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Multilateral Trade Agreements in Asia Envisioned in New Law

Wednesday, January 23, 2019
Sandler, Travis & Rosenberg Trade Report

President Trump has signed into law a bill that encourages trade agreements with countries in the Indo-Pacific region. The Asia Reassurance Initiative Act (S. 2736) also provides for a robust U.S. commercial presence throughout the Indo-Pacific region to promote U.S. exports and additional trade facilitation efforts, authorizes the imposition of penalties on entities and governments engaged in the theft of U.S. intellectual property, and requires a new comprehensive U.S. policy to promote energy exports.

The bill states that Congress supports multilateral, bilateral, or regional trade agreements with partners that comply with trade obligations; respect, promote, and strictly adhere to the rule of law; and increase U.S. employment and expand the economy. An Australian Financial Review article notes that this “call for the U.S. to return to multilateral trade deals counter[s] the president’s own tendency to pursue agreements with individual countries such as Mexico, Canada and Japan.”

The bill also expresses congressional support for (a) formal economic dialogues that include concrete, verifiable, and measured outcomes, (b) negotiations under the auspices of the World Trade Organization, including negotiations to enter into appropriate plurilateral and sectoral agreements, (c) full implementation of WTO Trade Facilitation Agreement by Indo-Pacific countries, and (d) the proactive, strategic, and continuing high-level use of the Asia-Pacific Economic Cooperation forum, the East Asia Summit, and the Group of 20 to pursue U.S. economic objectives in the Indo-Pacific region.

Other provisions of the bill include the following.

- encouraging the president to negotiate a comprehensive economic engagement framework with the Association of Southeast Asian Nations

- encouraging the president to produce a robust and comprehensive trade capacity building and trade facilitation strategy, including leveling the playing field for U.S. companies competing in the Indo-Pacific region

- requiring a report from the president to Congress that (a) describes U.S. government efforts to combat intellectual property violations and commercial cyber-enabled theft in the Indo-Pacific region, particularly China; and (b) includes a country-by-country assessment of priority areas for U.S. engagement and capacity building assistance (with funding for the Office of the U.S. Trade Representative to sponsor bilateral and multilateral activities designed to build capacity in these areas)

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