WASHINGTON (AFP) – Its share of trade dwindling in the Asia Pacific, the United States is scrambling to drum up support from a skeptical public for a regional trade deal that can boost exports and create jobs.
President Barack Obama wants the Trans-Pacific Partnership (TPP) linking the United States with an initial group of seven nations — Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam — to be the engine for a “high-standard, broad-based” regional trade agreement, officials said.
But pushing trade deals in the powerful Congress and among Americans at large is no easy task.
Three free trade pacts that were signed with South Korea, Panama and Colombia under Obama’s predecessor George W. Bush remain in limbo as lawmakers from Obama’s Democratic party attempt to reopen talks for more concessions.
More than one third of Americans feel trade agreements are bad for America, and more than 40 percent believe such pacts have hurt their personal financial situation, according to polls cited by the office of the US Trade Representative (USTR).
Surveys also show that only 13 percent of Americans think trade agreements create jobs, while over half think these pacts lead to job losses.
But with Obama setting a bold goal last week to double US exports over the next five years, an increase that will support two million new jobs in America, his administration is giving a rare push to the TPP deal.
Officials are “beginning an unprecedented 50-state domestic outreach strategy” and holding consultations to “remedy the deep skepticism on trade and to rebuild solid bipartisan support for trade,” said Demetrios Marantis, Obama’s deputy trade representative.
Marantis said negotiations for a TPP agreement with rapidly growing Asia-Pacific economies could be “complex and challenging but this watershed moment in trade policy demands our focus and ambition.
“If we are to set an enduring anchor to the world’s future drivers of economic growth, we must raise the stakes and push the envelope.”
The first round of negotiations for the TPP deal is expected to be in March and experts say more countries could eventually come aboard, including possibly Canada, Japan, Mexico and South Korea, and Malaysia or Indonesia.
“It is the first major proactive initiative that the Obama administration has put forward in the trade front,” Jeff Schott, a senior trade expert at the Washington-based Peterson Institute for International Economics, told AFP.
Although the current partners in the deal are not among the fastest growing economies or do not have sufficiently large economies, the US can still have a long term benefit, Schott and institute head Fred Bergsten said in a report to Obama’s top trade official Ron Kirk last week.
“The US payoff thus depends on extending the TPP to other major economies of the Asia-Pacific region, starting with Canada — and probably Mexico — in the very near future and hopefully adding Japan and South Korea within the next year or two,” they said.
The Asia-Pacific region is a huge market for the United States.
Even given the deteriorating global economy, US goods exports to the region totaled 747 billion dollars in 2008.
But “America faces the daunting prospect of getting locked out of the Asia-Pacific,” Marantis warned, pointing to China’s rapid trade inroads in the region.
Just a month ago, China and the 10 ASEAN member states ushered in the world’s third-largest free-trade area.
In addition, there are already 175 preferential trade agreements in force involving Asia-Pacific countries with an additional 20 agreements awaiting implementation and more than 50 others under negotiation.
Against the backdrop, the US share of trade with the Asia-Pacific has fallen, officials said.
“Our rough estimates suggest that an East Asia Free Trade Area could cost the United States at least 25 billion dollars of annual exports immediately, which translates into about 200,000 high-paying jobs,” Schott said.
“Over time, the discriminatory impact would become much greater as US-based international companies were forced to source more and more of their sales into the rapidly growing Asian markets from their subsidiaries in Asia.”