Asian Nations Priority Trade Partners for U.S., Official Says

By Susan Krause
Washington File Staff Writer

Washington - Where economic issues are concerned, the United States gives more attention to Asia than to any other region in the world, says Deputy U.S. Trade Representative (USTR) Karan Bhatia. 

Addressing the Asia-Pacific Council of American Chambers of Commerce March 16 in Manila, the Philippines, Bhatia said trade relationships between the United States and Asian nations are strong and growing.

Trade in U.S. goods with South and East Asia currently accounts for one-third of total U.S. trade, up almost 70 percent over the past 10 years, he said, adding that U.S. investment in the region "has more than tripled in that time frame."

Those trade relationships are built more on shared beliefs than on ties of geography, language or history, Bhatia asserted.

"With many Asian countries, we share a common understanding that we live in a competitive, dynamic world in which people, capital, goods and ideas generally should be allowed to move quickly to find their best and highest use," the trade official said. 

The shared understanding extends to the view that successful competition requires government policies that promote innovation, support the rule of law and encourage stable economic growth, he added.

"This common vision - and the growing flows of goods and investment that it is generating - underlie a U.S. conviction … that we will have no more important and potentially valuable set of economic relationships in the 21st century than those we have with Asia," Bhatia said.

Bhatia said the United States is engaged closely with its Asian trading partners in a variety of negotiations and cooperative initiatives to increase trade and investment, and also works to liberalize trade through regional entities such as the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) forum.  (See Asia-Pacific Economic Cooperation.)


But such efforts to strengthen and deepen trade relations with Asian partners face significant challenges, he said.

Negotiations for "meaningful, high-quality" free-trade agreements (FTAs) are difficult and complex, and often require political courage on both sides, Bhatia said, adding that modern diversified economies have concerns that reach far beyond tariff rates.

"The standard for FTAs that our Congress has established is a demanding one," he said.  "[S]ome might be tempted to lower their standards.  We won't."

Another problem, according to Bhatia, is growing protectionist sentiment, both in Asia and in the United States.

"As evidenced in some of the recent public discussion in the United States on the issue of foreign investment, political support for free trade is weaker than it has been in many years," he said.  "In a way we have not seen for years, economic isolationists on both ends of the political spectrum are reasserting themselves."  (See related article.)

The United States has benefited greatly from trade liberalization, he said, citing "unassailable evidence" that trade has contributed to the creation of jobs, stimulated innovation and given consumers lower costs and more choices.

The Bush administration is working to discourage protectionism and to affirm the benefits of free trade, Bhatia said, urging business leaders to help spread that message.

A third challenge comes from interests on both sides of the Pacific that seek to block U.S. engagement in Asia, Bhatia said.  He said former Secretary of State James Baker had been concerned about the emergence of a Pacific trading bloc that would exclude the United States and "urged the nations on both sides of the ocean not to draw a line down the middle."

"We are fortunate that his warning was heeded and that, instead, Pacific Rim nations have forged commercial ties with each other that have helped to drive unprecedented economic growth and political reform," he said. 

The risk of division has not disappeared, however, Bhatia said, noting that some interests both in the United States and in Asia would prefer that U.S. resources and energies be directed elsewhere.  That view "must be vigorously resisted," Bhatia said.

"The United States has played a constructive role in the development of the Asia we see today, and Asia has played a constructive role in the development of the United States," he said.  "We must safeguard that relationship, and work vigorously to create even stronger commercial and political ties in years to come."

The full text (PDF, 7 pages) of Bhatia's remarks, as prepared for delivery, is available on the USTR Web site. 

For additional information on U.S. policy, see East Asia and the Pacific and Trade and Economics.