Within weeks, the Trump administration rejected the troubled Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership (TTIP) and announced plans to renegotiate the terms of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. Trade advisers in the new government led by economist Peter Navarro say a greater reliance on bilateral – and non-multilateral – trade agreements will allow U.S. negotiators to create provisions that would bring maximum benefits to U.S. exporters and consumers. What are the arguments for and against such an approach? Currently, WTO members are engaged in a round of multilateral negotiations known as the Doha Development Agenda. Negotiations are currently stagnating; the four main players in the food trade (Brazil, the EU, India and the United States) have held discussions but have not yet reached an agreement. examples of multilateral agreements, In addition to the TPP, the 1994 North American Free Trade Agreement (NAFTA), signed between the United States, Canada and Mexico, signed in 2004 by the United States with Costa Rica, the Dominican Republic, Guatemala, Honduras, Nicaragua and El Salvador, paved the way for the WTO (World Trade Organization) agreement among all 149 member states. In addition, agreements have been signed specifically for intellectual property, which are an important element of all trade agreements, such as the Paris Patent Convention, the General Copyright Agreement and the Bern Copyright Agreement and the World Trade Organization (WTO) trade agreement, to name a few. Are we looking at whether a bilateral or multilateral trade agreement would better serve U.S. interests? Bilateral trade agreements have some problems, says Gary Clyde Hufbauer, Senior Fellow at the Peterson Institute for International Economics.
“First of all, bilateral agreements take a reasonable amount of time, and probably longer [in this case] because the requirements of the Trump administration are significantly higher than in previous free trade agreements. They want other countries to give and give until they have given everything – and more requirements mean more negotiating time. In addition, any new bilateral agreement must be ratified by the U.S. Congress. They use a very valuable product – it is the time of the congress for the ratification process. They need time, and congress needs to be massed. Bilateral agreements are not the same as trade agreements. The latter relates to the reduction or elimination of import quotas, export restrictions, tariffs and other trade barriers between states. In addition, the rules governing trade agreements are defined by the World Trade Organization (WTO). Proponents of the Trans-Pacific Partnership had argued that one of the greatest virtues of the 12-nation trade agreement was that it opened up Japanese markets to the United States.