Tuesday, March 24, 2009

Countries Pursuing FTAs as Part of Economic Recovery Effort

Countries Pursuing FTAs as Part of Economic Recovery Effort
(World Trade Interactive)

Even as concerns continue to mount that the global economic downturn will spawn a rash of protectionist measures, some countries are heading the other direction. Press reports this week indicate that free trade agreements are continuing to move forward around the globe, driven by the conviction that expanding trade will help economic recovery efforts rather than hinder them.

Chile and India have agreed to begin talks on a bilateral FTA, although it is unclear when those negotiations are expected to begin. According to press reports, the FTA would build on a preferential trade agreement the two countries implemented in 2007 under which 98% of Chilean exports to India and 91% of Indian exports to Chile are granted duty preferences. According to International Trade Daily, the FTA will cover “trade in goods, services, and investment as well as more ambitious cuts in tariffs on a larger list of goods.”

Chile already has dozens of FTAs in place, and President Michelle Bachelet said now is not the time to forsake that approach. “The way out of the [global economic] crisis is not via protectionist measures,” a Reuters article quoted her as saying. “We have a chance to show with India that the key to maintaining output in the real sector lies in encouraging free flows of goods rather than restricting them.”

Korea and Peru launched FTA talks in Seoul March 16. According to China’s Xinhua news service, the pact is expected to cover goods, services, investment, e-commerce, telecommunication and intellectual property. Korea is also close to wrapping up FTA talks with the European Union and recently agreed to pursue FTAs with Australia and New Zealand.

The Journal of Commerce reports that Japan and Peru will meet next week to discuss the possibility of a bilateral FTA. The proposed deal “would eliminate import tariffs on almost all products traded between the two countries,” the article said. Two-way trade is currently skewed in favor of Peru, which shipped over $2 billion worth of commodities to Japan in 2007.

Guatemala, Panama, Colombia.
According to Guatemala News, Guatemala has concluded FTA negotiations with Panama and Colombia. The Panama agreement is expected to take effect June 30, while the Colombia pact must first be approved by that country’s Constitutional Court.

Commentary: This list makes it appear that whatever the Koreans are doing wrong regarding FTAs must be measured compared to whatever they are doing right. Who is the stick in the mud over the Canada-Korea FTA? It appears Korea is square-dancing with a number of other partners? Which might indicate negotiations in good faith?

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