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USTR Notifies Congress Of Asia-Pacific FTA Talks

by Mary Swire, Tax-News.com, Hong Kong

17 December 2009


United States Trade Representative Ron Kirk has notified the US Congress that President Barack Obama intends to enter into the negotiation of a regional, Asia-Pacific trade agreement, known as the Trans-Pacific Partnership (TPP) agreement, with the objective of shaping a high-standard, broad-based regional pact.

In letters to the Speaker of the House of Representatives, Nancy Pelosi, and Senate President Pro Tempore, Robert Byrd, Kirk said that such an agreement would help to expand American exports, saving and creating good jobs in the US. The first round of negotiations has already been announced by the current TPP members, and will take place in March 2010.

The original TPP agreement was signed by New Zealand, Chile and Singapore on July 18, 2005 and by Brunei on August 2, 2005. On September 22, 2008, comprehensive negotiations for the US to join the TPP were announced. Australia, Peru and Vietnam also intended to participate in the negotiations.

The first round of negotiations was scheduled to take place in March 2009, but was postponed to allow the US Administration time to conduct a general review of US trade policy.

On November 14, 2009, President Obama confirmed that the United States would participate in the broader TPP that would include Singapore, New Zealand, Brunei, Chile, Australia, Peru, and Vietnam.

Since then, Office of the United States Trade Representative (USTR) staff have begun preliminary consultations in the US, and have also met with current TPP members and with the countries that have expressed interest in potentially joining the negotiations.

"USTR will now intensify consultations with Congress and with American stakeholders to develop objectives for the TPP negotiations, in order to enter already-scheduled talks in March with a robust US view that seeks the highest economic benefit for America's workers, farmers, ranchers, manufacturers, and service providers, and that reflects our shared values on labor, the environment, and other key issues," Ron Kirk announced.

To aid in those consultations, the USTR has issued a fact sheet giving key economic information about the current state of and potential for trade in the Asia-Pacific region, which already represents more than 40% of world trade, as well as a description of the opportunities for the growth of US exports and the retention of US jobs.

According to the East-West Center, Asia already accounts for 27% of total US jobs from exports, and employment from exports to Asia grew 12% from 2002 to 2006. US goods exports to the Asia-Pacific totaled USD747bn in 2008, up 8.3% over 2007. US services exports totaled USD186.5bn in 2008, up 7.7% over 2007. US small and medium-sized enterprises alone exported USD173bn to the Asia-Pacific in 2008.

The USTR considers that the successful conclusion of the TPP agreement, which will serve as a platform for economic integration across the Asia-Pacific region, can help the US ensure its share of the economic opportunities the region has to offer. It notes that, while US exports to the Asia-Pacific increased by 63% during the past five years, its share of trade in the region has declined by 3% in favor of US competitors.

Asia-Pacific countries have negotiated bilateral trade agreements and regional agreements, including ASEAN + 3 (Singapore, Malaysia, Indonesia, Thailand, Philippines, Vietnam, Brunei, Cambodia, Laos, and Burma plus China, Japan, and Korea) and ASEAN + 6 (ASEAN plus China, Japan, Korea, India, Australia, and New Zealand). There are said to be 175 preferential trade agreements in force that include Asia-Pacific countries, with another 20 awaiting implementation and more than 50 others under negotiation.


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