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International Resources: PMA Free Trade Agreements AnalysisTo help its members understand global marketplace dynamics, PMA has prepared this analysis of current ;U.S. Free Trade Agreements and Regional Free Trade Agreements. Free Trade AgreementsThe purpose of free trade agreements (FTA) is to increase the efficiency and fairness of trade between countries that sign such an agreement. The goals of free trade agreements are the elimination of tariffs imposed by the parties on the other party's trade goods as well as the promotion of economic integration and expansion of opportunity for citizens of both countries. The United States pursues comprehensive free trade agreements on a bilateral basis to expand opportunities for U.S. workers, farmers, and ranchers. The U.S. trade strategy is to pursue multiple market-opening initiatives on a global, regional, and bilateral basis, establishing models of success that can be used throughout all negotiations. The following information comes from the U.S. Trade Representative's Office and the U.S. Department of Agriculture on bilateral FTAs and regional FTAs (e.g. North American Free Trade Agreement - NAFTA). U.S.Bilateral Free Trade AgreementsU.S.-Australia: Agreement was signed May 14, 2004 and entered force on January 1, 2005. More than 99% of U.S. manufactured exports to Australia became duty-free immediately upon entry into force of the agreement. This is the most significant immediate reduction of industrial tariffs ever achieved in a U.S. FTA, and will provide benefits for U.S. manufacturing workers and companies; U.S. manufacturers estimate that the elimination of tariffs could result in $2 billion per year in increased U.S. exports of manufactured goods. There will be significant benefits for such key U.S. manufacturing sectors as autos and auto parts; chemicals, plastics and soda ash; information technology products; electrical equipment and appliances; non-electrical machinery; fabricated metal products; construction equipment; paper and wood products; furniture and fixtures; and medical and scientific equipment. U.S.-Bahrain: Agreement signed September 14, 2004. A U.S. - Bahrain FTA was an important step in implementing President George W. Bush's economic reforms in the Middle East and pursuing the goal of a Middle East Free Trade Area. Two-way trade was nearly $900 million in 2003. On the first day this agreement went into effect, 100% of consumer and industrial products and 81% of U.S. agricultural exports became duty-free. Bahrain opened its services market wider than any previous FTA partner, streamlined digital trade, protected intellectual property, facilitated government procurement, and provided for effective enforcement of labor and environmental laws. In 2003, U.S. exports totaled more than $500 million. This new trade opening expanded opportunities for exports of aircraft, machinery, vehicles, pharmaceutical and agricultural products such as meats, fruits and vegetables, cereals, and dairy products. U.S.-Chile Agreement was signed June 6, 2003. After 13 years of bilateral conversations and two of negotiations, the U.S. - Chile FTA entered into force on January 1, 2004. On that date, tariffs on 90% of U.S. exports to Chile and 95% of Chilean exports to the United States were eliminated. Chile is currently ranked as the 36th largest export market for the United States.
U.S.-Colombia Agreement was completed February 27, 2006. (Trade Promotion Agreement) More than 80% of U.S. exports of consumer and industrial products became duty-free immediately with the remainder phased out over 10 years. U.S. farm products that will benefit from improved market access include: pork, beef, corn, poultry, rice, fruits and vegetables, processed products, and dairy products.
U.S.-Israel Agreement completed January 1, 1995. The U.S.-Israel FTA is designed to stimulate trade between the United States and Israel. The agreement, which has no expiration date, provides for the elimination of duties for merchandise from Israel entering the United States. As of January 1, 1995, all eligible reduced rate imports from Israel were accorded duty-free treatment. The FTA does allow the two countries to protect sensitive agricultural subsectors with nontariff barriers including import bans, quotas, and fees.
U.S.-Jordan: Agreement was signed October 24, 2000. It was America's third FTA, and the first ever with an Arab state. The Jordan FTA achieves significant and extensive liberalization across a wide spectrum of trade issues. It eliminates all tariff and non-tariff barriers to bilateral trade in virtually all industrial goods and agricultural products within 10 years. U.S.-Korea Negotiations still ongoing. U.S.-Malaysia Negotiations still ongoing. U.S.-Morocco Agreement was signed June 15, 2004. This agreement expanded markets for U.S. farmers, ranchers, and businesses and provided greater choices for consumers. This agreement also strengthened the U.S. trading relationship with the Middle East and brought the U.S. one step closer to achieving President George W. Bush's goal of a U.S.-Middle East Free Trade Area (MEFTA). U.S.-Oman Agreement was signed January 19, 2006. A comprehensive agreement that will eliminate tariffs and barriers and expand trade between both countries. Oman is the fifth Middle Eastern country to have negotiated a free trade agreement with the U.S.. The agreement provides that 100% of consumer and industrial products and 87% of agricultural tariff lines will be duty-free. U.S.-Panama: Negotiations still ongoing. U.S.-Peru Agreement concluded December 7, 2005. (Trade Promotion Agreement) U.S.-Singapore Agreement signed September 3, 2003. The U.S.-Singapore FTA was the first U.S. FTA with an Asian nation and served as the foundation for other possible FTAs in Southeast Asia under President George W. Bush's U.S.-SACU (South African Customs Union) African Growth and Opportunity Act (AGOA) was signed July 13, 2004. An FTA with the five member countries of the Southern African Customs Union (SACU). These nations— Botswana, Lesotho, Namibia, South Africa, and Swaziland—make up the largest U.S. export market in sub-Saharan Africa, with $2.5 billion in U.S. exports in 2002.
Regional Free Trade AgreementsFree Trade Area of the Americas (FTAA) U.S.-Dominican Republic-Central AmericaFree Trade Agreement (DR-CAFTA): signed August 2, 2005.
North American Free Trade Agreement (NAFTA): Implementation began January 1, 1994 (all agricultural provisions will be implemented by 2008).
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