The proliferation of regional trade agreements: (re-)shaping the trade landscape with multilateralism on pause.

Position:International Law in a Multipolar World - Discussion

This panel was convened at 9:00 am, Saturday, April 6, by its moderator, Mark Wu of Harvard Law School, who introduced the panelists: Michael Moore, New Zealand Ambassador to the United States, former WTO Director General, and former New Zealand Prime Minister; Kenneth Smith Ramos, Head of the Trade and NAFTA Office of the Ministry of Economic of Mexico; Jeffrey Louis, Director of Economic Policy and Trade, World Bank; and Susan Schwab, Mayer Brown LLP; former U.S. Trade Representative.

INTRODUCTORY REMARKS BY MARK WU

Good morning. Thank you all for coming out on an early Saturday morning to discuss a very exciting trend that has happened over the course of the last decade, but particularly exciting in light of the developments of the last year, and that is the proliferation of regional trade agreements and what this means for the multilateral system as it has stalled.

We have an expert panel here who will share their views with respect to this question. Before I introduce the panel, I want to note that each of the panelists will be speaking in a personal capacity and not on behalf of their government or their institution, and each of them will be speaking for about 10 minutes. We are going to have a roundtable discussion afterwards, and then we will open it up for questions.

Let me start by introducing Ambassador Susan Schwab. I think many of you will know that she was the former U.S. Trade Representative from 2006 to 2009. In that position she was responsible for a number of free trade agreements--Colombia, Korea, Oman, Panama, Peru--as well as for launching the Trans-Pacific Partnership. She currently serves as the Professor of Public Policy at the University of Maryland where she was the former Dean of the School of Public Policy as well as a Strategic Advisor to Mayer Brown, and she is also on the board of a number of different companies, including Caterpillar, FedEx, and Boeing.

To my left is Kenneth Smith Ramos. Ken is the head of the Trade and NAFTA Office of the Ministry of Economy for the government of Mexico. He was formerly the lead agricultural trade negotiator for Mexico in his role as the Coordinator General of the SAGARPA and then served in a number of different roles, as Director-General for the Mexican FCC, for the Ministry of Economy, and so forth.

To his left is Ambassador Michael Moore. He is the former Director-General of the World Trade Organization. He oversaw the launch of the Doha Round itself, which we will be discussing today in terms of its interactions with the regional trade agreements. He also oversaw the conclusion of 10 different accessions of members to the WTO, the most significant of which is that of the People's Republic of China. He is the former Labor Prime Minister of New Zealand, has held a number of different roles in the New Zealand government such as Finance Minister, Trade Minister, not to mention several other posts, and currently serves as the New Zealand Ambassador to the United States.

Last but not least, we have Jeffery Lewis, who is the Director of Economic Policy and Trade for the World Bank's Poverty Reduction and Economic Management, or PREM network. He spent over 20 years at the World Bank in various capacities, including serving as a Senior Advisor to the PREM Vice President, as Advisor to the Office of Chief Economist, and as a Manager for the International Finance Team in the Development Prospects Group. We had an interesting conversation about how that links all the way back to what had happened over the course of the Asian financial crisis and so forth, and now watching a whole series of different developments occurring in the Pacific Rim and thinking about what these developments now will mean for developing countries around the world.

Before we begin, I want to acknowledge our two organizers of this panel, Daniel Behar of the Office of U.S. Trade Representative, as well as Luis Aguilar, for putting together this wonderful panel. Everything about the panel that you will see is all to their credit, and so with that, let me turn it over to Ambassador Moore.

MICHAEL MOORE

Speaking as a New Zealander, I would like to point out that New Zealanders are now multilateralists. In my day we went the unilateral path; that is, we opened our economy for our own good, just as much as we pretended it was for other people's good. In a way, we disarmed ourselves, but we were not mercantile. We now believe in the multilateral system.

Our economy was one of the most closed in the world in the OECD up until the 1980s. We now are among the most open after Singapore and Hong Kong. Cato puts us at the top on human freedoms. Heritage put us always in the top three or four on economic freedom. Forbes says we're the best place to do business. Transparency International always puts us up there with Finland as the least corrupt country, the most transparent country. So we get it, and we are continually surprised by how often we have to repeat the obvious about multilateralism, repeat the obvious about the virtues of globalization and economic freedom.

I think America sells itself short sometimes. If you think of the genius and generosity of the United States after the Second World War in devising a big, generous concept, like the Marshall Plan, I have to ask: What happened? I love teasing Congress, saying, "Tell me, if you are setting up the Marshall Plan again and an opinion poll went like this, 'Do you support keeping Texas with AR to pay the Germans who killed your son, or do you want a tax cut?' what would your electorate say? And on reflection, what was the right thing to do?" And the right thing to do was this huge generosity and confidence about what could happen here. It is in the American DNA. Maybe it goes back to Lincoln's second inaugural--with malice towards none but charity towards all--the confidence of dealing with the vanquished and not being too mercantile while you do it.

But we New Zealanders are true believers in the multilateral system. It is in our DNA. It's instinctive, and we didn't go towards many regional agreements. We had a bilateral agreement with Australia, but we were building. The Australians are our cousins. While China talks of two economies, one nation, we are building one economy, two nations. There's not a problem there. We've got the most open free trade agreement anywhere, except perhaps in England.

We aim at high-quality stuff, and we do this out of frustration with what's not happening in Geneva, and we're quite aggressive. We have ASEAN plus deal. We've begun negotiations with India and Russia. We are the first developed country to have a free trade agreement with China. It's very clean, and I can report that it's going well. Mind you, our product mix is a little different than some, but it is going really well, doubling in 18 months. We have done one with Hong Kong, and "Chinese Taipei," as we call it in the WTO, is very close to being ticked off.

And now there's the Trans-Pacific Partnership, or TPP, which is the biggest game in town. We are putting a lot of hope in this. Vietnam, Malaysia, Brunei, Australia, Singapore, New Zealand, Chile, Peru, Mexico, U.S., Canada, this is now our big deal. We can only repeat what our leaders have said and hold them to it as much as a small country can. So when our leaders at APEC said that the partnership would be comprehensive and would eliminate all tariffs, there it is. At the moment, Japan is very close to joining, but as we know, the toughest negotiations are not with each other, but at home. Can you negotiate it at home and get a consensus and then move forward? That's to be seen.

We are involved in another regional negotiation that not many have heard of. This is ASIP, which is India, ASEAN, ourselves, Japan, and China. This will not go very far, very fast, and this is not anti-American any more than the TPP is anti-Chinese. But you have to understand that as New Zealanders, we see ASEAN as central to our region.

If I could give ASEAN a bit of a plug, Southeast Asia is a very complex place. The territory boundaries aren't settled on the land, let alone the water. When Malaysia was established with Indonesia, we had the Vietnam War. We've had genocide in Cambodia. Burma has a history of military bad guys. So be very patient with ASEAN and understand how complex this is. When ASEAN wants to do something like this, you will find people like me will always be extremely tolerant. I don't believe much will happen for a while, but I think it's a very good thing that officials in New Delhi and Beijing and Burma and other countries are even talking trade.

So what will happen? If we get this 21st-century deal up and by that we do get the IP stuff, we do get the database stuff up, we do understand supply chain, that everything is changing, the trade figures are wrong as we know, we do understand the needs of 90 countries to provide a platform, it's always for future expansion. But to get to the 21st century, you also have to cover some of the 20th-century things, and this is where the question is, Is America up to it? The "too hard box" has been there for good reason. It's been too hard, but if you look at our colleagues and their needs, because anybody can understand their own negotiating brief--it's understanding the other guy's brief that's important--what do they need? Catfish, one shoe factory in Maine, textiles--our Vietnamese friends need some legs showing there. What do we need back from them? We need the SOEs. We need things on government procurement. We need to know that they have the capacity to implement, and we need to help them implement, and we need to put them to this capacity-building. It should be about sequence and capacity. I am proud to report that we are putting a lot of money to assist our friends in Vietnam. We've had 50 or so people down and building, so they can't use that as a way of stalling negotiations, but also there is a real reason. America has too...

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