The US has agreed to join Singapore, New Zealand, Chile and Brunei in a free-trade agreement that could set the pace for a broader Asia-Pacific free-trade area, officials said.
US Trade Representative Susan Schwab was expected to announce Washington’s decision to participate in the “Comprehensive Trans-Pacific Strategic Economic Partnership Agreement” at a meeting yesterday with ministers from the four countries on the sidelines of the UN General Assembly, the officials said.
“I can confirm that the US will join,” a US official said.
The agreement, the first trade pact involving a group of Pacific Rim countries, was signed between Singapore, Chile and New Zealand in 2005 before Brunei joined it a year later. It was commonly known as the “P4” group with a broad objective to tear down trade barriers among participants within a decade, officials said.
The US decision to join the agreement will give impetus to a long-term initiative within the 21-member APEC to forge a Free Trade Agreement of the Asia Pacific, officials said.
APEC, comprising such countries as the US, China, Russia, Chile, Japan, Canada, Australia and key Southeast Asian economies, account for nearly half of world trade.
Schwab was to announce yesterday the “launch of negotiations” for the US to join the P4 agreement, one Asia-Pacific diplomat involved in the talks said.
Washington in March decided to hold talks with the P4 on freeing up just investment and financial services.
“The terms of the US accession to the broad agreement is to be discussed later among the five parties,” the diplomat said. “The investment and financial services talks will be folded into the larger agreement.”
The P4 group has a “benchmark matched by few preferential trade agreements,” New Zealand Trade Minister Phil Goff said during a recent Washington visit.
With many APEC members seeing the prospect of a Asia Pacific free-trade area as a long term goal, Goff said “the alternative is to create a bottom-up process where like-minded countries agree to come together to liberalize trade between them at a much faster rate.”
New Zealand, which has concluded free trade agreements with Singapore, Thailand, Brunei and Chile, is the first OECD country to commence free trade negotiations with China.
The US has numerous bilateral free trade agreements, including with Singapore and Chile, but not with New Zealand or Brunei. But its latest free-trade pacts signed with South Korea, Columbia and Panama have not been ratified by the Democratic-led Congress, as US President George W. Bush’s administration nears the end of its term.
On the sidelines of the UN meeting tomorrow, Bush will hold talks on free trade with leaders of several countries in the Western hemisphere. Last year, the US exported a record US$1.6 trillion in goods and services to countries around the world and in the past four quarters trade has accounted for more than half of the growth in the US economy, the White House said at the weekend.
For the first half of this year, the US exported US$926 billion in goods and services, 18 percent higher than the same period last year, it said.
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