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This Week In Trade

GSP Jump-Start; TPP Japan, Legal Issues; WTO Wrestles Over Agenda

Posted: April 07, 2014

The long-expired Generalized System of Preferences (GSP) may get a boost toward renewal this week driven by the push from the administration and Congress to support Ukraine at a time of crisis, and the arrival of a Ukrainian delegation this week in Washington, according to informed sources.

They said that congressional efforts to find an offset for the program that does not invite opposition in the Senate seem to have been successful and that there may well be an announcement of GSP action this week. These sources noted that Senate Finance Committee Chairman Ron Wyden (D-OR) is scheduled to give a keynote address on Wednesday (April 9) to the American Apparel and Footwear Association meeting on International Sourcing, Customs, and Logistics Integration Conference, so stay tuned. AAFA has been among the key proponents of GSP renewal.

Beyond that, the focus this week is on the Trans-Pacific Partnership (TPP), particularly in relation to Japan, where U.S. Trade Representative Michael Froman will head to discuss market access issues and autos with Japanese TPP minister Akira Amari from April 8-10. Deputy USTR Wendy Cutler was already scheduled to meet in Tokyo with her counterparts on both of those issues beginning today (April 7).

Also on Froman’s agenda is an April 11 meeting with the Netherlands Minister of Foreign Trade and Development Lilianne Ploumen, which could involve discussion of the Transatlantic Trade and Investment Partnership (TTIP). On the same day, he is also slated to meet with the Director General of the International Labor Organization, the Secretary General of the Organization for Economic Cooperation and Development, and Pakistan’s Minster of Finance Ishaq Dar, according to USTR.

Also at the forefront this week are efforts in the World Trade Organization to come up with the post-Bali work program. At a meeting of the Trade Negotiations Committee today (April 7) in Geneva, WTO Director-General Roberto Azevedo conceded that consultations have not yet bridged differences over key issues, such as whether to use the existing texts for potential agriculture and non-agricultural market access negotiations left over from the Doha round.

Deputy U.S. Trade Representative Michael Punke made clear at the TNC that the U.S. does not support using those texts as the basis for future discussions. He also emphasized that post-Bali work needs to be based on updated data on countries' agricultural subsidies, a position that some in Geneva view as a delaying tactic.

In another development to watch this week, Colombia is on the hot seat for what the AFL-CIO charges is its failure to live up to its commitments under a U.S.-Colombia labor action plan struck three years ago today. But the Obama administration and the Colombian embassy are fighting back against those charges by releasing separate reports touting the plan's achievements. The action plan was politically linked the passage of the U.S.-Colombia free trade agreement.

Late last week, the U.S. and Taiwan held a meeting of the Trade and Investment Framework (TIFA), where the focus seemed to be on plans Taiwan’s plans to strengthen IPR enforcement, including online piracy and as well as the protection of pharmaceutical and medical devices, according to a USTR statement released Saturday (April 5)

USTR on Friday released its Section 1377 report on foreign trade barriers in the telecommunications sector. It slams China and India on a number of their policies, as well as proposals in the European Union to create a Europe-only cloud computing network, which USTR said could potentially lead to exclusion or discrimination against foreign firms.

On GSP, Froman made clear at the April 3 Ways and Means hearing on the president’s trade policy agenda that the administration strongly supports GSP renewal. Asked how the U.S.-Ukrainian trade relationship could be strengthened quickly, he replied that the “one thing that could be done is the renewal of GSP because Ukraine was a GSP beneficiary” and said he look forward to working with the committee to pass this renewal “as soon as possible.”

But a private-sector source said that the Russian threats facing Ukraine are not the only national security reason that may drive a potential GSP renewal. The source noted that considerations for Moldova and Georgia, which could also be vulnerable to Russian actions, are also a factor.

Related to the TPP talks, Froman is in Japan this week, ostensibly in an effort to make progress in the drawn-out negotiations on agriculture market access and automotive trade issues. Hanging over the U.S.-Japan market access talks this week is the fact that Japan and Australia today (April 7) announced they had concluded negotiations for a bilateral trade deal, known as the Economic Partnership Agreement. Under the deal, Japan granted additional market access for beef and dairy products from Australia, but did not agree to fully liberalize trade in these sectors.

Observers have previously said that a Japan-Australia deal could put pressure on the U.S. to wrap up its own bilateral negotiations with Japan under the TPP.

Separately, there is an informal consultation meeting taking place between some TPP participants on legal issues from April 8-11 in Washington. But it is not a formal meeting of the negotiating group on legal issues.

The Peruvian government announced the meeting in its official newspaper on April 4, saying it would focus on outstanding issues such as initial, administrative and general provisions; dispute settlement; transparency and anticorruption; exceptions; and final provisions.

A key outstanding issue being discussed in the legal group involves competing proposals from the United States and Malaysia on tobacco-specific language. Malaysia has proposed that tobacco control regulations be completely exempted from having to comply with TPP obligations, while the U.S. has tabled a much more scaled-back approach.

The TPP and the challenges it poses will also be the topic of a speech by Ways and Means Ranking Member Sander Levin (D-MI) to the Center for American Progress on April 9.

Levin was unsuccessful in his effort to prompt Froman at the April 3 hearing to say whether the monitoring programs and action plans he promised to keep track of Vietnam’s TPP implementation would be in place before the congressional vote on TPP. Froman would only say it depends on each specific case.

On TTIP, U.S. Chamber of Commerce President and CEO Thomas J. Donohue delivered two keynote addresses on the importance of the trans-Atlantic relationship today (April 7).

According to his prepared remarks, Donohue exhorted EU business groups to step up their efforts to generate support to the agreement, which he acknowledged faces serious pushback from opponents. He also urged government negotiators to redouble their efforts to complete a TTIP deal in a timely fashion, in what appeared to be a veiled criticism of the pace of the negotiations so far.

Donohue is set to visit Brussels this week for high-level meetings with senior government officials and business leaders to advocate for an ambitious TTIP deal, according to the Chamber.

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