After yet another failed attempt to forge a multilateral deal on global trade issues at July's WTO meeting, the United States was quick to take actions to protect its trade welfare. Seeing that time is a crucial factor, the US government grabbed the immediate weeks post-July fiasco to secure trade stability with the whole of Asia. The US government practically used the whole month of August to forge win-win deals with its Asian trade partners. Keen on targeting the bull's eye, negotiations with global trade giant China is a top priority. Earlier on, a deal with ASEAN and a vital Memorandum of Understanding with the Philippine government were signed.
Since compromise among collective economies proves too elusive as of the moment, US sent trade envoy Susan Schwab to do one-to-one talks with Asian economies. Schwab's first mission is to start negotiations with China on matters of agricultural and manufacturing trade. Schwab is scheduled to have a number of talks with her Chinese counterparts, Minister of Commerce Bo Xilia and other Chinese global trade experts, in the hope of establishing a bilateral agreement between the two economic giants. Schwab's visit to China was for two vital agenda: to widen trade liberalization and the trade surplus dispute.
The main glitch of the WTO talks is the failure of first world countries and developing countries to arrive at a concession on how to liberalize global trade. First-world countries like the US and EU demand that developing countries open up their economic doors wider than their current latitude. First-world economies want lesser barriers for manufactured goods and drastic reforms in agriculture sector. In turn, developing countries demand first-world economies to cut their agricultural subsidies and reduce tariff rates imposed on imported goods entering first world markets. The gridlock comes from the question of who should take the first move. Both parties appear to be not having enough willingness to take the first step. The first-world block cannot even agree on themselves on how much compromise are they willing to make, making the other block hesitant and doubtful of the first worlds’ sincerity.
Schwab's first agenda in China is to establish wider US-China market openness. US recognizes the great potential of China's booming economy on making great turns in the global trade. China's economic policies can spell a big difference on how American and European economies will perform. Schwab's visit is geared on establishing constructive engagement so China will take interests of the global trade as a prime consideration in its economic policies. Schwab's second agenda is to settle trade surplus issues that has been upsetting the US market.
Earlier on, in August 25, Schwab joined the economic heads of ASEAN in signing the US-ASEAN Trade and Investment Framework Arrangement (TIFA). The TIFA is an accord which further solidifies the steadfast trade relationship between ASEAN members and the US. Through FTA, direct investment from the US is expected to get even higher than the previous years’ multi-billion amount. With FTA, multilateral comprehensive dialogues will be easier to undertake and progressive results are more likely to materialize. For the side of US, the FTA is aspired to lead both parties in constructively engaging in measures to further deepen their agricultural and manufacturing relations, something important for both parties’ global trade welfare. A wider, more productive market access is the main goal of the FTA.
Two days prior to FTA signing, August 23, Schwab signed an important Memorandum of Understanding (MOU) with Philippine's Trade and Industry Secretary Peter Favila on strengthening their trade relationship. Intellectual property agreements, direct investments, and global trade matters are the main points of the signed MOU. Schwab is still scheduled to visit other Asian countries like Thailand and Singapore in hopes of securing more trade deals. Asia, being one of US's biggest global trade partner, is a crucial market for US economy.
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