Related News

Baltimore bridge collapse unlikely to disrupt global trade

Ahmed lands top Americas trade job at Barclays

US fraudsters get jail time for letter of credit advance fee scam

Wells Fargo hit with sanctions fine over trade finance insourcing

Russian bank claims top traders complicit in US$3.2bn trade finance fraud

A respected international diplomat has told GTR that the US is “entering a new period of important regional trade” that will be defined by closer adherence to environmental and social concerns.

Thomas Pickering, who at various points was the US Ambassador to the UN, Russia, India, Israel, El Salvador, Nigeria and Jordan, said that the signing of a number of free trade agreements, as well as the ongoing discussions around others, represents a “broadening of the whole trade picture, to include trade services and the protection of rights”.

America has in recent years signed agreements with Colombia, Panama, Peru, Chile and the combined countries of Central America.

In an interview in London this week, Pickering told GTR that the moves are perhaps in part sparked by a concern among US citizens that trade can be predatory (in terms of jobs), particularly in times of economic hardship.

Obama’s Democrat administration has been keen to seal closer ties with neighbouring countries in a bid to protect intellectual property and assuage fears of further US jobs being lost to cheap production centres in East Asia.

The offshoring wave of the 1990s is in quasi-reverse: US companies, tempted by improving business conditions in the likes of Mexico and the ease of doing business closer to home (in part established through free trade agreements) are now opening manufacturing bases closer to home.

David Rees, who covers Latin America for Capital Economics, tells GTR that the US is reluctant to trade with China and prefers to do business with its neighbours. “It’s almost like a trade Cold War – they don’t want to give their secrets away. And you’ve got the FTAs with the likes of Mexico so that could play a role over the medium to long-term.”

As well as addressing social concerns, Pickering expects climate concerns to be a dominant factor in the US trade and export strategy in the coming years.

This year, both US Exim and the World Bank readdressed their financing policies for coal-fired plants abroad, with the ECA calling a halt to such funding and the multilateral stringently restricting it.

Pickering also revealed his fears that any progress made through the multilateral talks with Iran could be scuppered by bi-partisan short-termism in both the Houses of Senate and Congress.

Six of the world’s most powerful governments struck a deal with Iran in November which will see it stop enriching uranium beyond levels needed to power nuclear power stations in return for the relaxation of international trade and economic sanctions worth a potential US$7bn to the Iranian economy.

However, elements of the US houses are pushing for the imposition of new sanctions – outlined now and affected upon Iran failing to meet its agreed commitments in six months.

Pickering explains: “I think the president and the administration has taken the view that ‘no sanctions’ is the best policy for the next six months and what comes after that, either a comprehensive agreement or another round of negotiations, will have to be determined by what progress has been made. I think that’s a fair and reasonable proposition but it’s not widely-shared.

“I think at the moment that more sanctions are likely to be favoured in the House of Representatives. I think in the Senate there are enough Democrats and Republicans who are supportive of Israel and additional sanctions [and] that the president will have a hard slog in approaching members, even if sanctions were left open to not be applied, unless some events happened that would bring them into effect.”