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 Volume 24, Number 33                                                                                                                  Monday, March 2, 2015

Trade Reports International Group


Lack of TPA Hurting TPP

   Lack of Trade Promotion Authority is having an impact in the ongoing TransPacific Partnership negotiations, where countries are hesitant to make compromises on politically sensitive issues that might be changed by Congress, Agriculture Secretary Tom Vilsack said Friday (WTD, 2/27/15).

 Without TPA, it is difficult to convince Canada and Japan to make good market access offers on sensitive agricultural products, the Agriculture Secretary told reporters.  He spoke during a telephone press conference with some of his predecessors to stress the importance of TPA and the TPP to US agriculture.

 A group of former agriculture secretaries released a letter to Congress on Friday calling for quick action on TPA.  The letter is part of an Administration push to get the US agricultural community more vocal in support of TPA and the TPP.

 The TPP will provide US farmers and ranchers with access to the fast-growing Asia-Pacific middle class, Mr. Vilsack said.  But without TPA, the 11 other countries involved in the negotiations are wary that what they negotiate might be undone by Congress.

 Mr. Vilsack told reporters that TPA is about striking a balance between Congress’ ability to say what should be in a trade agreement and the Administration’s ability to negotiate an agreement – while assuring trade partners that what they agree to will not be changed by Congress.

 If members do not like an agreement, they have the ability to vote against it, the agriculture secretary commented.  But “at the end of the day, process and procedure ought not to hold up our ability to get an agreement done,” he said.

 There is a current debate in the Senate Finance Committee holding up TPA legislation over conditions that would allow members to withdraw TPA treatment for a trade agreement.

 Those close to the discussions on Capitol Hill believe a TPA bill will be ready soon, despite the current disagreement.  House Ways and Means Committee Chairman Paul Ryan (R-Wisc) and Senate Finance Chairman Orrin Hatch (R-Utah) have said they want to move TPA in the spring.

       



Time For Compromise on TTIP

 If Washington wants to truly have a “new start” to the ongoing TransAtlantic Trade and Investment Partnership and make significant progress toward final agreement by the end of the year, the United States had better start coming forth with some compromises, commented visiting European Parliamentarian Manfred Weber on Friday (WTD, 2/27/15).

 Mr. Weber leads the Christian Social Union in the Parliament – which is the largest political grouping there.  He sits on the Parliament’s committee on civil liberties, justice and home affairs.

 The German moderate met last week with US Trade Representative Michael Froman and some members of Congress.

 In remarks at the Johns Hopkins School for Advanced International Studies, Mr. Weber said both sides in the negotiations must respect the other’s “red lines” – or risk the ultimate demise of the important negotiations.  It is better than both withdraw somewhat from their extreme stances and settle on “95-percent” of a full agreement rather than lose over some suffering issues.  Once settled, both sides could get back to the 5-percent of unfinished business, he suggested.

 Mr. Weber also urged the USTR to ease up on the secret nature of the negotiations.  Secrecy, he said, is hurting support in Europe by providing free-trade critics the advantage and leaving potential supports in the dark.  For instance, the member said, small and medium-size businesses throughout Europe have most to gain from a final agreement, but they are generally unaware of what both sides are doing.

 Even big corporations have not been as involved as they should be, Mr. Weber suggested.  Those big companies can get by very well in trade and investment with the United States without a TTIP.  However he pointed to a recent big car company rally in Berlin in support of the negotiations.

 Two central questions for the Europeans in the discussions are US insistence on an investor-state dispute settlement mechanism and respect for Geographical Indications.  Addressing free trade in energy between the two giant economies also has risen to the top of the TTIP agenda, at least as far as Brussels is concerned, he said.

 Europeans also are sensitive about the issue of data privacy.  The European Court of Justice last year handed down a proclamation that Europeans have the “right to be forgotten” when it comes to their Internet data transmission, Mr. Weber pointed out.

 Despite the expected difficulties, both sides need to reach compromises for the benefit of a full agreement – one that will eventually lead to models for global standards, Mr. Weber suggested.

       



North Korea Sanctions Legislation

 The House Foreign Affairs Committee unanimously approved legislation (HR 757) on Friday that would strengthen US sanctions against North Korea (WTD, 1/6/15).

 Similar legislation passed the House last year, but was not acted on by the Senate.

 The legislative move comes in the wake of a state-sponsored cyber-attack on Sony Pictures last November.

 HR 757 bans North Korean access to the hard currency and other goods that bolsters the regime there.  It also presses the Obama Administration to use its available tools to impose sanctions against the regime and on countries and companies that assist it in bolstering its nuclear weapons program.

 The bill also spotlights the human rights situation in the country.

Provisions

 HR 757 would –

 ●        deny sanctioned North Koreans and those facilitating their weapons programs access to the United States – including access to the US financial system and blocking their property in the United States;

 ●        call for a determination as to whether North Korea is a jurisdiction of primary money laundering concerns – requiring that banks meet strict monitoring and reporting rules when dealing with North Korean banks and other entities;

 ●        target banks that facilitate North Korean proliferation, smuggling, money laundering and human rights abuses;

 ●        target individuals who facilitated the cyberattacks against the United States;

 ●        authorize the President to sanction banks and foreign governments that facilitate the violation of the financial restrictions of United Nations Security Council Resolution 2094 passed in the wake of North Korea’s last nuclear test;

 ●        require enhanced inspection requirements of ships and aircraft arriving from ports and airports that fail to meet their international obligation to inspect North Korean cargo and

 ●        hold North Korean officials accountable for human rights abuses.

       



Around the Globe

             ●         Talks between Cuba and the United States continue under a positive, constructive and respectful atmosphere, Juan Jacomino, spokesman at the Cuban Interests Section in the United States told the Cuban News Agency (WTD, 2/26/15). “Positions on the issues to be defined for the operation of embassies once the reopening of these is decided have got closer,” said Jacomino.

 The talks are going well and are half the agenda for this round of talks on the process of restoration of diplomatic relations taking place in the State Department in the US capital, he said. Cuba came to the meeting with expectations regarding two important issues that would create the proper context for the restoration of diplomatic relations and opening of embassies: the exclusion of Cuba from the list of state sponsors of terrorism; and the resolution of the banking situation the Cuban Interests Section in Washington has gone through for its financial operations for more than a year.

 Meanwhile, Jen Psaki, State Department spokesperson, acknowledged at a news conference in Washington that the US policy toward Cuba over 50 years has failed. “It did not work for our national security or for the people of Cuba,” Psaki said, adding her government is hopeful on the dialogue it is holding with Cuba. She said that, in a new stage of relations, the two countries will have economic and national security benefits.

 Officials of the U.S. State Department, Commerce Department and Treasury will travel to Cuba “soon” to meet with representatives of ministries and banks as part of the exchanges that both countries will have in the coming weeks, the island’s government announced.  Foreign Ministry official Josefina Vidal will head the Cuban delegation, while the assistant secretary for Western Hemisphere affairs, Roberta Jacobson, will lead the U.S. delegation at meetings in March to discuss people trafficking, civil aviation, human rights and telecommunications, among other subjects.

             ●          In an address to representatives of Caribbean Community (CARICOM) member states on Thursday, Bahamas Prime Minister Perry Christie suggested that CARICOM take action to neutralize any adverse impact that could result from the United States’ decision to restore diplomatic relations with Cuba, the Nassau Guardian reported (see related report in this issue).  Christie, who previously said the announcement by the US “ought to be a very serious concern” for The Bahamas’ tourism product, said the region ought to find ways to partner with Cuba.

 Cuba’s impact on regional economies was among the topics under discussion at the 26th inter-sessional meeting of the Conference of Heads of Government of CARICOM in Nassau.  Addressing the opening ceremony of that two-day conference, Christie said the region needs to move quickly on the matter for the benefit of all countries.  “With a view to strengthening our relations with our sister nation... I reiterate that sooner rather than later, CARICOM should engage in feasibility surveys with a view to developing multi-destination tourism initiatives with Cuba,” said Christie, who is also the current chairman of CARICOM.

             ●          Trade ministers from 10 Southeast Asian countries pledged Sunday to break down further nontariff barriers to boost intra-regional trade as they seek closer economic integration, Kyodo news service reported (WTD, 10/3/14).  The trade ministers of member countries of the Association of Southeast Asian Nations gathered for their annual retreat in Kota Bharu, the capital of Malaysia’s northeastern Kelantan state, to chart the way forward for the grouping as it is poised to mark the formal establishment of the ASEAN Economic Community by end of this year.

 Under the AEC blueprint, the grouping -- with a combined population of over 625 million people -- envisions an integrated market and production base with free flow of goods, services and investments, skilled labor and capital.  It aims to boost intra-ASEAN trade further. In 2013, trade between ASEAN members amounted to $608.6 billion, accounting for 24.2 percent of total trade in the region. It was a 32.9 percent increase from the $458.1 billion recorded in 2008 when the AEC blueprint was first launched.

 “The implementation of the AEC measures does not mean that ASEAN will become a single economic entity by Jan. 1, 2016, rather it sends a strong signal that positive measures have been put in place towards a more liberalized and integrated economic region,” the ministers said in a statement at the end of the one-day retreat.  At present, ASEAN members have substantially eliminated custom import duties and beginning 2015, 97.3 percent of the products traded in the region are duty-free.

 The focus for the year, they added, will be on removing further nontariff barriers that impede trade, such as simplification of custom procedures, harmonization of standards, further liberalization of services and trade facilitation.

             ●          The 9th round of EU-Japan FTA talks took place last week in Brussels. The meetings focused on further consolidation of the negotiating texts (WTD, 12/16/14).  The round covered most of the areas to be included in the future agreement, namely tariffs, technical barriers to trade, access to public tenders, trade in services, rules on investment and sanitary and phytosanitary issues, regulatory cooperation, and transparency. A few other topics will be discussed during the inter-sessional phase at the end of March, for instance intellectual property rights.

 The objective of this round was to further consolidate the negotiating texts and to advance the discussion on the list of non-tariff measures the EU transmitted to Japan last December. The next round of negotiations will place in Tokyo at the end of April 2015.




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On the Web......

 

Africa


East Africa.  US-East Asian Cooperation Agreement signing.  (available at:  https://www.youtube.com/watch?v=ZPCWgbY_5qQ )  issued:  2/26/15.



Agriculture


TPA.  Agriculture Department statement on Trade Promotion Authority.  (available at:  http://www.usda.gov/wps/portal/usda/usdahome?contentid=2015/02/0050.xml&contentidonly=true )  issued:  2/27/15.



Asia-Pacific


TPP.  Remarks by several senators on the

Senate floor on the Asia-Pacific Partnership.  (available in the Congressional Record of February 26 ).



European Union


TTIP.  US Trade Representative’s office statement on the TransAtlantic Trade and Investment Partnership.  (available at:  https://ustr.gov/about-us/policy-offices/press-office/blog/2015/february/t-tip-strengthening-bulgaria-us-small )  issued:  2/27/15.



Export Controls


Korea (North).  House Foreign Affairs Committee statement on committee-approved legislation tightening controls on North Korea.  (available at:  http://foreignaffairs.house.gov/press-release/foreign-affairs-committee-votes-sanction-growing-north-korea-threat )  issued:  2/27/15.





Guatemala


US Relations.  Press conference call on visit to Guatemala by Vice President Biden.  (available at:  http://www.whitehouse.gov/the-press-office/2015/02/27/conference-call-senior-administration-officials-vice-presidents-trip-gua )  issued:  2/27/15.



Honduras


Labor.  Labor Department report on labor conditions in Honduras.  (available at:  http://www.dol.gov/opa/media/press/ilab/ILAB20150066.htm )  issued:  2/27/15.


Labor.  US Trade Representative’s office statement on labor rights in Honduras.  (available at:  https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/february/statement-us-trade-representative )  issued:  2/27/15.


Labor.  AFL-CIO statement on labor rights in Honduras.  (available at:  http://www.aflcio.org/Press-Room/Press-Releases/AFL-CIO-Responds-to-Department-of-Labor-s-Report-on-Labor-Rights-Violations-in-Honduras )  issued:  2/27/15.



Intellectual Property Rights


Special 301.  Public hearing on the Special 301 review by the US Trade Representative.  (available at:  https://www.youtube.com/watch?v=LFGsPgxS-bc and https://www.youtube.com/watch?v=g6edyoTFG6g )  issued:  2/24/15.



Korea (North)


Sanctions.  House Foreign Affairs Committee statement on committee-approved legislation tightening controls on North Korea.  (available at:  http://foreignaffairs.house.gov/press-release/foreign-affairs-committee-votes-sanction-growing-north-korea-threat )  issued:  2/27/15.



Labor


Honduras.  Labor Department report on labor conditions in Honduras.  (available at:  http://www.dol.gov/opa/media/press/ilab/ILAB20150066.htm )  issued:  2/27/15.


Honduras.  US Trade Representative’s office statement on labor rights in Honduras.  (available at:  https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/february/statement-us-trade-representative )  issued:  2/27/15.


Honduras.  AFL-CIO statement on labor rights in Honduras.  (available at:  http://www.aflcio.org/Press-Room/Press-Releases/AFL-CIO-Responds-to-Department-of-Labor-s-Report-on-Labor-Rights-Violations-in-Honduras )  issued:  2/27/15.



Motor Vehicles


Exports.  American Automotive Council statement on auto exports.  (available at:  http://americanautocouncil.org )  issued:  2/27/15.



Trade Policy


TPA.  Agriculture Department statement on Trade Promotion Authority.  (available at:  http://www.usda.gov/wps/portal/usda/usdahome?contentid=2015/02/0050.xml&contentidonly=true )  issued:  2/27/15.


TPP.  Remarks by several senators on the

Senate floor on the Asia-Pacific Partnership.  (available in the Congressional Record of February 26 ).


US.  Public Citizen statement on the US Trade Policy Agenda.  (available at:  http://citizen.org )  issued:  2/27/15.


US.  Course material from the Georgetown University Law School trade update conference.  (available at:  http://www.law.georgetown.edu/continuing-legal-education/programs/cle/international-trade-update/agenda/CourseMaterials/coursematerials.cfm )  issued:  2/27/15.


What we’re covering this week –

         The US Trade Representative’s office this week releases it annual report on the President’s trade agenda.  US Export-Import Bank President Fred Hochberg defends his agency against critics at the Center for Strategic and International Studies.

 Here are some of the events we’ll be following this week:

             ●          Monday, USTR is due to release the President’s Trade Agenda report.

             ●          Tuesday, Commerce Secretary Penny Pritzker discusses her agency’s budget at a hearing on the House Appropriations subcommittee on Commerce, Justice, science and related agencies.

             ●          Undersecretary of State for Economic Growth, Energy and the Environment Catherine Novelli discusses the President’s trade agenda at the Foreign Press Center.

             ●          Wednesday, the Washington International Trade Association sponsors a program on the World Trade Organization’s Trade Facilitation Agreement, with speakers including Assistant US Trade Representative Mark Linscott.

             ●          The US-Mexico Economic Dialogue is the topic at a Woodrow Wilson Center event featuring Commerce Secretary for International Trade Stephen Selig and Undersecretary of State Novelli.

             ●          On Thursday, the Center for Strategic and International Studies sponsors a program on the Export-Import Bank with President Hochberg.

             ●          Burson Marsteller and EUROCHAMBRES host a discussion on the TransAtlantic Trade and Investment Partnership with speakers including National Economic Council Special Assistant to the President Christopher Smart and European Union Ambassador David O’Sullivan.


Our  Blog


Updated:  1/6/15

 WTD’s

Friday Afternoon

Podcast

Straight talk.   

Click the highlighted text to hear snippets from WTD’s straight talk.

•  Comments by two veteran trade officials on secrecy in the TransPacific Partnership negotiations – first Chile Ambassador to the United States Juan Galbriel Valdes and then Taiwan Minister of Economic Development John Chen-Chung Deng.

•  Here’s what WTD on February 5 asked Latvian Ambassador to the US Andris Razans about US exports of chlorinated chicken to the EU and his response.

•  House Speaker John Boehner on December 4 comments on President Obama’s call for Trade Promotion Authority.

•  Canadian Ambassador to the United States Gary Doer comments on Trade Promotion Authority and the TransPacific Partnership on October 9 at the Financial Services Roundtable.

•  House Ways and Means Committee Chairman Dave Camp speaks to WTD about prospects for Trade Promotion Authority legislation on September 18.

•  Visiting South African President Jacob Zuma was asked at the National Press Club on August 4 what impact has President Obama’s color had on US relations with Africa.

•  Comments by Senate Finance Committee Chairman Ron Wyden to the press on trade and transparency on July 16.

•  Australia News Network interviews World Trade Organization Director General Roberto Azevedo during his visit to the G-20 meetings in Sydney on July 17.

•  New House Majority Leader Kevin McCarthy on June 22 tells Fox News Sunday why the US Export-Import Bank should end.

•  Here’s why Congressional ignorance can be very dangerous when it comes to willy-nilly support for free trade agreements, according to consumer advocate Ralph Nader.

 •  Here’s what’s at stake with Trade Promotion Authority and why Louisiana Republican Rep. Charles Boustany can’t sleep at night.

 •  Here’s what Wisconsin Republican Rep. Tom Petri said on the House floor April 10 about TTIP and Bratwurst.

 •  Here’s a brief interview with the Heritage Foundation’s Foundry report with House Financial Services Chair Rep. Jeb Hensarling (R-Texas) on the dangers of renewing the US Export-Import Bank given April 17.

 •  Here’s a brief snippet from remarks April 8 by Senate Finance Committee ranking Republican Orrin Hatch saying he is befuddled over why the President says he supports Trade Promotion Authority but doesn’t do anything about.

 •  Here’s Aspen Institute scholar and former Reagan Administration Assistant Secretary of Commerce speaking about with WTD on the many iterations of a US-European Union free trade agreement after a recent Hudson Institute event.

 •  Here’s what veteran House Democrat Richard Neal (Mass) – one of four cochairs of the new House TTIP Caucus – told WTD during a reception celebrating the caucus creation on April 3.

 •  Here’s what World Trade Organization chief spokesperson Keith Rockwell said in Washington on how and why the WTO is back.

 •  Here’s what Council of Economic Advisors Chair Jason Furman told the Joint Economic Committee last week about why there is so little mention of trade in the Economic Report of the President.

 •  This is why the European Union is wrong when it says it will never allow imports of US hormone-treated beef, Agriculture Secretary Vilsack tells WTD.