The initiative is intended to address some of the Western Hemisphere’s toughest problems, including spurring mass prosperity and mass immigration to the United States.
But the Americas Partnership for Economic Prosperity (APEP), which President Biden Launched at a summit with regional leaders in June, the U.S. has less traditional trade deals than it has in the past.
“It’s reasonable for people to be skeptical about how much real impact this will have,” said Matthew Goodman, a former White House official in the Obama administration who is now at the Center for Strategic and International Studies.
APEP reflects the administration’s attempt to reconcile its desire for stronger regional ties with congressional opposition to further trade liberalization, which many advocates — and the president’s labor union allies — blame for the loss of millions of American manufacturing jobs. Biden’s allies are pursuing a similar deal, the Indo-Pacific Economic Framework for Prosperity, in talks with 12 Asian countries.
The administration comes as a shock to Latin Americans China It has significantly expanded its influence in the region. Chinese consumers now buy about 15 percent of the region’s exports, up from just 1 percent in 2000. International Monetary Fund. A total of 21 Latin countries—including eight APEP members—participate in Beijing’s global infrastructure investment program known as the Belt-and-Road initiative.
The United States already has trade agreements with nine countries that agreed to participate in the initial APEP talks. The APEP group includes Barbados, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru and Uruguay.
Notable absentees from the first round of talks include Brazil and Argentina, two of the region’s largest economies.
No date has been set for the start of formal talks, although US officials have said they will begin soon.
“We’re going to move very quickly,” said one administration official, who insisted on anonymity in briefing reporters ahead of the official announcement.
Rather than offering greater access to the U.S. market, the partnership is designed to improve labor standards, supply chain resilience, decarbonization and pandemic recovery, officials said.
The administration also hopes to breathe new life into the Inter-American Development Bank, a multilateral financial institution criticized for non-performing loans.
Officials who briefed reporters offered few specifics about the partnership, which they described as a “flexible framework” that would include “high-quality contracts.”
Regional officials and analysts said they were shocked by the lack of concrete results after Biden’s comments last summer.
“Of course, we are happy to participate,” said a senior official from one of the participating countries. “But it is an invitation to speak. There is no proposal, for example if you compare it to … when trade agreements were negotiated. It’s much more modest and limited.”
Many countries want greater investment, said the official, who asked not to be quoted for clarity.
“But it’s not clear how the United States, in this highly competitive world, will push for that to happen. The Chinese are everywhere, and the Europeans are very active in Latin America today,” said the official, who questioned whether the partnership would meet the region’s investment needs.
The Biden administration’s proposal represents a sharp contrast to previous efforts to boost U.S. trade with its southern neighbors. In 1994, 34 countries agreed to begin negotiations on a Free Trade Area of the Americas (FTAA). The agreement would gradually reduce tariffs and other trade restrictions across a vast region stretching from northern Canada to the southern tip of Argentina.
After negotiations failed, the United States turned to negotiating smaller agreements with countries such as Colombia.
In a recent appearance at CSIS, Jose Fernandez, Under Secretary of State for Economic Growth, Energy and Environment, defended the Biden administration’s approach to trade deals.
“What we’re trying to do is create new rules of the road, create rules of the road where our employees can compete — not a race to the bottom,” he said. “Our agreements seek to establish a new global code of conduct.”
Voters will hold the administration accountable if Biden’s new approach to trade ultimately favors corporate interests, according to Lori Wallach, a trade expert at the American Economic Liberties Project, a nonprofit that opposes centralized economic power.
“This could have broader policy and political implications as millions of Americans who were scorned by past corporate-rigged trade deals hear that this administration is crafting a new trade policy to help them, and that raises expectations that could turn into anger. ,” he said.
Unlike a traditional trade agreement, anything emerging from negotiations with regional countries would not require congressional approval. According to Goodman, such an executive agreement would not be legally binding and would lack the mutual benefits of a full trade agreement.
“These types of agreements do not have the same credibility and sustainability as trade agreements,” he said.
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