Report Analysis and Discussion
The United States continues to tie Free Trade Agreement (FTA) negotiations to political rather than economic objectives. The US has shunned negotiations with existing customs unions such as the GCC in spite of Congressional Research Service studies revealing that negotiation time and resources would be better invested in negotiations with larger entities.
Although US exports to the GCC became more attractive in 2006 as the dollar fell 11% in value against the Euro, general US import tariffs on aluminum articles still range from 2.5% to 6.5%. The Bush administration’s trade promotion authority, the ability to negotiate on an accelerated basis with an up or down vote by Congress, expires on July, 1 2007.
Business leaders in the US are urging the administration to realign trade promotion to opportunities, job creation and efficient supply chain management. As the GCC continues to transform from resource exportation to high value added production, it remains to be seen whether US trade policy will be able to align itself to new opportunities.
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