Order Code RL33463
Trade Negotiations During
the 110th Congress
Updated January 8, 2008
Ian F. Fergusson
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division

---

Trade Negotiations During the 110th Congress
Summary
The Bush Administration has made bilateral and regional free-trade agreements
(FTAs) an important element 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. On May 10, 2007, Congressional leaders and the Bush Administration
announced a conceptual agreement on changes to currently notified free trade
agreements (FTA).
Negotiations have been concluded with Peru, Colombia, Panama, and South
Korea in time to be considered by Congress under U.S. trade promotion authority.
Legislation to implement the Peru FTA was approved by Congress and signed into
law by the President on December 14, 2007 (P.L.110-138). Several other trade
initiatives are under discussion, including a U.S.-Middle East FTA and an FTA with
countries in Association of South East Asian Nations (ASEAN) bloc. Legislation to
implement the Central American-Dominican Republic Free Trade Agreement
(CAFTA-DR) and FTAs with Bahrain and Oman were approved by the 109th
Congress.
The broadest trade initiative being negotiated is the Doha Round of 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. Although talks have now
resumed, major disagreements persist. Another regional initiative is the Free Trade
Area of the Americas (FTAA).
U.S. trade promotion authority (TPA) expired on July 1, 2007. Potential
agreements resulting from current trade negotiations (Colombia, Peru, Panama, and
South Korea) may be considered by Congress under TPA legislation enacted in
2002. 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.

---

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
U.S. Negotiating Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
TPA Notification and Consultation Requirements . . . . . . . . . . . . . . . . . . . . . . . . 5
Before the Start of Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
During Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Before Signing the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Entering Into the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Agreements Reached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Agreements Under Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The WTO Doha Round . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Free Trade Area of the Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Bilateral Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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
Table 1. Free Trade Agreements Approved by Congress Under Current Trade
Promotion Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 2. Trade Negotiations During the 110th Congress . . . . . . . . . . . . . . . . . . . 18

---

Trade Negotiations During the 110th
Congress
Most Recent Developments
December 14, 2007: President Bush signs legislation implementing the Peru
FTA (P.L.110-138). The Senate approved the legislation by a vote of 77-18 on
December 4, and the House of Representatives approved it by a vote of 285-132 on
November 10.
October 7, 2007: Costa Rican voters approved FTA with the United States in
a referendum by a 52%-48% margin.
July 17, 2007: WTO Agricultural and Industrial Market Access negotiating
committee chairmen released draft negotiating texts.
July 1, 2007: Trade Promotion Authority Expired.
Introduction
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 In the
109th Congress agreements were concluded and Congress approved the Central
American-Dominican Republic FTA and bilateral agreements with Bahrain and
Oman. 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 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
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).
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.

---

CRS-2
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 emphasis on regional and bilateral negotiations
undermines the World Trade Organization (WTO) and increases the risk of trade
diversion. Trade diversion occurs when the existence of 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 also 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
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
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
Representative-Designate,” Senate Finance Committee, May 16, 2006.

---

CRS-3
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 could 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 The ability of the United States to attract future
FTA negotiating partners may now depend on the reauthorization of trade promotion
authority, which lapsed on July 1, 2007.
Some Members of Congress have questioned the manner in which potential
FTA partners are chosen. Senator Baucus, now Chairman of the Senate Finance
Committee, criticized the Administration for overlooking high volume trading
partners in Asia and was quoted saying that “this Administration’s trade policy is
dictated largely by its foreign policy, not by economics.”8 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.9
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
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 “Baucus Proposes FTAs in Asia to Offset Chinese Influence,” Inside U.S. Trade,
December 10, 2004.
9 “Filling Up with Appetizers,” Congress Daily AM, June 11, 2003.

---

CRS-4
development assistance, provides nations with the ability to lift themselves out of
poverty and to ensure stability.10
Although the Administration is pursuing trade agreements on multiple fronts,
some critics question whether the United States should be negotiating trade
agreements at all. They contend 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.
With party control switching in the 110th Congress, Democratic leaders have
sought to make changes in U.S. trade negotiating strategy. On March 27, 2007,
House Ways and Means Committee Chairman Rangel and Trade Subcommittee
Chairman Levin unveiled a set of Democratic trade principles, including some that
likely will require, if implemented, the modification of the currently notified FTAs
with Colombia, Panama, Peru, and South Korea. After several weeks of negotiations,
congressional leaders and the Bush Administration announced a conceptual
agreement on May 10 on several issues that may clear the way for consideration of
the Peru and Panama agreements.
The conceptual template11 provides for enforcement of international labor
standards in an FTA partner’s domestic laws and regulations, adherence of FTA
partners to certain multilateral environmental agreements, an assurance that trade
agreements accord “no greater substantive rights” to foreign investors in the United
States than U.S. investors in the United States, a clarification that each agreement’s
“essential security” provision is not subject to challenge, insurance that government
procurement policies promote basic worker’s rights, and the incorporation of certain
flexibilities concerning test data and the approval of pharmaceutical products in
developing countries.
The result of the competitive liberalization strategy is that the United States has
been involved in an unprecedented number of trade negotiations during this
Administration. The United States has concluded agreements with Peru, Colombia,
Panama, and South Korea. Legislation to implement these agreement likely will be
considered by the 110th Congress under the timetable set forth by trade promotion
authority (see Table 1). During the 109th Congress, the United States ratified FTAs
with Bahrain, Oman, and a combined FTA with the Dominican Republic and the
countries of the Central American Common Market (Costa Rica, El Salvador,
10 National Security Council, National Security Strategy of the United States, September
2002, [http://www.whitehouse.gov/nsc/nss.pdf], pp. 17-21.
11 House Ways and Means Committee, “Peru and Panama FTA Changes,” available online
at [http://waysandmeans.house.gov/Media/pdf/110/05%2014%2007/05%2014%2007.pdf];
Office of U.S. Trade Representative, “Bipartisan Agreement on Trade Policy,” at
[http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2007/asset_upload_file127_
11319.pdf].

---

CRS-5
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 Oman or Costa Rica.
Table 1. Free Trade Agreements Approved by Congress Under
Current Trade Promotion Authority
Country
Public Law/Vote
Implementation Status
Chile
P.L. 108-77 (9/3/03)
In Force: (1/1/04)
House: 270-156 (7/24/03)
Senate 65-32 (7/31/03)
Singapore
P.L. 108-78 (9/3/03)
In Force: (1/1/04)
House: 272-155 (7/24/03)
Senate: 66-32 (7/31/03)
Australia
P.L. 108-286 (8/3/2004)
In Force: (1/1/05)
House: 314-109 (7/14/04)
Senate: 80-16 (7/15/04)
Morocco
P.L. 108-302 (8/17/04)
In Force: (1/1/06)
House: 323-99 (7/22/06)
Senate: UC* (7/22/06)
CAFTA-DR
P.L. 109-53 (8/2/05)
-El Salvador
House: 217-215 (7/28/05)
In Force: (3/1/06)
-Honduras
Senate: 55-45 (7/28/05)
In Force: (4/1/06)
-Nicaragua
In Force: (4/1/06)
-Guatemala
In Force: (7/1/06)
-Costa Rica
Referendum approved
-Dominican Republic
(10/07/07)
In Force: (3/1/2007)
Bahrain
P.L. 109-169 (1/13/06)
In Force: (8/1/06)
House: 327-95 (12/7/05)
Senate: UC (12/13/05)
Oman
P.L. 109-283 (9/26/06)
Pending
House: 221-205 (7/20/06)
Senate: 62-32 (9/19/06)
Source: Congressional Research Service
* UC- unanimous consent
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 July 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

---

CRS-6
promotion” or “fast-track”) procedures.12 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).13 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
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
12 For further information, see CRS Report RL33743, Trade Promotion Authority (TPA):
Issues, Options, and Prospects for Renewal, by J. F. Hornbeck and William H. Cooper.
13 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.

---

CRS-7
on the U.S. economy and on specific industrial sectors. There is no deadline for
submission of an implementing bill.
Agreements Reached
Peru. On November 18, 2003, the Administration formally notified Congress
of its intent to initiate negotiations for an FTA with Colombia, Peru, Ecuador, and
Bolivia.14 The negotiations began on May 18-19, 2004, with Colombia, Peru, and
Ecuador, but subsequently the negotiations proceeded on separate tracks.15 The
United States and Peru announced a bilateral deal on an FTA on December 7, 2005,
after resolving certain agriculture and intellectual property rights (IPR) issues, and
the agreement was signed April 12, 2006.16 The trade policy template agreed upon
by Congressional leaders and the Administration on May 10 has been incorporated
into the Peru agreement. In addition to the language on labor rights, environmental
protection, investment, and intellectual property rights incorporated into all the
pending agreements, the template specifically calls for the inclusion of an Annex to
the FTA covering forest sector practices in Peru. The Peruvian Congress approved
FTA legislation on June 28, 2006 by a vote of 79-14 and adopted amendments to
conform with the May 10th agreement on June 27, 2007. Legislation to implement
the Peru FTA was submitted by President Bush on September 27, 2007 and this
legislation was approved by the Senate Finance Committee by voice vote on October
4. On October 31, the House Ways and Means Committee approved implementing
legislation (H.R. 3688) by a vote of 39-0. The full House voted to approved the Peru
FTA by a vote of 285-132 on November 9, 2007 and the full Senate followed suit on
December 4 by a vote of 77-18. President Bush signed the implementing legislation
into law on December 14, 2007 (P.L.110-138).
With bilateral trade totaling $7.5 billion ($2.6 billion in exports and $5.9 billion
in imports), Peru was the 45th largest trading partner of the United States in 2006.
Many of Peru’s exports to the United States enter duty free under the Andean Trade
Promotion and Drug Eradication Act (ATPDEA) (P.L. 107-210), which has been
extended to February 29, 2008, and the Generalized System of Preferences (GSP).
Leading imports are gold, silver, jewelry, apparel, petroleum, and copper. Prominent
U.S. exports include heavy construction and drilling equipment and parts, petroleum,
plastics, cellular telephony equipment, and cereal grains.
Colombia. Like Peru, negotiations with Colombia started as a regional
agreement with the countries of the Andean Community, but subsequently pursued
14 In March 2005, Bolivians elected Evo Morales as President, who repudiated FTA
negotiations with the United States.
15 The United States discontinued talks with Ecuador after the government seized the assets
of Occidental Petroleum and cancelled its contracts in the spring of 2006.
16 For further information on this agreement, see CRS Report RL34108, U.S.-Peru Economic
Relations and the U.S.-Peru Trade Promotion Agreement, by M. Angeles Villarreal.

---

CRS-8
separate tracks.17 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 agreement was signed on November 22, 2006.
Colombia was the 33st largest trading partner of the United States in 2006 with
bilateral trade totaling $15.4 billion ($6.2 billion in exports and $9.2 billion in
imports). Leading U.S. imports include petroleum, coffee, spices, apparel, cut
flowers, gold, and precious and semi-precious stones. Prominent U.S. exports to
Colombia are heavy construction and drilling equipment, chemicals, cellular and line
telephony equipment, plastics, and cereal grains. As with Peru, many of Colombia’s
exports to the United States enter duty free under the Andean Trade Promotion and
Drug Eradication Act (ATPDEA) (P.L. 107-210), which was recently extended to
February 29, 2007, and the GSP.
The recent trade policy template, discussed above, calls for the inclusion of its
provisions to the Colombia agreement. However, a letter informing Ambassador
Schwab of the Agreement from Chairmen Rangel and Levin to USTR Schwab
highlighted the need to address “systemic and persistent violence against trade
unionists and other human rights defenders” in Colombia.18 On June 29, 2007, House
Democratic leaders, citing the necessity of “sustained results on the ground” against
such violence, announced that they would not support the Colombia FTA “at this
time.”19
Panama. During a hemispheric trade 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.20 Those
bilateral negotiations formally began 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. However, the
negotiations stalled primarily over agriculture and government procurement issues,
and were further delayed in the run-up to an October 2006 referendum on enlarging
the Panama Canal. On December 19, 2006, USTR announced the completion of
negotiations, subject to further discussions on labor issues.21 President Bush notified
Congress of his intention to sign the agreement on March 30, 2007. However, the
labor and environmental provisions of the Panama agreement were left open pending
agreement with Congress. The trade policy template agreed upon by congressional
leaders and the Administration on May 10 was incorporated into the agreement, and
17 For further information, see CRS Report RS22419, The U.S. Colombian Trade Promotion
Agreement, by M. Angeles Villarreal.
18 House Ways and Means Committee, “Peru and Panama FTA Changes,” at
[http://waysandmeans.house.gov/Media/pdf/110/05%2014%2007/05%2014%2007.pdf]
19 “Pelosi, Hoyer, Rangel, and Levin Statement on Trade,” press release June 29, 2007.
20 For further information, see CRS Report RL32540, The Proposed U.S.-Panama Free
Trade Agreement, by J. F. Hornbeck.
21 “Free Trade with Panama: A Summary of the Agreement,” December 19, 2006, at
[http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file564_
10234.pdf].

---

CRS-9
Panama signed the agreement on June 28, 2007. The Panamanian National
Assembly ratified the accord on July 11, 2007.
Consideration of the agreement by Congress may be complicated by the
September 1, 2007, election of Pedro Miguel Gonzales as President of Panama’s
National Assembly. He is wanted by U.S. authorities in connection with the murder
of a U.S. soldier in Panama City in 1992. On September 25, Ways and Means
Chairman Rangel reportedly referred to the Gonzales issue as an “800-pound gorilla
with Panama right in the middle of the living room.... This guy murdered a U.S.
soldier. It kind of makes labor and worker rights look kind of small.”22
Panama was the 64th largest trading partner of the United States in 2006 with
total trade of $2.9 billion. U.S. imports of $338 million were led by shrimp, fresh
fish, precious or semi-precious metals, refined petroleum, and sugar. U.S. exports
in 2005 totaled $2.5 billion and were comprised of refined petroleum, aircraft,
medicaments, corn, computer parts and accessories and telecommunications
equipment. Many Panamanian goods enter duty-free through the Caribbean Basin
Initiative and the GSP.

South Korea. The Administration notified Congress on February 3, 2006, of
its intent to begin FTA negotiations with South Korea.23 After eight formal rounds
of negotiation, and nearly round-the-clock sessions at the end March 2007, the
United States and South Korea concluded an FTA on April 1.24 The Administration
simultaneously notified Congress of its intention to enter into this agreement. South
Korea is the seventh largest trading partner of the United States with two-way trade
totaling $75.5 billion in 2006 — $30.8 billion in exports and $44.7 billion in imports.
Motor vehicles, computers and computer equipment, and consumer electronics are
major import categories; major U.S. exports include electrical and industrial
machinery, aviation, chemicals, and aircraft.
To achieve the agreement, negotiators resolved several thorny issues of
agriculture, auto tariffs, intellectual property rights, services trade, and the Kaesong
industrial complex. Tariffs on beef will be removed over a 15-year period, but the
agreement does not address the health restrictions imposed on U.S. beef. However,
Members of Congress have indicated that the FTA will not be considered until the
beef ban is lifted.25 Korea will not provide additional access for rice, but other U.S.
agricultural exports will either become duty free immediately or tariffs will be phased
out over a 10-year period. Both sides will remove their auto and light truck tariffs,
22 “House Ways and Means Committee Backs Draft Legislation on Peru FTA by Voice
Vote,” International Trade Reporter, September 27, 2007.
23 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.
24 Free Trade with Korea: A Brief Summary of the Agreement, at
[http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2007/asset_upload_file355
_11035.pdf].
25 For example, see press release of Senator Max Baucus, April 2, 2007, at [http://finance
.senate.gov/press/Bpress/2007press/prb040207a.pdf].

---

CRS-10
immediately or over time, and Korea agreed to remove its engine-displacement tax.
However, no guaranteed market access for U.S. autos was provided in the agreement,
as was sought by some Members of Congress. In other areas, products from the
Kaesong industrial complex in North Korea are not covered by the agreement, and
South Korea agreed to adopt strengthened laws concerning intellectual property
rights, especially patent and data protection for U.S. pharmaceuticals. In addition,
South Korea accepted liberalization of certain service sectors including financial
services, legal services, and U.S. ownership of telecommunications companies. The
House version of the trade policy template agreed on May 10 contained a note
indicating that Korea’s “systematic barriers” to trade in automotive, manufactures,
agriculture, and services “will have to be addressed.”26 On June 29, 2007, the House
Democratic leadership announced that it “cannot support the Korean FTA as
currently negotiated.”27
Agreements Under Negotiation
The WTO Doha Round
At the fourth 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.28 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.29 This framework had been the goal of the
unsuccessful fifth Ministerial, held in Cancun, Mexico, in September 2003. The
26 House Ways and Means Committee, “Peru and Panama FTA Changes,” see note p. 1, at
[http://waysandmeans.house.gov/Media/pdf/110/05%2014%2007/05%2014%2007.pdf].
27 “Pelosi, Hoyer, Rangel, and Levin Statement on Trade,” press release June 29, 2007.
28 For further information, see CRS Report RL32060, World Trade Organization
Negotiations: The Doha Development Agenda, by Ian F. Fergusson.
29 For more information, see CRS Report RL32645. The Doha Development Agenda: The
WTO Framework Agreement, coordinated by Ian F. Fergusson, and CRS Report RS21905,
The Agricultural Framework Agreement in the Doha Round Negotiations, by Charles
Hanrahan.

---

CRS-11
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.
The deadline for submitting an agreement to be considered under TPA has now
passed. For an agreement to be considered under TPA, Congress must have been
notified by April 2, 2007. At this point, the parties likely will seek to achieve some
measure of progress in the negotiations in the hope that the 110th Congress may
renew or extend TPA. However, the House leadership announced that their
“legislative priorities do not include the renewal of fast-track (i.e., TPA) authority on
June 29, 2007.”30 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 sixth 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.31 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 Lamy “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.
On January 31, 2007, Lamy announced the talks were back in “full negotiating
mode” with the prospect of formal negotiating sessions resuming in Geneva.32
Although members of the G-6 negotiating group on April 12, 2007, pledged to
complete the negotiations by the end of 2007, negotiations between the United States,
European Union, Brazil, and India again failed to reach an agreement on key
agricultural and industrial market access modalities at a meeting in Potsdam,
Germany, on June 21, 2007. During the summer and fall of 2007, the chairmen of the
agriculture, industrial, and rules negotiating groups released new draft texts. While
30 “Pelosi, Hoyer, Rangel, and Levin Statement on Trade,” press release June 29, 2007.
31 See CRS Report RL33176, The World Trade Organization: The Hong Kong Ministerial,
coordinated by Ian F. Fergusson.
32 “Lamy Announces Doha Talks Back in Full Negotiating Mode,” International Trade
Reporter, February 8, 2007.

---

CRS-12
elements of each of these texts have proved controversial, they have served to
continue the engagement of the various parties in Geneva at a time when many have
predicted the demise of the round.
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.33 The United States
traded $1,019.3 billion worth of goods with the FTAA countries in 2006: $390.9
billion in exports and $628.4 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, have been deadlocked, 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 fourth Summit of the Americas
took place in November 2005 at 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.34
33 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.
34 GAO Report 05-168, FTAA: Missed Deadline Prompts Efforts to Restart Stalled
Hemispheric Trade Negotiations, March 2005.

---

CRS-13
Bilateral Negotiations
Malaysia. The Administration announced FTA negotiations with Malaysia on
March 8, 2006.35 Despite five rounds of negotiations, the USTR announced on
March 23, 2007 that an agreement would not be reached in time to be considered
under TPA.36 Malaysia is the 10th largest trading partner of the United States with
two-way trade totaling $47.6 billion in 2006 — $11.2 billion in exports and $36.4
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.
In the negotiations, 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 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.37 On January 31, 2007,
House Foreign Affairs Committee Chairman Tom Lantos urged USTR Schwab to
suspend negotiations with Malaysia unless a Malaysian company cancels a deal to
develop gas fields in Iran. The negotiations proceeded the next week, and it was
unclear whether the matter was raised at the talks.38

Thailand. 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
demonstrations in Thailand over proposed IPR provisions, and by the subsequent
resignation of the chief Thai negotiator.39 Talks were put on hold 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 were not
35 For further information, see CRS Report RL33445, The Proposed U.S.-Malaysia Free
Trade Agreement, by Michael F. Martin.
36 “USTR Says U.S.-Malaysia FTA Negotiations Will Not Conclude Prior to April TPA
Deadline,” International Trade Reporter, March 29, 2007.
37 “ Negative List for Services Emerges as Another Hurdle in FTA Negotiations,” Inside
U.S. Trade, November 10, 2006.
38 “Malaysia Resists Lantos Demand Over Business Links to Iran,” Inside U.S. Trade,
February 9, 2007.
39 “Health NGOs to Focus Pressure on U.S. Ahead of Next Thai FTA Talks,” Inside U.S.
Trade, January 27, 2006.

---

CRS-14
formally suspended, though they remain in limbo.40 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.”41
The Administration sees the potential benefits of an FTA with Thailand 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.42 It also emphasized Thailand’s importance on military, security,
and political issues. Thailand is the 21st largest U.S. trading partner. Two-way trade
in 2006 was $29.8 billion — $22.3 billion in U.S. imports, $7.5 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.43
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.) No negotiations have taken place since March 2006 in the aftermath of the
Dubai ports controversy when 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. In 2006, the United States
imported $1.3 billion from the UAE and exported $11.2 billion to the Emirates
making it the 36th largest trade partner of the United States. 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
40 “New Thai Government Remains Committed To U.S. FTA Talks, but Wants More
Oversight,” International Trade Reporter, October 26, 2006.
41 Rep. Phil English, Letter to President Bush, June 8, 2006.
42 The White House, “Fact Sheet on Free Trade and Thailand,” October 19, 2003.
43 For further information, see CRS Report RL32314. U.S.-Thailand Free Trade Agreement
Negotiations, by Raymond J. Ahearn and Wayne M. Morrison.

---

CRS-15
countries in the region for an FTA with the United States.44 Countries would begin
the process by negotiating accession to the World Trade Organization45 and
subsequently by concluding Bilateral Investment Treaties (BIT) and Trade and
Investment Framework Agreements (TIFA) with the United States.46 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.47
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
countries reached $162.7 billion in 2006, consisting of imports of $110.7 billion and
exports of $52.0 billion.
Egypt. Egypt was the 51st largest trading partner of the United States with U.S.
imports in 2006 of $2.4 billion, U.S. exports of $4.1 billion, and two-way trade
totaling $6.5 billion. Major export to Egypt include cereals, aircraft and parts,
machinery, vehicles and parts, telecommunications equipment, and arms; imports
44 For further information, see CRS Report RL32638, Middle East Free Trade Area:
Progress Report, by Mary Jane Bolle.
45 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.
46 “President Bush Lays Out Broad Plan for Regional FTA with Middle East by 2013,”
International Trade Reporter, May 15, 2003.
47 Edward Gresser, “Blank Spot on the Map: How Trade Policy Is Working Against the War
on Terror,” Progressive Policy Institute, Policy Report, February 2003.

---

CRS-16
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
negotiations.48 In November 2004, a House Ways and Means Committee delegation
led by former 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.49 In addition, discriminatory taxes on imports and
poor labor rights standards have also been mentioned as impediments to an
agreement.50 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.51 The
United States has reportedly suspended consideration of an FTA with Egypt due to
continuing human rights issues, including imprisonment of a presidential candidate
in the 2005 elections and concerns over the treatment of Sudanese refugees.52
Taiwan. An FTA with Taiwan has been advanced by proponents in the last
several years.53 In the 110th Congress, H.Con.Res. 137 (Berkley) was introduced on
May 1, 2007 calling for the launch of FTA negotiations with Taiwan. Taiwan is the
eighth largest U.S. trading partner with total two-way trade in 2006 of $59.5 billion.
The United States is now Taiwan’s second largest trading partner after mainland
China. In 2006, the United States imported $38.1 billion in merchandise from
Taiwan with computers, circuitry, vehicle parts, television transmission, and
telecommunications equipment leading. U.S. exports to Taiwan, which totaled $21.4
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
48 U.S., Egypt Set Up ‘Subcommittees’ To Lay Groundwork for Free Trade Talks,
International Trade Reporter, July 21, 2005.
49 House Ways and Means Committee, “Congressional Delegation to Tunisia, Jordan, Oman,
and Egypt: Finding by the Delegation,” November 17, 2004, at
[http://waysandmeans.house.gov/media/pdf/trade/111704codelfindings.pdf]
50 “U.S. to Consider Egypt FTA After Next TIFA, Wants Further Reforms,” Inside U.S.
Trade, January 14, 2005.
51 “PHRMA Calls for U.S. to Oppose Egypt FTA Over IPR Violations,” Inside U.S. Trade,
February 4, 2005.
52 “Free Trade Talks with Egypt Put on Hold Pending Progress on Political, Other Issues,”
International Trade Reporter, January 26, 2006.
53 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.

---

CRS-17
standards, testing, certification and labeling requirements, and Taiwanese rice import
quotas.54 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.
New Zealand. There has been some Congressional interest in launching FTA
negotiations with New Zealand. In the 109th Congress, 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.55 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 the
solo U.S.-Australian FTA will 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 2006 with two-way trade of $5.9 billion. U.S. imports of $3.1
billion were led by meat, dairy products, wood products, and machinery. U.S.
exports of $2.8 billion were led by machinery, aircraft and parts, electronic
equipment and vehicles.
54 U.S. Trade Representative, 2005 National Trade Estimate Report on Foreign Trade
Barriers, pp. 591-608.
55 “Zoellick Says Relationship with New Zealand Makes FTA a Challenge,” Inside U.S.
Trade, May 23, 2003.

---

CRS-18
Table 2. Trade Negotiations During the 110th Congress
U.S. Total
Sensitive
Agreement
Trade+
Status
Areas
($ bill.)
Doha
$2,513.0* A work program was produced at the trade minis- Agriculture,
Development
terial meeting in Doha in Nov. 2001. On Aug. 1,
industrial
Agenda of
2004, negotiators reached a framework agreement market access,
the WTO
on the conduct of future negotiations. The sixth
services, trade
WTO Ministerial was held at Hong Kong in De-
facilitation,
cember 2005. Talks suspended on July 24, 2006.
development
issues
Free Trade
$1019.3 Negotiations began in 1998. Trade ministers met
Agriculture,
Area of the
in Miami on Nov. 20-21, 2003, where the third
antidumping,
Americas
draft text of the agreement was presented. Talks
textiles and ap-
have stalled, with no date for the next ministerial
parel, worker
meeting.
rights, IPR
U.S. - South
$75.5 Administration notified Congress of intent to
Agriculture,
Korea FTA
begin negotiations on Feb. 3, 2006. Negotiations
automobiles,
concluded and President notified Congress of
non-tariff barri-
intent to sign FTA on April 1, 2007; signed on
ers, trade reme-
June 30, 2007.
dies
U.S.-
$47.6 Administration notified Congress of intent to
Financial ser-
Malaysia
begin negotiations on March 8, 2006. Fifth round
vices, autos,
held Feb. 5- 9, 2007.
IPR
U.S.-
$29.8 The Administration officially notified Congress
Sugar, trucks,
Thailand
of its intent to negotiate an FTA on Feb. 12,
telecommunica-
FTA
2004. Negotiations formally began on June 28,
tions, IPR
2004. Last negotiating round in January 2006.
U.S.-
$15.4 Negotiations began May 2004; Negotiations con-
Agriculture,
Colombia
cluded on Feb. 27, 2006, and President notified
labor, IPR
Congress on Aug. 24, 2006 of intent to sign FTA;
agreement signed Nov. 22, 2006.
U.S.-United
$12.5 Notified with Oman Nov. 2004; talks began the
Worker rights,
Arab
week of Mar. 8, 2005. Last negotiating round in
investment,
Emirates
March 2006.
services
U.S.-Peru
$7.5 Negotiations with were concluded with Peru on
Agriculture,
Dec. 7, 2005 and agreement was signed on Apr.
labor, IPR,
12, 2006. President Bush submitted implementing environment
legislation on Sept. 27, 2007. Passed by Senate
Finance on October 4; by House Ways and
Means on October 31; by the full House on No-
vember 9; by the full Senate on Dec. 4 and signed
by President on December 14 (P.L.110-138)
U.S.- Panama
$2.9 On Nov. 18, 2003, the Administration formally
Agriculture,
notified Congress of its intent to begin negotia-
services, mari-
tions with Panama. Talks began formally on Apr. time services
25, 2004. Negotiations concluded December 19,
2006. President notified Congress of intent to
sign FTA on March 30, 2007; signed FTA on
June 28, 2007.
Source: Congressional Research Service
+Domestic exports (Fas value) plus imports for consumption (Customs value) with countries of proposed
agreement in 2006.
*2005 figure.

---