FTAs: a train leaving the station without America on board

EDITORIAL: "Trading Without America," Wall Street Journal, 7 August 2007, p. A10.

Great editorial, and yes, I do worry that Murdoch will dumb down the WSJ to the point where complex explanations like this one become far too rare on its pages.

The piece laments the fate of the Korean FTA, now blocked on the Hill. But what caught my eye was the chart on "bilateral trade fever," something that seemingly always happens whenever there's a hold up on multilateral trade negotiations (WTO).

According to the Business Roundtable (March 07), the U.S. has 10 FTAs, the EU 21. China has proposed or is negotiating FTAs with 28 countries. The percentage of the world's trade flowing through FTAs is now estimated at fifty. FTAs negotiated since 2002 in Asia-Pacific number 119, and there are roughly 300 FTAs in the world today.

Feel like we're falling behind in a conversation? I do.

This editorial triggered my column for next weekend, one in which I pirated some stuff from the book proposal for Vol. III currently awaiting an offer from Putnam (damn those August vacations!).

Comments

[Robert]

If you think that US is laging in the world of FTA today, what should "gap" countries think?If 50 countries rides the waves, what does means for the rest of 144 countries , most of witch are in the world "gap" open for everything that free honest trade is not.Looking from high places at the global scene they are unimportant with their GDP , but for a citizen living in such a country it means something to me.

[Michael]

At risk of speaking for a guy I've never met, I don't think he intended to insult the countries of the gap with this post. He likely read the article, thought "Boy, is America behind the curve!", and started writing.

Having not read the article, I can't say for sure. But I imagine you're right about the countries of the gap being farther behind still.

[Mark in Texas]

China has almost three times as many Free Trade Agreements as the US, but I suspect that the combined GDP of the 10 nations with which the US has FTAs is probably larger than the 28 nations in FTAs with China. I also suspect that the value of trade conducted via those FTAs is greater for the US combination.

China has different strengths and different goals. The US, in the near term is trying to get Mexico and nearby Caribbean nations up to a standard of living roughly equivalent to the poorest state in the US. Domestic politics is going to push in that direction if only to deal with the widespread unhappiness about immigration. FTAs with the poorer Gap nations farther from home is only going to dilute that near term political goal.

China, for a variety of reasons, is increasing its trade with a great many poor nations all over the Gap.