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This Week In Trade

All Eyes On Bali, Korea TPP Interest, Biden Asia Trip, Colombian President Visit

Posted: December 02, 2013

Posted: December 2, 2013

All eyes are on the World Trade Organization ministerial in Bali, Indonesia, where Director-General Roberto Azevedo is trying to advance work on a stalled package of trade concessions in response to demands from a number of member countries, excluding the United States.

The draft package as it emerged from the Geneva process that failed to resolve differences on a trade facilitation text also faces new opposition over a key agriculture element.

Indonesia's trade minister today (Dec. 2) hinted at a press conference that a draft text reached in Geneva last month on food security stockholding programs is now unraveling. He said there is no consensus among WTO members on the details of a “peace clause” that would protect those programs from WTO challenge.

Azevedo will instead engage in consultations with members to try to resolve outstanding issues in the Bali package in an informal process beginning on Dec. 4, the second day of the Dec. 3-6 ministerial.

U.S. Trade Representative Michael Froman will arrive in Indonesia on Dec. 3 after a visit to Japan, Vietnam and Malaysia to discuss the Trans-Pacific Partnership (TPP) negotiations, which will be the subject of a separate ministerial in Singapore from Dec. 7-10.

Froman had tried to push the negotiations forward by insisting that they are in the end game even though the U.S. had not tabled its proposals on key issues like the intellectual property protections for pharmaceuticals.

Also on TPP, the Center for Strategic and International Studies (CSIS) will hold a Dec. 5 discussion of TPP with the three of the four co-chairs of the congressional TPP caucus. The fourth co-chair, Rep. Ron Kind (D-WI), cannot attend because of a scheduling conflict, according to a Kind aide.

Separately, TPP is on the agenda of Vice President Joe Biden as he meets with senior officials in Japan on Dec. 2, his first stop of an Asia trip that will also take him to China and South Korea. He will be in Beijing from Dec. 4-5 to meet with Chinese President Xi Jinping, Vice President Li Yuanchao and Premier Li Keqiang on a wide range of bilateral, regional and global issues, including energy and climate, according to a White House announcement.

In Korea, Biden will meet President Park Geun-Hye and have a working lunch with her. He will also meet with Prime Minister Chung Hong-won during his visit, which will end on Dec. 7.

The White House announcement of the Biden trip says it will reaffirm the U.S. “enduring presence” as a Pacific power, and underscore the U.S. commitment to “rebalancing U.S foreign policy towards the Asia Pacific.”

In November, National Security Adviser Susan Rice announced that President Obama would travel to Asia in April “to continue strengthening our ties across the region.” This week, a former Obama White House official speculated that Obama's trip could be the new deadline for TPP conclusion.

Over the weekend, Korea formally declared its interest in joining TPP and said it would enter into preliminary bilateral talks with the current 12 parties, but made clear that it would seek to join only after getting more details about the deal and the conditions for its entry.

Froman noted that the U.S. is willing to consult with Korea at the “appropriate time” about joining TPP and said these consultations will focus on addressing outstanding bilateral issues, including the “full implementation of existing obligations.” He was apparently referring to disputes over the implementation of the U.S.-Korea FTA.

USTR and U.S. industry groups have complained about what they say are a number of gaps in the implementation of the U.S.-Korea FTA, including in the automobile and pharmaceutical sectors. Other outstanding issues include Korean restrictions on allowing financial data to flow outside of its borders and the Korea Customs Service's scrutiny of U.S.-originating goods.

Korea's interest in joining TPP is not as much of a surprise as one might surmise from the absence of a public reaction from U.S. business groups. Inside U.S. Trade as of late afternoon had not received a reaction statement to Korea's announcement.

The Korean government floated a trial balloon in October, and there were additional expression of interests in November. Korean government officials updated Acting Deputy U.S. Trade Representative Wendy Cutler on their internal deliberations.

The U.S. relationship with Colombia is in focus this week with the visit of Colombian President Juan Manuel Santos Calderon, who is visiting Washington from Dec. 3-4. He is scheduled to meet with President Obama, as well as House Speaker John Boehner (R-OH) and House Minority Leader Nancy Pelosi (D-CA). He will also participate in a number of business events, including a lunch at the U.S. Chamber of Commerce on the issues affecting the bilateral trade and economic relationship.