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This Week In Trade

New Model BIT, Senate Farm Bill, USTR Travels Headline Week's Trade Action

Posted: April 23, 2012

Posted: April 23, 2012

This week's trade activity got off to a quick start last Friday (April 20) as the Obama administration unveiled a new model bilateral investment treaty (BIT) and Senate Agriculture Chairman Debbie Stabenow (D-MI) released a draft farm bill that her committee will mark up this Wednesday (April 25).

While U.S. business groups are eager to restart BIT negotiations with countries like China and India, they expressed dismay over stronger labor and environmental protections that are included in the new model BIT. The Emergency Committee for American Trade was also disappointed that other changes it sought were not included.

On the farm bill, observers will be especially keen to see what comes out of the committee markup this week on issues like the provision of trade-distorting subsidies and the U.S. Department of Agriculture's General Sales Manager (GSM) 102 program. Brazil is pressing Congress to make changes in these areas in order to implement the findings of its World Trade Organization challenge against the U.S., and key farm leaders in the Senate appear sensitive to its demands.

U.S. Trade Representative Ron Kirk is in Singapore and Malaysia this week in order to discuss the Trans-Pacific Partnership (TPP) talks, advance "regional objectives" and deliver a speech on U.S.-Asia Pacific trade policy on April 26. He will be abroad in these countries from April 21-27, according to USTR.

In a related development, Ways and Means Committee Chairman Dave Camp (R-MI) is delivering a speech this week at the Center for Strategic and International Studies (CSIS) on U.S. trade policy. Among other topics, the speech is sure to touch upon the ongoing TPP negotiations, as it is part of a CSIS speaker series focused on TPP.

Deputy USTR Miriam Sapiro is in Brussels until April 26 in order to discuss the U.S.-EU High Level Working Group with European Commission officials. This follows up on a meeting held last week between Michael Froman, the top White House adviser on international economic issues, and EU Trade Commissioner Karel De Gucht on this same topic. Those two leaders discussed how to advance beyond longstanding difficulties in areas like regulatory cooperation.

Overall, these U.S.-EU talks on deepening trans-Atlantic economic ties are developing fairly slowly. While business groups have pushed for a high-level political endorsement of bilateral trade negotiations by both sides by mid-May, a top State Department official last week downplayed the idea that such an announcement would be possible by that time.

In Geneva, work continues on several new initiatives, including a services plurilateral agreement, after G20 trade ministers met for the first time last week in Mexico to discuss the international trading system. Deputy USTR Michael Punke represented the U.S. side, and once again stressed in his prepared remarks that WTO members must be willing to explore new avenues to liberalization, including a services plurilateral.

Punke did not explicitly mention the Doha round in his statement as released by USTR. By contrast, the so-called BRICS countries -- Brazil, India, Russia, China and South Africa -- released a separate statement stressing the importance of concluding the Doha round so that all countries may pursue a sustainable and "development-friendly" integration in the global trading system.

The regular work of the WTO, including the handling of international trade disputes, also continues this week with a meeting tomorrow (April 24) of the Dispute Settlement Body (DSB). Notably for U.S.-based observers, Antigua is slated to make a statement regarding the U.S. implementation of Antigua's successful challenge of U.S. online gambling restrictions.

Last month, Antigua was expected to announce new action against the U.S. in light of its failure to comply, but that never materialized. Antigua is stuck in somewhat of a bind because it is difficult to retaliate against the U.S. by raising tariffs or suspending intellectual property rights while ensuring that it follows WTO rules for doing so and does not do harm to its own economy in the process.