Doha, May 09 (QNA) - The Wall Street Journal said that reshaping the free-trade agreements of the 90s is driven by economic and political changes seeking economic integration and addressing challenges, but noted that the emergence of electronic services and e-commerce meant physical goods play a relatively smaller role in global trade.

In an article by Daniel Michaels titled "In New World of Trade Diplomacy, Free Trade and Tariffs Take a Back Seat," he said that the Biden administration has opened trade talks with Japan, the European Union, and more than 20 countries from India to Peru on cross-border economic links last year, but that those talks didn't focus on free trade or tariffs.

He attributed that change to gaps in wages and production costs between rich and poor countries that narrowed, which shifted attention to indirect costs like environmental regulations. He also added that the economic dislocation from globalization has made old-style free trade a losing proposition in many politicians eyes.

"FTAs (free-trade agreements) took off in the 1990s, when free-market economics appeared to have triumphed following the Soviet Unions collapse. In 1992, when independent presidential candidate H. Ross Perot warned of "a giant sucking sound" from American jobs being siphoned to Mexico by the then-proposed North American Free Trade Agreement, customs agents expended great efforts ensuring proper duties were being paid on products crossing borders," the article goes on to say.

The article also noted that the push continued through the early 2000s, peaking with two Obama-administration efforts: the Trans-Pacific Partnership, aimed at linking 12 countries in Asia and the Americas, and the Transatlantic Trade and Investment Partnership, between the U.S. and EU, but that it faced opposition in the two countries, ultimately leading to its failure.

"While the treaties collapse did prompt a big recalibration of objectives, it didnt portend an end to trade liberalization," the article said.

Instead, these deals started emphasizing other issues than tariffs.

"The project of the 2020s and the 2030s is different from the project of the 1990s," President Biden’s national security adviser Jake Sullivan said, reflecting the change in US diplomacy. He added that Washington now has a different set of fundamental priorities than simply bringing down tariffs.

The Biden administration is now working to provide Japan and the EU with access to the clean-energy subsidies in the Inflation Reduction Act, according to the article. The new deals focus on deepening economic ties, linking supply chains and leveling standards without touching customs duties. None requires congressional approval.

"In fact, the shift away from tariffs has been long under way, in part because tariffs are now so low. Most of the ill-fated TTIP’s elements were about nontariff barriers (NTBs), such as regulations and industrial standards," Michaels writes. 

Efforts to cut NTBs have been long under way, he added, citing An EU-South Korea FTA in 2011 dismantled barriers in cars, chemicals and pharmaceuticals, with Seoul following through by adopting chemical regulations modeled on EU legislation, opening the giant economy to Korean companies.

"Even if you dismantle tariffs, you might not have access to a market if you still have nontariff barriers," said Signe Ratso, a senior official at the European Commission, the EU’s executive arm, who was involved in negotiating the pact.

"Even under Mr. Trump, a vocal opponent of free trade, the U.S. worked to remove nontariff barriers. The U.S. and EU food and drug regulators in 2017 signed a mutual-recognition agreement on good manufacturing practices for active pharmaceutical ingredients. Like the aviation agreement, it allowed the two regulators to shift inspectors from each other’s facilities to markets seen as posing potentially greater risks, such as China and India," he added.

He concluded by saying that the reworking of Nafta as the U.S.-Mexico-Canada Agreement in 2020, centered in large part around nontariff issues including digital trade, intellectual property and standards covering labor conditions and the environment in Mexican factories. (QNA)