Wednesday, June 29, 2011


 Some malware cut down both of our computers earlier in the week, requiring us to use an old and slow laptop and a notebook to put out the daily issues.  We are waiting for the Geeks to get through with the first pc and then for the second.  Waiting is killing us.  It sort of thwarts everything we have planned on doing.

 The same is happening in US trade policy.

 Finally, Congressional supporters of advancing US trade in general are waiting for the Senate Finance Committee to finally schedule a “mock” markup of the three long-pending free trade agreements with Colombia, South Korea and Panama.  They also are waiting to set a markup probably tomorrow afternoon on the lapsed US Generalized System of Preferences Program and the Andean Trade Preferences Program. 

The committee also is expected to take up extension of the politically controversial 2009 additional trade adjustment assistance program for Americans who have lost their jobs directly related to trade.

 The pending free trade agreements have been pending for upwards of five years.

 Trade supporters also are waiting for the Obama Administration to finish its over-a-year review of a model Bilateral Investment Treaty.  That program is instrumental to providing assurances for companies – both American and foreign – that their investments will not be taken away or curtailed, which officials freely agree is true.

 Like with us, the waiting dampens enthusiasm for future initiatives – including the Administration’s highly-touted TransPacific Partnership negotiations – and erodes support for trade, rather than builds it.

 WTD, along with many of our subscribers, are getting impatient.  Understandably, some of our readers are asking why they are paying for a daily newsletter only to read the same story every day – why nothing is happening.  And they are cancelling for the first time in 20 years of publication.

 Its killing to have to wait and not exactly know what for.

 Jim Berger

Friday, June 24, 2011

Peace Funding Vs War Funding

        At a recent informal discussion on trade capacity building for developing countries – in advance of a big World Trade Organization review of the Aid for Trade Initiative next month – US trade officials touted the latest US capacity building offer, amounting to some $120 million over four years for subSaharan Africa.
        In addition to the paucity of the amount, US Trade Representative Ron Kirk told a different audience in Washington that financial constraints in this country will force the Administration to focus on only a few countries in Africa for trade assistance rather than qualifying all 52 countries on the continent. He mentioned Tanzania and Zambia, both of which he recently visited.
        Deputy World Trade Organization Director General Valentine Rugwabiza told a session on the subject by the Washington International Trade Association that trade capacity building pledges by all industrial and advanced developing countries – including the United States – are well above expectations from two years ago.
        Deputy World Trade Organization Director General Valentine Rugwabiza told a session on the subject by the Washington International Trade Association that trade capacity building pledges by all industrial and advanced developing countries – including the United States – are well above expectations from two years ago.
        Over the past decade, US trade capacity building spending amounted to some $12 billion to all countries around the globe when the program was first state, according to an senior-level Agency for International Development Agency official. A great majority of those funds came from the US development assistance budget.
        The sad fact is that the $12 billion in "peace-building" trade infrastructure funding made over the past 10 years pales in comparison with the $10 billion the United States pours into Afghanistan every month.
        Here's the link to the WTO compilation of capacity building success stories:

Monday, June 20, 2011

Popping Corks

Colombian Ambassador Gabriel Silva started out a roundtable to update reporters on the status of the long-stalled US-Colombia free trade agreement Friday by announcing he had “moved the champagne from the wine cellar into the fridge.”

But the Ambassador was not celebrating any progress on his country’s FTA with the United States. Tha...t deal – along with trade pacts with Panama and South Korea – remains in limbo while the White House and Congressional Republicans try to strike a deal to move the FTAs and expired Trade Adjustment Assistance benefits.

Instead, Mr. Silva was getting ready to pop open the champagne in response to the announcement that a trade agreement between Colombia and Canada will take effect on August 15.

“This is good news for all of us who believe in free trade,” Mr. Silva told reporters.
But it’s bad news for many US exports to Colombia – particularly agricultural products. US share of Colombia’s agricultural market already has been taking a nosedive since Bogota signed a trade deal with the big agricultural producing countries of Mercosur. Now – in less than two month – Canadian wheat, pork and other key commodities will have a competitive advantage over US products.

Mr. Silva said he has long been arguing that the US delay in approving the FTA – which has sat on the sidelines for over four years now – is costing US jobs. The situation will only get worse on August 15. And Colombia is continuing to look for other trading partners. A trade pact with the European Union is expected to take effect early next year. Meanwhile, Colombia’s legislature last week approved an investment protection agreement with China – the first step toward a possible free trade deal with that country.
Asked by WTD if it’s too late for the United States to win back its lost market share in Colombia, the Ambassador was optimistic. Colombians actually prefer US products and there are already strong business ties between Colombian and US companies because of the Andean trade preferences program (although that is now also expired).

But while the White House and Congress continue to wrangle over TAA, Colombia is moving ahead. Mr. Silva said he believes President Obama will live up to his commitment to get the FTA through Congress before the summer recess. But the Ambassador added that he hopes Congress is wise enough to understand that if the FTA is not approved now, it probably never will be.

So, is it time to get the champagne ready?

Saturday, June 4, 2011

Friday, June 3, 2011

Doha and Election Year Politics

The “caution” light is on in the White House. Like a traffic signal, the White House amber signal advises going slow before turning “red” to avoid a potentially drastic accident. The political light turns red in November – when political campaigning gets underway “hot and heavy.”

It is now the beginning of June and the first major Republican Presidential candidate – former Massachusetts Governor and popular Mitt Romney – has thrown his hat into the ring. More notables will do so in the weeks ahead – prior to August.

Politicos at the White House are looking around now for possible campaign “accidents.” Hence the mystery over the US position on the Doha Development Agenda negotiations which survived two Presidential elections.

Countless studies over the years have shown that implementation of even the most aggressive Doha agenda would have very little impact – hardly noticeable – on the US economy.

Politically, though, an agreement would provide fodder for President Obama’s opponents. On the liberal Democratic side – including especially the labor wing of the party – the President’s hold already is tenuous. Agreeing to a trade-opening trade agreement would be more than enough to erode current support from liberals – already ready to abandon the President. A third-party liberal candidate on the scene could do the trick. With the White House taking responsibility for concluding a “job-losing”, “NAFTA-style” multilateral trade agreement, that support would go over the edge.

The few Republican moderates who remain in the America populace – many of whom supported Obama rather than back conservative John McCain and his vote-devastating running mate – would readily abandon the President without much thought.

The Administration cannot afford for purely domestic political reasons to take a chance and conclude the Doha negotiations.

Passing the three pending free trade agreements – soon, however, – is okay because of US Trade Representative’s Ron Kirk’s successful endeavor in repainting those Bush Administration agreements. Although little changed in substance, all three – with Colombia, Panama and South Korea – are now “job-creating” endeavors and integral aspects of the President’s National Export Initiatives.

WTD quoted an anonymous negotiator in Geneva just after the last Presidential election three years ago who said the already nearly decade-old trade negotiations will have to wait another four years for substantial negotiations to go forward once President Obama is elected to a second term and can pursue his agenda generally unhindered by election-year politics.

So the “caution” light is on.

Any comments?

Jim Berger
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