International Trade and America's Place in the Global Economy - The Future

Increasing the Scope of NAFTA

Spreading free trade remains a key objective of the U.S. government in 2005. In the early months of his administration, President George W. Bush met with other world leaders in Quebec, Canada, and agreed to build on the success of NAFTA by establishing a free trade area stretching from the Arctic Circle to the tip of Chile. However, efforts to include Chile in NAFTA have so far produced limited results. The United States is also pursuing free trade with Asian countries through Asia-Pacific Economic Cooperation (APEC), an organization that promotes liberal trade and economic policies along the Pacific Rim.

Expanding Trade with the EU

Cultivating a stronger economic partnership with the EU is also a priority for the United States, although the two trading giants have a history of policy disagreements. For example, the countries of the EU have banned the import of genetically modified (GM) foods, because they are determined to avoid unforeseen dangers to public health and the environment, while the United States has embraced GM foods for being cheaper, more flavorful, more nutritious, and more resistant to disease. Since 2002 the EU had developed what it described as a "clear, transparent, and stringent system" to regulate genetically modified food, feed, and plants, which has been a point of contention between the EU and the United States, whose producers believe that they could increase exports by billions of dollars if the EU were to permit GM foods. In 2004 the EU took a step in this direction by allowing the import of a genetically modified sweet corn that is resistant to pests.

In addition to disagreements over genetically modified foods, the United States angered the European steel industry by imposing tariffs on all steel imports in March 2002. The EU, Japan, and other nations put their case to the WTO, claiming that the actions of the Bush administration broke international trading rules. On November 10, 2003, the WTO agreed. Before appeals of the WTO decision could be heard, the United States voluntarily lifted the tariffs.

African Growth and Opportunity Act

The African Growth and Opportunity Act (AGOA), signed into law under the Trade and Development Act of 2000 by President Clinton, liberalized trade between the United States and African countries. In December 2004 President George W. Bush extended the AGOA, with thirty-six African countries remaining eligible for economic and trade benefits, with the goal of ensuring that those countries working toward a free market are supported by trade with the United States, and with the hope that free trade and other sound economic policies will alleviate poverty and protect workers' rights in those nations.

Trade with Iraq

U.S. companies have worked to build commercial opportunities in Iraq since the United States unseated Iraqi dictator Saddam Hussein in April 2003. The Iraq Investment and Reconstruction Task Force (IIRTF) was formed under the U.S. Department of Commerce to provide information to U.S.-based companies about expanding business in Iraq and help support the reconstruction of the country through exports. In October 2004 the Export-Import Bank of the United States joined with the Iraqi Ministry of Finance and the Trade Bank of Iraq to allow for U.S. exports to Iraq to move more freely and to aid in reconstruction. Existing U.S. businesses in Iraq can expect support from the U.S. government to continue, with insurance policies for contractors who provide reconstruction services and financing through the Export-Import Bank for goods exported to Iraq.