GHY Tradelines

(Huffington Post)

President Barack Obama and British Prime Minister David Cameron on Monday pledged to pursue a broad trade agreement between the U.S. and European Union, amid growing domestic unrest with the Obama administration’s plans to include new political powers for corporations in the deal.

Negotiations have not formally begun, but a series of meetings between U.S. and EU officials have established some ground rules and the preliminary scope of the talks. Since tariffs are already low or nonexistent, the agreement will focus on regulatory issues. That emphasis has concerned food safety advocates, environmental activists and public health experts, who fear a deal may roll back important standards.

Obama and Cameron were vague on Monday, while celebrating the potential for a trade pact to create jobs. “Our extensive trade with the U.K. is central to our broader transatlantic economic relationship, which supports more than 13 million jobs,” Obama said at a press conference Monday. “I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive.” Read more here.
 

(Reuters)

China has raised concerns about European Union plans to negotiate an ambitious free trade deal with the United States, fearing it is a protectionist move, a senior EU official said on Tuesday.

Chinese officials queried EU foreign policy chief Catherine Ashton about the issue when she visited Beijing at the end of April for talks with Foreign Minister Wang Yi and other Chinese leaders. [...]

China worried about whether the plan was “a pulling of the wagons into a circle to … insulate the transatlantic economy from the rest of the world or is it, as we argue, even greater opening of both economies?” the EU official said, briefing journalists on condition he was not further identified. Read more here.
 

(Doug Palmer – Fox Business)

A new report on Monday credited imports with supporting 16 million U.S. jobs in a bid by business groups to improve the image of the ugly brother of trade.

While politicians from President Barack Obama on down love to tout the job-creating benefits of exports, they spend much less time praising imports, which many Americans associate with shuttered factories and the move of jobs overseas.

The report from a consortium of business groups said the facts are otherwise.

“Imports are not the bogeyman some Americans believe them to be,” the report from the U.S. Chamber of Commerce, the National Retail Federation, the Consumer Electronics Association and the American Apparel and Footwear Association concluded. “It is time to give imports the credit they deserve.” 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)
 

(Danielle Kurtzleben – US News)

If confirmed, the wealthy Hyatt Hotels heiress would be the second CEO named to Obama’s second-term cabinet

President Obama nominated Penny Pritzker on Thursday to be the next Commerce Secretary. The seat has been filled by Acting Secretary Rebecca Blank since last summer, when John Bryson resigned, citing health concerns.

“Penny is one of our country’s most distinguished business leaders,” Obama said on Thursday, speaking from the Rose Garden. “She knows that what we can do is to give every business and ever worker the best possible chance to succeed by making America a magnet for good jobs.”

Pritzker has an impressive business resume and pedigree alike: she is the CEO of investment firm PSP Capital Partners and Pritzker Realty Group, and is also an heir to the Hyatt Hotels fortune. Here’s why the president chose this real estate magnate and one-percenter to be a top economic official… 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.
 

(U.S. State Dept.)

As the pace of technological advance accelerates, and as technological capability spreads around the world, the need to update our Export Controls is increasingly urgent. We are no longer in an era in which a handful of countries hold the keys to the most sensitive technologies, as was the case during the Cold War. Today, a whole range of nations have advanced technological capability.

At the same time, because of the diffusion of technology, many U.S. companies must collaborate with foreign partners to develop, produce and sustain leading-edge military hardware and technology. Their survival depends on it.

But because our current export controls are confusing, time-consuming, and – many would say – overreaching, our allies increasingly seek to ‘design out’ US parts and services, thus avoiding our export controls and the end-use monitoring that comes with them in favor of indigenous design. This threatens the viability of our defense industrial base, especially in these austere times.

Click here to read the complete testimony of Tom Kelly, Acting Assistant Secretary, Bureau of Political-Military Affairs made before the House Foreign Affairs Committee Hearing on Export Control Reform.

Related: Officials Detail Export Control List Reforms, Offer No Timeframe on Additional Changes (STR Trade Report)

(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)
 

(IndustryWeek – AFP)

In a key step forward for a pact that would account for nearly 40% of the global economy, the United States gave Japan the green light Friday to enter talks on a Pacific trade agreement.

The two countries announced concessions for Japan to join negotiations on the 11-nation, U.S. driven Trans-Pacific Partnership, despite the opposition from some U.S. manufacturers and labor groups and Japan’s powerful farmers.

“I want our participation in the negotiations to come into force quickly so we can play a critical role in defining the rules” of the pact, Japanese Prime Minister Shinzo Abe told reporters in Tokyo.  Read more here.
 

(STR Trade Report)

The National Council of Textiles Organizations will remain the name of a larger industry group that as of April 1 will subsume the National Textile Association and the American Manufacturing Trade Action Coalition. The new organization will incorporate the 84 textile companies and their suppliers represented by NCTO, the 33 textile companies and their suppliers (along with 21 companies under the American Flock Association) represented by the NTA, and the 21 textile and other manufacturing companies represented by AMTAC. It will be chiefly governed by a set of internal councils that will be based on the production chain, namely a fiber council, yarn council, fabric and home products manufacturers council, and industry support council.

A joint press release characterized the move as an effort to ensure that the domestic textile industry has a more united and effective voice in trade negotiations as well as regulatory, government contracting and other issues that affect it. In particular, the press release states, the merger will provide “a more focused opportunity to properly brand the U.S. textile industry as an integral component of America’s 21st century economy by better highlighting its substantial economic contribution, particularly in the area of employment; its high-tech products; its cutting edge manufacturing processes; and its status as a globally competitive exporter.” It will also “more efficiently utiliz[e] the industry’s financial resources by eliminating duplicative efforts” and allow for “a more systematic effort to recruit new members.”

The press release seeks to counter the impression that the domestic textile industry has been losing political clout in recent years in tandem with a continuing slide in revenue and employment and is looking for ways to reclaim it as foreign competition increases. For example, it points out that in 2012 this industry employed 235,000 workers and stood as the world’s third-largest exporter of textile goods with $17 billion in shipments (up 36% from 2009) to more than 170 countries. In addition, U.S. textile mills have built 23 new plants and invested more than $3 billion in new plants and equipment over the last three years. The press release further states that the U.S. is the world leader in textile research and development, with private textile companies and universities developing new textile materials such as conductive fabric with antistatic properties, electronic textiles that monitor heart rate and vital signs, antimicrobial fibers, antiballistic armor for people and the machines that carry them, and new garments that adapt to the climate to make the wearer warmer or cooler.
 

(Reuters)

China expressed “resolute opposition” and “strong dissatisfaction” with a new U.S. cyber-espionage rule limiting imports of Chinese-made IT products, state media reported on Saturday.

The remarks underscore growing tension between the world’s top two economies after the United States accused China of backing a string of hacking attacks on U.S. companies and government agencies. China says the accusation lacks proof and that it is also a victim of hacking attacks, more than half of which originate from the U.S.

The new provision, tucked into a funding bill signed into law on Thursday, requires NASA, as well as the Justice and Commerce Departments, to seek approval from federal law enforcement officials before buying information technology systems from China. Read more here.
 

(STR Trade Report)

Ahead of a two-week Easter recess Congress is beginning to see some forward momentum on various trade issues. A miscellaneous trade bill could be assembled in the coming weeks and lawmakers have started to discuss in more detail the Obama administration’s trade liberalization initiatives for this year.

Miscellaneous Trade Bill (MTB)
March 28 is the deadline for submitting disclosure forms for bills that were introduced in the 112th Congress to be included in the 113th Congress miscellaneous trade bill process. The House Ways and Means Committee has said that individual bills will not have to be reintroduced and that no new bills are being accepted at this time. On March 18 a number of businesses wrote to House and Senate leaders urging them to “work in a bipartisan and bicameral manner to ensure expeditious passage of the MTB” because the Dec. 31 expiration of the last such bill has increased import duties on over 600 products, “adding to the 20 percent cost differential that U.S. manufacturers already face.”

European Union FTA
The White House formally notified Congress this week of its intent to launch negotiations, no earlier than late June, on a Transatlantic Trade and Investment Partnership with the European Union. Lawmakers have made clear that there are several objectives they want U.S. negotiators to pursue in these talks, and it can reasonably be expected that the House Ways and Means and Senate Finance committees will hold hearings to communicate those objectives in the relatively near future.

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. Though some lawmakers have called for a reinstatement of this authority since that time, it remains a divisive issue and until recently there has been little practical reason to pursue it. Now, however, with the U.S. aiming to conclude the Trans-Pacific Partnership negotiations by the end of this year and about to embark on the TTIP talks, the prospects for legislative action on TPA are looking up. Both Republicans and Democrats are urging the White House to be more actively engaged on this issue, and acting U.S. Trade Representative Demetrios Marantis said last week that the administration is “ready to begin our work with you on TPA.”

Read more here.
 

(RTTNews)

China and the United States have “enormous shared interests”, Chinese President Xi Jinping told U.S Treasury Secretary Jacob Lew, who is currently on a visit to Beijing.

“In the China-U.S. relationship we have enormous shared interests, but of course unavoidably we have some difference,” Xi said.

The agenda for the talks, at Xi’s first major meeting with a foreign official after taking office, primarily include cyber hacking, market access and the Chinese currency. The main focus of the talks has been the importance of the relationship between Beijing and Washington, and the officials avoided discussing controversial matters. Read more here.
 

(AP)

American businesses complained to lawmakers Wednesday about Indian trade protectionism, contending that tariff and regulatory barriers are shutting out foreign firms despite the nation’s market-opening reforms.

Advocates for the pharmaceutical, information technology and agricultural industries detailed their grievances to a House subcommittee on trade where lawmakers also grumbled about Indian policies that favor local producers.

“They are for free trade on their terms,” said Democrat Rep. Richard Neal.

There’s strong bipartisan support for deeper U.S.-India ties, which have been pushed by the administrations of George W. Bush and Barack Obama, and trade has grown markedly in the past decade and is approaching the $100 billion mark. But experts say that total is small, considering the size of the two economies. Read more here.
 

(James McCusker – Herald Net)

Manufacturing is one of those things that looks simple from a distance, but can be messy up close. It’s a lot like economics in that respect.

For over a half-century, since the end of World War II, the United States has been preaching and practicing an economic policy based on ending import tariffs and other barriers to free trade.

The policy made sense from a theoretical standpoint. Since the time of Adam Smith and David Ricardo, economics has painted a clear picture of the efficiency and consumer benefits of free trade. Read more here.
 

(STR Trade Report)

The Interagency Trade Policy Group held a public hearing March 12 on the U.S. negotiating objectives for the recently-announced International Services Agreement, an effort by the United States and 20 other trading partners to achieve an ambitious plurilateral deal that eliminates or reduces barriers to services traded either on a cross-border basis or through a foreign commercial presence. The ISA negotiations should begin in early spring and will initially include Australia, Canada, Chile, Colombia, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland, Taiwan and Turkey. This group represents nearly two-thirds of global trade in services and could expand as negotiations progress.

Deputy Assistant U.S. Trade Representative for Services Christopher P. Melly indicated at the hearing that the USTR has received nearly 50 written submissions on the ISA, in addition to the 12 witnesses representing a broad range of interests who testified at the hearing. He added that U.S. objectives for the agreement include ensuring that U.S. service suppliers can compete on the basis of quality and competence rather than nationality; securing greater regulatory transparency and predictability from U.S. trading partners; and addressing new issues arising in the global marketplace. “Our overarching goal is to create an environment that enables our service suppliers to do what they do best, anywhere in the world,” said Melly. Witnesses at the hearing included, among others, the U.S. Coalition of Service Industries, the U.S. Chamber of Commerce and the AFL-CIO. Issues raised at the hearing included enhanced market access and national treatment, cross-border data flows, state-owned enterprises, and regulatory barriers and regulatory discretion.
 

(STR Trade Report)

A recent Gallup poll found that 57% of Americans view trade as “an opportunity for economic growth through increased U.S. exports,” which Gallup characterizes as “a much more positive view” of foreign trade than in recent years. Slightly over a third of respondents (35%) said trade is “a threat to the economy from foreign imports.” The wording of the poll is indicative of what economists say is a false dichotomy, but according to Gallup the results show that “the Obama administration is likely operating in an environment more supportive of U.S. trade deals with other countries than has been the case in the recent past.”  Read more here.
 

(IndustryWeek – AFP)

Talks resuming after Taipei lifts 6-year-old ban on some U.S. beef imports

Taiwan and the United States will resume stalled trade talks next week after Taipei removed a 6-year-old ban on some U.S. beef imports, officials said Wednesday.

The U.S. delegation will be led by Deputy U.S. Trade Representative Demetrios Marantis at the two-day discussions beginning Monday, the American Institute in Taiwan, the de facto embassy, said in a statement. Read more here.