U.S. to negotiate "Pacific 4" financial services pact

WASHINGTON (Reuters) - The United States plans to negotiate a financial services and investment agreement with four countries in the Asia-Pacific region that have linked their economies through a free trade pact, the U.S. Trade Representative's office said on Monday.

The talks with Singapore, Chile, New Zealand and Brunei -- together known as the "P-4" -- will begin in March.

The United States already has free trade deals with Singapore and Chile. The new initiative could lead to similar pacts with New Zealand and Brunei, if the Bush administration gets political support to move beyond talks on bilateral investment rules and removing trade barriers in banking, insurance and other financial services.

In the longer term, the P-4 talks could be a stepping stone to a free trade pact covering the 21 member economies of the Asia Pacific Economic Cooperation forum. However, that is probably an issue for the next U.S. president who will take office in January, 2009.

"We see these investment and financial services negotiations as an opportunity to further our engagement with countries committed to high-standard trade agreements," U.S. Trade Representative Susan Schwab said in a statement.

"This initiative also will provide another opportunity for the United States to participate in the regional trade architecture that is emerging in the vitally important Asia-Pacific region," Schwab said.

The Bush administration will consult with members of Congress and other interested parties before deciding whether to fully join the P-4's "Trans-Pacific Strategic Economic Partnership" pact, Schwab said.

Many U.S. companies are worried about losing sales in the fast growing Asia Pacific if the United States is not part of the region's rapidly growing web of free trade pacts and other preferential trading arrangements.

"This agreement could be a catalyst to open markets for U.S. exports across the Asia-Pacific region, which accounts for half the world economy," Myron Brilliant, the U.S. Chamber of Commerce's vice president for Asia, said in a statement.

If other U.S. free trade partners in the Asia-Pacific region -- such as Mexico, Australia and Peru -- also join the P-4 pact, that would help move the region toward the proposed Free Trade Area of the Asia Pacific, Brilliant said.

U.S. pork producers said they were eager for the United States to fully join the P-4 pact and move toward a regional free trade deal.

"This is an important step toward expanding pork exports to the Asia-Pacific region," National Pork Producers Council President Jill Appell, said in a statement. "Pork producers have benefited tremendously from the increased exports that result from trade agreements."

(Editing by Vicki Allen)