Download US RTAs and the impact on EU

US PTAs and their impacts on
trading partners
Tim Josling
Intro
• US played the Bilateral trade game in the prewar 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 “competitative liberalization”
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Currently 17 PTAs
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NAFTA
Chile
Australia
CAFTA+DR
Bahrain, Oman
Singapore
Israel, Jordan, Morocco
Peru
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In the pipeline
• 3 awaiting Congress
– Panama
– Colombia
– Korea
• Under negotiation
– TPP (Australia, Brunei, Chile, Malaysia, NZ, Peru, Singapore,
Vietnam)
• Some in abeyance
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South Africa
FTAA
Thailand
Ecuador
Bolivia
UAE
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… 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
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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
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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
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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
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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 intercontinental pacts
• Restore momentum lost by Doha foot-dragging
• Begin the task of including China in a WTO+ agreement
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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
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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
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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; ChinaASEAN; Australia-NZ-ASEAN; Australia-India;
India-Japan; China-Japan; China-Taiwan.
• WTO is one way of filling in the matrix: superPTAs is another
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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
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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?
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Thanks
Contact me at Josling@stanford
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