At a House of Representatives Ways and Means Committee hearing, USTR Ron Kirk laid out the Obama Administration’s agenda on trade. The most immediate effort is the free trade agreement with South Korea, with work on the Colombia and Panama free trade agreements in the intermediate term and the Trans-Pacific Partnership trade talks further out. The hearing was the first time that Kirk testified to the House Committee that has jurisdiction over trade policies.

 

 In a press release issued after the hearing USTR Kirk said, “The President intends to submit the U.S.-Korea trade agreement to Congress in the next few weeks,” with approval by Congress expected sometime in the spring. In his prepared statement for the committee Kirk reported there is “ongoing work to ensure that Korea fully opens its market to U.S. beef and beef products.” Korean officials had refused to make any changes in the beef provisions last fall when they agreed to changes in the language on automobiles.

The U.S. industry has agreed to not ship beef from animals over 30 months of age because of Korean consumers’ concerns about BSE, even though the World Animal Health Organization has ruled that the U.S. has controlled BSE and all beef is safe for international trade. Senator Max Baucus (MT-D), Chairman of the Senate Finance Committee with jurisdiction over trade issues, has said that he will vote against the agreement unless U.S. beef gets more access. That issue could seriously delay the timetable for passage of the agreement. Other Asian countries like Japan and China will closely follow the discussions because the U.S. is urging them to also provide greater market access for beef.

The situation on the Colombia and Panama agreements is less certain. Again Kirk used his press release to emphasize the position of the Administration, “But let me clear: There remain serious issues to be resolved before the Colombia and Panama agreements can be submitted for Congressional consideration.” The rights of labor leaders and violence against them have been ongoing issues. Panama also has tax compliance problems. The President wants USTR Kirk to resolve the issues as soon as possible this year; a team of USTR negotiators is to be in Colombia this week. In the press release, Mr. Kirk said, “For this timetable to work, it will be critical for them (Colombia and Panama) to come to the table, prepared to take additional meaningful actions.”

USTR Kirk was most positive about the Trans-Pacific Partnership (TPP) agreement that will meet the high standards President Obama has set for trade agreements. Nine Pacific Rim countries are negotiating a comprehensive agreement, with some others, including Japan, considering joining. Kirk said in the prepared text, “In just over a year, TPP has become the single most important regional trade negotiation and the platform for economic integration in the world’s most dynamic region.” In November of this year the U.S. is hosting in Hawaii the Asia-Pacific Economic Cooperation (APEC) Forum where progress on the TPP will be highlighted.

Official support was made in the prepared text for the Doha Round of WTO trade policy negotiations with USTR Kirk’s well used phrase, “To move an agreement forward, we need market access commitments from all countries – including the advanced emerging nations – commensurate with their role in the global economy.” He did not reveal how the U.S. might change its offer on Doha to close the deal.

Russia’s proposed assession as a WTO member was mentioned, and Mr. Kirk said the Administration will work with Congress to pass Permanent Normal Trade Relationship status necessary for the U.S. to approve Russia’s WTO membership. Nothing was said about why the U.S. should support Russia becoming a WTO member given our ongoing regulatory problems with meat trade to Russia and its embargo of wheat exports after a short crop last year.

Enhanced regulatory cooperation was mentioned by Kirk, particularly as it related to NAFTA and the Transatlantic Economic Council with the EU. Sanitary and phyto-sanitary regulatory issues continue to be the new non-tariff barriers, like BSE in beef, which must be dealt with if agricultural trade is to flourish. The Commission on Commerce and Trade with China was also mentioned as a problem solving relationship that was working.

Missing from the statement was any mention of the trucking dispute with Mexico due to the U.S. refusal to honor commitments under NAFTA to provide access to the U.S. for Mexican trucks that meet U.S. safety requirements. The Administration released a “concept document” last month for discussion with the Mexican government, but a concrete proposal appears to be months away.

Also missing from his message was any indication that the $2.3 trillion of goods and services imported in 2010 has any positive effects on U.S. citizens. USTR Kirk rightly lamented about “those who are skeptical about the benefits of trade,” but how could the casual observer have any other opinion when no mention is made by the USTR of the benefits of trade for businesses and consumers getting access to a wider variety of goods and services at lower prices and having access to technology not yet available in the U.S. The Obama Administration is not the first one to ignore the importance of imports, but now would be good time to be the last one.

The tone of USTR Kirk’s message was positive and hopeful, but the path forward looks like it is full of all of the roadblocks that have stalled U.S. trade policy for the last four years. Kirk is scheduled to testify to the Senate Finance Committee on March 9 and Chairman Baucus and Ranking Minority member Orrin Hatch (UT-R) have written asking what additional step are needed for the Colombia and Panama agreements and for an expeditious timetable for moving the agreements through Congress. Delay in actions continues to favor other exporters like Australia, Canada and the EU. Until something is actually accomplished, like Congress passing the U.S.-Korea agreement, U.S. trade policy will continue to be a hindrance to President Obama’s goal of doubling U.S. exports in five years.