GHY Tradelines

(Heather Scoffield – Canadian Press)

The leaders of Canada and the Pacific Alliance will be sizing each other up today to see if Canada might be a good fit with the nascent Latin American trade bloc.

Stephen Harper wants to see if it’s worthwhile engaging in yet another round of talks to free up trade and investment. And the leaders of the Pacific Alliance – which groups Chile, Colombia, Peru and Mexico – want to know if Canada is serious enough about economic integration to at least partly let go of its trade and investment restrictions and its visa requirements.

The opposition NDP is leery about joining a group when Canada is already engaged in several different trade talks that are dragging on and on, and before a parliamentary committee studying the Pacific Alliance has even reached any conclusions. Read more here.
 

(Monika Ermert – Intellectual Property Watch)

The pace to negotiate bilateral or plurilateral free trade agreements has been accelerating rapidly over the last month as the big trading blocs seem eager to position themselves in the race for market access and standards.

China, Japan and Korea in March hurried to open their first official round of negotiations (CJK), just in time to edge ahead of Japan’s joining the negotiations of an enlarged Trans-Pacific Partnership Agreement (TPP) and also ahead of the official start of a Transatlantic Trade and Investment Partnership (TTIP) announced by the European Union and the United States earlier this year. Meanwhile, a concerned Association of Southeast Asian Nations (ASEAN) rushed to counter these ventures with their own competitive bid by starting detailed talks on a Regional Comprehensive Economic Partnership (RCEP) in Brunei Daressalam last Friday.

For years, China and Korea had been reluctant to negotiate the CJK FTA, said Junji Nakagawa, professor of international economic law at the Institute of Social Sciences of the University of Tokyo. Research on the CJK started in 2003, with an official study begun in 2010 and finalised only last spring. Read more here.
 

(Japan Times)

The 11 countries involved in the Trans-Pacific Partnership free-trade negotiations began their 17th round of talks in Lima on Wednesday with the focus on whether exceptions should be made to the general rule of tariff elimination.

Even though Japan gained the unanimous backing of the members last month to become the 12th member of the talks, it cannot take part until the U.S. completes the 90-day notice required by Congress to admit it. The earliest Japan can join is expected to be the July round in Malaysia.

With Japan seeking to protect its rice and other sensitive agricultural products by retaining tariffs through the TPP negotiations, decisions by the existing members at the 10-day meeting could affect Tokyo’s plans for the talks. Decisions already made by TPP members are not renegotiable as countries aim to conclude a deal by the end of the year. Read more here.
 

(Mark Weisbrot – Huffington Post)

The Trans-Pacific Partnership (TPP) is a very special trade agreement. It is so special that our government officials who are negotiating it want to keep it completely secret from us. It’s like a special Christmas present so they want it to be a surprise! And to make sure it’s a surprise, they won’t even let a single member of Congress see what they are negotiating. However, hundreds of corporations have been given access to the draft text.

This should give you some idea of our government’s trade agenda. President Obama says that he wants to create jobs through trade, but this agreement is more likely to cost jobs here than to create them. Leaked drafts of parts of the agreement indicate that our negotiators are trying to increase patent protection for pharmaceutical companies, for example. This will not create jobs, although it may make our big drug companies and their shareholders richer.

When our government tells us such an agreement will create jobs in the U.S., they are saying that the agreement will increase our exports faster than imports. So, for the TPP, they are saying that we will increase our exports to Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and now possibly Japan faster than our imports from these countries. That is unlikely. We were promised the same thing with NAFTA two decades ago, but it didn’t work out that way at all. Read more here.
 

(BJ Siekierski – iPolitics)

If the Harper government learned anything from its belated push to join the Trans-Pacific Partnership negotiations, it was that it’s better to be eager early.

They don’t intend to make the same mistake twice.

On Friday morning, the prime minister’s director of communications, Andrew MacDougall, is briefing the media with senior government officials on the prime minister’s trip to Peru and Colombia next week.

Though MacDougall probably won’t say it this plainly, there’s a simple reason for the three-day visit: membership in the Pacific Alliance. Read more here.
 

(STR Trade Report)

While most of the trade-related news from Washington over the last two weeks has come from the White House rather than Capitol Hill, groundwork is being laid for action later this year on a number of issues. For example, supporters are still working to reinstate duty breaks on manufacturing imports and other goods. Also on the radar are trade negotiations with nearly a dozen Asia-Pacific countries and the European Union, which could mean a reauthorization of trade promotion authority later this year.

MTB Reform

Sens. Rob Portman, R-Ohio, and Claire McCaskill, D-Mo., introduced April 24 a bill (S. 790) that would reform the miscellaneous trade bill process by giving the International Trade Commission a more active role. Under this bill companies seeking to reduce or suspend a tariff on an imported product would submit their request directly to the ITC instead of first having to get a member of Congress to introduce legislation. The ITC would then submit a draft bill for each request to the Senate Finance and House Ways and Means committees. This process would be used for the next three MTBs, in 2013, 2015 and 2018.

The ITC would also have to submit to these committees each year a report that (a) makes recommendations on sectors of the U.S. economy that could benefit from duty suspensions or reductions without causing harm to other domestic interests and (b) assesses the feasibility and advisability of suspending or reducing duties on a sectoral basis rather than on individual articles.

Trade Promotion Authority

The last congressional grant of TPA (also known as fast track), which allows the president to submit trade agreements to Congress for a straight up-or-down vote, expired in 2007. However, with several negotiations underway or set to begin in the near future, the White House, Congress and the trade community are preparing to advance TPA legislation this year.

Sen. Baucus said at an April 24 hearing on the Trans-Pacific Partnership negotiations that he “would like to see a bipartisan TPA bill introduced by June.” However, some members of the House are reportedly working to finalize a letter to Democratic leaders opposing TPA. The draft asserts that a broad delegation of Congress’ constitutional authority to regulate foreign trade is not generally appropriate because today’s trade agreements “delve deeply into many non-trade matters under the authority of Congress and state legislatures.”

Other

Following is a list of additional trade-related legislation that has been introduced recently. The texts of these bills are or will shortly be available on the Library of Congress Web site.

S. 780/H.R. 1663 – to provide for an exception from infringement for certain component parts of motor vehicles (introduced April 23 by Sen. Whitehouse and Rep. Issa; referred to the Senate and House Judiciary committees)

H.R. 1708 – to suspend temporarily the duty on certain footwear (introduced April 24 by Rep. Jenkins; referred to the House Committee on Ways and Means)

H.R. 1777 – to increase U.S. exports to Africa by at least 200% within 10 years (introduced April 27 by Rep. Smith; referred to the House committees on Foreign Affairs, Ways and Means, Small Business and Financial Services)

H.R. 1823 – to prohibit the importation or exportation of mussels of a certain genus (introduced April 30 by Rep. Heck; referred to the House Committee on the Judiciary)
 

(Global Times)

The recent news about Japan eagerly joining the Trans-Pacific Partnership (TPP) talks touched a raw nerve in China. Combined with similar plans from Vietnam and some other Southeast Asian neighbors, China’s worries about the TPP are growing.

The TPP did not attract much attention in 2003, when it was founded, but its potential was enormously strengthened since the US announced its interest in the original four-party partnership.

The entry of the US has not only added weight the influence of the new free-trade zone, but spurs the member states to form new trade rules outside the framework of the WTO. Read more here.
 

(Michael Geist – The Star)

While the need for business insight as part of trade talks is understandable, the two-tier approach raises serious concerns about the lack of transparency.

As the future of the proposed Canada – European Union Trade Agreement becomes increasingly uncertain – the EU has been unwilling to compromise on the remaining contentious issues leaving the Canadian government with a deal that offers limited benefits and significant costs – the Trans-Pacific Partnership Agreement (TPP) is likely to emerge as the government’s new top trade priority.

The TPP has rapidly become of the world’s most significant trade negotiations, with participants that include the United States, Australia, Mexico, Malaysia, New Zealand, Vietnam, Japan, and Canada. There is a veil of secrecy associated with the TPP, however, as participants are required to sign a confidentiality agreement as a condition of entry into the talks. Despite those efforts, there have been occasional leaks of draft text that indicate the deal could require major changes to Canadian rules on investment, intellectual property, cultural protection, procurement, and agriculture. Read more here.
 

(Mike Palmedo – Infojustice.org)

Pressure on Capitol Hill for Trade Promotion Authority (TPA) is growing.

TPA – called “fasttrack” in the 1990s when it was used to negotiate NAFTA – allows the executive branch to negotiate trade agreements that Congress cannot amend during the ratification process.  It also sets procedural rules under which trade agreements are negotiated, and the objectives of the United States for the outcomes of trade negotiations.

At last week’s Senate Finance Committee hearings on the Trans Pacific Partnership, Chairman Max Baucus said that he “would like to see a bipartisan TPA [Trade Promotion Authority] bill introduced by June.” [...]

TPA was last granted to the executive branch in the Trade Act of 2002, but the authority expired in 2007. The Trade Act of 2002 included specific negotiating objectives for USTR for each section of trade agreements, including intellectual property.  Assuming the upcoming TPA legislation is structured the same way as the expired TPA, this presents an opportunity for public interest IP advocates to weigh in on what USTR’s goals should be when it tables text for future agreements. Read more here.
 

(Dean Baker — Aljazeera)

The US-EU free trade pact and TPP are about securing regulatory gains for major corporate interests, writes Baker.

In polite circles in the United States, support for free trade is a bit like proper bathing habits: It is taken for granted. Only the hopelessly crude and unwashed would not support free trade.

There is some ground for this attitude. Certainly, the US has benefited enormously by being able to buy a wide range of items at lower cost from other countries. However, this does not mean that most people in the country have always benefited from every opening to greater trade.

And it certainly does not mean that the country will benefit from everything that those in power label as “free trade”. That is the story we are seeing now as the Obama administration is pursuing two major “free trade” agreements that in fact have very little to do with free trade and are likely to hurt those without the money and power to be part of the game. Read more here.
 

(Peter Lee – Asia Times)

Oscar Wilde wrote, “When the gods wish to punish us, they answer our prayers.” Perhaps this is how Kurt Campbell feels today.

Campbell, after all, as assistant secretary for East Asia in Hillary Clinton’s State Department, was a key architect and proponent of the “pivot to Asia”, which was meant to elicit satisfactory behavior from China – and, in the process, demonstrate US leadership and relevance – by confronting the PRC with a phalanx of Pacific democracies (plus Vietnam of course) determined to impose liberal security, economic, and human rights norms on the rogue superpower.

The inevitable result of US backing has been an increased willingness of the Philippines, Vietnam, and Japan to stand up to China, which has contributed a virtuous cycle of Chinese hostility and a further defensive cleaving of the smaller nations to the United States. Read more here.
 

(STR Trade Report)

The U.S. has approved Japan’s bid to join the ongoing Trans-Pacific Partnership negotiations after “concluding a robust package of actions and agreements” aimed at resolving several long-standing trade irritants. The U.S. will now work with the other ten TPP countries “to facilitate Japan’s participation in the TPP negotiations as expeditiously and smoothly as possible.” Japan could take part in the talks as soon as mid-July, which some observers say could jeopardize the goal of concluding an agreement by the end of this year.

Information made available by the Office of the U.S. Trade Representative states that the two sides have agreed on a process for addressing in parallel to the TPP negotiations a number of non-tariff measures in the areas of insurance, transparency, trade facilitation, investment, intellectual property rights, standards, government procurement, competition policy, express delivery, and sanitary and phytosanitary standards. Outcomes achieved on these NTMs will be tangible and meaningful and implemented through legally binding agreements, exchange of letters, new or amended regulation or law, and/or other mutually-agreed upon means when the TPP takes effect with respect to both countries. Read more here.

Related: Why it’s so Important That Japan is Joining Talks for a Pacific Free Trade Pact (Quartz)
 

(Barrie McKenna — Globe & Mail)

Japan’s imminent entry into the Trans-Pacific Partnership talks is a vivid reminder that the dream of global free trade is all but dead as countries turn to regional and bilateral quick fixes.

The TPP would span the Pacific Ocean, linking Canada and as many as a dozen other countries comprising 40 per cent of the world economy. But, like Canada’s still-elusive agreement with the 27-member European Union, these regional deals fall short of the stalled efforts to get a deal at the World Trade Organization, experts say.

For one, China and other new trade superpowers aren’t at the table, leaving vast areas of trade untouched. And the proliferation of sometimes overlapping agreements raises the prospect of conflicting trade regimes from region to region and country to country. Read more here.
 

(BNN)

The chief executive of Ford Motor Co. complained on Tuesday about Japan’s devaluation of the yen and reiterated his opposition to Tokyo entering into free trade talks with the United States under an Asia-Pacific agreement.

The yen has fallen around 8 percent against the dollar this year, driven down by Tokyo’s fiscal and monetary policies.

“The markets should determine the exchange rate,” Ford CEO Alan Mulally told a small group of reporters in Bangkok, referring to what he said was “the devaluing of the yen”.

Ford has been vocal in opposing Japan’s entry into the talks for the Trans-Pacific Partnership (TTP), a U.S.-led Pacific free trade pact, until Tokyo opens its market to more U.S. cars.

“It’s the most closed automobile market in the world,” Mulally said, highlighting the combination of non-tariff barriers on vehicle imports and distribution. Read more here.
 

(STR Trade Report)

The Office of the U.S. Trade Representative indicated in a March 13 press release that the 11 countries that are currently involved in the Trans-Pacific Partnership negotiations achieved significant progress at the 16th round of talks held this month in Singapore. The USTR noted that the parties achieved the goal of putting the negotiations “on an accelerated track toward conclusion of a next-generation, comprehensive agreement in the 2013 time frame envisioned by President Obama and the Leaders of the ten other TPP countries.”

According to U.S. Chief Negotiator and Assistant U.S. Trade Representative Barbara Weisel, TPP negotiators intensified their drive at the Singapore round to “find mutually-acceptable paths forward on the remaining issues in the legal texts of the agreement” and “succeeded in finding solutions to many issues in a wide range of areas such as customs, telecommunications, investment, services, technical barriers to trade, sanitary and phytosanitary measures, intellectual property, regulatory coherence, development, and other issues.” As a result of this progress, the negotiating groups on customs, telecommunications, regulatory coherence and development will not meet again to discuss the legal texts. Instead, any remaining work in these areas will be addressed in late-stage rounds as the agreement is finalized. According to the USTR, this will enable negotiators to focus on tough issues in the areas of intellectual property, competition and the environment.

The parties also advanced the negotiations in the areas of market access for goods, services and investment, and government procurement. According to the USTR, “productive exchanges occurred on tariff packages on industrial goods, agriculture, and textiles, as well as on rules of origin and how best to promote the development of regional supply chains in order to benefit companies based in the United States and the other TPP countries.” The parties also agreed to conduct additional intersessional work to build on market access advances.

The TPP trade ministers are scheduled to meet in mid-April on the margins of the APEC Trade Ministers meeting in Indonesia to discuss progress achieved to date and provide further guidance to negotiators. The 17th round of talks will be held in Lima, Peru, on May 15-24. The USTR indicates that high-level officials will become more engaged in the process as the discussions draw to a close.
 

(IndustryWeek – AFP)

Further talks are needed in areas such as IP rights and labor standards, officials from the Pacific Rim countries said after 10 days of talks on the proposed Trans-Pacific Partnership which faces an October deadline.

As 11 nations scramble to seal an accord this year, intellectual property (IP) protection has emerged among hurdles to a U.S.-led Pacific free trade pact, negotiators said Wednesday.

Further talks are needed in areas such as IP rights and labor standards, officials from the Pacific Rim countries said after 10 days of talks on the proposed Trans-Pacific Partnership (TPP) which faces an October deadline. Read more here.
 

(Anthony Fensom – The Diplomat)

“TPP” might have spelled total political paralysis for any other Japanese leader. But after stunning markets with his reflationary “Abenomics” policies, Japanese Prime Minister Shinzo Abe is expected to surprise again next week by taking on the farm lobby and announcing Japan’s participation in Trans-Pacific Partnership talks.

The move follows plans by Japan to enter into free trade agreement (FTA) negotiations with the European Union later this month. In a busy period for trade diplomats, Australian media have even reported the possibility of an Australia-Japan trade pact being sealed this year.

Yet a TPP including Japan and also potentially South Korea would dwarf such bilateral deals, comprising 13 nations accounting for 40% of global output and 30% of world trade. According to the Yomiuri Shimbun, the reformist prime minister will announce Japan’s participation in TPP negotiations as early as March 13th, prior to the annual convention of his Liberal Democratic Party on the 17th.

The top-selling daily said Tokyo and Washington aimed to reach agreement by the end of this week by “setting aside highly contentious issues,” such as agriculture. Read more here.
 

(Journal of Commerce)

Eleven national organizations representing dairy farmers and dairy industry workers have sent a letter to eight members of Congress urging them not to approve the Trans-Pacific Partnership trade deal without considering the impact on dairy farms and workers.

The letter states that the pending trade deal could have “tremendous impact” on where and how dairy products are produced and processed and urges Congress to adopt new trade policymaking procedures, rather than reinstating “fast-track” authority. Read more here.
 

(STR Trade Report)

The Obama administration delivered to Congress March 1 its 2013 Trade Policy Agenda and 2012 Annual Report. This document continues the administration’s focus on policies that will increase U.S. exports, such as seeking to “create and defend open markets” and “challenging unfair trade practices and enforcing U.S. trade rights under our agreements.” Priority issues for 2013 will include the Trans-Pacific Partnership agreement, a Transatlantic Trade and Investment Partnership with the European Union, and efforts within the World Trade Organization on trade facilitation, information technology and services. The administration also plans to “work with Congress on trade promotion authority” to facilitate the conclusion, approval and implementation of “market-opening negotiating efforts.”

The report highlights plans to continue or initiate numerous efforts, including the following.

National Export Initiative. The agenda asserts that overall U.S. exports of goods and services have increased by more than 39% from 2009, supporting one million additional domestic jobs. This is behind the pace needed to meet the NEI’s original goal of doubling U.S. exports by the end of 2014 “in support of up to two million additional U.S. jobs.” In 2013 efforts to advance the NEI will include the Export Promotion Cabinet coordinating through the Trade Promotion Coordinating Committee the launch of initiatives including a national marketing campaign targeting small and medium-sized exporters, an expanded Export University Program, the “Global Business Solutions” trade financing packaging that will work with community banks to expand the U.S. financial infrastructure offering trade-related products, commercial statecraft training for foreign service officers, and public-private partnerships that will deliver commercial services for U.S. businesses overseas.

TPP. The U.S. seeks “an ambitious conclusion” to the TPP negotiations and along with its partners is “working diligently” to try to complete the talks in 2013.

TTIP. The report notes the president’s intent to launch TTIP negotiations with the EU but gives no further details on when they might begin or how long they might last.
Read more »

(Ninemsn)

America’s decision to pursue a trans-Atlantic free-trade deal won’t delay the ambitious Pacific negotiations involving Australia, a senior US trade official has assured.

US President Barack Obama announced during his State of the Union address earlier this month that his administration had decided to launch comprehensive free-trade negotiations with the European Union.

But State Department Assistant Secretary Jose Fernandez says those negotiations will not distract America from the Trans-Pacific Partnership (TPP), an ambitious set of talks currently involving 11 countries.

“That’s not going to be a problem,” Mr Fernandez told reporters from Singapore on Thursday during a visit to the region.

“We can walk and chew gum at the same time.”

Mr Fernandez says the US still hopes to finalise the the TPP this year, with the 16th round of negotiations about to begin in Singapore. Read more here.