Trade is like a bicycle – it needs forward momentum to avoid falling over.
Last March, President Obama issued his 2014 U.S. Trade Agenda, which outlined ambitious priorities for expanding American trade and investment around the world, in support of expanded job growth and enhanced U.S. competitiveness. Part of the trade agenda’s ambition lay in an “all of the above” approach – that is, the United States would move forward on major bilateral, plurilateral and multilateral efforts to expand cross-border commerce, while securing bipartisan support for renewed Trade Promotion Authority (TPA) in Congress. We at USCIB applauded loudly and set about drumming up private-sector support.
More than six months on, while some progress has been made, I fear that we face a number of disappointments, potential setbacks and stiff challenges that have served to undercut the administration’s ambitions and the broader cause of expanded trade. Consider these developments:
- In July, a small group of countries led by India blocked implementation of the World Trade Organization’s Trade Facilitation Agreement, which was agreed last December at the WTO ministerial in Bali. This has sent the organization into yet another crisis, putting the brakes on the WTO’s whole post-Bali agenda.
- Unfounded anxiety, some might say hysteria, has sprung up in Europe over certain aspects of the Transatlantic Trade and Investment Partnership (TTIP), such as the same strong investor-state dispute settlement provisions that already exist in numerous U.S. and European commercial agreements. The hysteria is threatening to upend these crucial negotiations, and could complicate efforts to negotiate a U.S.-China bilateral investment treaty.
- Several countries, including the United States, are threatening to carve out certain sensitive areas from liberalization commitments under the Trans-Pacific Partnership (TPP), as well as in the TTIP negotiations.
- TPA legislation remains stalled on Capitol Hill, captive to Washington’s increasingly polarized, partisan divide.
All this is deeply disappointing. Expanding trade and investment is essential for economic growth and job creation. Indeed, the International Chamber of Commerce (ICC) and the Peterson Institute for International Economics estimate that the trade facilitation agreement alone would create 21 million new jobs worldwide. More broadly, it is increasingly clear that freeing up cross-border trade and improving conditions for FDI must be part of critical global efforts to address climate change and promote sustainable development.
After investing so much time and effort to champion the pro-trade consensus that now seems to be fraying, we in the business community have every right to be frustrated. Yet we must try to help our political leaders around the world pick up the pieces and get back to the negotiating table in Geneva, summon the courage to stand up for an ambitious approach to the TPP and TTIP negotiations, and move forward – after lengthy delays – on Trade Promotion Authority.
With that in mind, in October I joined USCIB (and ICC) Chairman Terry McGraw and ICC Secretary General John Danilovich in Geneva at the World Investment Summit. Convened by the UN Conference on Trade and Development, the summit was an important opportunity to look at how FDI can be leveraged for sustainable development, economic growth and jobs. In addition, both John and Terry have spearheaded an aggressive global campaign to help get the WTO back on track.
As this issue of International Business went to press, we joined with the OECD and its Business and Industry Advisory Committee (BIAC) to organize a high-level conference in Washington, D.C. on new directions in trade and investment policy. The October 30 event showcased groundbreaking policy-related research from OECD on the rise of global value chains, trade in services and other aspects of the 21st-century global economy. We hope that the fresh ideas and new perspectives offered at the conference will help demonstrate the importance of moving forward to tackle today’s most pressing trade and investment barriers.
USCIB continues to play a leadership role pressing for strong, market-opening commitments in TPP and TTIP. We are also working closely with a broad-based business coalition to move forward on TPA. The old saying still holds: trade is like a bicycle – it needs forward momentum to avoid falling over. That is why it is more important than ever for business around the world to keep up the pressure on our political leaders to implement the Bali package, strive for ambitious, high-standards agreements with Asia and Europe, push ahead to negotiate a high-standard U.S.-China bilateral investment treaty, and get off the dime to pass meaningful Trade Promotion Authority.
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