[A-List] US imperialism: bilateral trade deals

["Michael Keaney" <michael.keaney@xxxxxx>]

Singapore and U.S. Near a Trade Deal
By EDMUND L. ANDREWS
New York Times, November 20 2002

WASHINGTON, Nov. 19 - The United States reached a tentative free-trade
agreement with Singapore today, the first of what the Bush administration
hopes will be a web of similar deals worldwide.

But even after two years of work, and talks that stretched until just before
dawn this morning, the two countries could not reach a final agreement
because of disputes about Singapore's ability to impose capital controls in
a financial crisis.

The new agreement, if completed and approved by Congress, would eliminate
tariffs on about $33 billion in trade between the two countries and would
give American banks and service companies more access to one of Asia's main
financial centers.

It is probably more important as an indicator of the United States' new
strategy in opening up global trade markets.

That strategy increasingly relies on negotiating deals with individual
countries and small regions, in part to build support for more ambitious
projects, like a "free trade agreement for the Americas" and a new global
trade agreement at the World Trade Organization.

In addition to Singapore, the White House hopes to wrap up a free-trade deal
with Chile by the end of the year. It is also starting talks with five
countries in Central America and with Australia, and it is trying to open
talks with other countries in Southeast Asia.

But the United States is actually behind the European Union, which has
already negotiated its own market-opening deals with Chile and several other
countries.

Reaching an agreement with Singapore is easier than with many countries
because it has historically been a free-trade port for imported goods and it
is a high-wage country with a modern service-based economy.

The Bush administration is still wrestling with Chile, eight years after the
United States first proposed a free-trade deal with that country, on how it
will enforce its labor and environmental regulations.

Negotiating a free-trade deal with Australia will face far larger political
obstacles because Australia is one of the United States' biggest rivals in
global agriculture production.

American agriculture remains highly protected by both tariffs and government
subsidies, and farm lobbies have enormous political influence in Washington.

In Singapore, American officials have yet to persuade leaders that they
should forsake the ability to block companies from moving money out of that
island nation in times of financial crisis.

Robert B. Zoellick, the United States trade representative, told reporters
in Singapore today that the two countries had achieved the substance of a
free-trade agreement. Officials from both countries said they hoped to
resolve the last obstacle in the next few weeks.

Mr. Zoellick has sharply accelerated his push for bilateral free-trade deals
since late July, when Congress passed legislation that gives the
administration the authority to negotiate trade deals and then submit them
to Congress for a simple yes-or-no vote without changes or amendments.

Mr. Zoellick's strategy is based on what he calls "competitive
liberalization," the idea that a bilateral trade agreement with one country
puts pressure on others to seek their own deals with the United States.

Immediately after he finished talks in Singapore, Mr. Zoellick flew to a
meeting in Manila today of economic ministers from Southeast Asian nations,
including the Philippines, Indonesia, Malaysia and Thailand.

"I firmly believe that a process of competitive liberalization will enhance
our ability" to negotiate broader market-opening agreements, Mr. Zoellick
told reporters in Singapore today.

Because Singapore has always been a free port for most imported goods, the
agreement would not affect American exports of products. The main effect for
American companies is in opening markets for services, like banking and
investment management, legal services, engineering, and architecture.

Just today, in a nod to the proposed agreement, the Monetary Authority of
Singapore said it would gradually lift its restrictions on licenses for
American banks, allowing them to offer a full range of services and expand
their networks of branches and automated teller machines.

The agreement would also expand the ability of foreign law firms, most of
which are prohibited from practicing local law, to operate in Singapore.

Singapore would be freed from tariffs on exports to the United States. One
of its biggest benefits would be to get tariff-free treatment for products
whose components are largely produced on two nearby islands in Indonesia,
where wages are much lower.

Negotiators from both countries said they hoped to resolve the issue of
capital controls quickly, clearing the way for a final deal.

But Mr. Zoellick apparently did not break down Singapore's resistance on
another issue: its longtime ban on chewing gum, a prohibition ordered to
keep the nation's streets and sidewalks cleaner.