Obama Says US Ready to Join Asia-Pacific Trade Talks

16 December 2009

The administration of US President Barack Obama notified Congress on Monday that it intends to negotiate a free trade agreement with a group of nations in the Asia-Pacific. It is the first bold trade-opening move of the Obama presidency.

In letters to two prominent members of the US Congress dated 14 December, US Trade Representative Ron Kirk said that Obama intends to enter into negotiations toward a Trans-Pacific Partnership Agreement (TPP), an Asia-Pacific trade deal that aims to liberalise markets and integrate economies across the region.

The TPP, which took effect in 2006, currently covers founding members Brunei, Chile, New Zealand and Singapore. Australia, Peru and Vietnam have also signalled an interest in joining the pact, and Kirk indicated that the current signatories hope to broaden the agreement's scope even further.

In his letters to House Majority Leader Nancy Pelosi and Senator Robert Byrd, who is now President Pro Tempore of the Senate, Kirk stressed that US exporters could be pushed out of the Asia-Pacific market if Washington fails to liberalise trade with countries in the region.

"We have seen a proliferation of trade agreements in the Asia-Pacific region to which the United States is not a party," Kirk wrote. "These agreements, as well as other economic developments, have led to a significant decline in the US share of key Asia-Pacific markets over the past decade."

Kirk failed to note, however, that the United States already has bilateral free trade deals with four of the seven current or potential TPP members: Australia, Chile, Peru and Singapore. It is not clear whether the region-wide agreement would entail even greater market opening than what has already been implemented under those deals.

Obama gave vague signals of US interest in participating in the TPP talks in a speech in Tokyo last month. In the weeks since, USTR officials have been holding consultations with lawmakers and interest groups to weigh support for a deal. The Office of the USTR is now seeking comments from the public; Kirk promised in his letters to hold "regular and rigorous consultations" with lawmakers as the negotiations proceed.

And for good reason: the US Congress will have to approve any new trade deal before it can take effect. Kirk has suggested that his office will not hesitate to ask lawmakers to grant the White House ‘fast-track' negotiating authority if and when an agreement is ready for approval. The special authority, also known as Trade Promotion Authority, or TPA, would require lawmakers to vote simply Yes or No on a given trade agreement; they would have no opportunity to amend the negotiated deal.

The first round of the expanded TPP negotiations will be held in March in Australia.

ICTSD reporting.

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