October 27, 2014
The Arizona Republic
Russ Wiles

Twenty years after NAFTA, free-trade proponents are setting their sights on two potential pacts that they contend could boost global economic growth, increase jobs and lower costs for consumers.

Both the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership still are being negotiated and, even if finalized, would still face an uncertain ratification fate in the U.S. and other nations. But speakers at a luncheon meeting Monday in Phoenix held high hopes that the trade deals would get done.

The Pacific-regional trade agreement, in particular, represents an excellent opportunity to "move the world out of the economic doldrums," said Rep. Matt Salmon, R-Ariz., , one of the speakers at the International State of the State meeting hosted by the Phoenix Committee on Foreign Relations, attended by about 250 people. "These kinds of free-trade agreements drive the costs of products down, which benefits every Arizonan and Americans in general," he said.

Tami Overby, a senior Asia specialist with the U.S. Chamber of Commerce, said American negotiators in particular "are going after non-tarriff barriers" that make it harder for U.S. companies to compete. As one example, she cited requirements in some Asian nations that businesses must store data in those countries rather than use lower-cost options elsewhere. As another example, she cited the preponderance of state-owned companies in Vietnam that receive low-cost loans and market protection.

"Our markets are already open," Overby said. "We want to open their markets to American products."

Salmon said intellectual-property safeguards are another focus of the Pacific-region discussions.

Negotiations on the Transatlantic pact, by contrast, are largely focused on cutting through red tape and other product regulations that drive up costs for consumers in the U.S. and Europe. Salmon cited vehicles and pharmaceuticals as examples of industries in which both Americans and Europeans make safe, effective products but must submit to double layers of regulatory scrutiny.

Chris O'Connor, the British consul general in Los Angeles, predicted the Transatlantic pact would create jobs both in the U.S. and Europe. Bilateral trade between the U.S. and Britain, for example, is currently about $200 billion a year and could expand if the pact is ratified. "We see it as a real potential boost to our economy and the U.S. economy," he said.

Trade pacts including the North American Free Trade Agreement, which took effect 20 years ago, cause disruptions that hurt some companies and industries. The Phoenix talk, in front of a mostly pro-business audience, didn't touch much on job losses, for example. But if the agreements get ratified, Overby said she would expect legislation to be introduced in Congress with the aim of providing some relief to suffering industries. That happened following free-trade deals a few years ago with South Korea, Panama and Colombia, she said.

Regardless of the fate of the trade deals, Salmon said Arizona enjoys "nothing but upside" when it comes to increased international trade. Arizona is primed to benefit from what Salmon sees as a "renaissance" of Mexican manufacturing, along with increased energy production and reforms in telecommunications and other industries. He also said Arizona has the potential to build broader, deeper trading ties with nations other than Mexico and Canada, its two key partners.

Trade pacts in the works

Two proposed global trade agreements dominated discussion of the International State of the State meeting of the Phoenix Committee on Foreign Relations.

  • Trans Pacific Partnership. This trade proposal is being negotiated among the U.S. and 11 other nations on both sides of the Pacific, including Australia, Canada, Chile, Japan, Mexico and Malaysia but not China. It could open new market access for American goods and services, enforce various labor standards and require global commitments on environmental standards.
  • Transatlantic Trade and Investment Partnership. This pact is being negotiated between the U.S. and the European Union. It would provide greater compatability and transparency on trade and investment regulation, while upholding high health, safety and environmental standards. Cutting through regulatory red tape is a primary goal.

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