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USAPC Congressional Study Group (CSG): February 4, 2008

Mr. Murray Hiebert, U.S. Chamber of Commerce, discusses U.S. trade in Southeast Asia on February 4, 2008.

New U.S. Trade Strategies in Southeast Asia

(WASHINGTON, DC) February 4, 2008 – The United States will join negotiations on investment and financial services next month among Singapore, Chile, New Zealand, and Brunei, also known as the P-4 group, and also will explore whether to participate in their comprehensive Free Trade Agreement (FTA), the Trans-Pacific Strategic Economic Partnership. Ms. Barbara Weisel, Assistant U.S. Trade Representative (USTR) for Southeast Asia and the Pacific, and Mr. Murray Hiebert, Senior Director for Southeast Asia at the U.S. Chamber of Commerce, elaborated on the announcement at a luncheon sponsored by the U.S. Asia Pacific Council of the East-West Center.

The P-4 Agreement went into force in 2006, except for the investment and financial services chapters, and is a high-standard agreement based largely on the U.S. bilateral FTAs with Singapore and Chile. It was intended to serve as a pathway to broader Asia-Pacific trade integration. With the proliferation of bilateral and regional FTAs in the region, the United States sees this initiative as a potentially useful means of deepening U.S. engagement in the Asia-Pacific region and participating in developing the emerging regional trade architecture.

Mr. Hiebert provided insight from the private sector. He said that businesses are largely supportive of the pending free trade agreements in Southeast Asia, including the U.S. decision to join the P-4 talks. The region has become increasingly attractive to American business, serving as a counterweight and alternative manufacturing base to China as economies in the region develop quickly. Many multinational businesses have also taken a strong interest in trade agreements, including the proposal for a Free Trade Agreement of Asia Pacific (FTAAP), hoping to promote the free flow of goods, services, and investment and harmonize the array of conflicting rules and standards that currently exist in the region.

The United States also is actively engaged in other efforts to further strengthen its trade relations with Southeast Asian countries, Ms. Weisel said. The signing of the U.S.-Vietnam Trade and Investment Framework Agreement (TIFA) last summer created an important platform from which to support Vietnam’s implementation of its WTO accession commitments and to deepen bilateral ties between the two countries. Weisel said the United States also made solid progress at the January round of FTA negotiations with Malaysia, although progress on sensitive issues is likely to be put off until after Malaysian elections, widely expected to be held in the next couple of months. It also is hoping to reengage shortly with Thailand’s newly-elected government, and will evaluate political developments over the coming months to determine appropriate next steps for deepening the relationship. Weisel noted that the United States continues to seek to further enhance trade and investment relations with both Indonesia and the Philippines and hopes to launch new bilateral initiatives with each of these countries in the coming year. The United States is supporting Laos’ WTO accession efforts, which are progressing slowly. Finally, the United States also is working to support ASEAN integration through its U.S.-ASEAN TIFA, including projects aimed at trade facilitation and harmonization of standards.

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