Trade talks focus on problems
WASHINGTON -- In a dramatic shift from the leadership of former Senate Finance Committee Chairman Max Baucus, D-Mont., new chairman Sen. Ron Wyden, D-Ore., devoted more attention to problems with trade than to its benefits on May 1 when Trade Rep...
WASHINGTON -- In a dramatic shift from the leadership of former Senate Finance Committee Chairman Max Baucus, D-Mont., new chairman Sen. Ron Wyden, D-Ore., devoted more attention to problems with trade than to its benefits on May 1 when Trade Representative Michael Froman appeared before his committee to discuss the Obama administration's trade agenda.
Baucus, who resigned from the Senate to become U.S. ambassador to China, was a trade enthusiast, but Wyden, in his opening statement, said, "The extraordinary economic changes of the last generation demonstrate how important it is that future trade policies are reformed to reflect the times."
Wyden's statement and questions asked by other Democratic senators signaled that passing trans promotion authority in the Senate will be very difficult.
After the hearing, Wyden told reporters he would take his time to consider how to give the executive branch trade promotion authority, which allows the administration to negotiate with other countries and only allows Congress to vote the final agreement up or down, not amend it.
"We are going to move as quickly as we can to do trade right," Wyden said.
In his opening statement, Wyden raised a series of specific issues:
• Vietnam has a law that calls into question the ability of U.S. businesses to move their data in and out of the country governments, and China, Brazil and Europe are also considering developing systems that would effectively build digital barriers to trade.
• Chinese government-backed steel and solar firms "are able to take entire segments of the American economy out at the knees."
• India and China "use highly technical standards to advantage their domestic firms and extract American companies' intellectual property for their own use -- a shakedown, plain and simple."
• The commitments that China made when it joined the World Trade Organization are undermined by its currency manipulation.
Wyden said Americans expect to easily find the information they want on key issues like trade online, but "too often, there is trade secrecy instead of trade transparency."
He asked Froman if he would guarantee that the administration would take the Trans-Pacific Partnership agreement to the public before Obama signs it.
Froman replied that the timetables could be part of the Trade Promotion Authority bill, but did not say the agreement would be released before it is signed.
Sen. Charles Schumer, D-N.Y., asked Froman if he has raised currency manipulation in the TPP talks, but Froman said no.
Schumer said he would not support TPA "without objective criteria to define and enforce against currency manipulation."
Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., said she was surprised the TPP issue has not been raised, and that changes in the relative value of the Japanese yen gives Japanese automakers an advantage over U.S. automakers, while U.S. automakers cannot get their vehicles into Japanese car dealerships.
Froman replied that "it has been important to the world that Japan get back on a path to economic growth" and that the Treasury Department "has the lead and engages with Japan" on currency manipulation.
Senate Finance ranking member Orrin Hatch, R-Utah, said the administration needs to campaign for TPA, but Hatch also said he was disappointed the administration has not brought cases against Russia in the WTO and has refused to bringing WTO cases against India on intellectual property rights.
Hatch also noted that a recent survey has shown that U.S. trade representative "ranks dead last in employee job satisfaction among small agencies."
He also said that USTR has failed "to effectively play its traditional role as a bulwark against other federal agencies" on trade issues.
Hatch cited the role of the Health and Human Services Department on tobacco products in the TPP, Treasury's "insistence on relegating financial services discussion to pre-existing forums" in the Trans-Atlantic Trade and Investment Partnership (T-TIP) negotiations with the European Union and the Food and Drug Administration's "fear of dispute settlement that resulted in a weaker USTR proposal" in the TPP.
Froman did reassure Sen. Pat Roberts, R-Kan., that USTR will take a hard line on the issue of geographic indicators for agricultural products in the T-TIP negotiations.
But when Roberts asked what the Europeans' reaction had been, Froman said, "I have not yet been able to convince them."