WASHINGTON (Reuters) - The United States wants to expand trade ties with Latin America and is looking to Brazil to help bring long-running world trade talks to a close by offering deeper cuts in its manufacturing tariffs, U.S. Commerce Secretary Gary Locke said on Friday.
“We’re looking forward to really developing an aggressive trade agenda, opening markets not just (in) the United States, but also two-way trade, because that’s going to be key to the economic prosperity of the entire hemisphere,” Locke told the Reuters Latin American Investment Summit.
Locke said the global economy may be turning the corner on the financial crisis that caused trade flows to plummet in the Western Hemisphere and around the world.
“I think clearly we’re going to continue to feel the effects of the financial crisis on trade,” Locke said, but added “we are starting to see things bottoming out.”
The United States is a top destination for exports from many countries in Latin America.
But in the first two months of 2009, U.S. imports are down 50 percent in value from Venezuela, 33 percent from Colombia, about 28 percent from Mexico and Brazil and 19 percent from Chile compared to the same months last year.
The U.S. economic stimulus package should help boost demand in coming months, but it will take a long time before growth is completely restored, Locke said.
In the meantime, Locke said countries need to resist protectionism, though he acknowledged that some might view U.S. bailouts of its financial and auto sectors as just that.
U.S. President Barack Obama had “great” meetings with Latin American leaders last month in Trinidad and hopes to be able to enact trade agreements with Colombia and Panama negotiated under former President George W. Bush, Locke said.
But the key to persuading the Democratic-run U.S. Congress to approve the deals will be negotiating a set of “side agreements” to address outstanding concerns, he said.
The Obama administration is pressing Colombia to do more to reduce murders of trade unionists and to prosecute more people responsible for the crimes.
It wants Panama to reform tax-haven laws and do more to protect the rights of workers to organize and call strikes.
“The key is to come up with benchmarks to measure progress on a lot of the issues that has been discussed,” he said.
Locke also said he looked forward to traveling to Chile in September for a regional business competitiveness meeting and to hosting talks with Brazilian government and business officials in late June or July.
In the seven-year-long Doha round of world trade talks, Washington wants Brazil and other major developing countries like China and India to make better offers to open their markets to foreign goods, he said.
“What matters to us in the United States is true reductions and tariffs and barriers,” Locke said. “The issue is whether Brazil will be opening its markets to other developing countries and developed countries.”
A key priority for Brazil in the Doha talks is for the United States to make deep cuts in its farm subsidies and to lower barriers that limit imports of South American products, such as sugar, cotton, orange juice and ethanol.
Every negotiation requires difficult trade-offs, so “I’ve always believed you’ve got to look at any agreement in totality and not just sector by sector by sector,” Locke said.
“Latin America produces so much agricultural products that Americans very much enjoy and want. And we of course in the United states offer a lot of expertise in technology, energy, clean energy that is badly needed in the developing countries of Latin America,” he said.
Locke noted that the U.S. tariff on ethanol had caused friction with Brazil, a major ethanol producer, and indicated U.S. ethanol policy could stand a review.
“As people are beginning to understand, we need to really look at and evaluate the full impact of how we produce ethanol, and whether or not ultimately it’s consuming more energy, or what the implications are with respect to the price of food, and whether there are other ways of producing ethanol that are in total less energy consumptive,” Locke said.