US Chamber of Commerce predicts Pacific trade pact ready next year
By Matthew Pennington ,AP Sunday, July 15, 2012, 12:03 am TWN
WASHINGTON -- The head of the U.S. Chamber of Commerce said Friday he is hopeful a major trans-Pacific trade pact will be completed in 2013, but not this year as originally planned.
The chamber's president, Thomas Donohue, was speaking ahead of a trip to promote commercial ties in East Asia, where he will be urging Japan to be willing to open its markets and join the Trans-Pacific Partnership (TPP).
The United States and eight other Pacific Rim nations are negotiating what is one of the most ambitious trade pacts in decades, a key plank of U.S. efforts to boost its exports into Asia.
Canada and Mexico are due to enter the negotiations later this year, joining U.S., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Japan, the world's third-largest economy, last year expressed interest in joining, but it's unclear if Prime Minister Yoshihiko Noda has sufficient domestic support for the move.
The pact will slash import tariffs on a wide range of goods and services, and aims at improving intellectual property protection and reducing regulatory barriers. Japan would be under particular pressure to open up its heavily protected farming sector.
"I don't think the desire of the original participants (in the trade pact) to wrap this thing up in the next four to five months is practical," Donohue told The Associated Press, citing the upcoming U.S. presidential election and the looming year-end deadline for a deficit-reduction agreement.
But he said it could be done by summer 2013, which would give Japan more time to get on board.
Donohue begins his trip in South Korea, to discuss the implementation of a landmark trade agreement with the U.S., before traveling to China, where the chamber is due to meet Premier Wen Jiabao and his likely successor, Li Keqiang, and hold informal talks with business leaders and former government officials.
The chamber, America's largest business advocacy group, is sponsoring a conference in Beijing to attract more Chinese investment to the U.S. The chamber is flagging the experiences of successful Chinese investors — and hinting that American companies facing barriers in China's markets should enjoy comparable access.
China is a major U.S. trading partner and its largest foreign creditor, but Chinese direct investment into the U.S. remains comparatively small, although May saw the biggest takeover of a U.S. company by a Chinese one to date, with Dalian Wanda Group Co. planned purchase of movie chain AMC Entertainment Holdings for US$2.6 billion.
Donohue partly attributed the relatively low level of Chinese investment to suspicion of the U.S. screening process, which has seen some deals rejected on national security grounds. Also, both Republicans and Democrats in Congress have voiced concern over Chinese technology firms like Huawei Technologies Ltd. and ZTE Corp. operating in the U.S.
Donohue said the chamber has sought to allay Chinese concerns and show that security screening has affected only a few investors.
"If they want to buy Lockheed Martin or Boeing, it ain't happening, and they know that. Everyone knows that," Donohue said, adding there are, however, some 16,000 thousand public companies that Chinese could invest in.
He likened American worries over the impact of potential Chinese investment with those directed at Japan during its boom in the 1980s — when many here also feared the economy could be eclipsed by an emerging Asian rival.
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