Treasury Secretary James A. Baker III said Monday that Japan, South Korea and Taiwan may want to follow Canada's lead in working toward a more liberal trade policy with the United States.
Mr. Baker, in a speech before the 50th anniversary meeting of the National Cotton Council, said the Canada-U.S. Free Trade Agreement could be the catalyst for future agreements and a new, more-competitive U.S. trade policy.We need to enhance the resiliency of the trading system by promoting liberalization on a number of fronts - multilateral, mini-lateral and bilateral, he told the 500 delegates to the council meeting.
Mr. Baker said the Canadian-U.S. Free Trade Agreement already has grabbed other nations' attention. The agreement, signed by President Reagan and Canadian Prime Minister Brian Mulroney and now being debated by the legislatures of both nations, creates what is generally regarded as the freest trading system existing today among two nations.
The inquiries it already has elicited for similar agreements are encouraging, Mr. Baker said.
He said he hopes it will spur follow-up liberalization at negotiations already under way to revamp the General Agreement on Tariffs and Trade, the document that governs most commerce among democratic nations.
The GATT talks for the first time will seek to lay down rules for such prickly issues as services, intellectual property rights, trade-related investment and agriculture.
If not (successful at GATT), we might be willing to explore a 'market liberalization club' approach, through mini-lateral arrangements or a series of bilateral agreements, he said.
Then he added: There are voices in other nations - including Japan, South Korea, Taiwan - that have indicated that they do not wish to be left behind. He did not elaborate.
He told the cotton organization that the Canadian-U.S. agreement would benefit their industry, primarily by lowering the costs of trade and creating new markets.
It means you should be able to sell more cotton to Canada in the form of textile and apparel products now subject to tariffs as high as 25 percent, he said.
He noted the investment provisions protect investors in both nations in transactions such as starting new ventures or selling most old ones.