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This Week In Trade

TTIP Round, TPP Intersessionals, Bali Package, Critical Round Of ITA Talks

Posted: November 11, 2013

Posted: November 11, 2013

U.S. trade officials will have their hands full this week as they participate simultaneously in four major negotiations: the second round of Transatlantic Trade and Investment Partnership (TTIP) talks in Brussels; intersessional meetings of the Trans-Pacific Partnership (TPP); negotiations on a trade package for the December World Trade Organization ministerial; and a critical round of talks to expand the Information Technology Agreement (ITA).

The negotiating groups that will meet for the second round of TTIP talks in Brussels Nov. 11-15 are those covering services, investment, energy and raw materials, and regulatory issues. The TTIP negotiating groups on investment and services are meeting every day this week in Brussels, according to an EU source. U.S. and EU officials will also be holding videoconference discussions encompassing “other issues” throughout the month of November.

Investment negotiators will face the difficult task of trying to narrow their differences on investment protection and investor-state dispute settlement (ISDS). The first negotiating round in July revealed more than a dozen differences between the U.S. and EU approaches on investment, according to informed sources.

Chief among them are the EU's position of holding open the possibility that a final TTIP agreement might not include ISDS; the scope of a potential ISDS mechanism; and differing approaches to the obligation to accord investments fair and equitable treatment.

The European Commission on Nov. 19 will host a briefing for stakeholders on the sidelines of the TTIP round, and U.S. and EU negotiators are slated to give a closing press conference the same day.

On TPP, negotiators will hold a meeting on rules of origin Nov. 12-18 in Salt Lake City, Utah, and one on legal and institutional issues Nov. 12-14 in Washington, according to USTR. These are part of a slew of intersessional meetings aimed at advancing the talks ahead of a TPP ministers' meeting in early December.

Next week, TPP chief negotiators will meet in Salt Lake City along with “key experts” to try to narrow down the list of outstanding issues. But the length of that list -- which includes the contentious issues of market access, intellectual property, environment and state-owned enterprises -- has led many observers to conclude that it will not be possible for TPP countries to meet their goal of concluding the talks this year.

But USTR officials have been warning some U.S. stakeholders they should not assume that a year-end conclusion is impossible. USTR has also been conveying the message to stakeholders that any input they wish to provide for the negotiations needs to be made now, which one industry source interpreted as a clear indication that USTR is moving toward deciding on end-game compromises in the near term.

The objective of concluding the TPP talks this year will be on the agenda for U.S. Treasury Secretary Jack Lew when he travels to Japan, Singapore, Malaysia and Vietnam this week, according to a Nov. 8 press release from his office. All those countries are currently participating in TPP, unlike China, which Lew is also slated to visit during his Asian trip.

According to Treasury, Lew will also hold discussions with his counterparts in the five Asian countries about the U.S. and regional economic outlook as well as on policies to boost regional growth and global demand.

During his visit to China on Nov. 15, Lew will discuss “progress on the reform agenda and efforts to level the playing field for U.S. workers and business,” according to the Treasury release. His visit will come on the heels of an important Communist Party meeting known as the “Third Plenum,” which is taking place Nov. 9-12.

U.S. officials and business representatives are hoping the meeting will yield more details about what types of economic reforms China's new leadership plans to pursue. For instance, Assistant USTR for China Affairs Claire Reade said last week that the Third Plenum may give U.S. officials a better understanding of the repeated statements by China's leaders regarding their ambitions for reform.

At the same time, Reade said one Chinese pilot project for testing out trade and investment reforms -- the Shanghai Free Trade Zone (FTZ) -- has not only failed to yield any major results thus far, but could end up stalling China's broader reform efforts as the government focuses on the FTZ.

In a related development, USTR Agriculture Negotiator Islam Siddiqui and Agriculture Undersecretary Michael Scuse will travel to Beijing Nov. 12-14 to co-chair meetings of the sanitary and phytosanitary (SPS) working group of the U.S.-China Joint Commission on Commerce and Trade (JCCT). The meeting of the full JCCT is slated to take place next month.

In Geneva, last-minute efforts by WTO members to cobble together a trade package for the Dec. 3-6 ministerial meeting in Bali, Indonesia, are likely to continue this week, even though today (Nov. 11) was the date set by Director-General Roberto Azevedo for assessing whether the package is possible.

Azevedo is meeting today with the chairmen of the negotiating areas to assess the progress that has been made over the last few weeks, and will report back to all WTO members at a Trade Negotiations Committee (TNC) meeting tomorrow.

He is likely to let the talks continue after that point if he deems they have made enough progress. As of late last week, WTO members had not been able to bridge the major gaps in the trade facilitation, agriculture and development components of the package.

WTO members have pushed back to Nov. 21 the date of a General Council meeting that will formally end the Geneva process. But one source insisted last week that negotiations on the Bali package cannot last all the way until then because the results would have to be adopted at a formal TNC meeting and then transmitted to the General Council.

On the ITA expansion, negotiators will meet in Geneva starting today to make a major push to see if they can hammer out deal before the Bali ministerial. This week's round, which participants hope will be the last, is planned to go until Nov. 20 but could spill over into the following days.

There has been a lot of push-and-pull between negotiators over the past year over what products should be subject to tariff elimination, and those discussions will continue this week as the U.S. and other participants try to ensure that a final deal is commercially meaningful.

In Washington, the heads of USTR as well the Commerce and Agriculture departments will be out and about this week making public appearances.

USTR Michael Froman is slated to speak at the Atlantic's Washington Ideas forum on Nov. 13. He will also hold a private meeting with Israel's economy minister later that day and will make remarks on Nov. 14 at a closed-door meeting of the U.S.-Japan business conference at the U.S. Chamber of Commerce

Meanwhile, Commerce Secretary Penny Pritzker is slated to deliver a speech on Nov. 14 outlining her vision and priorities for the department, which she took over in June.

According to a Nov. 8 Commerce press release, Pritzker has developed her vision based on consultations with U.S. business stakeholders, Commerce employees, foreign leaders, and members of the international business community.

“The feedback that she received has helped to inform the areas the Department will focus on as it continues to provide the services that create the conditions for economic growth and job creation in the context of a more competitive global economy,” Commerce said.

Her speech comes just days after the White House announced its intention to nominate Bank of America Merrill Lynch executive Stefan M. Selig as the next undersecretary of international trade in the Commerce Department.

Pritzker is also slated to testify on Nov. 13 at a hearing of the Senate Commerce Committee on how to strengthen U.S. innovations and manufacturing.

Agriculture Secretary Tom Vilsack will discuss the future of the U.S. agriculture community and the regulatory road ahead at a Nov. 14 event sponsored by Politico. Vilsack is sure to touch upon the farm bill that is currently being considered by a House-Senate conference committee.