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This Week In Trade

Colombia FTA Announcement Launches Week Focused On TPP, Agriculture

Posted: April 16, 2012

Posted: April 16, 2012

The U.S. and Colombian announcement over the weekend that their bilateral free trade agreement will enter into force on May 15 kicked off a busy week for U.S. trade policy that will be dominated by developments in the ongoing Trans-Pacific Partnership (TPP) negotiations and agricultural trade policy.

Other trade developments this week include the trip today (April 16) to Brussels by Deputy National Security Adviser Michael Froman to meet with top European Union trade officials to discuss how best to cooperate through two trans-Atlantic forums focused on deepening bilateral trade.

In addition, trade ministers of the G-20 group of nations are scheduled to meet in Mexico April 19-20 ahead of the June G-20 leaders' summit, although the U.S. will be represented by Deputy U.S. Trade Representative Michael Punke instead of USTR Ron Kirk. And the Department of Defense is slated to submit by April 18 a report recommending that Congress return to the president the authority to determine the level of control applied to exports of satellites.

On the Colombia FTA, yesterday's announcement that the trade deal will enter into force next month came after the Obama administration certified that Colombia had taken the necessary steps to implement its FTA obligations and a related action plan on labor rights. That prompted an immediate backlash from labor unions including the AFL-CIO, who prior to Obama's trip had warned the president not to certify Colombia as fully complying with the action plan.

This Wednesday, the TPP talks will take center stage as U.S. business groups formally relaunch the U.S.Business Coalition for TPP at an event on Capitol Hill. That event will feature comments from Kirk, House Ways and Means Committee Chairman Dave Camp (R-MI), Senate Finance Committee Chairman Max Baucus (D-MT), and ambassadors from TPP countries as well.

Although the TPP talks are nowhere near completion, members of the coalition are interested in increasing their outreach to Hill offices in order to underscore why the TPP is an important trade deal.

The TPP negotiations themselves are also heating up prior to the next full round of talks in Dallas early next month. TPP negotiators are holding inter-sessional negotiations on rules of origin on April 17-21 in Los Angeles, which will also be the site of talks on technical barriers to trade on April 17-19. In addition, negotiators are slated to meet in Hanoi on April 16-19 to discuss investment, and the U.S. will host negotiators in Washington on April 22-24 to tackle financial services.

The TPP talks are also bound to come up Wednesday when USTR Chief Agricultural Negotiator Islam Siddiqui testifies before the Senate Finance trade subcommittee on opportunities for U.S. agriculture and food producers in the Asia-Pacific region.

Also on the agricultural front, U.S. and Brazilian officials are slated to meet on April 17 in Washington, in part to discuss the development of the next U.S. farm bill.

Roberto Azevedo, Brazil's ambassador to the World Trade Organization, is leading the Brazilian team and is expected to drive home the point that current farm bill proposals would only lead to more trade-distorting subsidies, and that there could be consequences if legislation containing those policies is passed. He made a similar point to the leaders of the congressional agriculture committees in a letter sent earlier this year.

A former U.S. agriculture secretary earlier this month agreed that the next farm bill will be more trade distorting than current U.S. farm policy because Congress may fund new safety net programs in part by eliminating direct payments, which are considered to be less trade distorting than other subsidies.

The direction of the next farm bill will also be under the microscope this week when the chairmen and ranking members of the House and Senate Agriculture Committees outline their priorities at the annual conference of the North American Agricultural Journalists in Washington.

Azevedo and other Brazilian officials are in town under the auspices of the U.S.-Brazil cotton framework agreement. Under that framework, the two sides meet every three months. The meetings this week will include a formal "operational review" of the U.S. General Sales Manager (GSM) 102 program, meaning the U.S. may be required to hike up fees it charges under that program even more if its usage is found to exceed certain levels.

The cotton framework agreement was negotiated in 2010 as a way to forestall Brazilian retaliation in an adverse World Trade Organization ruling against U.S. cotton subsidies.

In other agriculture news, Siddiqui is slated to meet this week with the National Cattlemen's Beef Association and the U.S. Cattlemen's Association to discuss beef market access, the TPP talks, and the ongoing U.S. appeal of an adverse WTO ruling against the U.S. country of origin labeling system, according to USTR.

NCBA had pressed USTR not to appeal the ruling, putting it at odds with consumer advocates and rancher groups like the U.S. Cattlemen's Association and R-CALF, which had pressed for an appeal.

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