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This Week In Trade

Third TTIP Round; JCCT Meeting In China; Labor, Environment Issues

Posted: December 16, 2013

Posted: December 16, 2013

The final week before Washington packs up for the holidays won't be a quiet one for the U.S. trade agenda, with the third round of the Transatlantic Trade and Investment Partnership (TTIP) negotiations already underway in Washington and the annual U.S.-China Joint Commission on Commerce and Trade (JCCT) taking place Dec. 18-20 in Beijing.

At the third TTIP round, which began today and lasts through Friday (Dec. 20), U.S. and EU negotiators will try to find enough common ground so that early next year they can go beyond conceptual discussions on new rules and start laying down proposals in black-and-white legal text.

In principle, that means negotiators this week will try to advance the discussion across the full range of areas under negotiation, from sanitary and phytosanitary (SPS) rules to investment. The two sides also will try to identify areas where there may be a need for higher-level political direction, in preparation for a ministerial stocktaking meeting slated for January or February. The round will include a stakeholder event on Dec. 18 and a closing press conference on Dec. 20.

On the first day of the round, Corporate Europe Observatory, a Brussels-based non-governmental organization (NGO), published what it claimed is a leaked position paper from the European Commission laying out the EU's goals for a regulatory coherence chapter of TTIP. Among other things, the paper further elaborates on the commission's proposal for a Regulatory Cooperation Council that would be created under TTIP to provide a framework for future regulatory cooperation between the two economies (Inside U.S. Trade, Oct. 11).

Meanwhile, U.S.-China trade relations will be in the spotlight when U.S. Trade Representative Michael Froman, Commerce Secretary Penny Pritzker and Agriculture Secretary Tom Vilsack travel to Beijing for the annual meeting of the JCCT, which is a forum for addressing specific commercial issues between the two sides. Vice Premier Wang Yang will chair the Chinese delegation, according to USTR.

The JCCT will likely span the range of bilateral trade issues, if the mid-year JCCT review conducted in September is any indication. At that meeting, U.S. and Chinese officials touched upon more than two dozen topics, including intellectual property rights, pharmaceuticals, government procurement, investment, services, industrial policies, regulatory obstacles and agriculture.

U.S. industry groups have already identified several issues on which they hope China will make progress during this week's JCCT. For instance, the American Farm Bureau Federation and three other agricultural groups have urged the Obama administration to press China at the JCCT for faster and more consistent consideration of new biotechnology crop applications.

Also, U.S. technology groups have asked U.S. officials to push back at the JCCT on new restrictions proposed earlier this year by the Chinese government on telecommunications and business services. These groups argue that the proposed changes would incorrectly classify a range of business and electronic commerce activities as telecommunications services, thereby subjecting them to new foreign investment restrictions.

On government procurement, China has not yet made good on its pledge to submit a new revised offer by year end to accede to the Government Procurement Agreement (GPA). The U.S. and other GPA parties have called on China to improve its most recent offer, tabled in November 2012, by including coverage of state-owned enterprises; lowering thresholds above which the GPA's non-discrimination disciplines apply; removing several broad exclusions to coverage; and expanding coverage of sub-central entities and services.

Labor and environmental issues will also be front and center on the USTR agenda this week. Froman is slated to meet today (Dec. 16) with United Steel Workers President Leo Gerard to discuss labor issues, according to USTR. He will then participate in a meeting of the Labor Advisory Committee (LAC), which consists of Gerard and other union leaders who advise the administration on trade negotiations. Labor Secretary Thomas Perez will also take part in the LAC meeting.

The meeting comes a week after Gerard and three other union leaders announced their opposition to the Trans-Pacific Partnership (TPP) as an agreement that would further erode U.S. jobs, but made clear that their focus was also on fighting the possible renewal of fast-track negotiating authority. On fast-track, the saga continues even as the proponents failed to introduce a bill last week the way they had hoped to do. Talk is now that Senate Finance Committee Chairman Max Baucus (D-MT), Ranking Member Orrin Hatch (R-UT) and Ways and Means Chairman Dave Camp (R-MI) have reached agreement on a text, but legislative aides said today (Dec. 16) they have not been briefed on any bill text.

Three of these union leaders -- Gerard, International Association of Machinists President R. Thomas Buffenbarger and Teamsters President James Hoffa -- sit on the LAC, while Communications Workers of America President Larry Cohen does not.

Buffenbarger, who chairs the LAC, in June urged the administration to roll back restrictions on information provided to the committee that he said have severely limited its ability to provide advice to U.S. trade negotiators as specified in the statute.

On the environment side, USTR will hold a meeting today of the Trade and Environment Policy Advisory Committee (TEPAC) “to discuss trade and environment priorities for the Administration,” the agency said. Froman will participate in the meeting along with Environmental Protection Agency Administrator Gina McCarthy and Interior Secretary Sally Jewell.

In addition, U.S. and Colombian officials will meet on Dec. 19 for the first meeting of the U.S.-Colombia Environmental Affairs Council and Environment Cooperation Commission since those bodies were established under a bilateral free trade agreement. The U.S.-Colombia FTA went into effect on May 15, 2012.

U.S. trade policy toward Africa will also feature on the agenda this week. Assistant USTR for Africa Florie Liser will chair a roundtable discussion today with government agencies, private-sector representatives and NGOs on the role of trade capacity building in supporting African exporters to the U.S. under the African Growth and Opportunity Act (AGOA), according to USTR. On Thursday (Dec. 19), Liser will also chair a roundtable meeting on AGOA renewal with stakeholders from the textile and apparel industry. AGOA expires in September 2015, and USTR is currently conducting a broad review of the program.

In a related development, 16 congressional chairmen and ranking members of committees and subcommittees with jurisdiction over trade and foreign relations sent a Dec. 12 letter to the Government Accountability Office requesting a report assessing AGOA's effectiveness in spurring economic growth and development in sub-Saharan Africa.

On the multilateral front, Assistant USTR for World Trade Organization and Multilateral Affairs Mark Linscott will speak at a Global Business Dialogue event tomorrow (Dec. 17) to discuss the outcome of the ninth WTO ministerial meeting held earlier this month. At that meeting, WTO members approved a trade facilitation agreement that is not expected to enter into force for several years, along with concessions on agriculture and development issues.

On the legislative agenda, the Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs will hold a hearing on Dec. 18 titled, “U.S. Economic Engagement in the Asia-Pacific Region,” which will feature testimony from officials from the State and Commerce departments.

The hearing is sure to touch upon the TPP negotiations, which ministers from the 12 participating countries last week announced would not be concluded by the end of this year. In a joint statement issued at the conclusion of a four-day meeting in Singapore, TPP ministers said they will meet again in January, which sources said is likely to take place in conjunction with the World Economic Forum in Switzerland.

In a related development, Chilean voters yesterday elected Michelle Bachelet of the center-left Concertacion coalition as the country's next president. Bachelet, who will take office on March 11, has been critical of the TPP negotiations and indicated she would launch a review of the deal if elected.