mike Godfrey, Tax-News.com, Washington

27 May 2009


The National Foreign Council (NFTC) has applauded the Senate Finance Committee for holding a hearing on the US-Panama Free Trade Agreement (FTA). The NFTC also pressed the Administration to send forth the trade pact for Congressional approval and provide a timeline for action on pending agreements with Colombia and South Korea.

“The NFTC applauds Senators Baucus and Grassley for scheduling (the) hearing and beginning to lay the legislative groundwork for consideration of the Panama FTA,” said NTFC President Bill Reinsch. “As (US Trade Representative) Kirk indicated, the administration is working diligently to resolve remaining issues with the Panamanian government. We urge the President to send the agreement to Congress as soon as possible for bipartisan approval, and to outline next steps on the pending agreements with Colombia and South Korea.”

“With each day that passes without the Panama agreement in place, the United States risks losing important opportunities that can help to grow US exports, our economy and jobs,” said NFTC Vice President for Regional Trade Initiatives Chuck Dittrich. “The multi-billion dollar Panama Canal expansion project, which is slated for completion in 2014, and other projects present numerous opportunities for US businesses in the equipment, financial services and transportation sectors. However, those opportunities could be lost to our competitors if we continue to delay.”

The US-Panama FTA was signed June 28, 2007, and once enacted, will result in the duty-free trade of nearly 90% of US consumer and industrial goods exports to Panama, with other tariffs being phased out over 10 years. In 2008, bilateral trade between the United States and Panama reached roughly USD5.3bn, with USD4.9bn coming from US exports.

During the hearing, both Finance Committee Chairman Max Baucus and Ranking Republican Chuck Grassley urged the administration to endorse the agreement and send it to Congress while the US and Panama worked on a tax information exchange agreement, which is one of the issues currently stalling US ratification of the trade deal.

The NFTC also welcomed reports of statements by Kirk indicating that the United States will go ahead with negotiations to join the Trans-Pacific Partnership (TPP), which already comprises Brunei, Chile, New Zealand and Singapore and is seeking to add the US, Peru, Australia and Vietnam.

“If press reports are accurate, this is indeed good news and the NFTC and its members strongly support Ambassador Kirk's vision for using the TPP negotiations as a means to expand our commercial engagement with the Asia-Pacific region,” said Dittrich. “The strategy that seems to be emerging from USTR is to engage our trading partners on a multitude of levels, including enforcement of existing agreements and resolution of long-standing disputes.”

“Engaging early on through the TPP to develop a creative approach to a plurilateral and comprehensive market opening initiative in the Asia-Pacific region jump starts this Administration's strategy and signals to our trading partners that the United States is serious about expanding markets for American products and services,” he continued. “Starting negotiations this year through the TPP will lay the groundwork for an even more productive Asia-Pacific Economic Cooperation conference hosted by the United States in 2011.”

A large coalition of US multinationals with business interests in Asia Pacific and South America has already written to President Obama urging him 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 the letter, signed by several large multinationals and agricultural associations, including Boeing, Caterpillar, General Electric, Intel and the American Meat Institute, it was 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.

The Trans-Pacific Strategic Economic Partnership was signed by Brunei, Chile, New Zealand and Singapore in late 2005. In September 2008, further negotiations for the United States to join the group were launched but interrupted by the change in administration from George W. Bush to Obama in January.


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