Bush to push for free trade initiative
Washington, October 18:
US President George W Bush is expected to push for a plan to improve the patchwork of free trade initiatives in the Asia-Pacific region at the annual APEC summit in Vietnam next month.
The move is part of reforms being campaigned by Bush for the Asia-Pacific Economic Cooperation (APEC) forum, comprising 21 developing and developed economies in the region, a senior US State Department official said.
“We can’t ignore FTAs (free trade agreements). They are here to stay. So, the real question is how do we make them better and what kinds of factors we need to consider,” said Michael Michalak, the US envoy to APEC.
There are presently up to 100 free trade agreements and regional trading arrangements underway or being proposed by APEC economies, which include the United States, China, Japan, Russia, Chile and key Southeast Asian economies.
Some of the free trade initiatives in the region are accused of distorting trade than creating trade. They are said to be selective in product coverage and having extremely complicated rules, not in tandem with the global trading system.
Noting that the APEC forum has held extensive discussions on the subject for several years, Michalak said, “we want to take it to another level, in terms of a way forward.” He did not elaborate on the proposed US initiative.
“The president has said in the past that APEC is a premier multilateral economic institution in the Asia-Pacific region and so we hope that we would have some solid reform initiatives going forward,” he said.
The free trade initiative, he said, was part of a broader reform plan focusing on APEC’s trade, investment and security agenda. “We are working now with the White House to more fully flesh that out. One of the things which we would be looking at very carefully is APEC needs to have a response to all of the FTAs in the region,” he pointed out.
While the United States is waging an uphill campaign to gain global consensus to open markets globally in the Doha World Trade Organization (WTO) negotiations, it is also eyeing free trade arrangements in the Asia-Pacific region as an insurance in case world trade talks collapse.
Some American economists have urged the Bush administration to push for an APEC-wide free trade agreement, subsuming the “noodle bowl” of FTAs and more importantly to prepare a regional “plan B” in case Doha fails. As APEC economies account for more than half the world economy and almost half of world trade, they believe an APEC FTA outcome would be more ambitious than Doha, which at best seeks modest reductions in market impediments.
“Doha remains our number one priority but as we talked in the past, certainly the American trade agenda has a global, regional and bilateral component to it,” Michalak said. “And we are looking very hard at the regional component now and we hope that the president would have some very good words to say about that, going forward,” he said. The United States is also apparently concerned that the mushrooming of free trade pacts in the region, particularly in Asia, could pose obstacles to it as China races to forge agreements with booming economies.
Washington has openly said that its free trade pacts are more comprehensive that those of China.