Ways to Expand Trade Agreements Without Comprehensive FTAs Discussed
Trade advocates and a trade scholar discussed how effective U.S.-Asia sectoral agreements could be, as well as the possible downsides of such agreements, during an Asia Society Policy Institute webinar Jan. 26. The Japan mini-deal was not exactly a sectoral deal because it lowered tariffs on a variety of products across different categories, but the agreement's digital trade plank is one that negotiators could consider as a template for a digital trade accord across more Asian countries.
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Jake Colvin, National Foreign Trade Council vice president for global trade, said that while the digital trade chapter that's part of the Japan-U.S. mini-deal is good, it doesn't really address the e-commerce barriers because it doesn't include customs and trade facilitation. That's what would really help micro and small companies that sell online, he said.
John Murphy, U.S. Chamber of Commerce senior vice president for international policy, praised what's in the Japan deal, but added that “mini deals have serious downsides because they undermine the case for an eventual broader agreement.”
Moderator Wendy Cutler, the Asia Society's vice president, asked the panelists if a plurilateral agreement to lower tariffs on medical supplies would be a good target. Murphy said there's some logic there, but shortages in masks, gowns and gloves were as much or more about a demand surge than about import or export barriers.
Sarah Stewart, a former deputy assistant U.S. trade representative for environment, discussed how to get countries to agree to more ambitious environmental standards in trade, and expressed hope that the Paris climate agreement would be added to USMCA.
Murphy cited “tension between harnessing trade as an engine of growth or recovery and conditionality of trade.” Other countries would not be able to be pushed as much as Mexico was, he cautioned, because Mexico is far more dependent on exports to the U.S. than, say, Vietnam or India is.
The Generalized System of Preferences benefits program is “another example of that,” Murphy said, referring to Democrats' interest in adding human rights and environmental standards to the eligibility rules. He asked if countries are really going to rewrite their laws for a program that adds up to only $25 billion a year in exports across all countries that participate in it. “There is such a thing as potential overreach in these areas,” he said.