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US PTAs and their impacts on trading partners

US PTAs and their impacts on trading partners. Tim Josling. Intro. US played the Bilateral trade game in the pre-war period (RTA Act) Was main protagonist for multilateral trade rules in the Post-war system (GATT)

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US PTAs and their impacts on trading partners

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  1. US PTAs and their impacts on trading partners Tim Josling

  2. Intro • US played the Bilateral trade game in the pre-war period (RTA Act) • Was main protagonist for multilateral trade rules in the Post-war system (GATT) • Began to waiver in 1980s (Israel, as a political gesture) and (Canada, as a friendly response) • Burst of activity in 1990s (NAFTA) • And birth of “competitativeliberalization” Canterbury June 2011

  3. Currently 17 PTAs • NAFTA • Chile • Australia • CAFTA+DR • Bahrain, Oman • Singapore • Israel, Jordan, Morocco • Peru Canterbury June 2011

  4. In the pipeline • 3 awaiting Congress • Panama • Colombia • Korea • Under negotiation • TPP (Australia, Brunei, Chile, Malaysia, NZ, Peru, Singapore, Vietnam) • Some in abeyance • South Africa • FTAA • Thailand • Ecuador • Bolivia • UAE Canterbury June 2011

  5. … and don’t forget • Schemes with extensive preferential access: • CBI • AGOA • And the persistent “non-PTA” process: • APEC • And all the Trade and Investment Framework agreements (TIFA) and Bilateral Investment Treaties (BIT) that stop short of PTAs Canterbury June 2011

  6. So what’s important to agriculture? • NAFTA created a single market between US and Mexico for farm goods • US-Chile is a “clean” agreement that includes agriculture fully (high-quality agreement) • CAFTA+DR secures access already granted to CA, but gives US better access in CA markets • Limited sugar access but otherwise “clean” in agriculture • Australia-US by contrast is low-quality: long transition period to a not-too-open market • Sugar excluded altogether Canterbury June 2011

  7. Korea changes the game • Good (not perfect) access to a major market for US agriculture • Rice protected by Korea, but hope of some access eventually • Enough beef access into Korea to satisfy (most) US beef exporters • Hope was for model for Japan • PTA with a big market elevates the interest level Canterbury June 2011

  8. TPP: what does this add? • Of the nine negotiating partners, four already have Bilaterals with the US: but hope that it would “clean up” some of these (sugar with Australia?) • Seen as a way of involving ASEAN countries (maybe Thailand, Philippines and Indonesia will follow?) • Japan ambivalent but has been attending sessions Canterbury June 2011

  9. TPP … • Rhetoric is for “high-quality” agreement: Obama’s trade legacy? • Consistent with Article XXIV GATT • Get “first mover advantage” on EU negotiations with Asia • Advance more ambitious parts of APEC that had stalled • Provide a model for “open regionalism” and inter-continental pacts • Restore momentum lost by Doha foot-dragging • Begin the task of including China in a WTO+ agreement Canterbury June 2011

  10. Link with Europe? • Systemic pressure on EU to agree to multilateral agreement not at issue: EU wants Doha more that does US (and Asia?) • Concern that EU has a more flexible political mandate for PTAs (US Congress major hurdle) • Playing catch-up in certain markets (EU-Korea ahead of US-Korea?) • For manufactures, ROO will be important • Simultaneous negotiations between US and EU with Japan will provide interesting dynamic Canterbury June 2011

  11. Links with other regions • Response to Brazil’s rejection of FTAA plans and attempt to consolidate SAFTA • Concern with Chinese policies in Latin America may lead to PTAs that gave LA exports edge in Chinese market • Counterweight to ASEAN + 3 agreements that exclude North America • Isolate India if it reverts back to more protectionism Canterbury June 2011

  12. Links with other regions • Establish US interests in integrating Asia BTAs (c.f. original aim of FTAA) • Examples include Peru-Korea; India-South Africa; India- Indonesia, Cambodia; China-NZ; China-Korea; Australia-China, Taiwan; China-ASEAN; Australia-NZ-ASEAN; Australia-India; India-Japan; China-Japan; China-Taiwan. • WTO is one way of filling in the matrix: super-PTAs is another Canterbury June 2011

  13. Agricultural component of TPP? • Present talks have avoided controversial issues of timelines for transition • Many farm products would have to be included to attract support in US, Canada, Australia, NZ, Thailand, etc. • Korea, Japan appear willing to test the (political) limits of including agriculture • Could include more that just tariff cuts and long transition periods for market access Canterbury June 2011

  14. Conclusion • New dynamic in trade system largely unrelated to Doha • Managing the matrix will be challenge for the rest of this decade • Agriculture will be inside many agreements, even those that include EU (CAP reform allows that to happen with less internal disruption) • Doha may get agreed eventually as a way of facilitating many of these PTAs • Is this a cause of concern? Or should we be welcoming it as a way forward, a building block in contrast to the WTO “big round” stumbling block? Canterbury June 2011

  15. Thanks Contact me at Josling@stanford Canterbury June 2011

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