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This Week In Trade

TPP Meeting; Froman, Lew In China; APEC Ministers; Russia WTO; TTIP

Posted: May 12, 2014

Posted: May 12, 2014

The week in trade kicks off with the May 12-15 meeting in Vietnam of chief negotiators for the Trans-Pacific Partnership (TPP), where many sources say the focus will be on having trading partners find out exactly how much progress the U.S. and Japan made last month and whether that is sufficient for them to move on their sensitive issues.

Also happening this week are trips by Treasury Secretary Jacob Lew and U.S. Trade Representative Michael Froman to Beijing; a meeting of Asia-Pacific trade ministers in China that industry groups hope could lead to progress in the negotiations to expand the Information Technology Agreement (ITA); continued clashes between Russia and the West at the World Trade Organization; and developments related to the U.S.-EU trade talks.

The week also brings the second anniversary of the U.S.-Colombia Free Trade Agreement on May 15 and the outcome of Indian national elections on May 16, which Froman has said will set the stage for the U.S. pursuing its trade complaints with the new Indian government.

On TPP, Japan's chief negotiator suggested today that progress in bilateral negotiations between the U.S. and Japan during President Obama's trip to Tokyo last month had cleared the way for all 12 parties to make major headway in this week's talks, which he said would cover both outstanding market access and rules issues.

But other sources said they remained doubtful about the amount of progress that will be achieved this week, citing the prevailing uncertainty about how far the U.S. and Japan have advanced their bilateral negotiations, and the apparent unwillingness of the two sides thus far to explain the details to the other parties in the negotiations.

Inside U.S. Trade has a reporter on the ground to keep readers abreast of latest developments in Vietnam as well as in Singapore, where TPP ministers will meet May 19-20 to “check in” on the status of the talks. Ministers will head there after attending at Asia-Pacific Economic Cooperation (APEC) trade ministerial May 17-18 in Qingdao, China.

U.S. industry groups in March publicly called for the ITA expansion negotiations to be wrapped up by the May APEC ministerial. USTR said at the time that it supported that goal as long as an acceptable outcome to the negotiations could be achieved.

China had held up the ITA expansion talks by refusing to improve on its most recent offer, which sought a narrower product coverage and a longer tariff phaseout period for some product categories than what other participants were willing to accept.

Prior to heading to Qingdao, Froman will stop in Beijing on May 15 to meet with Chinese government officials, according to a USTR press advisory. His visit will come two days after Lew visits the Chinese capital on May 13 to discuss the U.S.-China economic relationship. The talks will cover the U.S., Chinese and global economic outlook, as well as progress on China’s reform agenda, and preparations for the upcoming U.S.-China Strategic and Economic Dialogue, according to a May 8 Treasury announcement.

Froman today (May 12) is slated to meet with Joe Hansen, president of the United Food and Commercial Workers (UFCW), which represents workers in the meat packing industry, among other sectors. The UFCW, along with the United Autoworkers, was one of two unions that supported the U.S.-Korea FTA.

On May 13, Froman will meet with Pakistani Minister of Commerce Dastgar Khan at the Trade and Investment Framework Agreement Council meeting. The following day, he participate with Turkish Minister of Economy Nihat Zeybekci in a meeting of the U.S.-Turkey High-Level Committee, which was formed to explore how to deepen bilateral economic ties in light of Turkey’s complaints that it will be disadvantaged by the Transatlantic Trade and Investment Partnership (TTIP).

The clash between Russia and Western economies took place at a meeting today in Geneva of the World Trade Organization's General Council, where Moscow had requested to discuss “trade-restrictive measures of certain members” and the EU had requested to discuss Russian trade barriers. Russia last month charged that U.S. sanctions on Russian individuals and companies put in place over the Ukraine crisis violated WTO rules.

In statements at the General Council meeting, Deputy U.S. Trade Representative Michael Punke and EU Ambassador to the WTO Angelos Pangratis did not directly address Russia's complaints on U.S. sanctions but raised worries over what they said was Russia's failure to live up to its WTO obligations.

Punke said this failure covers both substantive and procedural measures, such as notifications, to the point of raising systemic issues. Punke charged that Russia had failed to live up to its sanitary and phytosanitary (SPS) obligations, saying the U.S. noted “with concern" Russia's bans on imports of food and beverages from Ukraine, Lithuania, Moldova and Poland without evidence of valid SPS concerns. He also said the U.S. faces difficulties in terms of getting approval for facilities that can export to Russia.

Pangratis sounded a similar theme in terms of highlighting Russia's "blockade" of imports of pork from the EU, which he said has not changed despite repeated EU complaints. He also charged that Russia is failing to implement the bound tariff rates to which it agreed when it acceded to the WTO in 2012.

Also at the General Council, WTO Director-General Roberto Azevedo, in his role as chair of the Trade Negotiations Committee, updated delegations on the status of efforts to craft by the end of the year a work program to conclude the Doha round. He signaled that discussions on the work program are still at an early stage, and urged WTO members to engage prior to the summer break in serious conversations about what concessions they are willing to make to deliver a Doha outcome.

The week will also put the spotlight on investment provisions of the TTIP, as the European Commission is holding a May 13 stakeholder event on this issue in the context of its ongoing consultations about its approach to investment in the U.S.-EU talks.

Lead participants in the forum are Rupert Schlegelmilch, director for trade in services, investment, intellectual property and public procurement in the Directorate-General for Trade, and Ditte Juul-Jorgensen, who serves in DG Trade as the director of the sections on WTO Legal Affairs and Trade in Goods.

Also on TTIP, 178 consumer, environmental and labor groups from the U.S. and EU today pressed Froman and European Trade Commission Karel de Gucht in a letter to explain what the two sides are proposing in terms of regulatory cooperation.

The groups posed specific questions based on what they say is a December 2013 position paper presented by the commission on cross-cutting disciplines and institutional provisions to be included in a TTIP chapter on regulatory coherence. Among the U.S. signatories were the AFL-CIO, United Steelworkers and the Sierra Club.

That paper, which was leaked in December, shows that Brussels is pushing for a final U.S.-EU trade deal that would contain a broad range of new obligations for governments on either side to inform each other of forthcoming policies that could potentially impact trans-Atlantic trade - including legislation from the U.S. Congress.

Also this week, the International Trade Commission will hold a public hearing on May 14 as part of its investigations into the economic impact of the proposed plurilateral agreement to eliminate tariffs on certain environmental goods. Public comments on the “green goods” initiative were due to USTR on May 5.

Meanwhile, the EU last week completed its own domestic procedure to prepare the ground for the green goods negotiations. The Council of the EU approved “negotiating directives” to guide the commission in the talks, specifically asking EU negotiators to explore the inclusion of non-tariff barriers and environmental services in the initiative.

The negotiating directives approved by trade ministers at the Foreign Affairs Council meeting on May 8 closely resemble the public conclusions that the council issued on the same day, according to one informed source. In those conclusions, the council emphasized “the need to explore the ground for liberalization of environmental services, including trade-related services, and to address Non-Tariff Barriers to environmental goods and services.”

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