Why We Need a Breakthrough in the Dallas Trade Talks
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The 12th round of negotiations between the Trans-Pacific Partnership (TPP) countries kicked off today in Dallas, Texas. More than 500 government officials from the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam are gathered to discuss the rules for trade and investment.
There is a lot at stake for American companies and workers in the TPP.
In an op-ed in today's Wall Street Journal [subscription required], the Chamber’s Myron Brilliant, senior vice president for the International Division writes:
With 13 million Americans unemployed, no priority facing our nation is more important than putting Americans back to work. While divisions in Washington run deep, Democrats and Republicans agree that boosting exports is a vital part of any jobs strategy.
With 95% of the world’s consumers outside the U.S., the opportunities are immense, and it’s critical that the U.S. government do everything in its power to help American business and workers seize them.
Nowhere is this potential more striking than in Asia, the world’s fastest growing region. Two billion Asians joined the middle class in the last 20 years. The IMF estimates the world economy will grow by $22 trillion over the next five years, and nearly half of that growth will be in Asia.
However, the U.S. may be falling behind in the world’s most dynamic region. Over the past decade, the growth in U.S. exports to Asia has lagged our overall export growth, and the share of U.S. exports sent to Asia actually fell in 2011.
What’s going on? One factor is that the U.S. has fallen behind in the race to clinch new market-opening free trade agreements (FTAs) with Asian countries. Our agreements with Korea, Australia, and Singapore are incredibly important, but they are not enough.
Contrast that with the Americas, where U.S. FTAs with a dozen nations cover 87% of U.S. trade with our hemispheric neighbors. The result is that nations in the Americas last year purchased nearly as much U.S. exports as Asia and Europe combined.
Meanwhile, the number of intra-Asia free trade agreements has exploded, rising from 6 to 70 over the past 15 years; with an additional 80 under negotiation.
Free trade agreements have a proven record boosting trade. In our analysis, U.S. exports to new FTA partner countries have grown on average four times as rapidly in the 3-5 year period following the FTA’s entry into force as U.S. exports to the world.
So how do we get more trade deals in Asia? The answer is the Trans-Pacific Partnership (TPP) agreement, a nine-nation FTA negotiation between the U.S., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.
Not only is the TPP on track to conclude this year, but its open architecture allows for more countries to join, making it a model for 21st Century trade deals.
The TPP can act as an anchor for policies that promote free enterprise and free markets in Asia, giving U.S. companies not just increased market opportunities, but also insurance against protectionist sentiments.
To achieve this ambition, we need a high-standard agreement. The TPP must strengthen intellectual property and investment protections; ensure that procurement policies are transparent and fair; simplify tariff schedules, rules and standards; and address the role of state-owned enterprises in the economy.
We can take a big step towards that goal this week in Dallas, site of the 12th round of TPP negotiations. The Chamber is urging all the TPP countries, including the U.S., to get this deal done in 2012.
That won’t happen unless all countries, the U.S. included, are prepared to put everything on the table and work towards achieving an ambitious and commercially meaningful outcome.
The longer we take, the more the U.S. risks falling behind. With a clear pathway toward ensuring fair and market-based competition among TPP partners — and with jobs at stake — now is the time to be bold.
Chamber staff is in Dallas all week championing the needs of its members. Their focus is to hold negotiators accountable to the vision of achieving a level playing field and more opportunities.