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President’s Trade Policy Agenda Focuses on Finalizing TPP, Continuing TTIP and WTO Efforts

Friday, March 06, 2015
Sandler, Travis & Rosenberg Trade Report

The Obama administration released this week its 2015 Trade Policy Agenda, which asserts that “trade policy done right … is among the nation’s best tools to address the challenges of globalization and technological change and promote American interests and values.”

The report asserts that the pace of globalization and technological change is not slowing down and that the U.S. will continue to see foreign imports because consumers demand them and the U.S. has virtually no barriers to them. The report thus casts ongoing efforts to negotiate a number of trade liberalization initiatives as a way to increase U.S. exports (and the better paying jobs they support) and ensure that the U.S. “leads in defining the rules of the road” for international commerce in the 21st century.

Trade policy objectives for 2015 include the following.

TPP. The U.S. “will conclude negotiations with TPP [Trans-Pacific Partnership] countries” this year. TPP will include “the strongest labor and environmental provisions of any trade agreement” as well as new provisions that create disciplines on state-owned enterprises, advance digital freedom, promote the development of and access to innovation, strengthen anticorruption efforts, benefit small businesses and further global development. “TPP is integral to the U.S. rebalance to Asia,” the report states, “and allows us to set the rules of the road in an important and dynamic region – rules that will otherwise be set by countries that do not share our interests or our values.”

TTIP. The U.S. expects to make “significant progress” in negotiations on a Transatlantic Trade and Investment Partnership with the European Union following a “fresh start” in the talks after a new European Commission was seated in late 2014. In these negotiations the U.S. is seeking ambitious market openings in goods, services and investment and working to address areas such as regulatory and other non-tariff barriers to U.S. exports, the participation of small and medium-sized enterprises in the transatlantic economy, and the challenges of trade in the modern digital economy.

WTO. The U.S. will work to conclude negotiations on a balanced and commercially meaningful expansion of the Information Technology Agreement, hopes to achieve substantial progress toward concluding a Trade in Services Agreement, and will encourage other WTO members to take the necessary steps so that the Trade Facilitation Agreement takes effect by the next WTO ministerial conference in December.

GSP. The administration will work with Congress to renew authorization of the Generalized System of Preferences, which expired July 31, 2013, taking into account that GSP aids U.S. manufacturing by lowering the cost of imported goods used as inputs in domestic production.

Labor. The U.S. will work with the Colombian government to advance the implementation of the Colombia Action Plan Related to Labor Rights and urge additional action on areas of concern such as collecting fines for unlawful subcontracting, targeting shifting forms of unlawful subcontracting, and prosecuting recent cases of violence against trade unionists. The U.S. will also continue to consult with the government of Bangladesh to press for further progress on the GSP labor action plan, including issuing regulations implementing amendments to the Bangladesh Labor Act, completing building safety inspections, responding to unfair labor practice complaints, and enacting additional needed labor reforms, including for export processing zones. Further, the U.S. will continue to engage with Guatemala following the September 2014 reactivation of a labor dispute settlement process and continue to press for improved labor conditions in Honduras and the Dominican Republic.

Environment. The U.S. will continue to monitor closely the implementation of environmental obligations under existing trade agreements; e.g., emphasizing to Peru that its recent economic reforms must not weaken environmental protection and supporting that country’s implementation of an action plan targeting key challenges in its forestry sector. The U.S. will also continue efforts to eliminate tariffs on environmental goods through the Environmental Goods Agreement negotiations.

Enforcement. The U.S. will continue to “hold China and other trade partners accountable to their WTO obligations,” including through WTO disputes launched in 2014 concerning China’s antidumping and countervailing duties on U.S. electrical steel, Indonesia’s restrictive licensing measures on horticultural and animal products, and India’s discriminatory domestic content requirements for solar cells and solar modules. In addition, the Interagency Trade Enforcement Center will “continue to push further and dig deeper into, and address trade distortions resulting from, the complex web of industrial policies and bureaucratic systems of key trading partners like China” and continue to monitor the compliance of trading partners such as Russia, Brazil and India with their WTO commitments. Finally, the U.S. will continue to work with Korea, Colombia and Panama to ensure that free trade agreements with those countries are fully implemented and continue to operate smoothly.

Bilateral/Regional Initiatives. To create additional bilateral and regional trade and investment opportunities, the administration will pursue the following efforts.

China – continue concrete steps to make maximum progress in bilateral investment treaty negotiations “consistent with our negative list approach and a commitment to national treatment in the pre-establishment phase;” continue to work toward securing China’s participation in the Government Procurement Agreement; and work to improve intellectual property protection, remove regulatory barriers and improve time-to-market of innovative pharmaceuticals and medical devices in China

Russia – continue to monitor Russia’s implementation of its WTO obligations and take any actions necessary to ensure U.S. exports are treated consistently with those commitments

India – discuss the prospects for moving forward with a high-standard BIT as India releases its model BIT; achieve substantial progress on intellectual property issues

Americas –work with CAFTA-DR partners to address outstanding issues related to intellectual property, sanitary and phytosanitary measures, worker rights and environmental protections; possibly take steps to re-establish normal trade relations with Cuba

Africa – work with Congress on a seamless and timely renewal of the African Growth and Opportunity Act for as long a term as possible; expand the Trade Africa initiative to include countries beyond the East African Community (Burundi, Kenya, Rwanda, Tanzania and Uganda)

Middle East/North Africa – advance bilateral trade relationships with MENA countries such as Turkey; create and pursue initiatives that can help lay the groundwork for greater economic integration among MENA countries

Southeast Asia – build on work with Asia-Pacific Economic Cooperation forum countries in the areas of regulatory transparency, promoting trade in environmental goods and services, protecting trade secrets and educating economies on the damaging effects of localization barriers; intensify work with partners in the Association of Southeast Asian Nations by working bilaterally to address trade and investment barriers and enhance mutual economic growth and development; work with Burma to achieve further improvements in the protection of worker rights

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