The U.S. business community in Singapore in a letter to congressional leaders this week urged approval of the Trans-Pacific Partnership this year -- making the case for the deal by emphasizing that existing and future Asian trade agreements put U.S. companies at a competitive disadvantage in the region.
“In Asia, U.S. companies are competing against formidable Asian and European multinationals with deep, historical links throughout the economies, reinforced by strong government-to-government bilateral ties,” the American Chamber of Commerce in Singapore wrote in an Oct. 6 letter to Senate Majority Leader Mitch McConnell (R-KY), Senate Minority Leader Harry Reid (D-NV), House Speaker Paul Ryan (R-WI) and House Minority Leader Nancy Pelosi (D-CA).
“American goods and services are at a competitive disadvantage against Asian goods and services due to Asia's many existing and developing free trade agreements, offering in many cases unfettered duty free access.”
“We have a very small window of opportunity,” the group continued, “to get ahead of our competitors, before the conclusion of the 16 member mega-FTA, the Regional Comprehensive Economic Partnership (RCEP) in the next one to two years, which, together with China's One Belt One Road initiative will put us further behind.”
Steven Okun, chairman of AmCham's TPP Task Force -- and one of the letter's signatories -- in an interview with Inside U.S. Trade reiterated that failure to pass TPP will mean the other countries are going to move forward bilaterally or multilaterally, but made clear that the impact of RCEP -- which is led by China -- “very much depends on what happens with TPP.”
“RCEP is to a degree plan B,” Okun said on Oct. 5. “But it's not just TPP versus RCEP. It's everything that's happening,” adding that Australia already has more free trade agreements with countries in the region than does the U.S.
“The prospects for RCEP are different with or without TPP,” he added. “RCEP is not as impactful if there is TPP.”
Okun said U.S. lawmakers need to take into account the perspective of those who work and live in the Asia-Pacific region, emphasizing that their view is not granted enough attention in the debate over the deal.
“We don't think this is as much a part of the debate as it should be,” Okun said. “We think we bring a perspective that is important to consider,” he continued, noting that AmCham Singapore was the first business group to urge the U.S. administration to join the TPP negotiations.
In that vein, Okun said, a delegation of Asia Pacific Council of American Chambers of Commerce is slated to travel to Washington from Dec. 4-7 to meet with members of Congress.
According to Okun, the regional commercial ties in Asia result in the fact that American businesses “don't have the same head start because people don't know us that well.” And for that reason, Okun said, businesses need to build up U.S. brands to compete more fairly in the region.
Despite the fact that Asian consumers are “sophisticated and savvy buyers,” the group writes in its letter to congressional leaders, “our brands however do not always automatically translate into market share if we cannot overcome the distance and socio-cultural mindshare to compete on a level playing field.”
“The TPP provides the foundation for which U.S. companies, both big and small, can more confidently invest in the region, sending a strong signal that we are here in a big way and are serious players in the market,” the letter continues.
Should the U.S. Congress fail to pass the deal this year, the group states, “the consequences of a delayed or languished TPP are detrimental to our long term interests, regardless of whether or not these investments sit in TPP member countries,” AmCham Singapore wrote.
“This is a window of opportunity that cannot be missed and we urge you to take the necessary action to make the Trans-Pacific Partnership a reality.”
In addition to the commercial importance, the group emphasized that “the good reputation that the United States has built up over the decades in Asia” is on the line when considering whether to move forward with the deal.
“The United States cannot afford to be painted as an unreliable trading partner, negotiating for and receiving access, standards, and rules on behalf of our companies, and then not show up at the finish line,” AmCham Singapore wrote.
“Now more than ever, U.S. companies need to have the United States Congress firmly behind us, fully engaged in the Asia Pacific region, strengthening U.S. presence and cooperation in a concrete, consistent, and meaningful manner.”
The letter -- signed by Okun, Dwight Hutchins, chairman of AmCham Board of Governors, and Judith Fergin, AmCham executive director -- also garnered support from 56 individual companies. -- Jenny Leonard (jleonard@iwpnews.com)
