The United States Trade Representative (USTR) is expected to announce in a few weeks the launch of a new set of free trade agreement (FTA) negotiations. Four countries have been most frequently mentioned in this context, namely Korea, Malaysia, Egypt and Switzerland. The first two countries on this list are seen as the most likely candidates, while the latter two countries each present unique difficulties (politically-related with respect to Egypt; agriculture-related with respect to Switzerland) that may prevent the commencement of negotiations in the near-term, although that remains possible.
The principal impetus for the pending announcements is the fact that the President’s “trade promotion authority” (TPA) is due to expire in mid-2007. Although TPA can certainly be renewed by that time, the politics of trade, and the lapse of TPA between 1994 and 2002, makes renewal an uncertain prospect. For this reason, the Administration is anxious to complete negotiations with FTA candidates as soon as possible so that the agreements can be submitted to Congress under current TPA procedures.
Aside from the crop of new FTA candidates, ongoing negotiations continue with Colombia and Ecuador for an Andean FTA. As we advised in a prior ALERT, negotiations with Peru were completed in late 2005 (with assistance from AFI), and there are indications that the Administration is prepared to submit a Peru FTA to Congress for approval with or without other Andean nations. Negotiations with Thailand, Panama and the Southern African Customs Union are also continuing, although each set of talks have hit roadblocks that throw into doubt when, or if, these negotiations will be completed. An FTA with Bahrain was recently approved by Congress, while an FTA with Oman was signed last week and is being readied for Congressional approval. As we also advised in a prior ALERT, the Morocco FTA went into force as of January 1, 2006.
The bilateral FTA agenda is augmented by the ongoing Doha Round of multilateral negotiations under the World Trade Organization. Successive ministerial meetings of the major trading partners - first in Seattle, then in Cancun and most recently in Hong Kong this past December – have failed to yield significant accord on major issues (most importantly the treatment of domestic and export subsidies provided on agricultural products), and the ultimate fate of the Doha Round remains in serious doubt. Widespread opinion is that the Doha Round must be completed before the close of this year if it is to have a chance of consideration under present U.S. TPA procedures.
In anticipation of the expected announcement on the new set of FTA negotiations, AFI Members are strongly encouraged to review their “supply lines” and report to Bob Bauer or Jeff Levin on specific products which would be of interest in possible FTA talks with Korea, Malaysia, Egypt or Switzerland.
As always, Members with questions regarding the FTA process or specific agreements are urged to contact Bob Bauer or Jeff Levin.
