9 September 2008

Baucus Calls for Change in U.S. Trade Policy, Agreements with Asian Nations

This article is excerpted from the 9 September 2008 edition of “WorldTrade Interactive”.

Ahead of elections this November that could put Democrats in control of both Congress and the White House, Senate Finance Committee Chairman Max Baucus, D-Mont., used a Sept. 5 speech in Seattle to give a preview of what U.S. trade policy toward Asia could look like in the coming months and years. ... Baucus said the U.S. should refocus its trade policy on four principles and take a number of specific actions in response to the economic, political and social changes that are affecting this region.

Trade Principles. Asserting that “it is time to get back to basics,” Baucus said the U.S. must reaffirm the following fundamental principles.

• International rules help stabilize the global economy....
• Open market economies create jobs and increase prosperity for everyone.
• Good economic policy makes good foreign policy, and foreign policy must not dictate economic policy.
• The world’s more prosperous countries are morally obligated to help those less fortunate.

Recommended Actions. ...

• A trade policy should be developed for the Asia-Pacific region as a whole, not just China. A reinvigorated APEC, one with a clear mission to expand trade between member economies, can set an example for the World Trade Organization and other trade forums. Likewise, the U.S. must ramp up its engagement with other regional groupings, particularly the Association of Southeast Asian Nations.

• The U.S. should think outside its free trade agreement “box” when considering new economic engagement with Asia-Pacific countries.

Examples include an FTA in services with Japan and combining existing FTAs with Chile, Singapore, Australia and Korea and opening the resulting regional agreement to countries like Malaysia, New Zealand, Taiwan and Vietnam. Other measures could include “taking small steps” on issues like transparency with the Philippines and dialogue with Thailand.

• Tariffs on products from the region’s poorest countries, including Cambodia, should be lowered....

• Natural resources should be protected through a sectoral agreement (in APEC, the WTO or elsewhere) on trade in environmentally-friendly goods and services.