October 16,2003

Baucus and Dooley Press Administration to Prioritize Commercial Benefits in Bilateral and Regional Free Trade Agreements

(WASHINGTON, D.C.) U.S. Senator Max Baucus, (D-Mont) and U.S. Representative Calvin
Dooley (D-Calif.) sent a letter to U.S. Trade Representative Robert Zoellick today emphasizing the
importance of promoting bilateral and regional free trade agreements that will provide significant
commercial benefits for the U.S., while continuing to press for a successful negotiating round in the
World Trade Organization (WTO).

Full text of the letter follows.

October 16, 2003

The Honorable Robert Zoellick
United States Trade Representative
600 17th Street, N.W.
Washington, DC 20508
Re: Free Trade Agreement Priorities

Dear Ambassador Zoellick:

In the aftermath of the failed WTO Ministerial in Cancun, America’s best hope for liberalizing trade
and opening new markets – in the short term – lies in bilateral and regional free trade agreements.
As you know, for the past several months, we have engaged in a dialogue with the business
community, the agriculture community, think tanks, and others in the private sector on how the
United States can use its limited trade negotiating resources to our best advantage in selecting FTA
partners. We want to share with you the conclusions we have reached through those discussions.

First, it is clear that bilateral and regional agreements are not a substitute for a successful
negotiating round in the WTO. The United States should not de-emphasize the Doha Round in our
trade agenda – even for a short “break” – because the WTO remains the most viable forum for
resolving difficult issues in agriculture trade. Moreover, the potential commercial significance of a
Doha Round agreement dwarfs that of the United States’ current and pending FTAs combined. But
revitalizing the Doha Round will require both high- level involvement and leadership. We urge the
President to make this a priority issue.

Second, we need to prioritize bilateral and regional trade agreements that promise significant
commercial benefits. The International Trade Commission’s recent study on the economic impact
of the United States’ existing free trade agreements clearly demonstrates that only FTAs that
liberalize trade with relatively large markets provide measurable economic benefits to American
farmers, workers, businesses and consumers. With multilateral results delayed, and 3.2 million lost
American jobs since the beginning of 2001, we need to focus on ways to maximize the commercial
benefits of trade liberalization in the short term.

Third, trade liberalization is a goal that should be pursued primarily for its own sake. While good
models and foreign policy considerations can inform the selection of FTA partners, those concerns
must be subordinate to the goal of maximizing market opportunities. Trade is a sensitive and
sometimes divisive issue in our country today. In order for the Congress, the business community,
and the general public to provide the support needed to negotiate and implement free trade
agreements – at the rate of several per year – there must be visible economic gains that can be
measured in exports, profits, and jobs. Without those gains, it will be increasingly difficult to
generate the political will to implement a series of trade agreements that promise only intangible or
foreign policy benefits.

Finally, there is strong support both in Congress and in the private sector for increasing USTR’s
resources. We recognize the serious effort it will take to simultaneously pursue bilateral
opportunities, WTO negotiations, and existing enforcement priorities. We are working to provide
those resources through the appropriations process.

Since our FTA outreach effort began, we understand that the Administration has developed certain
criteria and procedures to guide the FTA selection process in future. We believe that a coherent and
rational framework for the selection of FTA partners is crucial to a successful U.S. trade policy.
With the recent slow-down in WTO negotiations and increased attention on FTA negotiations, we
urge you to be more open and explicit in articulating the Administration’s framework for FTAs.

We would appreciate an opportunity to review any documents that may shed light on this important
subject, and discuss it further with you.

We hope we can continue to work closely with you to advance our mutual goal of beneficial trade
liberalization.

Sincerely,

Senator Max Baucus

Representative Cal Dooley

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