Economic Effects Being Measured on Canada’s and Mexico’s Entries Into Trade Accord

Canada and Mexico have been invited to join negotiations of the Trans-Pacific Partnership, the newest trade agreement involving the United States and eight other countries.

Now the U.S. International Trade Commission will weigh the economic effects of additional duty-free access of goods if Mexico and Canada are added. Both countries already have a free-trade accord with the United States under the North American Free Trade Agreement, enacted in 1994.

The ITC will submit its report to U.S.

Trade Representative Ron Kirk no later than Nov. 19.

Canada and Mexico were invited to join the trade talks in June. Their invitation triggered a 90-day consultation with Congress on objectives related to these new entrants to the TPP negotiations. Mexico and Canada will join the TPP negotiations once current TPP members successfully conclude the same notifications with their local legislative bodies.

Trade negotiators have been hammering out a new trade accord for years. The 14th round of TPP negotiations will be held Sept. 6–15 in Leesburg, Va.

The last round of talks were held July 2–10 in San Diego, where the various trade negotiators discussed issues such as cross-border services, telecommunications, government procurement, competition policy and customs.

The negotiating groups also made progress on rules of origin, investment, financial services and temporary entry. The United States tabled a new proposal in the intellectual property–rights group having to do with copyright limitations and exceptions.

Apparel makers and importers in the United States have been pressing for moreliberal regulations regarding rules of origin, hoping that the trade pact will not mandate a yarn-forward provision, meaning that textiles and apparel must be made of regional yarns to receive duty-free status.

President Obama announced in November 2009 that the United States would participate in the Trans-Pacific Partnership, a trade accord being negotiated with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Japan has shown interest in joining the group.

Obama is hoping that the trade pact will help U.S. exports of goods and services to these countries.

One of the top issues is making the regulatory systems of the member countries more compatible so U.S. companies can operate more seamlessly in TPP markets.

New emerging trade issues include addressing trade and investment in innovative products and services, such as digital technologies, and making sure that state-owned enterprises compete fairly with private companies. —Deborah Belgum