NAFTA Partners Deserve Quick Entry into TPP Talks
Assembled in the White House Rose Garden for a joint press conference on Monday, the “three amigos” of North America projected an image of trilateral comity in keeping with the depth of their countries’ relationships. Yet Mexican President Felipe Calderón and Canadian Prime Minister Stephen Harper departed the one-day North American Leaders’ Summit without a firm commitment from U.S. President Barack Obama on their request to join the Trans-Pacific Partnership (TPP). Buried in the penultimate line of the lengthy joint statement was a coy response: “The United States welcomes Canada’s and Mexico’s interest in joining the TPP as ambitious partners.”
As President Obama acknowledged in the Rose Garden, TPP’s high-standards approach “could be a real model for the world.” Indeed, the goal of the original four TPP members—Brunei, Chile, New Zealand, and Singapore—was to create a uniquely comprehensive agreement to which like-minded countries on both sides of the Pacific could accede, thus linking Asia and the Americas. Similarly, the U.S. decision to join TPP made more sense for the bloc’s potential to grow than for the market-access gains to be found in the members’ relatively small economies. For Washington, TPP carries significant strategic weight as long as it continues to expand.
To its credit, the Obama administration recognizes the geopolitical benefits of TPP in the context of increased U.S. engagement with the Asia-Pacific. Its reluctance to advocate for expanded participation from the Western Hemisphere, however, risks a gross strategic oversight. As Harper candidly remarked to an audience at the Woodrow Wilson Center on Monday, while “most of the members of the Trans-Pacific Partnership would like to see Canada join, I think there’s some debate, particularly within the (Obama) administration, about the merits of that."
Admittedly, the accession of new countries could complicate and prolong negotiations—perhaps an overwhelming prospect for negotiators attempting to meet a self-imposed December deadline. Yet TPP expansion represents the best chance for the United States to assert its leadership in shaping the trans-Pacific architecture, a possibility that appears to be understood by the State Department. In a speech last November, for example, Deputy Secretary of State Bill Burns expressly linked the economic goals of Asia and the Americas and envisioned TPP becoming the foundation for a Free Trade Area of the Americas. At a Council of the Americas event in February, Under Secretary for Political Affairs Wendy Sherman reiterated that a stronger focus on the Pacific includes the countries of the Americas, which are assuming growing global leadership roles.
Notwithstanding debate in Washington, the arguments in favor of Mexico and Canada are well-documented. In comments submitted to the Office of the U.S. Trade Representative (USTR) in January, the Council of the Americas argued that both countries are crucial parties to any trade arrangement with the Pacific region given the importance of our shared supply chains and production platforms. After 18 years of the North American Free Trade Agreement (NAFTA), our economies are so closely integrated that we now produce goods jointly for global consumption, with boosts to Mexican or Canadian exports translating into increased U.S. exports and jobs. TPP thus offers a promising vehicle for updating our trilateral trading relationship to the high standards of a 21st-century agreement, including technologies and products that did not exist when NAFTA was signed.
The Canadian and Mexican governments are pressing their case to join the negotiations sooner rather than later. Of course, they would rather influence the outcomes than simply accept rules that others have shaped. For the United States too, both countries could be important allies at the negotiating table. Mexico’s Secretary of Economy, Bruno Ferrari, put it bluntly in a recent op-ed in Politico: “In developing U.S. trade policy moving forward, it would be unwise for Washington to exclude the largest Latin American economy in the Pacific region from this comprehensive trade bloc. Mexico is a top economic partner that should not be ignored—an ally that has worked hard and is well prepared to engage in this next-generation trade pact.”
For President Calderón, in particular, time is of the essence. Three days after the official start of campaigning for the July 1 presidential election, he lobbied hard in Washington for Mexican participation in TPP—a coup that would burnish his legacy of aggressive trade promotion. Mexican embassy officials have made no secret of their hope to gain a seat at the bargaining table before the election and certainly before the December inauguration of a new president. Meanwhile, the congressional-affairs staff has been actively courting support on Capitol Hill, to some success. Last week, a bipartisan group of 28 U.S. House of Representatives Members signed a letter to U.S. Trade Representative Ron Kirk on the positive impact of Mexico’s entry into TPP on the U.S. economy.
The United States will host the next negotiating round in Dallas in mid-May—an ideal opportunity to signal U.S. support of expedited accession for its NAFTA partners. At a time when several countries in the Western Hemisphere are reviving old protectionist ghosts, the Obama administration should embrace the interest of its neighbors in further trade liberalization. This is not to say that challenges do not exist, and both countries must be prepared to discuss sensitive issues (Canada’s dairy and poultry sectors, for example). Nevertheless, the addition of both countries would help ensure that TPP is a true pan-Pacific agreement, rather than one weighted toward Asia.
That Mexico and Canada are so keen to join TPP is a testament to the pact’s potential to create a new paradigm for free trade. As Secretary Ferrari noted, the United States and its TPP partners should consider new entrants with the same forward-thinking approach that has governed the talks to date.
Kezia McKeague is a contributing blogger to AQ Online. She is director of government relations at the Council of the Americas in Washington DC.
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