Friday, July 29, 2011

USTR's Middle of the Road Strategy


“We are not going to stand idly by while other nations sign hundreds of free trade agreements” US Trade Representative Ron Kirk stated during a presentation earlier this week to the Bretton Woods Committee – a day after Washington pulled the rug from under continued attempts by other nations to keep the Doha Development Agenda negotiations alive. 
The USTR is right.  He is not going to stand idly by.  More likely than not, he will lay down in the middle of the road and let others run over the United States as they proceed on their own toward liberalized  trade.
But Mr. Kirk foresaw that criticism.  He said Washington will go after Canada for its refusal to unleash its Mounted Police on its citizens who cam cord first-run movies in their theaters – and a couple of other minor issues that did not stick in my head.  He also credited himself with moving through Congress three long-delayed free trade agreements with Colombia, Panama and South Korea.  All are three years old already – started and completed by the previous Administration – and far from Congressional approval.
Mr. Kirk also pointed to the ongoing “21st Century” free trade agreement negotiations with eight other major economies in the Asia-Pacific region – whose US participation was initiated by President  Bush and then US Trade Representative Susan Schwab.  Those talks – never really on a steady foundation because of serious concerns by others of US intent -- have been seriously undermined by the Obama Administration’s hostility toward the development agenda of the Doha Development Agenda negotiations.  Vietnam and Malaysia are strong stakeholders in both negotiations.
There are no plans for more FTAs from the US view -- except in response to a question from the floor about the need for closer trade ties in the Middle East to balance out the social upheaval of late.  Mr. Kirk said his office was in the “very, very early” stages of such a plan – which was outlined by President Obama in May.  (He couldn’t remember the name of the initiative – which is the Trade and Investment Partnership Initiative. )
So what’s in the works or on the books by others – an EU-Canada free trade agreement; an India-EU trade arrangement; a China-New Zealand trade agreement; a South Korea-India economic partnership agreement;  Canada-Panama FTA -- and the list goes on.
What’s the bottom line on US trade policy formulation – Do nothing and certainly don’t bother the President with such trifling issues.
Jim Berger

Monday, July 25, 2011


     "I want Congress to send me a set of trade deals that would allow our businesses to sell more products in countries in Asia and South America that are stamped with the words, ‘Made in America."
     That’s what President Obama said in his opening remarks at a town hall meeting at the University of Maryland Friday.
     So, now we know what’s really holding up the three FTAs – President Obama is waiting for Congress to send him the trade deals with Colombia, Panama and South Korea, but Congress can’t send him the agreements, because lawmakers don’t have them. Congress can’t vote on the three FTAs until the President formally submits them – which at the very end of his College Park appearance on Friday Mr. Obama indicated isn’t going to happen until there’s a deal on the debt limit.
     Of course, the President knows perfectly well how the "fast track" legislative process under Trade Promotion Authority works. He was simply trying to shorthand a complicated procedural issue for an audience that doesn’t – while sending reassurances to the US business community that desperately wants these FTAs that he still plans to move forward. And at the same time, the President was also doing a little blame-laying – basically telling the audience that Congress – not the White House – is holding up the FTAs.
     Lawmakers certainly are not innocent in the delay over the FTAs, but neither is the White House. And while the two sides continue to point fingers at each other, the FTAs continue to sit...

Thursday, July 21, 2011

Controls, Controls, Controls, Controls, Controls

WTD is into its third day of covering an exhaustive – and exhausting – Commerce Department export controls outlook conference, which is explaining to an audience of well over 1,000 participants the ins-and-out of last Friday’s multifaceted proposed regulation on shifting mun...itions items from the State Department’s controls list to the less stringent and clearer Commerce Department Commodity Controls List.
Three days is enough to get a start on understanding the new regulation.

Commerce’s strategy at the conference is a correct one – repeating over and over again what the regulations mean in practice – without using bureaucratic philosophical terms. The audience is either rapt or has simply mutated into their seats. I can’t tell.

After two or three rounds of plenaries and numerous breakout sessions, even I am beginning to understand the regulations. An hour-long question and answer session this morning with Commerce’s regulation guru Assistant Secretary Kevin Wolf included a disclaimer that even he had to read the definition of “specially designed” at least a half-dozen times to begin to understand it. But he had encouraging words for the audience suggesting a read of a dozen or more times will help it to begin to make sense.

Overheard at a session on the new Strategic Trade Authorization license exception rule was one participant saying under his breath – “You have to have the rule memorized to begin to understand the explanation.”
Also noticed – sitting right next to me – was a young controls expert in the making from an old-line law firm fast sleep for the nearly one-and-a-half hours of the session. A peek at his notes indicated – “STA license exception” That was it.

But most participants seem to prove the old adage – better devil you than the devil you don’t. The only real applause came early on in the opening address on Tuesday by Commerce Undersecretary for Business and Industry Eric Hirschhorn when he announced that Commerce would put back on its webside a pdf copy of the old Export Administration Regulations.

Jim Berger

Wednesday, July 13, 2011

Mr. Kirk and the Early Harvest

Here’s what US Trade Representative Ron Kirk said to a luncheon meeting of the Agribusiness Council on Tuesday when asked about the prospects for an early harvest in the Doha Development Agenda –

"Well, you know the easy thing for everybody to do in Doha is to all say let’s just do what we’ve all agreed on. Well, okay. Then you try to make a list of what it is that everyone has agreed on.

There is a reality that you’ve not going to bridge the gaps, particularly in manufacturing and others in order to conclude the round in the foreseeable future.

So there was some thought that if you could have a package of those items on which you had some consensus, maybe you could have an ‘early’ harvest if you could find a way to give, frankly, the developed economies some assurance that everybody just won’t pocket this and run away.

So how do you do that in a way that creates an incentive for us to come back to tackle the tough issues around market access in manufacturing and opening up services. Trade facilitation – that’s the good news.

The bad news in Doha is that there’s 10 people in the room, we all got 10 different things on the list. So it is a challenge. It is engaging at times. Ridiculously humorous. You need a good sense of humor to do what we do.

What some of us perceive as being thoughtful in terms of keeping, frankly, the emerging markets engaged and adding a reason to bring them back to the table on some issues which they believe they can address. So, we’re not there yet. We’re not there. We’re not ready to give up, but we’re not there.

Jim Berger