Trade Politics and Bilateral Trade Agreements 1 Report Delivered October 9, 2008 By: Stefanie Westerman.

Trade Politics and

Bilateral Trade Agreements

1

Report DeliveredOctober 9, 2008

By:Stefanie Westerman

• Trade Politics – History• Bilateral Agreements – To date• Politics of Bilateral Agreements• Problems• Solutions

Overview

2

• From the start of our country until 1934, US trade politics was inward looking

• 1934 – Secretary of State, Cordell Hull• Great Depression had discredited

protectionism• Post World War II

• 1960s – support for trade liberalization began to lessen• Trade Adjustment Assistance

• 1974 – Trade Promotion Authority

“It's not the facts on the ground; it's the politics in the air” – Charlie Rangel

3

History of Trade Politics

Bilateral Trade Agreements

4

• Definition• 1985 -- Israel, President Ronald Reagan• 1989 – Canada, President George H.W.

Bush • 1994 - NAFTA

• 2000 – Jordan, President Bill Clinton _______________________________________

• Trade Diversion & Trade Creation• Economic/Security Interests• Undermine the WTO Multilateral System?

Status of Free Trade Agreements Negotiated Since Trade Promotion Authority was Restored in 2002

5

Country Negotiations

Launched

Negotiations

Completed

Approved by

Congress

Entry into Force

Chile X X X January 1, 2004

Singapore X X X January 1, 2004

Australia X X X January 1, 2005

Morocco X X X January 1, 2006

DR-CAFTACosta Rica Dominican Rep.El SalvadorGuatemalaHondurasNicaragua

X X X El Salvador and the United States: Mar. 1, 2006; Honduras: April

1, 2006;Nicaragua: April 1,

2006;Guatemala: July 1, 2006;

Dominican Republic: March 1, 2007

Bahrain X X X August 1, 2006

Oman X X X

Peru X X X

Colombia X X

Panama X X

Korea X X

Source: U.S. Chamber of Commerce

6

Trade Politics of Today

• May 10, 2007 – fundamental change to US trade policy• labor, environmental regulation, intellectual property, port

security, and investment in trade agreements

• Peru FTA passed in 2007• Colombia under TPA, vote to “stop

the clock”• TAA needed • Colombia, Panama and South Korea

signed but pending Congressional Approval

Bilaterals and Trade Politics

• So many votes on FTAs since 2002• Difficult for Congress• Communication between

Administration and Capitol Hill• Bilaterals: Flare points more easily

identified

7

Current Problem

• TPA – Power of Congress• Significance of Bilateral Agreement • Economic Gain• Foreign Policy Imperative• Trans-Pacific Strategic Economic

Partnership Agreement (P-4)• Singapore, New Zealand, Chile, and Brunei

8

9

SolutionStop negotiating bilateral agreements and focus on

regional/multilateral deals.

• Trade education• TAA• State Level Trade Delegations – build

up support/economic impact on a local level

• Meet with leaders in key Capitols around world

• Find new ways of communicating with the Hill

Candidates Positions

10

• McCain• Continue negotiating bilateral

agreements• Very supportive of WTO and

multilateral • Obama

• Renegotiate NAFTA – labor/environment

• Regretful Doha round collapsed in July, but right for the US to walk away

• USTR• TPA?

11

Conclusion

• Domestic Impact of Solution• Global Impact of Solution

“A Member of Congress is placed in the position of weighing the effects of his/her constituency verses the overall impact on

the United States and other trading partners.” William Cooper

Questions?

Sources Used

12

BNA International Trade Daily, Democrats Pledge to Work Through Multilateral Fora to Achieve Trade Goals,” August 19, 2008. Connell, Sean. US Korea FTA Position Paper. U.S.-Korea Business Council, 2006. Cooper, William. “Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy.” CRS Report for Congress, July 23, 2008.  Council on Foreign Relations, “The Presidential Candidates on Trade,” May 22, 2007.  “Cut a deal on Colombia,” Los Angeles Times, April 12, 208.  Dauster, William. U.S. Senate Committee on Finance, “Trade Promotion Authority Annotated,” February 2007. http://finance.senate.gov/TradePromotionAuthority.pdf  Destler, I.M. American Trade Politics. Washington DC: Institute for International Economics, 4th ed. 2005. “Forecast on Latin America and the Caribbean” Conference, AACCLA’s 41st Annual Meeting, September 22-23, 2008.  Griswold, Dan. Bilateral Deals are no Threat to Global Trade. CATO Institute, July 28, 2003.  Griswold, Dan. Dems betray our ally Colombia. CATO Institute, April 18, 2008.  Morrison, Wayne and William H. Cooper. “The Future Role of U.S. Trade Policy: An Overview.” CRS Report for Congress, July 14, 2008.  Reid, John. “Chamber Welcomes Bipartisan Deal to Move Trade Agenda Forward,” U.S. Chamber of Commerce, May 10, 2007.  U.S. Trade Representative, “Dates you need to Know on Colombia,” http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2008/asset_upload_file320_15036.pdf  Strawbridge, Jamie. “TAA, Colombia Deal Must Move Together To Succeed Finance TAA Markup In Doubt; Service Workers Extension Toughest,” Inside US Trade, June 20, 2008. Stout, David. “Bush to Force Vote on Colombia Trade,” The New York Times, April 7, 2008. U.S. Department of State. “Foreign Trade and Global Economic Policies,” Info USA, 2008. White House, “President Signs Trade Act of 2002,” http://www.whitehouse.gov/news/releases/2002/08/20020806-4.html  Zoellick, Robert. Unleashing the trade winds, The Economist, December 2005.