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This Week In Trade

Obama Asia Trip Dominates Week In Trade, Focus On Meeting With Abe

Posted: April 21, 2014

Posted: April 21, 2014

President Obama's visit to Asia dominates the week in trade with all eyes on his meeting with Japanese Prime Minister Shinzo Abe on April 23, and what, if anything, it will produce to advance the negotiations for a Trans-Pacific Partnership (TPP).

But a senior administration official late last week all but ruled out the possibility that the meeting would yield a breakthrough in the U.S.-Japan negotiations under TPP, which are focused on market access for agriculture and autos. The official said on April 18 that the meeting would provide Obama and Abe an opportunity to review the status of the negotiations and provide further impetus, but that the U.S. is not looking to conclude an agreement in Tokyo.

National Security Adviser Susan Rice said in an April 18 briefing that Obama's Asia trip will give the president the “chance to continue to make progress” on TPP because he is visiting both Japan and Malaysia, two of the 11 countries negotiating TPP with the U.S.

In an April 21 joint statement, U.S. and Japanese business groups also seemed to suggest that the Obama-Abe meeting may only yield a commitment by both sides to redouble efforts to conclude TPP. The statement by the U.S. Chamber of Commerce, the U.S.-Japan Business Council, Keidanren and the Japan-U.S. Business Council called on the two leaders to “pursue conclusion of the [TPP] agreement with renewed focus, vigor and purpose at this critical time in the negotiations,” adding that failure to do so “runs the risk that the TPP will founder.”

The groups pledged that they will “proactively” advocate for ratification of TPP in both countries if it contains a comprehensive market access deal, and will also lobby for the passage of a bill renewing fast-track authority in the United States.

The Obama-Abe meeting, which starts on April 23, will be preceded by U.S.-Japan negotiations on TPP that on the U.S. side will involve Acting Deputy U.S. Trade Representative Wendy Cutler, Deputy Undersecretary of Agriculture Darci Vetter and Assistant AUSTR Sharon Bomer Lauritsen.

This is further evidence of the enormous effort that the Obama administration is putting into advancing TPP at a time when sources see Japan as having moved away from its earlier pledges regarding the initiative. USTR Michael Froman will accompany President Obama on his trip to Asia.

Obama starts his trip in Tokyo on April 23 with a private dinner with Abe, followed the next day by a bilateral meeting and a joint press conference. On April 25, Obama will travel to South Korea for a two-day visit, which will include a meeting with President Park Geun-hye on the first day. In Korea, the president will also meet with business leaders to discuss the U.S.-Korea economic relationship, the implementation of the U.S.-Korea free trade agreement, and the SelectUSA initiative seeking to promote foreign direct investment in the United States.

He will then visit Malaysia on April 26, which will mark the first visit by a U.S. president to the country since Lyndon B. Johnson in the 1960s. On Monday, April 28, Obama will leave for a two-day visit to the Philippines, which will include a meeting with President Benigno Aquino on the first day. Obama is slated to leave for Washington on April 30. In all these countries, he will meet with business leaders, according to Rice.

In advance of Obama's Asia trip, the Communications Workers of America and the International Brotherhood of Teamsters used the U.S.-Korea FTA, also known as KORUS, as an example of how trade agreements do not live up to the promises that politicians and trade negotiators make about them. The U.S.-Korea trade deficit has widened in the time that the KORUS has been in effect.

“The data on the US-Korea FTA adds more weight to the argument that Congress should not even bring TPP up for consideration unless every aspect of the agreement can be openly debated and, if needed, modified to serve the interests of all Americans,” the two unions said in an April 21 statement.

In an apparent reference to the administration's statements that Korea must fully implement KORUS before joining TPP, the two unions said the “failure” of KORUS is “so extreme that the U.S. is holding up South Korea's joining TPP because of it.”

Beyond the Asia trip, this week in trade brings developments related to the Transatlantic Trade and Investment Partnership (TTIP), which some supporters see as lagging due to the U.S. focus on TPP. On Wednesday (April 24), Assistant USTR Dan Mullaney will participate in a discussion on TTIP held by Johns Hopkins University. Also participating in the discussion is Hiddo Houben, the head of the trade section at the EU delegation in Washington, who will leave his slot this summer.

The panel discussion comes less than a month before officials will meet in Washington for the fifth round of TTIP negotiations the week of May 19. The U.S. and the EU have decided to focus first on advancing the market access part of the initiative in the hope of picking up speed.

This week may also see the release of new position papers by the European Commission regarding the regulatory elements of TTIP. The commission had said it intended to release the papers last week but did not do so.

In Washington, the Commerce Department today (April 21) is expected to issue its preliminary determination in an antidumping investigation of Mexican and Turkish steel rebar. A number of members of Congress have raised issues about Commerce's trade remedy investigation into Mexican and Turkish steel rebar, although their complaints have largely focused on Commerce's subsidy investigation into Turkish imports.

On Tuesday (April 22) public comments are due to the U.S. Department of Agriculture's Animal And Plant Health Inspection Service (APHIS) on its proposed rule to allow the importation of chilled or frozen beef from 14 states in Brazil. This deadline was extended from Feb. 21, after stakeholders and eight senators had requested such an extension.

They argued that the proposed rule has various implications involving trade, food safety and the health of U.S. livestock herds. They expressed alarm about the possible risk of foot-and-mouth disease (FMD) being brought into the United States.

In addition, the Export-Import Bank is holding its annual conference on April 24 and 25, which will include a panel discussion on the administration's trade agenda on the second day. Ex-Im is facing opposition from House Republicans to the renewal of its charter, which expires in September.

The trade discussion at the Ex-Im event will feature Commerce Secretary Penny Pritzker, Agriculture Secretary Tom Vilsack and Energy Secretary Ernest Moniz, according to an Ex-Im spokesman. At that point, Froman will be in Asia with Obama.

On Friday, April 25, the U.S. is expected to request a dispute settlement panel at the World Trade Organization about India's local content requirements in both phases of the Jawaharlal Nehru National Solar Mission (JNNSM), an initiative designed to boost the country's solar power sector.

Under the initiative, purchasing domestic solar cells and modules is a condition for companies to enter into power purchase agreements with Indian power companies and get benefits such as favorable rates for electricity purchases, according to the U.S. panel request.

Also on April 25, the U.S. has to decide whether to extend a labor enforcement plan with Guatemala for six months or reactivate formal dispute settlement proceedings under the Central American Free Trade Agreement (CAFTA). USTR has said that, if Guatemala fails to implement the plan by April 25, the United States reserves its right to restart the dispute settlement proceedings that were suspended as a result of the enforcement plan.

The 18-point enforcement plan – agreed in April 2013 – contains various measures with specific timeframes that Guatemala was supposed to implement within six months to improve labor law enforcement. USTR already opted last October to extend the action plan by an initial six-month period.

The action plan was aimed at resolving a dispute in which the U.S. charged that Guatemala violated its labor commitments under CAFTA by failing to effectively enforce its own laws related to the right of association, the right of workers to organize and bargain collectively, and acceptable working conditions. The U.S. brought that case based on a petition filed by the AFL-CIO and six Guatemalan unions in 2008.