Ben Muse thinks that we ought to reconsider the potential for regional and bilateral trade deals to be the engine of trade liberalization in light of the Doha round’s stall. I’m doubtful of that strategy.
The FTAA isn’t moving because the US is insisting upon the inconclusion of non-trade issues while Brazil is demanding that agricultural subsidies be addressed. The recently announced Korea-US PTA will cause significant trade diversion and is worth pursuing “only if agricultural reforms are an integral part of the deal,” which are quite unpopular in Korea (pdf).
For a menu of potential PTAs, Muse highlights Jeffery Schott’s Free Trade Agreements: US Strategies and Priorities. Ben, which FTAs do you think the US ought to pursue?
Trade Diversion 
Jonathan,
Just a quick note to let you know I’ll get back to you shortly. I’m not blowing off your question.
I didn’t realize you were at Gonzaga. My son is there a couple years behind you.
I enjoy your blog – I find a lot of useful things.
Ben
I think the point of the article I was summarizing was the prediction that, soon, a time is going to come when multilateral negotiations are not really going to be a viable option (at least for a while). I don’t think the authors liked that conclusion. I don’t think they were advocating FTAs, merely predicting an acceleration in negotiations.
Prior to that time, I think our focus should be on the multilateral approach. Multilateral agreements are certainly much more attractive than bilateral or regional agreements I don’t think it’s a foregone conclusion that the Doha Round is going to fail. At this point I’d be concerned about bilateral or regional negotiations interfering with the multilateral track.
If the multilateral approach is not an option, the opportunity costs of FTA negotiations are much smaller.
The benefits of FTAs for the U.S. are generally small, although they can be larger for countries involved in the negotiations with us. But if we can find FTAs where the investment of a few millions in negotiating costs leads to a few billions in annual benefits, and the collateral damage is modest, then they might be a good idea.
Beyond that, there is the potential to advance U.S. diplomacy through FTA agreements. Furthermore, they engage business interests politically in support for maintaining legal and administrative U.S. trade infrastructure.
That doesn’t answer your question – about what FTAs I think would be valuable. Choi and Schott expect a Korea-US agreement would be welfare enhancing, even in the absence of an agricultural agreement. Choi and Schott also point to the potential for an agreement to address a wide range of issues (for example anti-dumping, invesment rules, standards, intellectual property rights and so on). These could encourage investment and efficient resource allocation within the two countries and thus encourage economic growth.
Ben,
Thanks for your thoughtful comment. I’m happy to learn that we agree that the US ought to pursue the multilateral approach so long as that road is open.