President Felipe Calderón of Mexico urged the United States on Tuesday to enter a Pacific free-trade agreement. “In this very difficult time in the world economy, the world needs more trade and not less trade,” he said in a speech at the United States Chamber of Commerce, a business lobbying group.
Calderón, whose conservative National Action Party is almost certain to lose the presidency in July, credited his nation’s participation in the North American Free Trade Agreement and more than forty other trade pacts with helping its economy grow 4 percent last year and create almost 600,000 net new jobs.
The Obama Administration has signaled an interest in joining the Trans Pacific Partnership to deepen American engagement in East Asia. The organization seeks to eliminate all tariffs on imports and exports between Pacific nations by the middle of this decade.
The partnership began in 2006 as a free-trade area including Brunei, Chile, New Zealand and Singapore. Australia, Malaysia, Peru and Vietnam are on track to join. Canada, the Philippines, South Korea and Taiwan also want to come aboard.
Canada, Japan and Mexico urged the United States to ascend to the organization in November but have yet to receive an answer.
Ahead of a summit of American states almost two weeks ago, Colombia’s president Juan Manuel Santos Calderón also pressed the United States to engage more actively with other countries in the Western Hemisphere.
“If the United States realizes its long-term strategic interests are not in Afghanistan or Pakistan but in Latin America, there will be great results,” Santos predicted.
Relations between Colombia and the United States were frayed by President Barack Obama’s two year delay of the implementation of a bilateral free-trade deal. A similar agreement with Panama was also upheld throughout the first half of his presidency.
The American leader faces his own reelection battle in November and will be hard pressed to convince his Democratic Party base that freer trade across the Pacific is in the interest of American workers.
Manufacturers that were once headquartered in the industrial heartland of the United States, parts of the Midwest and northeast of the country that are now known as the Rust Belt, have shifted production overseas, often to China or other low wage countries in East Asia as well as Mexico.
The president has blamed this outsourcing on other nations not playing by the rules. “Our workers are the most productive on Earth,” he said in January, “and if the playing field is level, I promise you, America will always win.”
Yet Obama is reluctant to lift trade barriers that would create a level playing field. Rather he has enacted protectionist measures that further distort free trade.
The United States prohibit foreign sales of high technology and weapons and subsidized domestic automakers, banks and insurance companies. Ethanol subsidies expired this year but many import and investment restrictions remain. “Buy American” procurement rules further add to the cost of trade.