Back in November it was widely speculated that Obama’s second term would be punctuated by an aggressive pursuit of free trade initiatives.
In recent weeks, it’s become clear that free trade will indeed take center stage in Obama’s second term.
I mention this because I just read an excellent piece over at the Council for Foreign Relations website, Opportunity Knocks for Obama on Trade originally published in World Politics Review.
In the article, author Edward Alden lays the foundation for what many perceive as the biggest year for U.S. trade policy in a decade with the negotiation of two major free trade agreements, the Trans-Pacific Partnership Agreement and the U.S.- E.U. Free Trade Agreement.
Let’s take a closer look at these two ground-breaking agreements.
Trans-Pacific Partnership Agreement
The first major agreement taking center stage in 2013 is the Trans-Pacific Partnership or TPP.
The TPP is the first international commercial agreement pursued by the Obama administration from scratch.
The TPP would link Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Mexico and Canada into a “free trade” zone similar to that of NAFTA.
America already has free trade agreements with six of the 10 countries in the TPP: Peru, Chile Australia, Singapore, Canada and Mexico.
For the United States, the pact could require opening up protected sectors like dairy, sugar and textiles in exchange for new U.S. export opportunities.
Other countries such as Japan and South Korea could join the talks.
For a great discussion on the TPP, head on over to Salon and read Trans-Pacific Partnership: The biggest trade deal you’ve never heard of
U.S.-EU Trade Agreement
The second major agreement to look out for in 2013 is the U.S.-E.U. Trade Agreement.
This free-trade agreement between the United States and Europe will have a potentially huge economic impact on both– already each other’s biggest overseas trading partners.
The trans-Atlantic pact could rival the North American Free Trade Agreement in scale and be an inexpensive way to encourage growth between the European Union and the United States.
While tariffs on goods traded between the United States and the European Union are already low, companies that do substantial amounts of trans-Atlantic business stand to benefit immensly from even a modest increase in the volume of trade.
While China has dominated the political debate in the United States, U.S. trade with Europe is much larger, totaling $485 billion in goods in the first nine months of last year, compared with $390 billion in trade with China.
Negotiations on this landmark agreement are already underway and may take one to two years to complete.
Together, these trade agreements could produce the biggest liberalization of trade since the early 1990s, when the North American Free Trade Agreement entered into force. Look for 2013 to be a pivotal year for U.S. Trade Policy.
Fox Business does a great job of breaking down the key trade initiatives in the video segment What to Expect on Trade in Obama’s Second Term.