U.S. tries to narrow EU advantage in free trade agreements
The United States is working hard to implement more free-trade agreements to benefit U.S. companies, but is still far behind the European Union in using this method to open up markets, a U.S. trade official said Monday.
The European Union has at least 35 free-trade agreements in place. When the Bush administration came to office the only free-trade agreements ratified or negotiated were the North American Free Trade Agreement with Mexico and Canada, and bilateral agreements with Israel and Jordan. Since then the administration has completed free-trade agreements with Chile, Singapore, Australia, and signed a Central American Free Trade Agreement with five countries that will probably also include the Dominican Republic. The Office of the U.S. Trade Representative has begun negotiations with Colombia, Peru and Ecuador on an Andean Free Trade Agreement, as well as with Qatar, Thailand and is working on a hemispheric Free Trade Agreement of the Americas.
The United States is trying to catch up to the EU “to make sure U.S. companies have an opportunity to get their products in those markets,” said Gregory Walters, director of small business affairs.
Speaking at the National Industrial Transportation League’s seminar on “Free Trade and Logistics,” Walters said a big reason for the disparity is that the United States seeks agreements that are broader in scope than those pursued by the EU.
The EU’s approach is strictly to gain market access for its exporters. The United States takes a more comprehensive approach to include labor and environmental standards, protection of intellectual property rights, and provisions on investment, distribution and services. The United States, for example, is the largest provider of service and the USTR is trying to eliminate trade barriers for this sector too. The United States also includes agriculture in its agreements, while the EU until recently mostly focused on manufacturing because of its own agricultural subsidies.
These types of agreements take longer to negotiate, but are necessary “so U.S. businesses can operate on a level playing field because a U.S. company has certain regulatory costs here” that do not exist in other countries, Walters said.