Chief Executives Urge U.S. Aggressiveness in Negotiating Trade Agreements

• Of the estimated 130 free trade agreements (FTAs) in force around the world today only 2 include the United States.

• Only 11 percent of world exports are covered by U.S. FTAs, compared with 33 percent for European Union FTAs and customs agreements.

• While Western European nations have negotiated 909 bilateral investment treaties, the United States is party to 43.

These are just a few of the alarming trade facts from The Business Roundtable’s new paper – The Case for U.S. Trade Leadership: The United States is Falling Behind – which calls attention to the new era in trade negotiations, an era of greatly expanded activism on trade on the part of our trading partners. (To read the full report, click here.)

"The numbers and facts are clear: the rest of the world is more engaged than we are in shaping the future of global trade," said Philip M. Condit, chairman of BRT’s International Trade and Investment Task Force and chairman and CEO of The Boeing Company. "It’s time to reinvigorate our trade efforts and push forward aggressively. We cannot afford to be left behind as other nations negotiate and reap the benefits of one trade agreement after another, gaining access to markets that should be benefiting American workers, farmers, consumers and companies. It’s time for the United States to get back into the game."

The BRT has long played a key role in trade issues for years and led last year’s effort by the business community to secure Permanent Normal Trade Relations with China. The new BRT paper on trade leadership notes that the first step for getting the United States "back into the game" is to build a national consensus that can form the basis of an agreed mandate from the Congress for the Executive Branch to move forward on breaking down trade and investment barriers through negotiations.

The BRT recognizes that labor and environmental issues are important factors in forming such consensus. "We need to address those issues," Condit said. "However, in pursuing labor and environmental objectives, the United States should not adopt a ‘one size fits all’ approach. The approach should be tailored to individual circumstances, and it should be based on the outcome of consultations among businesses, the Congress, U.S. negotiators, labor, environmental groups, and the countries with whom we are negotiating."

"We Have Nothing to Fear from Further Engagement in Trade"

According to the paper, "The United States has, for more than 50 years, pushed for a rules-based, global system of trade agreements that serves to help all nations improve living standards through economic progress. This historic mission, stretching in an unbroken line over the service of every President from Franklin Roosevelt to George W. Bush, must not be lost. Nothing less than the expansion of peace and security, not to speak of our own economic welfare, rests on this effort. Now, especially, when the United States is the most competitive nation in the world, we have nothing to fear from further engagement in trade."

Among the other disquieting trade facts from the report:

• The number of bilateral investment treaties (BITs) quintupled during the 1990s, from 385 to 1,857. The United States ranks only 26th in the number of BITs concluded as of January 2000.

• 16 Western European countries have BITs with Brazil (the largest country in Latin America), 16 with China (the largest country in Asia), 10 with India (population nearly 1 billion), and 13 with Indonesia (population over 200 million). The United States has not signed a single BIT with any of these nations.

• Even on our own continent, we’re faring poorly: Mexico has FTAs with at least 28 countries; 25 of these agreements were concluded since 1994.

U.S. businesses, workers and farmers face both an immediate and long-term threat from being left out of international trade and investment agreements. Immediately, they are forced to compete on an uneven playing field. Longer term, our trading partners are creating rules that cut against us and are forming strategic alliances that are hostile to U.S. interests. U.S. exports and jobs will pay a price for U.S. inaction, the report notes.

"The United States is no longer the indispensable country on trade," Condit added. "Compared with our most important trading partners, we are clearly on the sidelines when it comes to major agreements. Other nations are cutting deals without us, gradually surrounding the United States with a network of preferential trade agreements that benefit their companies, their workers and their farmers at the expense of ours."

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The Business Roundtable is an association of chief executive officers of leading corporations with a combined workforce of more than 10 million employees in the United States. The chief executives are committed to advocating public policies that foster vigorous economic growth and a dynamic global economy.