Order Code RL33463
CRS Report for Congress
Received through the CRS Web
Trade Negotiations During the 109th Congress
Updated November 14, 2006
Ian F. Fergusson
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Trade Negotiations During the 109th Congress
Summary
The Bush Administration has made bilateral and regional free-trade agreements
(FTAs) more important elements of U.S. trade policy, a strategy known as
“competitive liberalization.” This strategy, it argues, will push forward trade
liberalization simultaneously on bilateral, regional, and multilateral fronts. It is
meant to spur trade negotiations by liberalizing trade with countries willing to join
FTAs, and to pressure other countries to negotiate multilaterally. Critics contend,
however, that the accent on regional and bilateral negotiations undermines the
multilateral forum and increases the risk of trade diversion away from competitive
countries not in the trade bloc.
The United States is participating in several other regional and bilateral trade
negotiations. Agreements were concluded and became effective during the 108th
Congress with Australia, Chile, and Singapore. Also during the 108th Congress, an
agreement with Morocco was approved, but it did not take effect until January 1,
2006. Legislation to implement the Central American Free Trade Agreement and the
FTA with Bahrain were approved by Congress in the first session of the 109th
Congress. Negotiations are underway with Panama, Thailand, three Andean nations
(Colombia, Peru, and Ecuador), and the United Arab Emirates. Negotiations have
recently concluded with Peru, Colombia, and Oman. USTR announced the launch of
FTA negotiations with South Korea on February 3, 2006, and with Malaysia on
March 8. Several other trade initiatives are under discussion, including a U.S.-Middle
East FTA and an FTA with countries in southeast Asia.
An ongoing regional initiative is the Free Trade Area of the Americas. In April
1998, 34 Western Hemisphere nations formally initiated negotiations on tariffs and
nontariff trade barriers in the hemisphere, but the talks have now stalled.
The broadest trade initiative being negotiated is the multilateral trade
negotiations in the World Trade Organization (WTO). In November 2001, trade
ministers from WTO member countries agreed to launch a new round of trade talks
covering market access, trade remedies, and developing-country issues. After
fruitless meetings to attempt to resolve differences between the major parties in July
2006, the negotiations were “suspended” indefinitely.
Potential agreements resulting from current trade negotiations may be
considered by Congress under trade promotion authority (TPA) legislation enacted
in 2002. That legislation covers agreements signed before June 30, 2007. Under the
legislation, if the President meets notification requirements and other conditions,
Congress will consider a bill to implement a trade agreement under an expedited
procedure (no amendment, deadlines for votes). The notification requirements
include minimum 90-day notices before starting negotiations and before signing a
trade agreement.
This report replaces CRS Issue Brief IB10123, Trade Negotiations During the
109th Congress, by Ian F. Fergusson.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
U.S. Negotiating Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
TPA Notification and Consultation Requirements . . . . . . . . . . . . . . . . . . . . . . . . 5
Before the Start of Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
During Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Before Signing the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Entering Into the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Agreements Ratified or Implemented . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S.-Dominican Republic-Central American FTA (DR-CAFTA) . . . . 6
U.S.-Bahrain FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
U.S.-Oman FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Agreements Under Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Multilateral Trade Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regional Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Free Trade Area of the Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S.-Andean FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
U.S.-Southern African Customs Union FTA . . . . . . . . . . . . . . . . . . . . 11
Bilateral Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
U.S.-Panama FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
U.S.-Thailand FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
U.S.-Malaysia FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
U.S.-United Arab Emirates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Potential Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Middle East-North African Free Trade Agreement . . . . . . . . . . . . . . . 14
Enterprise for ASEAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
List of Tables
Trade Negotiations During the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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Trade Negotiations During the 109th
Congress
Most Recent Developments
October 30- November 2, 2006: U.S. and Malaysian negotiators held their
third round of talks in Kuala Lumpur.
October 23-26, 2006: U.S. and Korean negotiators held their fourth round of
FTA talks on Cheju Island, South Korea.
September 26, 2006: President Bush signed legislation implementing the U.S.-
Oman FTA (P.L. 109-283).
August 24, 2006: President Bush notified Congress of his intention to enter into
an FTA with Colombia.
August 1, 2006: The U.S.-Bahrain FTA was proclaimed in effect.
July 24, 2006: WTO Director-General Pascal announces the “suspension” of
the Doha Round of WTO trade negotiations after negotiators failed to reach
agreement on agricultural subsidy and tariff issues.
Background and Analysis
For over 50 years, U.S. trade officials have negotiated multilateral trade
agreements to achieve lower trade barriers and rules to cover international trade.
During the 108th Congress, U.S. officials negotiated and Congress approved four
bilateral free-trade agreements with Australia, Chile, Morocco, and Singapore.1 The
Bush Administration is making bilateral and regional free-trade agreements more
important elements of its trade policy. The multilateral arena is no longer the only
1 The United States also is a party to four previous negotiated agreements: the U.S.-Israel
Free Trade Agreement (effective 1985), the Canada-U.S. Free Trade Agreement (effective
1989), the North American Free Trade Agreement (effective 1994), and the U.S.-Jordan
Free Trade Agreement (effective 2001).

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CRS-2
means, or perhaps even the principal means, by which the United States is pursuing
liberalized trade.2
Trade agreements are negotiated by the executive branch, although Congress has
the ultimate Constitutional authority to regulate interstate and foreign commerce.
Trade promotion authority (TPA) requires that the President consult with and advise
Congress throughout the negotiating process. After the executive branch signs an
agreement, Congress may consider implementing legislation if any statutory changes
are required under the agreement. There is no deadline for submission of the
legislation, but once a bill is submitted, TPA requires a final vote within 90
legislative days.
U.S. Negotiating Strategy
U.S. negotiating strategy is based on a concept known as “competitive
liberalization.” As explained by the Administration, this strategy is designed to push
forward trade liberalization on multiple fronts: bilateral, regional, and multilateral.
It is meant to further trade negotiations by liberalizing trade with countries willing
to join free trade agreements, and to put pressure on other countries to negotiate in
the WTO. According to former United States Trade Representative (USTR) Robert
B. Zoellick,
we want to strengthen the hand of the coalition pressing for freer trade. It would
be fatal to give the initiative to naysayers abroad and protectionists at home. As
we have seen in the League of Nations, the UN, the IMF and the World Bank,
international organizations need leaders to prod them into action.3
Critics assert that the accent on regional and bilateral negotiations undermines
the World Trade Organization (WTO) and increases the risk of trade diversion.
Trade diversion occurs when the lower tariffs under a trade agreement cause trade to
be diverted away from a more efficient producer outside the trading bloc to a
producer inside the bloc. What results from the plethora of negotiated FTAs,
according to one economist, “is a ‘spaghetti bowl’ of rules, arbitrary definitions of
which products come from where, and a multiplicity of tariffs depending on source.”4
More recently, new USTR Susan Schwab described the negotiation of bilateral and
regional FTAs as a way to “establish the breadth and scope of potential multilateral
agreements in years to come by setting precedents and by demonstrating the real
benefits of free and fair trade.”5
2 For further information, see CRS Report RL31356, Free Trade Agreements: Impact on
U.S. Trade and Implications for U.S. Trade Policy, by William H. Cooper.
3 Robert B. Zoellick, “Unleashing the Trade Winds,” The Economist, December 7, 2002, p.
29.
4 Jagdish Bhagwati and Arvind Panagariya, “Bilateral Trade Treaties Are a Sham,”
Financial Times, July 14, 2003.
5 “Opening Statement of Deputy U.S. Trade Representative Susan C. Schwab, U.S. Trade
(continued...)

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The manner in which the Administration chooses potential FTA partners has
been the subject of scrutiny by some Members of Congress. Traditionally, regional
and bilateral trade agreements have been negotiated for a mixture of economic,
political, and development reasons. The U.S.-Canada Free-Trade Agreement (FTA)
was primarily economic in nature: recognizing the largest bilateral trade relationship
in the world between two countries at a similar stage of development. The
partnership with Mexico to create NAFTA brought in a country at a different stage
of development and gave attention to trade as a lever to encourage economic
advancement. It also had a geopolitical rationale of encouraging stability in the U.S.
neighbor to the south. The FTA with Israel was seen by supporters as an affirmation
of U.S. support for the Jewish state, while the FTA with Jordan can be seen as a
reward for Jordan’s cooperation in the Middle East peace process.
In May 2003, then-USTR Zoellick enumerated several factors used to evaluate
countries seeking to negotiate trade agreements with the United States, but he said
there were no formal rules or procedures to make the determination.6 A GAO study
released in January 2004 reported that an interagency process had been established
to assess FTA partners using six factors. These factors include a country’s readiness
in terms of trade capabilities, the maturity of its political and legal system, and the
will to implement reforms; the economic benefit to the United States; the country’s
support of U.S. trade liberalization goals; a partner’s compatibility with U.S. foreign
and economic policy interests; congressional or private sector support; and U.S.
government resource constraints.7 More recently, former USTR Rob Portman
announced that new FTA partners would be determined by which countries could
negotiate an agreement before the expiration of U.S. trade promotion authority in
June 2007.8
Some Members of Congress have questioned the manner in which potential
FTA partners are chosen. Senator Baucus, ranking member of the Senate Finance
Committee, criticized the Administration for overlooking high volume trading
partners in Asia and has been quoted saying that “this Administration’s trade policy
5 (...continued)
Representative-Designate,” Senate Finance Committee, May 16, 2006.
6 These considerations included cooperation with the United States in its foreign and
security policies; country support for U.S. positions in the Free-Trade Area of the Americas
(FTAA) and the WTO; the ability of a trade agreement to spur internal economic or political
reform in the target country or region; the ability to counteract FTAs among other countries
or trading blocs that disadvantage American firms; the presence of congressional interest
or opposition to an FTA; support among U.S. business and agricultural interests; the ability
of a country to anchor broader trade agreements to spur regional integration; the willingness
of a partner to negotiate a comprehensive agreement covering all economic sectors; and the
capacity constraints of the Office of the USTR. “Following the Bilateral Route?,”
Washington Trade Daily, May 9, 2003; “Zoellick Says FTA Candidates Must Support U.S.
Foreign Policy,” Inside U.S. Trade, May 16, 2003.
7 GAO Report 04-233, International Trade: Intensifying Free Trade Negotiating Agenda
Calls for Better Allocation of Staff and Resources, January 2004, pp 9-10, 12.
8 “Portman Says FTA Decisions Based on Ability to Sign by 2007,” International Trade
Reporter, October 7, 2005.

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CRS-4
is dictated largely by its foreign policy, not by economics.”9 In addition, some
business groups have expressed a desire to concentrate more on the multilateral
negotiations of the WTO, which potentially could yield greater commercial gains.10
For example, in January 2005 the National Association of Manufacturers
recommended launching FTA negotiations with Egypt, India, Malaysia, New
Zealand, and South Korea.11
The Administration cites the negotiation of free trade agreements in multilateral,
regional, and bilateral settings as an integral part of its strategy to enhance prosperity
and freedom for the rest of the world. In its September 2002 National Security
Strategy, the Administration seemed to equate the concept of ‘free trade’ with a basic
freedom or moral principle, “the freedom for a person or a nation to make a living.”
According to this document, free-market economic and trade policies, more than
development assistance, provides nations with the ability to lift themselves out of
poverty and to insure stability.12
While the Administration is pursuing trade agreements on multiple fronts, some
critics question whether the United States should be negotiating trade agreements at
all. They state that American jobs are lost because of cheaper imports, and that
relocation of U.S. production to other countries has been facilitated by trade
agreements. Some argue that trade agreements do not adequately address the
problem of countries with lower labor and environmental standards that are able to
produce at lower cost. Some critics believe that the U.S. economy will be harmed
by the Administration’s pursuit of free-trade agreements.
The result of the competitive liberalization strategy is that the United States is
involved in an unprecedented number of trade negotiations. Multilaterally, the
United States and the other 148 countries of the WTO are participating in the Doha
Development Agenda. Regionally, the United States has engaged with 33 other
western hemisphere countries in an effort to create a Free Trade Area of the
Americas, and has conducted FTA negotiations with countries in South America
(Colombia, Peru, and Ecuador), Southern Africa (Botswana, Lesotho, Namibia,
South Africa, and Swaziland), Panama, Thailand, Oman, and the United Arab
Emirates. Of these, agreements have been concluded with Peru, Colombia, and
Oman. The United States has ratified FTAs with Bahrain and with the Dominican
Republic and the countries of the Central American Common Market (Costa Rica,
El Salvador, Guatemala, Honduras, and Nicaragua). Implementing legislation for
these agreements has been passed by the United States, but the agreements have not
yet entered into force with all countries. Agreements with Singapore and Chile
9 “Baucus Proposes FTAs in Asia to Offset Chinese Influence,” Inside U.S. Trade,
December 10, 2004.
10 “Filling Up with Appetizers,” Congress Daily AM, June 11, 2003.
11 “NAM Calls for Tougher Line On China, Cites Five FTA Candidates,” International
Trade Reporter, February 3, 2005.
12 National Security Council, National Security Strategy of the United States, September
2002, [http://www.whitehouse.gov/nsc/nss.pdf], pp. 17-21.

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entered into force on January 1, 2004, an agreement with Australia entered into force
on January 1, 2005, and an agreement with Morocco entered into force on January
1, 2006.
TPA Notification and Consultation Requirements
Later sections of this report refer to formal notifications by the Administration
to Congress. Under trade promotion authority (TPA) legislation passed in 2002
(Title XXI, P.L. 107-210), the President must notify Congress before starting
negotiation of a trade agreement and before signing a completed agreement. TPA
legislation applies to trade agreements entered into before June 1, 2007. If the
Administration meets the notification requirements, consults as required, and satisfies
other conditions in the TPA legislation, the 2002 legislation calls on Congress to
consider implementing legislation for a trade agreement under expedited (“trade
promotion” or “fast-track”) procedures.13 The following briefly reviews the
notification and consultation requirements.
Before the Start of Negotiations. Before starting negotiations, the
Administration must notify Congress at least 90 calendar days in advance. (This
requirement was waived for certain negotiations that were underway before
enactment of the TPA legislation.) Before and after submitting this notice, the
Administration must consult with the relevant congressional committees and the
Congressional Oversight Group (COG).14 The Administration must comply with
certain additional consultation and assessment requirements for agricultural, textile
and apparel, and fish and shellfish negotiations.
During Negotiations. In the course of negotiations, the USTR must consult
closely and on a timely basis with the COG and all committees of jurisdiction.
Guidelines developed by the USTR, in consultation with the House Ways and Means
Committee and the Senate Finance Committee (the revenue committees), cover
briefings of the COG, access by COG members and staff to documents, and
coordination between the USTR and the COG at critical periods of the negotiations.
Before Signing the Agreement. At least 180 calendar days before signing
a trade agreement, the President must report to the revenue committees on proposals
that might require amendments to U.S. trade remedy laws. At least 90 calendar days
before entering into a trade agreement, the President must notify Congress of the
13 For further information, see CRS Report RL31974, Trade Agreements: Requirements for
Presidential Consultation, Notices, and Reports to Congress Regarding Negotiations, by
Vladimir N. Pregelj, and CRS Report RL32011, Trade Agreements: Procedure for
Congressional Approval and Implementation, by Vladimir N. Pregelj.
14 Members of the COG are the chairman and ranking member of the House Ways and
Means Committee and the Senate Finance Committee, three other members from each of
those committees (no more than two from the same party), and the chairman and ranking
member from any other committees with jurisdiction. COG members are official advisers
to the U.S. delegation in trade negotiations. They consult with and provide advice to the
USTR on the formulation of objectives, negotiating strategies, and other trade matters.

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CRS-6
intention to enter into the agreement. No later than 30 days after this notification,
private sector advisory committees must submit reports on the trade agreement to
Congress, the President, and the USTR. Also at least 90 calendar days before
entering into a trade agreement, the President must provide the International Trade
Commission (ITC) with the details of the trade agreement and request an assessment.
The USTR must consult closely and on a timely basis (including immediately
before initialing an agreement) with the revenue committees, the COG, and other
congressional advisers, and with the agriculture committees when an agreement
relates to agricultural trade.
Entering Into the Agreement. Within 60 days of entering into the
agreement, the President must submit a list of required changes to U.S. law that likely
would be necessary to bring the United States into compliance with the agreement.
Not later than 90 calendar days after the President enters into an agreement, the ITC
must report to the President and to Congress on the likely impact of the agreement
on the U.S. economy and on specific industrial sectors. There is no deadline for
submission of an implementing bill.
Agreements Ratified or Implemented
U.S.-Dominican Republic-Central American FTA (DR-CAFTA). On
January 8, 2003, negotiations formally began on an FTA between the United States
and the five nations composing the Central American Common Market (CACM) —
Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.15 U.S. trade with the
region totaled $34.9 billion in 2005. The United States imported $18.1 billion
(primarily apparel items, bananas, coffee, and integrated circuits) and exported $16.8
billion (led by apparel, textiles, electrical generating equipment, and electrical
components for assembly).
On December 17, 2003, the United States concluded negotiations on a U.S.-
Central America Free Trade Agreement (CAFTA) with four of the five CACM
countries (Guatemala, Honduras, El Salvador, and Nicaragua). Costa Rica later
agreed to CAFTA on January 25, 2004, after resolving market access issues with the
United States in the areas of telecommunications, insurance, and agriculture.
President Bush notified his intent to enter into the agreement on February 20, 2004.
The parties signed CAFTA on May 28, 2004, at a ceremony at the Organization of
American States in Washington, D.C. Just as negotiations on CAFTA were
completed, the United States commenced negotiation of an FTA with the Dominican
Republic with the intent that the resulting agreement would be integrated in the FTA
with the Central American countries. Negotiations between the United States and the
Dominican Republic began on January 12, 2004, and concluded on March 15, 2004.
As negotiated between the United States and the Dominican Republic, the Dominican
Republic would have its own market access provisions, but would accept the CAFTA
framework already negotiated. On March 25, 2004, the President notified Congress
15 For further information, see CRS Report RL31870, The Dominican Republic-Central
America-United States FTA (DR-CAFTA), by J.F. Hornbeck.

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of his intent to sign the FTA with the Dominican Republic. A new agreement was
signed by all seven countries in Washington, DC, on August 5, 2004, and was
referred to as the DR-CAFTA. The House Ways and Means Committee held its first
hearing into CAFTA on April 21, 2005.
President Bush sent draft implementing legislation to Congress on June 23,
2005. On the same day, the legislation was introduced in the House (H.R. 3045) and
in the Senate (S. 1307). The bills were referred to the Ways and Means Committee
and to the Finance Committee respectively. The Senate Finance Committee
approved S. 1307 by voice vote on June 29, 2005, and the full Senate approved the
bill by a 54-45 vote on June 30, 2005. The House Ways and Means Committee
ordered H.R. 3045 favorably reported by a 25-16 vote on June 30, 2005. The House
approved the legislation on July 28, 2005, by a vote of 217-215, and later in the day
this bill passed the Senate by a vote of 55-45.16 The President signed the legislation
on August 2 (P.L. 109-53). President Bush implemented the agreement with El
Salvador on March 1, 2006, with Honduras and Nicaragua on April 1, 2006, and with
Guatemala on July 1, 2006.

U.S.-Bahrain FTA. On January 26, 2004, formal negotiations began on a
U.S.-Bahrain FTA. Talks concluded after three rounds on May 27, 2004.17 On
September 14, 2004, the two countries signed an agreement. The House approved
implementing legislation by the vote 327-95 in the House on December 7, 2005; the
Senate approved the measure by unanimous consent on December 13. The President
signed the legislation on January 11, 2006 (P.L. 109-169), and the agreement was
proclaimed in force on August 1, 2006. Concerns over Bahrain’s labor laws and its
commitment to ending the boycott of Israel have continued to be a source of concern
to some in Congress.18 This FTA was touted by the Administration as a first step in
the creation of the Middle East Free Trade Area by 2013, and it foresees the
possibility that other nations in the gulf region could link to this agreement as they
reform their economies and develop their trade potential. U.S. merchandise trade
with Bahrain totaled $783 million in 2005: imports of $432 million included apparel,
textiles, fertilizers, chemicals, and aluminum and exports of $351 million were led
by aircraft and aircraft parts, military equipment, passenger vehicles, machinery, and,
not surprisingly, air conditioning equipment.
U.S.-Oman FTA. FTA talks were announced on November 15, 2004, and
talks began in March 2005. On October 3, 2005, USTR announced that negotiations
had been concluded with Oman, and under the timetable set forth by TPA, the
agreement was signed on January 19, 2006, in Washington, DC. The House Ways
and Means Committee conducted a “mock mark-up” of implementing legislation for
16 Although the Senate had acted previously, the final legislation must originate in the House
(as a revenue measure), and the bills must be identical (under TPA procedures), hence the
revote.
17 For further information, see CRS Report RS21846, Proposed U.S.-Bahrain Free Trade
Agreement, by Martin A. Weiss.
18 “U.S. Denies Report Bahrain Continuing Boycott of Israel Despite Earlier Commitment,”
International Trade Reporter, May 18, 2006; Letter to USTR Portman from Reps. Rangel,
Levin, Cardin, and Becerrra, March 29, 2006.

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CRS-8
the FTA on May 10, 2006; Senate Finance conducted its own “mock mark-up” on
May 18. The Senate version contained an amendment barring the importation of
goods made from slave labor or as a result of trafficking of foreign workers. This
amendment was not included in implementing legislation submitted by the
Administration (S. 3569), which was approved by the Senate Finance Committee by
a vote of 10-3 on June 28, 2006, and by the full Senate by a vote of 60-34 the next
day. The House Ways and Means Committee approved its version of the legislation
(H.R. 5684) by a vote of 23-15 on June 29; the House approved it by a vote of 221-
205 on July 20. President Bush signed this legislation (P.L. 109-283) on September
26 2006. The House debate centered around whether the United States could prevent
Omani firms from operating U.S. ports or other facilities under the agreement if it
was determined that such operation was detrimental to national security. Worker
protections in the Oman and the UAE have also been a controversial issue in the
negotiations. Both nations rely heavily on guest workers, and reportedly place heavy
restrictions on the right to strike or to organize.19 In 2005, the United States imported
$555 million from Oman and exported $593 million to the kingdom.20
Agreements Under Negotiation
Multilateral Trade Negotiations
At the 4th Ministerial meeting of the World Trade Organization (WTO) in Doha,
Qatar, on November 9-14, 2001, trade ministers from over 140 member countries of
the World Trade Organization agreed to launch a new round of multilateral trade
negotiations.21 The negotiations became known as the Doha Development Agenda,
because of the possibility of increased participation of developing-country members,
which now account for about four-fifths of the WTO members.
The work program combined ongoing negotiations on agriculture and services
liberalization with new negotiations on trade barriers for industrial products, WTO
rules on dumping and subsidies, several topics that developing countries had sought
such as easier access to medicines under the existing WTO Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS), and so-called “Singapore
issues” (investment, competition, transparency in government procurement, and trade
facilitation).
On August 1, 2004, negotiators in Geneva reached agreement on a framework
for the conduct of future negotiations.22 This framework had been the goal of the
19 U.S. to Conclude Oman FTA as Early As Next Month After Two Rounds, Inside U.S.
Trade, April 29, 2005.
20 For further information, see CRS Report RL33328, Proposed U.S.-Oman Free Trade
Agreement, by Mary Jane Bolle.
21 For further information, see CRS Report RL32060, World Trade Organization
Negotiations: The Doha Development Agenda, by Ian F. Fergusson.
22 For more information, see CRS Report RL32645. The Doha Development Agenda: The
(continued...)

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unsuccessful 5th Ministerial, held in Cancún, Mexico, in September 2003. The
framework provides a blueprint for future negotiations on agriculture, non-
agricultural market access (NAMA), and services. Ministers also agreed to begin
negotiations on trade facilitation, but the other so-called Singapore issues of
government procurement, investment, and trade and competition policy were dropped
from the Doha round negotiations. Members acknowledged that the December 31,
2004 deadline for completion of the round would not be met, and the framework set
no new deadline. However, the expiration of U.S. trade promotion authority (TPA)
in July 2007 has become the de facto deadline for the talks. For an agreement to be
considered under TPA, it must be submitted to Congress by March 31, 2007, and
Congress must be informed of the progress of the rules negotiations by December
31, 2006. Following agreement on any negotiating modalities, countries must apply
the formulas adopted, including any flexibilities, to their tariff schedules, must verify
the schedule of concessions of other countries, and engage in bilateral negotiations
over those schedules. This process is expected to take several months.
The WTO’s 6th Ministerial was held in Hong Kong from December 13-18, 2005.
Although certain concrete steps were taken on assistance to least developed countries
(LDCs), an end date of 2013 for agricultural exports subsidies, and the use of a
“Swiss” formula in the NAMA negotiations, broader agreement on the modalities of
the talks remain elusive. A new deadline for agriculture and industrial market
modalities was set for April 30, 2006, but that deadline, like all the others, came and
went.23 An end of June 2006 summit of trade negotiators likewise failed in their
attempt to achieve agriculture and industrial market access modalities. On July 24,
2006, Director-General Pascal “suspended” the negotiations after a July 23 session
of the G-6 negotiating group (United States, European Union, Japan, Australia,
Brazil, and India) ended in deadlock. Lamy made no indication on when, or if, the
negotiations would resume. Subsequently, several WTO groups such as the G-20
and the Cairns Group of agricultural exporters have met to lay the groundwork to
restart the negotiations.
Regional Negotiations
Free Trade Area of the Americas. In 1994, 34 Western Hemisphere
nations met at the first Summit of the Americas, envisioning a plan for a Free Trade
Area of the Americas (FTAA) by January 2005. The FTAA is a regional trade
proposal among 34 nations of the Western Hemisphere that would promote economic
integration by creating, as originally conceived, a comprehensive (presumably WTO-
plus) framework for reducing tariff and nontariff barriers to trade and investment.24
22 (...continued)
WTO Framework Agreement, coordinated by Ian F. Fergusson, and CRS Report RS21905,
The Agricultural Framework Agreement in the Doha Round Negotiations, by Charles
Hanrahan.
23 See CRS Report RL33176, The World Trade Organization: The Hong Kong Ministerial,
coordinated by Ian F. Fergusson.
24 For more information, see CRS Report RS20864, A Free Trade Area of the Americas:
Status of Negotiations and Major Policy Issues, by J. F. Hornbeck.

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CRS-10
The United States traded $976.7 billion worth of goods with the FTAA countries in
2005: $399.9 billion in exports and $576.8 billion in imports.
Formal negotiations commenced in 1998, and five years later, the third draft text
of the agreement was presented at the Miami trade ministerial held November 20-21,
2003. The FTAA negotiations, however, are at a crossroads, with Brazil and the
United States, the co-chairs of the Trade Negotiations Committee (TNC) that
oversees the process, at odds over how to proceed. Deep differences remain
unresolved as reflected in the Ministerial Declaration, which has taken the FTAA in
a new direction. It calls for a two-tier framework comprising a set of “common rights
and obligations” for all countries, augmented by voluntary plurilateral arrangements
with country benefits related to commitments. The 4th Summit of the Americas took
place in Mar del Plata, Argentina, but there was no agreement on reviving
negotiations.
Progress on the FTAA still depends on Brazil and the United States agreeing on
a common set of obligations and defining parameters for plurilateral arrangements.
This goal remains elusive, despite ongoing communications between their trade
representatives. In the meantime, the trade dynamics of the region are changing, with
many in the region heading toward bilateral agreements with the United States, the
EU, and each other. Brazil and other Mercosur countries may have to evaluate the
welfare tradeoffs of entering a deeper versus a shallower two-tier FTAA, or no FTAA
at all, given the agreements forming around them. In March 2005, the Government
Accountability Office (GAO) issued a report criticizing the handling of the FTAA
negotiations by its two co-chairs, the United States and Brazil. It faulted two
mechanisms intended to facilitate progress as having failed to revitalize the talks, the
two-tiered negotiating structure and the co-chairmanship of the U.S. and Brazil. It
also faulted the two nations for placing a higher priority on other trade negotiations,
such as the Doha Round and other regional FTAs.25
U.S.-Andean FTA. On November 18, 2003, the Administration formally
notified Congress of its intent to initiate negotiations for an FTA with Colombia,
Peru, Ecuador, and Bolivia.26 (In March 2005, Bolivians elected a President, Evo
Morales, who repudiated FTA negotiations with the United States.) The negotiations
began on May 18-19, 2004, with Colombia, Peru, and Ecuador. The United States
and Peru announced a bilateral deal on an FTA on December 7, 2005, after resolving
their agriculture and intellectual property rights (IPR) issues and the agreement was
signed April 12. The United States signed a deal with Colombia on February 27,
2006; President Bush notified Congress of his intent to enter into an agreement with
Colombia on August 24 and the White House announced that the agreement would
be signed on November 22, 2006. Congressional Democrats, who will form the
majority in the 110th Congress, have advocated the modification of the agreements
to provide additional labor safeguards. The Peruvian Congress approved FTA
25 GAO Report 05-168, FTAA: Missed Deadline Prompts Efforts to Restart Stalled
Hemispheric Trade Negotiations, March 2005.
26 For further information on these agreements, see CRS Report RS22419, The U.S.
Colombian Trade Promotion Agreement and CRS Report RS22391, U.S.-Peru Trade
Promotion Agreement, both by M. Angeles Villarreal.

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CRS-11
legislation on June 28 by a vote of 79-14. The outlook for an FTA with Ecuador has
been clouded by several investment disputes including the recent seizure of the assets
of Occidental Petroleum and the cancellation of its contracts.27 In 2005, the United
States imported $20.0 billion from the three Andean countries and exported $9.9
billion, for a total of $29.9 billion in trade. Colombia accounted for nearly half of
that total. Leading U.S. imports in 2005 from the three countries were crude and
refined petroleum oils, which were imported primarily from Colombia and Ecuador;
bananas; copper; coffee; and cut flowers. About half of U.S. imports from the region
came in under existing Andean trade preferences, which terminate at year-end 2006
and may not be renewed. Leading U.S. exports were machinery parts, data
processing machines, corn, wheat, and telecommunications transmission apparatus
such as cellular phone equipment.
U.S.-Southern African Customs Union FTA. On April 18, 2006, the
United States abandoned work on an FTA with the Southern African Customs Union
(SACU). Instead, the United States announced that it would begin a new work
program on trade and investment issues. The talks had began in November 2002,
when the USTR notified Congress of the intent to negotiate an FTA with the five
nations of SACU.28 The first round of talks began in Johannesburg, South Africa, on
June 3, 2003. SACU is a customs union composed of South Africa, Botswana,
Lesotho, Namibia, and Swaziland. The negotiations were hampered by the
reluctance of SACU to negotiate on the full range of issues that have been addressed
in other bilateral and regional FTAs that the United States has signed. At one point,
SACU countries envisioned a two-stage negotiating process, with a market access
agreement serving as an early harvest. Other issues of concern to the United States
such as government procurement, investment, and intellectual property rights would
be put off in a follow-up agreement. Such a strategy would have represented a
departure from U.S. negotiating practices.29 While all the SACU states are eligible
for the tariff preferences under the Africa Growth and Opportunity Act (Title I, P.L.
106-200), the negotiation of an FTA would have “locked-in” and potentially
expanded such tariff advantages.
Bilateral Negotiations

South Korea. The Administration notified Congress on February 3, 2006, of
its intent to begin FTA negotiations with South Korea. The first round of talks began
the week of June 5, 2006, in Washington, DC. Korea is the 7th largest trading partner
of the United States with two-way trade totaling $71.5 billion in 2005 — $27.7
billion in exports and $43.8 billion in imports. Motor vehicles, computers and
computer equipment, and consumer electronics are major import categories; major
27 “U.S. Freezes Ecuador FTA After Government Cancels Occidental Contract,” Inside U.S.
Trade, May 19, 2006.
28 For further information, see CRS Report RS21387, United States-Southern African
Customs Union (SACU) Free Trade Agreement Negotiations: Background and Potential
Issues, by Danielle Langton.
29 “SACU Stills Wants FTA with U.S. that Delays Talks on Investment, IPR”, Inside U.S.
Trade, February 24, 2006.

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CRS-12
U.S. exports include electrical and industrial machinery, aviation, chemicals, and
aircraft. The talks were announced after the resolution of a high-profile disputes over
screen-quotas for Korean films and restrictions on U.S. beef exports to Korea. The
negotiations will likely contend with South Korea’s well protected agricultural
sector; non-tariff barriers in the automotive and other manufacturing sectors; U.S.
protection of textiles and apparel and the status of products made at the Kaesong
industrial complex, an industrial zone in North Korea set up by South Korean
manufacturers. Senator Max Baucus, incoming Chairman of the Senate Finance
Committee, has commented that including the Kaesong complex has “the potential
to sink the U.S.-Korea FTA.”30 Proponents contend that an FTA would solidify South
Korea’s position as an economic powerhouse and would benefit the U.S.-South
Korean security relationship.31
U.S.-Panama FTA. During the FTAA summit in Miami on November 18,
2003, then-USTR Zoellick announced that the Administration had formally notified
Congress of its intent to begin negotiations for an FTA with Panama.32 Those
bilateral negotiations began formally on April 25, 2004, in Panama City, Panama.
In announcing the proposed FTA, the USTR cited Panama’s return to democracy, its
position as a regional financial and commercial center, and its assistance with
counternarcotics, anti-terrorism, and anti-money laundering efforts. Panama was the
65th largest trading partner of the United States in 2005 with total trade of $1.2
billion. U.S. imports of $320 million were led by shrimp, fresh fish, precious or
semi-precious metals, refined petroleum, and sugar. U.S. exports in 2005 totaled
$904 million and were comprised of refined petroleum, aircraft, medicaments, corn,
computer parts and accessories and telecommunications equipment. In the
negotiations, the United States is seeking to address high tariff levels on some
agricultural products, restrictive service licensing practices, and the lack of regulatory
transparency. Panama is seeking greater access to its largest market and is also
seeking maritime concessions. Currently, the negotiations appear to be stalled over
sensitive agricultural products, retail services, investment, and government
procurement related to the Panama Canal Area. The United States has also sought
recognition by Panama of U.S. sanitary and phyto-sanitary certification of U.S. meat
and poultry products. In August 2006, USTR Schwab expressed some doubt that the
negotiations with Panama may be concluded in the TPA timeframe.33

U.S.-Thailand FTA. On February 12, 2004, the Administration officially
notified Congress of its intent to negotiate an FTA with Thailand. Negotiations
began formally on June 28, 2004, in Hawaii and the latest round of talks took place
in January 2006, in Chiang Min, Thailand. These negotiations were accompanied by
30 “Baucus, Korean Ambassador Spar Over Tough Issues in Free Trade Pact,” International
Trade Reporter, June 22, 2006.
31 For further information, see CRS Report RL33435, The Proposed South Korea-U.S.
Free Trade Agreement (KORUSFTA), by William H. Cooper and Mark E. Manyin.
32 For further information, see CRS Report RL32540, The Proposed U.S.-Panama Free
Trade Agreement, by J. F. Hornbeck.
33 “Schwab signals UAE, Panama FTAs Unlikely to be Finished This Year,” Inside U.S.
Trade, September 8, 2006

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CRS-13
demonstrations in Thailand over proposed IPR provisions, and by the subsequent
resignation of the chief Thai negotiator.34 Talks were suspended by Thailand in
March 2006 prior to a snap election in April, the results of which were later
invalidated by Thailand’s judiciary. On September 19, 2006, Thailand experienced
a military coup which overthrew the government of Thaksin Shinawatra. While the
United States strongly condemned the coup, the negotiations reportedly have not
been formally suspended.35 In June 2006, Ways and Means Committee Member Phil
English announced his opposition to the U.S.-Thailand FTA, claiming that “Thailand
continues to demonstrate that it does not share common views with the United States
with respect to ... a country’s right to police its markets effectively from predatory or
illegally traded imports.”36
The White House sees potential benefits as: (1) promotion of U.S. exports,
notably benefitting U.S. farmers and the auto and auto parts industries; (2) protection
of U.S. investment; and (3) advancement of the Enterprise for ASEAN Initiative
(mentioned later in this issue brief) and the U.S.-Singapore FTA.37 It also
emphasized Thailand’s importance on military, security, and political issues.
Thailand is the 19th largest U.S. trading partner. Two-way trade in 2005 was $23.3
billion — $19.9 billion in U.S. imports, $7.2 billion in U.S. exports. Leading U.S.
imports were computers and parts, television receivers, and jewelry; and leading
exports were integrated circuits, semiconductors, computers, and computer parts.
The continuation of a 25% U.S. tariff on light trucks, intellectual property rights
protections, services, and sugar are issues in the negotiations.38
U.S.-Malaysia FTA. The Administration announced FTA negotiations with
Malaysia on March 8, 2006. The second round of negotiations began the week of July
17, 2006.39 Malaysia is the 10th largest trading partner of the United States with two-
way trade totaling $ 44.2 billion in 2005 — $10.5 billion in exports and $33.7 billion
in imports. Major exports to Malaysia include electronic circuitry, computer parts
and equipment, scientific equipment, aircraft, and machinery. U.S. imports from
Malaysia include computers and parts, electrical machinery, telecommunications
equipment, furniture, and rubber products. The United States is seeking the removal
of import licensing restrictions on motor vehicles, removal of government
procurement restrictions, increased IPR protection, and liberalized protected financial
services. Government procurement restrictions, in which a certain share of Malaysian
business is reserved for ethnic Malays, has been identified as a major obstacle in the
34 “Health NGOs to Focus Pressure on U.S. Ahead of Next Thai FTA Talks,” Inside U.S.
Trade, January 27, 2006.
35 “New Thai Government Remains Committed To U.S. FTA Talks, but Wants More
Oversight,” International Trade Reporter, October 26, 2006.
36 Rep. Phil English, Letter to President Bush, June 8, 2006.
37 The White House. “Fact Sheet on Free Trade and Thailand,” October 19, 2003.
38 For further information, see CRS Report RL32314. U.S.-Thailand Free Trade Agreement
Negotiations, by Raymond J. Ahearn and Wayne M. Morrison.
39 For further information, see CRS Report RL33445, The Proposed U.S.-Malaysia Free
Trade Agreement, by Dick K. Nanto.

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CRS-14
negotiations. A second major disagreement is the scope of services liberalization.
The United States is reportedly insisting on using a negative list modality for the
services negotiations, which would result in liberalization of all services not
specifically exempted. Conversely, the Malaysians are seeking a positive list — each
service sector would require specific identification and agreement to be covered.40
Following the first round of negotiations, the Malaysian trade minister commented
that any FTA would need to take into account its development needs and to provide
“adequate flexibilities and safeguards” for the liberalization of certain sectors.41
U.S.-United Arab Emirates. On November 15, 2004, the USTR sent formal
notification to Congress that the Administration intended to pursue FTA negotiations
with both the United Arab Emirates (UAE) and Oman. Talks began in March 2005.
The USTR said that both of these FTAs would be a move toward the President’s plan
for a Middle East Free Trade Area. (See “Other Potential Trade Agreements”
below.) Negotiations on the FTA were suspended in March 2006 in the wake of the
Dubai ports controversy, in which a Dubai firm attempted to assume management
contracts stemming from its investment in a company operating ports in the United
States. This controversy may affect the type of investment and government
procurement provisions that are included in this FTA. Also, in 2005 the
Administration identified the UAE as one of four countries that might be the subject
of U.S. sanctions for human trafficking.42 In 2005, the United States imported $1.5
billion from Kuwait and exported $8.5 billion to the emirates. The leading U.S.
import was crude petroleum. Leading U.S. exports were aircraft, cars, and
machinery.
Other Potential Trade Agreements
Middle East-North African Free Trade Agreement. On May 9, 2003,
President Bush announced an initiative to create a U.S.- Middle East Free Trade
Agreement by 2013. This initiative would create a multi-stage process to prepare
countries in the region for an FTA with the United States.43 Countries would begin
the process by negotiating accession to the World Trade Organization44 and
subsequently by concluding Bilateral Investment Treaties (BIT) and Trade and
40 “ Negative List for Services Emerges as Another Hurdle in FTA Negotiations,” Inside
U.S. Trade, November 10, 2006.
41 “Malaysian Trade Minister Wants Allowances, Flexibility in Free Trade Agreement With
U.S.,” International Trade Reporter, July 6, 2006.
42 “U.S. Threatens FTA Partners in Gulf With Sanctions Over Human Trafficking.” Daily
Report for Executives, June 6, 2005.
43 For further information, see CRS Report RL32638, Middle East Free Trade Area:
Progress Report, by Mary Jane Bolle.
44 In the Middle East region, Afghanistan, Algeria, Iran, Iraq, Libya, Lebanon, Syria, and
Yemen are not members of the WTO. Saudi Arabia became a WTO member in December
2005.

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CRS-15
Investment Framework Agreements (TIFA) with the United States.45 As domestic
reforms progress, countries would then negotiate FTAs with the United States,
possibly linking to other existing or in-progress FTAs, such as with Jordan, Morocco,
Bahrain, Oman, or the United Arab Emirates. Qatar and Kuwait have also been
mentioned as a near-term FTA candidates. The USTR has stated that FTAs with
Middle Eastern countries are consistent with the 9/11 Commission recommendation
that the United States encourage development in the Middle East by expanding trade.
The Administration’s rationale for this potential FTA is to provide the incentive
for the transformation of the economies of the Middle East and their integration into
the world economy. One study reports that, since 1980, the share of world exports
emanating from middle eastern countries has dropped from 13.5% to 4%, and that
per capita income has fallen by 25% in the Arab world.46
Enterprise for ASEAN. This initiative, announced by President Bush on
October 26, 2002, provides the impetus for the negotiation of bilateral FTAs with
individual countries of the Association of Southeast Asian Nations, or ASEAN
(Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore,
Thailand, and Vietnam). The first stage of this process is expected to be the
negotiation of a region-wide trade and investment framework agreement (TIFA),
which is seen as the first step in the process of negotiating individual FTAs with
ASEAN member states. Thailand is the first candidate for an FTA under this
initiative (see earlier section on Thailand). As seen by the Administration, the
principal benefits to the United States of FTAs with ASEAN member states are the
potential to reduce high tariffs on agricultural products and to eliminate restrictive
tariff-rate quotas on other U.S. exports, while the major benefit to ASEAN countries
would be improved access to the U.S. market. The initiative is also seen as a way of
countering growing Chinese influence in the region. Two-way trade with ASEAN
reached $148.5 billion in 2005, consisting of imports of $98.9 billion and exports of
$49.6 billion.
Egypt. Egypt is the 54th largest trading partner of the United States with U.S.
imports in 2005 of $2.1 billion, exports of $3.2 billion, and two-way trade totaling
$5.3 billion. Major export to Egypt include cereals, aircraft and parts, machinery,
vehicles and parts, telecommunications equipment, and arms; imports include
textiles, apparel, carpets, petroleum, and iron and steel. With a population of 65.3
million, Egypt is the largest country in the Middle East. Egypt has been a member
of the World Trade Organization since 1995, and it has concluded a TIFA with the
United States.
Egypt’s central position in the Arab world has led to speculation that the United
States would seek to launch FTA negotiations. The two sides reportedly have
established a number of exploratory “subcommittees” to prepare for the
45 “President Bush Lays Out Broad Plan for Regional FTA with Middle East by 2013,”
International Trade Reporter, May 15, 2003.
46 Edward Gresser, “Blank Spot on the Map: How Trade Policy Is Working Against the War
on Terror,” Progressive Policy Institute, Policy Report, February 2003.

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CRS-16
negotiations.47 In November 2004, a House Ways and Means Committee delegation
led by Chairman Thomas found reforms in customs administration, tariff reduction,
and tax reform encouraging, but they cited continuing intellectual property rights
violations and Egyptian restrictions on U.S. agricultural imports as impediments to
an agreement.48 In addition, discriminatory taxes on imports and poor labor rights
standards have also been mentioned as impediments to an agreement.49 In January
2005, the Pharmaceutical Research and Manufacturers of America (PhRMA)
indicated that it opposed launching FTA negotiations with Egypt after the Egyptian
Ministry of Health granted marketing approval to generic drugs without, PhRMA
alleges, providing legally required data exclusivity periods.50 The United States has
reportedly suspended consideration of an FTA with Egypt due to continuing human
rights issues, including the imprisonment of a presidential candidate in the 2005
elections and concerns over the treatment of Sudanese refugees.51
Taiwan. An FTA with Taiwan has been advanced by proponents in the last
several years.52 In the 109th Congress, two concurrent resolution (H.Con.Res. 342
[Andrews]; H.Con.Res. 346 [Ramstad]) were introduced in February 2006. Taiwan
is the 8th largest U.S. trading partner with total two-way trade in 2005 of $56.9
billion. The United States is now Taiwan’s second largest trading partner after
mainland China. In 2005, the United States imported $34.9 billion in merchandise
from Taiwan with computers, circuitry, vehicle parts, television transmission, and
telecommunications equipment leading. U.S. exports to Taiwan, which totaled $22.0
billion, included integrated electronic circuits, electrical machinery, aircraft parts,
corn, and soybeans. While the Bush Administration has indicated support for the
concept of a U.S.-Taiwan FTA, it cites several outstanding trade disputes, including
Taiwan’s enforcement of intellectual property rights, the imposition of excessive
standards, testing, certification and labeling requirements, and Taiwanese rice import
quotas.53 In addition, the negotiation of an FTA with Taiwan likely would encounter
the ire of the mainland Chinese government, which considers Taiwan to be a
province of China. Taiwan acceded to the WTO on January 1, 2002, and signed a
Trade and Investment Framework Agreement with the United States in 1994.
47 U.S., Egypt Set Up ‘Subcommittees’ To Lay Groundwork for Free Trade Talks,
International Trade Reporter, July 21, 2005.
48 House Ways and Means Committee, “Congressional Delegation to Tunisia, Jordan, Oman,
and Egypt: Finding by the Delegation,” November 17, 2004. [http://waysandmeans.house.gov/media/pdf/trade/
111704codelfindings.pdf]
49 “U.S. to Consider Egypt FTA After Next TIFA, Wants Further Reforms,” Inside U.S.
Trade, January 14, 2005.
50 “PHRMA Calls for U.S. to Oppose Egypt FTA Over IPR Violations,” Inside U.S. Trade,
February 4, 2005.
51 “Free Trade Talks with Egypt Put on Hold Pending Progress on Political, Other Issues,”
International Trade Reporter, January 26, 2006.
52 For further information, see CRS Report RS20683, Taiwan’s Accession to the WTO and
Its Economic Relations with the United States and China, by Wayne M. Morrison.
53 U.S. Trade Representative, 2005 National Trade Estimate Report on Foreign Trade
Barriers, pp. 591-608.

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CRS-17
New Zealand. In the 109th Congress, there is some congressional interest in
launching FTA negotiations with New Zealand. In February 2005, 54 House
Members launched the “Friends of New Zealand Congressional Caucus” to
demonstrate support for FTA negotiations. Proponents claimed an FTA with New
Zealand would be a natural complement to then ongoing U.S. FTA negotiations with
Australia due to the high degree of integration of the Australian and New Zealand
economies. However, Administration officials have enumerated several political and
security impediments to a potential FTA, including New Zealand’s longstanding
refusal to allow nuclear powered ships into its harbors and its refusal to support the
United States in the Iraq war.54 An FTA with New Zealand may also entail tough
negotiations on sensitive U.S. agriculture sectors such as beef, lamb, and sugar,
although many of these issues were also under negotiation with Australia. For its
part, New Zealand fears that a solo U.S.-Australian FTA would reorient U.S. trade
and investment away from New Zealand towards Australia. New Zealand was the
53rd largest trading partner of the United States in 2005 with two-way trade of $4.9
billion. U.S. imports of $3.2 billion were led by meat, dairy products, wood
products, and machinery. U.S. exports of $2.9 billion were led by machinery, aircraft
and parts, electronic equipment and vehicles.
54 “Zoellick Says Relationship with New Zealand Makes FTA a Challenge,” Inside U.S.
Trade, May 23, 2003.

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CRS-18
Trade Negotiations During the 109th Congress
(* Agreements Approved by Congress)
U.S. Total
Agreement
Trade+
Status
Sensitive Areas
($ bill.)
Doha Develop-
$ 2,513.0 A work program was produced at the trade ministerial
Agriculture, in-
ment Agenda
meeting in Doha in Nov. 2001. On Aug. 1, 2004, nego-
dustrial market
of the WTO
tiators reached a framework agreement on the conduct
access, services,
of future negotiations. The 6th WTO Ministerial was
trade facilitation,
held at Hong Kong in December 2005. Talks suspended
development is-
on July 24, 2006.
sues
Free Trade
$ 976.7 Negotiations began in 1998. Trade ministers met in
Agriculture,
Area of the
Miami on Nov. 20-21, 2003, where the third draft text
antidumping, tex-
Americas
of the agreement was presented. Talks have stalled,
tiles and apparel,
with no date for the next ministerial meeting.
worker rights,
IPR
U.S. - South
$71.5 Administration notified Congress of intent to begin
Agriculture, auto-
Korea FTA
negotiations on Feb. 3, 2006. Fourth round held Oct.
mobiles, non-tar-
23-26, 2006.
iff barriers
U.S.-Malaysia
$44.2 Administration notified Congress of intent to begin
Financial ser-
negotiations on March 8, 2006. Third round held Oct.
vices, autos, IPR,
30- Nov. 3, 2006.
gov. procure-
ment.
* U.S.-Domin-
$34.9 Talks were formally launched with five Central Ameri-
Textiles and ap-
ican Republic-
can countries on Jan. 8, 2003 and with the Dominican
parel, rules of
Central Amer-
Republic (DR) on Jan. 12, 2004. The United States, the
origin, worker
ica FTA (DR-
five Central American countries, and the DR signed the
rights, agricul-
CAFTA)
DR-CAFTA agreement on Aug. 5, 2004. Both Houses
ture, environ-
approved implementing legislation (H.R. 3045) on July
ment, IPR.
28, 2005. The President signed the legislation on Aug.
2. (P.L. 109-53). Proclaimed force between the U.S. and
El Salvador on Mar. 1, 2006, with Honduras and Nica-
ragua on Apr. 1, with Guatemala on July 1.
U.S.-Thailand
$23.3 The Administration officially notified Congress of its
Sugar, trucks,
FTA
intent to negotiate an FTA on Feb. 12, 2004. Negotia-
telecommunica-
tions formally began on June 28, 2004.
tions IPR
U.S.-Andean
$29.9 Talks began with Colombia, Peru, and Ecuador in May
IPR, agriculture,
FTA
2004. Negotiations with were concluded with Peru on
investment
Dec. 7, 2005 and signed on Apr. 12, 2006. Negotiations
concluded with Colombia on Feb. 27, 2006, and Presi-
dent notified Congress on Aug. 24, 2006.
U.S.-SACU
$10.9 Talks began on June 3, 2003, but negotiations were
Gov. procure-
FTA
dropped on April 18, 2006.
ment, textiles,
pharmaceuticals
U.S.-United
$8.5 Notified with Oman Nov. 2004; talks began the week of
Worker rights,
Arab Emirates
Mar. 8, 2005, with the UAE.
investment, ser-
vices
*U.S.-Oman
$1.1 Notified with UAE in Nov. 2004; Agreement signed on
Worker’s rights,
Oct. 3, 2005. Passed Senate June 29, 2006, passed
port security
House July 20. Signed by President, Sep. 26, 2006 (P.L.
MEFTA
109-283).
U.S.- Panama
$1.2 On Nov. 18, 2003, the Administration formally notified
Agriculture, ser-
Congress of its intent to begin negotiations with Pan-
vices, maritime
ama. Talks began formally on Apr. 25, 2004.
services
* U.S.-Bahrain
$0.8 Talks began on Jan. 26, 2004. Agreement reached May
Serve as hub for
FTA
27, 2004; signed Sept. 14, 2004. House approved im-
Middle East FTA
plementing legislation Dec. 8, 2005; approved by
Senate Dec. 13; signed by President Jan. 11, 2006 (P.L.
109-169); entered into force Aug. 1, 2006.
Source: Congressional Research Service
+Domestic exports (Fas value) plus imports for consumption (Customs value) with countries of proposed agreement in 2005.

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