Section 163 of the Trade Act of 1974 requires the President to report yearly to Congress on his trade policy agenda. These are usually rather boring reading of a report prepared by the Office of the U.S. Trade Representative (USTR). This year’s report was much anticipated because the Obama Administration has high profile agenda items that could shape trade policy for years to come.
Negotiations will intensify on the Trans-Pacific Partnership (TPP) Free Trade Agreement (FTA) with ten other countries, and possibly Japan, that have been ongoing for two years with a goal of achieving agreement by the end of the year. About mid-year the U.S. will begin talks with the EU on a Transatlantic Trade and Investment Partnership (TTIP) agreement to address market access and regulatory barriers that inhibit trade. At the WTO, efforts include trade facilitation, expansion of the Information Technology Agreement, talks on an International Services Agreement and ensuring that exporters reap benefits from Russia joining the WTO.
The Administration will work with Congress on securing Trade Promotion Authority to guide current and future negotiations and renewing Trade Adjustment Assistance programs before they expire on December 31, 2013. It will also work with Congress to renew authorization of the Generalized System of Preferences (GSP) program scheduled to expire on July 31, 2013. The USTR will continue to work with Congress to find a mutually-agreeable solution to the Brazil Cotton dispute in the next farm bill and continue cotton-related trade capacity building in West Africa.
The Asia-Pacific region has 40 percent of the world’s population and over 40 percent of world trade and is expected to grow faster than the world average through 2016. The agenda notes that Canada and Mexico joining the TPP talks will “enhance regional trade integration, while fulfilling President Obama’s pledge to address concerns related to the North American Free Trade Agreement (NAFTA).” The TPP-FTA is viewed as the most promising platform for development of a long-talked about Free Trade Area of the Asia-Pacific that will include all countries of the region, including China.
The goals of the U.S.-EU TTIP are reciprocal market openings in goods, services, and investment, modernization of trade rules and reducing non-tariff barriers (domestic regulations) that are the most significant obstacles to increased trade. These would strengthen the close strategic partnership between the U.S. and EU to the advantage of businesses and workers in both economies.
The U.S. plans to advance market-opening measures at the WTO with the highest potential to yield significant and timely results in preparation for the ninth WTO Ministerial Conference in Bali, Indonesia in December. A multilateral trade facilitation agreement that allows goods to move though ports faster at lower costs is the most discussed item. No mention was made of including agricultural issues, but other countries are expecting some items to be included.
Agriculture received specific attention across a wide range of issues. The USTR will us consultative mechanisms established in the FTAs with Korea, Columbia and Panama to ensure that commitments related to agricultural market access are upheld and science-based sanitary and phytosanitary standards are applied to U.S. agricultural exports. He will work with Russia and China to secure market access for U.S. food and agricultural exports that is consistent with science-based sanitary and phytosanitary standards. That is particularly important with the recent concerns about the use of ractopamine in beef and pork production. The Administration expects increased U.S. beef exports to Japan as a result of the January 2013 agreement with Japan and to make more progress as changes in Japan’s risk assessment process continue.
The U.S. will continue to challenge at the WTO China’s misuse of its trade laws in antidumping and countervailing duties cases related to chicken products and seek timely and thorough implementation of China’s past commitments regarding various measures impeding imports of U.S. food and agricultural products. In January the U.S. asked the WTO for consultations with Indonesia on measures that impede U.S. agricultural exports and reduce Indonesian consumers’ access to high-quality agricultural products. If the issues are not resolved through consultations within 60 days, the U.S. may request a WTO dispute settlement panel.
The U.S. will continue its WTO challenge of India’s prohibition on the importation of U.S. poultry meat and chicken eggs. The U.S. obtained a WTO panel in June 2012 to examine India’s measure, which purports to be concerned with preventing avian influenza, but lacks a scientific basis. The U.S. will work with regional partners to continue developing the Middle East and North Africa Trade and Investment Partnership. The Administration will also undertake efforts to help U.S. exporters to take full advantage of trade and investment opportunities in Brazil.
The USTR will work with Canada and Mexico – through bilateral consultative committees, as well as the relevant NAFTA committees – to address barriers to U.S. exports of agricultural products. With Canada, the U.S. will build on significant progress made under the Beyond the Border Action Plan and the Regulatory Cooperation Council Action Plan initiatives.
According to the USTR, more than half of U.S. imports provide inputs to value-added production in the U.S. Data from the Department of Commerce are cited that U.S.-based multinational firms employ 23 million Americans and pay compensation 25 percent higher than the U.S. private sector average. The U.S. has become part of cross-border supply chains that require both imports and exports to maximize incomes for businesses and workers. This has led to renewed interest in bilateral investment treaties (BIT). The U.S. updated its model BIT in 2012 and is now seeking BITs with China and India and has exploratory talks with Russia, Cambodia and others.
Over the last year the impact of trade on economic growth has become more apparent. Not all of the items on the Obama Administration’s agenda will be successful, but securing half of them would add substantially to economic efficiencies and improve the standard of living for workers and consumers in the U.S. and across the globe.
Ross Korves is an Economic Policy Analyst with Truth About Trade & Technology (www.truthabouttrade.org). Follow us: @TruthAboutTrade on Twitter | Truth About Trade & Technology on Facebook.