Wednesday, September 11, 2013

Summary: The Pacific Trade Agenda-Implications for the Western Hemisphere

By Melanie Kaplan

How can the Trans-Pacific Partnership and the Pacific Alliance boost Asian trade with Latin America? Panelists discussed this issue and more.

Keynote Remarks:

Mike Moore, Ambassador of New Zealand to the U.S., former WTO Director General, and former Prime Minister of New Zealand

Opening Presentations:

Antoni Estevadeordal, Manager of Integration and Trade, Inter-American Development Bank (Download his presentation)
Masahiro Kawai, Dean and CEO, Asian Development Bank Institute

Panelists:

Yasushi Akahoshi, Minister for Economy, Trade, Industry, and Energy, Embassy of Japan
James Bacchus, Chairman, Global Practice Group, Greenberg Traurig
Antonio Ortiz-Mena, Head of Section, Economic Affairs, Embassy of Mexico
Eric Farnsworth, Vice President, Council of the Americas (moderator)

Summary

In partnership with the Inter-American Development Bank and the Asian Development Bank Institute, the Council of the Americas brought together high-level members of the policy and business communities from the Pacific Rim to share insights on increasing economic ties between Asia and Latin America. Based on the increase in trade and investment over the last decade, the panelists debated the costs and benefits of the latest trade initiatives in both regions such as the Pacific Alliance and Association of Southeast Asian Nations (ASEAN), as well as larger inter-regional agreements such as the Trans-Pacific Partnership (TPP).

Growing Latin American-Asian Trade and Investment Antoni Estevadeordal of the Inter-American Development Bank and Masahiro Kawai of the Asian Development Bank Institute provided the context for new trade initiatives by discussing the growth in inter-regional trade and investment since 2000. According to their research, inter-regional trade is concentrated in a few countries, despite trade between Asian and Latin American countries growing to a much larger scale. Also, Estevadeordal and Kawai recommended that policymakers monitor the trade imbalances created between the two regions. Regional Trade Agreements: Opportunities and Challenges New Zealand Ambassador Mike Moore explained how his country’s geographic location and history influenced the government’s decision to support global trade liberalization. He framed the TPP as an opportunity for the participant countries to lower tariff and non-tariff barriers to trade on both sides of the Pacific. The TPP will help create new opportunities for small businesses, promote economic integration, and encourage good governance, said Moore. Nevertheless, countries must find common ground on issues still under negotiation such as intellectual property rights, he noted. In addition to the TPP, there are numerous intra-regional trade agreements and integration projects in both regions. Panelists mentioned the overlap of membership in the Asia Pacific Economic Cooperation, ASEAN, and the Regional Comprehensive Economic Partnership. In the Western Hemisphere, the Pacific Alliance is a new trade bloc created by Chile, Colombia, Mexico and Peru to jointly expand their outreach to Asia. James Bacchus of Greenberg Traurig pointed out that one of the most unique aspects of the Pacific Alliance is its negotiation process known as “early harvest,” in which member-countries enact portions of the agreement as they come to a consensus on each issue. Within the global context, Bacchus mentioned that others can learn from this methodology, considered acceptable under World Trade Organization rules. The Role of the TPP in Pacific Trade With only Chile, Mexico, and Peru representing Latin America in the TPP, COA’s Eric Farnsworth asked how these trade agreements could affect the region as a whole. The panelists agreed that non-signatory countries are still likely to feel the effects of the TPP, particularly in terms of anticipated shifts in global supply chains. In attendance at the event, the Salvadoran ambassador to the U.S. spoke to this issue, cautioning of potential losses in Central America. Antonio Ortiz-Mena of the Mexican embassy proposed that interested countries unilaterally reduce tariff barriers, creating both trade efficiency gains and positioning themselves well for the future. As they finalize the agreement, the TPP’s architects should consider countries across Asia and Latin America interested in promoting free trade, he said.

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Summary: The Pacific Trade Agenda-Implications for the Western Hemisphere

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