After this fall's collapse of World Trade Organization (WTO) global trade liberalization talks, businesspeople worried that progress on trade was stalled. But the Bush administration has pushed forward with a raft of bilateral trade deals. Recently, the government has signed free trade deals with Chile, Morocco, Singapore and four Central American nations. Free trade agreements with Australia, Bahrain, Thailand and a bloc of southern African nations are also in the works. These deals slash nearly all tariffs and other trade barriers.
These deals help small businesses more than large companies, economists say, because many entrepreneurs don't have the resources to compete in a more closed foreign economy. And each country offers entrepreneurs specific opportunities. Australia and other Southeast nations are poised for strong economic growth in 2004, making them prime consumers of U.S. goods, says Walter Lohman, executive director of the US-ASEAN Business Council, a trade group.
Southeast Asia's work force is so competitive that , a specialist on Asian business at the University of Michigan, Ann Arbor, says foreign direct investment in Southeast Asia may be more profitable even than in China, the world's biggest recipient of foreign funds. The Latin American trade deals may also help entrepreneurs. Small U.S. service companies have already prospered in Central America, while Chile, which has a large agricultural sector, has proved to be a strong market for U.S. manufacturers of farm machinery and other capital goods.
Still, obstacles remain. The Central America deal, as well as the prospective Australia and Thailand agreements, still have to be ratified by Congress, which tends to be more protectionist in an election year. Yet the White House has made the deals a priority and convinced Congress to ratify the Chile and Singapore deals. And the Bush administration is being careful to protect the interests of U.S. businesses: The Central American agreement, for example, contains some import restrictions that protect industries in key states.