President Obama’s Trade Agenda

1. President Obama’s Trade Agenda Dale Jones – ITRN 701 Global Trade Politics Seminar Dr. Stewart Malawer Presentation #2 / April 23, 2013

2. Key Articles and Links • USTR – The Presidents 2013 Trade Policy Agenda http://www.ustr.gov/sites/default/files/Chapter%20I%20-%20The%20President%27s%20Trade%20Policy%20Agenda.pdf • Acting USTR Marantis address to Senate, March 19, 2013 http://iipdigital.usembassy.gov/st/english/texttrans/2013/03/20130319144447.html#axzz2PUmunywX • Wall Street Journal “A New Economic Strategy” Feb 6, 2013 (posted on Dr. Malawer’s Web Site) (An Alternative to the Administrations Agenda with some potentially strong arguments) http://www.internationaltraderelations.com/Article.New%20U.S.%20Int%27l%20Eco,%20Strategy%20%28Zoellick%29%20%28WSJ%202.6.13%29.pdf • The American, The American Enterprise Institute, “Not So Fast: Conflicting Deadlines for the TPP and US-EU FTA”, Claude Barfield, March 8, 2013 (Some concerns about the potential timing and success of the President’s agenda)http://american.com/archive/2013/march/not-so-fast-conflicting-deadlines-for-the-tpp-and-us-eu-fta • World Politics Review, “Opportunity Knocks for Obama on Trade”, January 8, 2013 (An optimistic outlook on the President’s trade agenda and the potential for it)http://www.worldpoliticsreview.com/articles/12604/opportunity-knocks-for-obama-on-trade

3. President Obama’s International Trade Agenda Focus First Term “Expand Exports” Second Term “Expand Trade Overall” Expand Trade Overall through focus on FTAs Trans Pacific Partnership US – EU Transatlantic Trade and Investment Partnership Trade Promotion Authority WTO Focus – Trade Liberalization IT and International Services Agreements • National Export Initiative • Enforcement of US Protections • Finalized pending Bush Administration Agreements • South Korea • Colombia • Panama

4. USTR report to Senate in March 2013 Key Accomplishments • Since2009, increased U.S. exports have supported 1.3 million additional American jobs. • Last year, U.S. exports @ record high • Since 2009, manufacturing exports up 47 percent; agricultural exports up 44 percent; and services exports up 24 percent

5. Three Pending Free Trade Agreements Finalized October 12, 2011 WASHINGTON – “Congress approved free trade agreements Wednesday with South Korea, Colombia and Panama, ending a four-year drought in the forming of new trade partnerships and giving the White House and Capitol Hill the opportunity to show they can work together to stimulate the economy and put people back to work.” CBS News

6. President’s 2013 Trade Policy Agenda The President’s Trade Policy Agenda for 2013 describes how the Administration will continue to use every available policy tool over the next year – and develop new tools as necessary – to pursue the most efficient and productive pathways for trade liberalization in order to support greater economic growth and jobs. Moving forward, the Administration will continue to work with willing trading partners as we constantly seek ambitious, comprehensive, and high-standard trade and investment commitments that will enhance the ability of U.S. workers and firms to compete here at home and on a level playing field around the world. We will continue to enforce our trade agreements rigorously to bring home their economic benefits, preserve and support additional U.S. jobs, and discourage trade-inhibiting actions that diminish economic growth. We will strengthen trade relationships in every region, partner with developing countries to share the benefits of trade more broadly, and continue to reflect and uphold American values in trade policy. Our efforts in 2013 will build on many successful 2012 initiatives to enable continued progress toward President Obama’s National Export Initiative goal to double U.S. exports in support of up to two million additional U.S. jobs by the end of 2014. We will further intensify negotiations with Trans-Pacific Partnership (TPP) countries to secure a next-generation, high-standard trade agreement in the world’s fastest growing region. We will launch negotiations with the European Union toward a Transatlantic Trade and Investment Partnership agreement to further strengthen the world’s largest trade relationship. At the WTO, we will continue to advance promising pathways for 21st century trade liberalization and to seek to revitalize Members’ workin Geneva, including on trade facilitation, expansion of the Information Technology Agreement, and negotiations on a new International Services Agreement.

7. Key Components to the President’s Second Term Trade Agenda • Trans-Pacific Partnership (TPP) • US – EU Trade Agreement (AKA The Transatlantic Trade and Investment Partnership (TTIP) • Trade Promotion Authority (Fast Track)

8. USTR to Senate, March 2013 Administration’s Trade Agenda • Consult with Congress on U.S negotiating objectives • Hold trade partners accountable • Intensify Trans-Pacific Partnership negotiations • Trans-Atlantic Trade and Investment Partnership with the European Union • Geneva Discussions at WTO - advance trade liberalization; include trade facilitation and expansion of the Information Technology Agreement and Trade Services provisions. • Seek Trade Promotion Authority

9. Continue the Export Initiative • Exports continued to climb, hitting record highs in all major sectors in 2012; • services exports were up 24 percent over 2009; • manufacturing exports were up 47 percent; and • agricultural exports were up 44 percent. • Consequently, overall U.S. exports of goods and services have increased by more than 39 percent above the level of exports in 2009, and this has supported more than 1 million additional American jobs;

10. Challenges to the Objectives • Replacement of the US Trade Representative – Ron Kirk • Congressional Interest in participating in the determination of international trade policy • Objections and time required to gain Trade Promotion Authority • Complexity of TPP and EU Negotiations

11. The Battle for “Fast Track” House of Representative Ways and Means Committee Chairman Dave Camp, a Michigan Republican, urged President Barack Obama to "demonstrate his commitment to a vigorous and productive trade policy" by opening talks with Congress on the "fast track" powers and "nominating a qualified and committed U.S. trade representative.“ The current U.S. trade representative, Ron Kirk, plans to step down soon. That will leave the position of chief U.S. trade negotiator vacant as the United States prepares to launch trade talks with the European Union and as it seeks to finish talks on a Trans-Pacific Partnership pact by the end of the year. It is considered essential to assuring other countries that any deal they reach with the United States will not be picked apart by U.S. lawmakers during the approval process. Both Camp and Senate Finance Committee Chairman Max Baucus, a Democrat from Montana, have announced plans to pursue TPA legislation. But many lawmakers believe a strong push from Obama is needed because trade bills are unpopular with many Democrats.

12. Fast Track and the USTR US Business Roundtable Today with Business Roundtable President John Engler And how might the administration win passage of TPA? One, they could name the new USTR head, and that person, as part of the confirmation hearing could then be testifying as to the important need to have that, and saying that would be one of their priorities as the head of the USTR: "That the president has said, 'Help me get this renewed.' Indeed, Engler used his opening remarks to call on the President to nominate a U.S. Trade Representative as soon as possible, get that person confirmed, and get working.

13. The WTO agenda? • To realize the enormous potential of more open markets for trade in services to support additional jobs and economic growth worldwide, the United States is joining like-minded WTO Members this year in launching multi-party negotiations toward an ambitious international services trade agreement (ISA). • Protectionism - Agriculture and the WTO – a case by case approach seems to be the trend • The United States is currently the world's largest services trader. U.S. exports of private services measured almost $600 billion in 2011, and sales through foreign affiliates exceeded $1 trillion in 2010. Taken together, international sales of services by U.S. companies are on the order of $1.7 trillion per year, which is equivalent to approximately 11 percent of U.S. Gross Domestic Product (GDP). • ISA talks in Geneva include 20 trading partners and the United States has trade agreements with 10 of these negotiating partners. The ISA offers a unique platform to work on deeper services integration simultaneously with diverse partners such as Japan, Chinese Taipei, Israel, Norway, Pakistan, andTurkey, and to help influence the development of the global services architecture. • Participate in negotiations to expand the scope of the WTO Information Technology Agreement (ITA) of 1997 that now covers over $4 trillion in annual global trade.

14. The Trans Pacific Partnership • More than 40 percent of global trade, and experts estimate that economies around the Pacific Rim will continue to grow faster than the world average through 2016. • TPP partners now include Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam • The “ambitious, comprehensive and high-standard” Transatlantic Trade and Investment Partnership (TTIP) TPP, APEC and the APEC’s ultimate goal of a Free Trade Area of the Asia-Pacific (FTAAP)

15. APEC and the TPP TPP market snapshot (including Australia) GDP: US$20,734 billion (2011) GDP per capita: US$31,491 (2011) Population: 658.4 million (2011) Trade with Australia: AU$135.303 billion (2011)

16. Transpacific Partnership GDP Potential, 2010 The Economist “Opening up the Pacific” November 12, 2011 Accessed and downloaded March 26, 2013 from; http://www.economist.com/blogs/banyan/2011/11/free-trade-agreements

17. The EU Transatlantic Trade and Investment Partnership • Even though tariffs are already low, with an average of 3%, the sheer size of the transatlantic economy and trade means that removing these barriers would have a positive impact on both jobs and growth. However, the real benefits would come from removing NTBs • For the EU, the added value of increased economic cooperation and representation on the world stage. A country like the UK would never be able to negotiate a deal with the US on the same terms as the EU as a bloc can. • From a global perspective, a transatlantic partnership would be able to set standards for future world trade- and it would be an incentive for (re)emerging economies or developing countries to step up their game, improve their competitiveness and prosperity by opening up markets and working towards meeting the new TTIP global standards. • Eliminating tariffs would already offer some gains but greater potential from eliminating “behind-the-border” obstacles ; as much as 80% of the total potential GDP gains come from cutting costs imposed by bureaucracy and regulation, as well as from liberalizing trade in services and public procurement. • The TTIP would boost exports in almost all sectors, but would be especially beneficial to certain sectors in both the EU and the US. In the motor vehicles sector, EU imports are expected to go up by 42% and exports by 43%. EU exports of motor vehicles to the US would increase by 149%. Other EU sectors that have a lot to gain from the TTIP by increased sales to the rest of the world would be the metal products (+12%), processed foods (+9%), chemicals (+9%), other manufactured goods (+6%) and other transport equipment (+6) sectors.[3]

18. The Dynamics & the US Relationship with China • In 2013, the United States will address trade objectives with China using all available tools including dialogue, negotiation, and enforcement when appropriate. We will seek to increase transparency and eliminate market access barriers across all sectors. • We will advance Bilateral Investment Treaty (BIT) negotiations with China to secure improved market access, important investor protections, and increased certainty for US investors. • work to obtain a comprehensive offer from China, commensurate with other Parties‘ coverage, to join the WTO Government Procurement Agreement to provide substantial access for U.S. and international exporters to one of the world’s largest government procurement markets. • Closely monitor implementation of China’s bilateral and WTO commitments to respect and protect U.S. intellectual property, and will work with China to improve intellectual property protection and enforcement, recognizing that strong rule of law is essential to encourage and support continued innovation. • Continue to hold China accountable for its other WTO commitments through appropriate enforcement efforts that aim to end discriminatory policies wherever they are discovered in China.

19. A worker in the Port of Qingdao in March. China's Ambassador to the WTO Yi Xiaozhun warned that the nation's exports situation this year is not positive and trade frictions targeting China will continue in the long term. Yu Fangping / For China Daily

20. The BRIC(S) Evolving Influence • To engage or ignore? • Russian Relationships and trade status • Brazil – overtures of interest in a US Trade Agreement • India’s Momentum and Challenges

21. The State Department Role • The Clinton Model • John Kerry’s Approach • Distractions • Iran • North Korea • Syria

22. National Export Initiative • NEI Video

23. Trade and Regulatory Change Initiatives Interagency Trade Enforcement Center (ITEC) to take a “whole-of-government” approach to monitoring and enforcing Americans’ trade rights around the world. ITEC uses expertise from across the federal government to assert U.S. trade rights obtained through various international trade agreements.

24. Key Export Initiative Pieces • Interagency Trade Enforcement Center (ITEC) • Export Promotion Cabinet (EPC) • Trade Promotion Coordinating Committee (TPCC) • 70 NEI recommendations

25. The Export Promotion Cabinet and the Trade Promotion Coordinating Committee In 2013, the EPC will coordinate through the TPCC the launch of innovative initiatives including: a national marketing campaign targeting small and medium-sized exporters; an expanded Export University Program; the “Global Business Solutions” trade financing packaging that will work with community banks to expand the U.S. financial infrastructure offering trade-related products; commercial statecraft training for foreign service officers; and public-private partnerships that will deliver commercial services for U.S. businesses overseas. The Administration will also implement the operational plans of the President’s Commercial Advocacy Task Force, which was created by Executive Order in December 2012, including assembling deal teams and developing robust trade leads for U.S. businesses. In 2013, the Administration will continue to increase collaboration with U.S. cities and states to develop their own export plans, integrate Export.gov with BusinessUSA.gov to better deliver online services, and continue implementing a national tourism strategy to boost U.S. services sector exports.

26. Policy Recommendations • Stay the Course on the primary trade agenda objectives – be aggressive • Clarify and focus the “enforcement approach” to international violations • Formalize and reiterate the State Department’s “Trade Advocacy Role” • Formulate a strategic approach to combat protectionism in WTO and FTAs