[Ngo-sanrm] Update on TPP, things are not going well

Sustainable Agriculture and Natural Resources Management Working Group ngo-sanrm at ngocentre.org.vn
Tue Apr 8 01:24:43 BST 2014


*Inside U.S. Trade - 04/04/2014*

*Ways And Means Members Press Froman On TPP Issues, Including Vietnam*

Posted: April 3, 2014


 Members of the House Ways and Means Committee yesterday (April 3) pressed
U.S. Trade Representative Michael Froman on a number of outstanding issues
related to the Trans-Pacific Partnership (TPP) negotiations, including how
Vietnam can be expected to live up to the deal's labor obligations and how
strongly he will fight Japan's efforts to protect its sensitive agriculture
products from more import competition.

In addition, members pressed Froman to seek disciplines in TPP against
currency manipulation, though he offered little more than his longstanding
general response that fighting currency manipulation is a priority for the
Obama administration.

On Japan, Ways and Means Chairman Dave Camp (R-MI) acknowledged that Japan
has sided with the U.S. on a number of rules issues, but has created a
serious impediment in market access negotiations by insisting on excluding
or limiting a "significant number of important agricultural products from
the scope of TPP."

Camp said that, in his view, the U.S. should leave behind countries such as
Japan not willing to make the necessary commitments for a high-standard
deal. After the hearing, Camp said he is confident that if Japan wants to
stay in TPP, it will have to move off its current position.

But Froman did not respond to Camp's statement about leaving Japan behind,
saying instead that the U.S. is very much focused on bridging the remaining
gaps on agriculture and automotive issues with Japan.

He stressed that the U.S. and other TPP countries are looking for Japan to
offer comprehensive market access, both in agriculture and other areas.
Froman said that the U.S. is aware of the political sensitivities that
Japan is facing and that the U.S. is "plenty creative" in trying to come up
with ways of ensuring that Japan can provide comprehensive market access
while also addressing these political sensitivities.

The trade representative also noted that all TPP countries have
sensitivities, and that countries are still working toward an ambitious TPP
deal in that context.

Froman stopped well short of saying that Japan must phase out all the
tariffs on sensitive items or completely open its market. He said that the
U.S. is seeking "meaningful additional market access that is consistent
with our stakeholders' objectives as part of this ambitious agreement."

Ways and Means Ranking Member Sander Levin (D-MI) noted that Japan's size
of its economy as well as its historically export-dependent and closed
market poses particular challenges to completing a TPP deal. "The Korea
agreement was hard -- and remains hard with a number of disturbing
implementation issues outstanding, and in some cases growing. Japan will be
harder. Important markets in Japan are even more closed and its economy is
bigger," he said.

Froman said that, once the Japan market access issue has been settled, the
challenge will then be bringing Canada to the table. According to Froman,
Canada has not yet made an agriculture offer to the U.S. since it appears
to be waiting on what will happen with Japan.

Camp signaled after the hearing that the TPP negotiations need to move at a
faster pace. "We will have to move to really start making progress on some
of the remaining issues" that were identified at the hearing, he said. Camp
added that he remains committed to pushing the administration to conclude a
viable TPP agreement this year.

For his part, Froman said he still hopes to conclude the TPP deal this
year, though the feasibility of that was questioned by Rep. Jim McDermott
(D-WA). He said after the hearing that the chances of concluding TPP this
year are "not better than 50-50."

The hearing addressed a range of other issues such as trade barriers in
China and India, as well as the potential conclusion of the negotiations
for expanding the Information Technology Agreement (ITA), which China has
been holding up with its demands for protecting sensitive items.

On ITA, Froman testified that the U.S. and others have made "proposals to
China to try and get them back to the table with what we think is a
reasonable path forward." But he acknowledged that China has not yet
responded positively and that the U.S. is continuing to raise this at every
one of its high-level meetings with China, including at the Joint Committee
on Commerce and Trade meeting last December. "And we will continue to press
that and try and get them back to the table so that we can complete that
agreement." Froman testified.

*Froman said that once the market access issues of TPP are resolved, it
will allow negotiators to make a*deal on the outstanding rules issues.
These include the data exclusivity term for biologic drugs, an issue he
said was one of the most challenging in the negotiations given countries'
widely different levels of protection for such drugs.


 He cited as other outstanding rules issues the disciplines on state-owned
enterprises (SOEs), the scope of the investor-state dispute settlement
mechanism, and the dispute settlement rules for sanitary and phytosanitary
(SPS) obligations.

He insisted that there are "a reasonable number" of outstanding rules
issues and "some critical outstanding issues on market access" that need to
be solved, but said that TPP was in the "end game." That point was clearly
contradicted by Levin, who said that there is a "long list of fundamental
issues" where the outcome remains uncertain. Levin characterized that
status of TPP as being in the middle of its negotiations.

"The list of major outstanding issues in TPP is too long to recite or
describe here, but includes currency manipulation, environmental
protections and labor standards, access to medicines, food safety rules,
state-owned enterprises, tobacco controls, cross-border data flows and
privacy protections, and investment issues. I hope we can discuss those
issues today," he said in his opening statement.

Froman said he anticipates that the TPP chapter on SPS will be subject to
some form of dispute settlement, either in the World Trade Organization or
the TPP itself. But he said the issue is not fully resolved yet.

The Obama administration has been reluctant to agree to industry demands
for binding dispute settlement on SPS in TPP apparently due to the
objections of U.S. regulators who feel that they may be hampered in their
rulemaking. But the U.S. is now saying it is willing to consider dispute
settlement for the chapter depending on the ultimate outcome of the SPS
negotiations (*Inside U.S. Trade*, March 7).

Froman said negotiators are making progress in the SPS chapter in a way
that would ensure U.S. regulators such as the Food and Drug Administration
can protect U.S. food safety and implement the Food Safety Modernization
Act.

*On Vietnam, Froman acknowledged that the country will be unable to take on
the obligations of the *TPP immediately, and that there must be a phase-in
of its obligations, as well as follow-up monitoring arrangements. "We need
to make sure that we've got mechanisms for assuring that they meet their
obligations consistent with the standards of the agreement," he said.


 He acknowledged that Vietnam poses a particular challenge given its low
level of development and its command economy, but insisted that engagement
is the best option for promoting reforms there. He also said that the
Vietnamese government sees the TPP as a potential mechanism for carrying
out its domestic reform agenda, for example, on SOEs.

Both Levin and Rep. John Lewis (D-GA) pressed Froman on Vietnam's poor
labor rights record and its human rights violations.

Levin cited Vietnam's "poor record on labor rights and the rule of law" as
an obstacle to a successful TPP agreement, saying the country represents an
even bigger challenge than Colombia did. The U.S. and Colombia negotiated a
labor action plan that was politically linked to the passage of their
bilateral free trade agreement, but Levin said Bogota has not fully
complied with provisions of the action plan.

"The Colombia agreement was hard -- and remains hard with a deeply
troubling record of compliance with the Labor Action Plan," he said.
"Vietnam will be harder. The fact that the communist government believes
it, and not independent labor unions chosen by the workers themselves,
represents workers in the workplace creates a new threshold issue." He
noted that Brunei, Malaysia, and Mexico will also face challenges in
implementing TPP labor commitments.

Froman said that, in TPP, the U.S. is seeking a "meaningful" right to
association and collective bargaining, as well as meaningful disciplines on
forced labor, child labor and acceptable conditions of work, consistent
with International Labor Organization (ILO) standards.

Froman said the U.S. would develop action plans and work programs to ensure
Vietnam will live up to the labor obligations. He said that effort will
also require capacity building and technical assistance, from either the
ILO or the AFL-CIO's Solidarity Center, which serves as a conduit for U.S.
foreign aid. In addition, Froman said, the administration is working with
the State Department and the U.S. Agency for International Development to
ensure that there will be resources available for Vietnam to fully
implement its obligations under TPP.

He said the U.S. is also pushing Vietnam to make progress on its human
rights violations in order to create the environment in which there would
be support for its participation in TPP.


*J*
*utta Hennig and Victoria Guida*

*Inside U.S. Trade - 04/04/2014, Vol. 32, No. 14*
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://ngocentre.org.vn/pipermail/ngo-sanrm/attachments/20140408/23728d37/attachment-0014.html 


More information about the Ngo-sanrm mailing list