As president, Mitt Romney would seek to form a hemispheric trade zone with Latin American countries, his top adviser on trade policy said, reprising a similar plan that stalled seven years ago.
“The first thing we’d like to do is stitch up the agreements we have” with Central and South American nations, former Commerce Secretary Carlos Gutierrez, who is now advising the Romney campaign, said yesterday during an interview in Washington. It’s “an effort to make the hemisphere more globally competitive.”
Romney, the presumptive Republican presidential nominee, and President Barack Obama have talked about boosting exports and increasing enforcement of international trade rules during a political season in which job creation is a top priority. The Obama administration and officials from eight other nations are negotiating the Trans-Pacific Partnership, a trade pact that will probably include Mexico and Canada by the end of the year.
Romney’s trade policy “will probably be focused primarily, but not exclusively, on Latin America” and the Western Hemisphere, Gutierrez said. “We also need to be very aggressive in Asia,” including completing the Pacific trade accord and establishing new free-trade agreements in the region.
Efforts to create a Free Trade Area of the Americas, which would have included 34 nations within the Western Hemisphere, stalled in 2005 after opposition from Argentina, Brazil, Paraguay, Uruguay and Venezuela, according to the Congressional Research Service.
Romney’s plan for a free-trade region in the hemisphere would be different because it would build upon trade pacts the U.S. already has in place, said Gutierrez, who led the Commerce Department under President George W. Bush from 2005 to 2009.
Ten of the 19 existing U.S. free-trade deals are with countries in the Western Hemisphere, according to the U.S. Trade Representative’s office. Congress last year approved agreements with Colombia, Panama and South Korea, which were negotiated by Bush’s administration and revised by Obama.
“There is a trend toward regionalization” globally, including China’s efforts to forge trade pacts in Asia and possibly use the renminbi as the default currency, said Gutierrez, who’s now vice chairman of the institutional clients group at Citigroup Inc. (C:US)
“We need to get it right first where we have geographic proximity,” he said.
Gutierrez said that the Obama administration hasn’t been active enough in completing trade deals, and that trade accords signed by the president were inherited from the Bush administration.
A spokesman for Obama’s re-election campaign disputed that characterization of the president’s record.
“President Obama has signed into law new trade agreements with Colombia and Panama, took steps to negotiate a Trans- Pacific Partnership that includes Latin American countries like Peru, Chile and Mexico, and worked to eliminate trade barriers with Latin America,” Adam Fetcher said in an e-mailed statement. “Latin American leaders have praised the President’s leadership on trade issues while exports of goods to Latin America have gone up over 50 percent since 2009.”
A regional accord would make shipping within the hemisphere easier and would increase productivity, according to Gutierrez. It wouldn’t call for the use of a common currency, he said.
“It will take a lot of work,” he said. Countries such as Honduras and Chile, which have free-trade pacts in place with the U.S., would also need to agree to reduce trade barriers among themselves, he said.
“Conceptually, it’s a good idea,” Eric Farnsworth, vice president of the Council of the Americas in Washington, said of the Romney proposal. “It would certainly be more meaningful with Brazil,” the largest economy in South America, he said in a phone interview.
Potential hurdles to completing an umbrella trade pact for the hemisphere include finding agreement on disputes over agricultural policy and rules of origin for products, according to Farnsworth.
“There is a fairly technical process here,” he said. Political opposition to such a regional agreement among countries with bilateral trade deals with with U.S. would probably be limited because those pacts are already in place, he said.
Gutierrez said it’s not clear whether enough common ground exists between the U.S. and Brazil to establish a free-trade agreement.
Argentina, Ecuador, Bolivia and Venezuela are among countries that wouldn’t be included in a regional trade zone consisting of countries that have existing accords with the U.S. Relations between the U.S. and Ecuador have been strained by the South American nation’s ties with Iran and its granting of asylum to WikiLeaks’ founder Julian Assange.
The U.S. yesterday filed a complaint against Argentina at the World Trade Organization, alleging that the country discriminates between imported and domestic products.
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