U.S. official optimistic about progress on free trade

WASHINGTON Mon Feb 4, 2013 6:20pm EST

WASHINGTON (Reuters) - A senior U.S. official said on Monday he was optimistic progress can be made on a number of trade fronts in President Barack Obama's second term, but declined to say whether he was on a short list to be the next U.S. Trade Representative.

"This is a an exciting time to be engaged in trade policy, in trade promotion," U.S. Commerce Under Secretary Francisco Sanchez told reporters after a speech to the Information Technology Innovation Foundation, a technology policy group.

Sanchez said the administration was pushing to wrap up talks on the Trans-Pacific Partnership, a proposed free trade pact covering the United States, Australia, Vietnam, Canada, Mexico, New Zealand and five other countries in Asia and Latin America.

The United States and European Union are also discussing the possibility of launching trade talks, and the Obama administration has "reinvigorated" trade enforcement efforts to make sure other countries play by the rules, Sanchez said.

"I, for one, get the importance of business, not only to our economy, but to our overall way of life," Sanchez said in his remarks to the group.

Current U.S. Trade Representative Ron Kirk has said he plans to step down by the end of the month. Sanchez, who is Hispanic, has been mentioned as a possible successor along with U.S. Export-Import Bank President Fred Hochberg and others including current acting White House budget director Jeffrey Zients.

Obama is under pressure to bring more women and minorities into his Cabinet after nominating white males to a number of prominent posts. Obama also raised the expectations of gays in his second inaugural address.

Hochberg, a former president of the Lillian Vernon catalog business, is openly gay and has traveled the world as Ex-Im Bank chief to help finance U.S. exports.

Zients is the author of a controversial Obama administration plan that would move the U.S. Trade Representative's office to within a revamped Commerce Department focused on exports. The U.S. Chamber of Commerce and key congressional committees oppose the plan, fearing it would weaken the USTR.

PLAN TO DOUBLE EXPORTS

Sanchez has also played a big role in the White House's ambition to double exports by the end of 2014, leading numerous trade missions to boost exports over the past four years.

He led negotiations over the weekend on a new tomato trade pact with Mexico that averted a possible trade war.

Sanchez, in his remarks on Monday, touched on a number of issues likely to confront the next USTR.

He touted foreign direct investment from China and other countries as a source of new U.S. jobs, and said the United States would aggressively push back against actions by other countries to keep out U.S. companies.

However, Sanchez said it would be foolish for the United States to go so far as to threaten to block Chinese investment in the United States to prod Beijing to open up.

"I would proceed with extreme caution with using investment policy as a stick," Sanchez said. "I think we're better off here being a model" for open investment regimes.

He warned that Argentina's policies, which discriminate against imports and foreign businesses, could backfire, partly by discouraging foreign investment and also by encouraging some companies to leave, which some have already quietly done.

"I have great concerns for Argentina that as early as a year from now that their economy will show signs of decline in part because of the policies they have been promoting," he said.

In response to a question, he stopped short of saying the United States should suspend trade benefits for India and Brazil to pressure those countries to open their markets.

But "I think we have to be able to look at all tools in our toolbox," Sanchez said.

On another issue, Sanchez said he was optimistic the White House and Congress would come together on a immigration reform package that would include provisions to make it easier for high-skilled foreigners to work in the United States.

"I can't think of any other time in the last five or six years that we have been in a place to help us achieve immigration reform. I'm very hopeful," he said.

(Reporting By Doug Palmer; Editing by Todd Eastham)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Recommended Newsletters

Reuters U.S. Top News
A quick-fix on the day's news published with Reuters videos and award-winning news photography and delivered at your choice of one of four times during the day.
Reuters Deals Today
The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day.
Reuters Technology Report
Your daily briefing on the latest tech developments from around the world from Reuters expert tech correspondents.