U.S., ASEAN Sign Trade and Investment Framework Agreement

By Susan Krause
Washington File Staff Writer

Washington - The United States and the member countries of the Association of Southeast Asian Nations (ASEAN) have signed a trade and investment framework agreement (TIFA), which is expected to facilitate market access and promote trade in key areas such as agriculture and pharmaceuticals. 

U.S. Trade Representative (USTR) Susan Schwab announced the cooperative arrangement from the Malaysian capital Kuala Lumpur, where she is attending ASEAN's 38th Economic Ministers' Meeting.  (See related article.) 

In a statement released August 25, Schwab said economic and geopolitical relations with the ASEAN region are a high priority for the United States.

"The U.S.-ASEAN TIFA signed today reflects our commitment to establishing the architecture that will facilitate an even more vigorous U.S. economic engagement in the ASEAN region," she said.  "The TIFA will be a platform to intensify our trade and investment relations with the ASEAN region, which collectively constitutes our fourth largest trading partner and represents one of the most rapidly growing and dynamic economies in the world." 

The 10 member countries of ASEAN are Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The framework agreement provides for the establishment of a ministerial-level dialogue that will address areas of mutual concern, improve coordination on regional and multilateral trade issues and establish a course of action for building trade and investment relations.

Initially, the participating countries will concentrate on three projects, the USTR's office said.

One initiative would establish an "ASEAN Single Window," which would facilitate trade within the region and between the United States and ASEAN countries by implementing a common system for entry of goods. 

A second priority is the development of a framework agreement on sanitary and phytosanitary (plant health) issues - health and food safety regulations that are essential to agricultural trade.

The third project would be an effort to coordinate standards for pharmaceutical registration and approval, accelerating the delivery of medical innovations in the ASEAN region.

The TIFA is expected to help pave the way for the two sides to negotiate a full-fledged regional free trade agreement.


The economic ministers discussed concerns about the breakdown of the World Trade Organization (WTO) Doha Round of negotiations and agreed to work together to restart the multilateral trade talks.  (See related article.)

"I welcome the strong message from my ASEAN counterparts affirming their commitment to work for a breakthrough in the agriculture and non-agriculture market access negotiations, so we can put the Doha Round back on track before the end of this year," Schwab said.   

In a joint press conference with Malaysian Minister of Trade Rafidah Aziz following the talks, the USTR said the United States is committed to do "everything possible" to realize the developmental goals of the Doha negotiations.

"The most important thing that we can do to contribute to global economic development and the alleviation of poverty is to generate more global trade," she said.  "One percentage point increase in global trade will be so much more significant as a poverty-alleviating tool than any formal foreign aid program."

The ministers also agreed to continue their support for the accession of Vietnam and Laos to the WTO. 

Asked whether the United States would use the TIFA to raise specific issues with the military regime in Burma, Schwab said the agreement would not change U.S. concerns about human rights issues in that country.  (See U.S. Support for Democracy in Burma.)


According to statistics provided by the USTR's office, two-way trade between the United States and the ASEAN countries amounted to $149 billion in 2005, a 9 percent increase over the previous year and an increase of some 75 percent over the last decade.  U.S. foreign direct investment in the region was almost $80 billion in 2004, an increase of 13 percent over the previous year.

The United States has different levels of engagement with individual countries in the region.  It signed a bilateral free trade agreement (FTA) with Singapore in 2003.  In addition, it currently is negotiating bilateral FTAs with Malaysia and with Thailand.  The United States has completed TIFAs with Indonesia, the Philippines, Brunei and Cambodia.  In late May, the United States completed a bilateral market access agreement with Vietnam, paving the way for that nation to enter the WTO.  (See related article.)

For more information, see Trade and Economics.

The text of Schwab's statement and a joint media statement released by the ministers are available on the USTR Web site.