Friday, September 30, 2011

WTD's Friday Afternoon podcast for September 30, 2011

Dumb Decisions -- On the Middle East

Decisions made by this Administration are getting weirder and weirder.

I’ve been reporting on international trade policy in Washington for some 30 years – and have heard a lot of things that were hard to fathom. But during the past two weeks I’ve heard – and reported – some very difficult things to believe about the Middle East.

Just yesterday, Assistant Secretary of State for the Asia and Pacific Kurt Campbell told a big meeting of the Pacific Economic Cooperation Council that the American people are demanding "some nation-building at home" – saying the Obama Administration will start to turn its attention domestically.

Mr. Campbell essentially said the Administration will respond to perceived public and budget-cutting demands to start withdrawing from the Middle East – including its economic programs. But, he quickly added, Washington will increase its attention to the Asia-Pacific region where nearly half world trade originates. He – and other State Department trade officials – spelled out a long list of initiatives in which the United States will be "pro-active."

Asked by WTD if his remarks stem from his portfolio since he doesn’t get paid for talking about the Middle East, Assistant Secretary Campbell suggested that might be a part of the reason for the remarks, but assured WTD that the decision to remove itself from the Middle East has been made.

The remarks came less than week after a line-up of high-level Middle East finance officials gathered in Washington for the annual meetings of the World Bank and the International Monetary Fund – several of whom were explicit about the United States paying more economic attention to their region in the aftermath of the social and political revolutions.

Two ministers contacted by WTD indicated that they just about pleaded with the United States to begin – or at least start talking about – possible free trade arrangements. Tunisia Finance Minister Jalloul Ayed explained the reason for the upheaval in his country. Tunisia led the string of revolutions – and the demise of old-time autocratic rulers in the region. Demonstrators shouted about democracy, but the reason for their disgruntlement was high unemployment and little hope for advancement by the large populations of young educated citizens without jobs.

Egyptian Deputy Prime Minister Hazem El-Beblawi – who spoke a few days earlier at the US Chamber of Commerce – said the same.

Economic activity – including trade – is needed now, both leaders said. Noting that his country has very little trade activity with any country now, Mr. Ayed said at least initial discussion of trade liberalization with the United States would go a long way toward at least bolstering the aspirations of his people – an essential element for political and social stability.

USTR has promised Tunis a re-look at its economic trade relations – including reactivation of its Trade and Investment Framework Agreement – in November.

But the credibility of the United States is at an all-time low among other nations – and about the only thing concrete that ministers and other economic officials could take back to their capitals was "hope" based on suspected empty rhetoric and false promises.

The latest remarks by Mr. Campbell seem to justify that criticism.

An essay in the most recent issue of Foreign Affairs suggests that the biggest danger of further economic declines in the Arab states of the Middle East is the enticement of young intellectuals toward radicalism. They don’t support jihad, the article continued, but may see little else.

Any comments?

Jim Berger

Engage the Arab Spring -- a blog by National Foreign Trade Council Vice President Dan O'Flaherty

We’ve been here before. That was in 1992 when the Soviet Union had collapsed and Congress passed the "Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act." The law embodied the transition of the region from hostile adversary to partner and substituted a policy of engagement for that of military defense and confrontation. The law authorized aid programs and set performance criteria for traditional AID-style government-to-government programs.

But it went farther. It established a platform for private sector engagement by creating American Business Centers that connected U.S. companies to commercial opportunities that would in turn stimulate the growth needed to legitimate the successor regimes.

In 2011 we need a Middle East North Africa Freedom Support Act. At 23%, the MENA region has the highest unemployment of any region in the world. Post-revolutionary unemployment in Tunisia is about 18%. In Egypt, where 32% of the people are under 15, unemployment is 16%. Combined with rising food prices, the economic crisis could easily undermine the prospects for democracy.

Last week the G-8 committed $80 billion to five countries in the region over two years. This will provide desperately needed budget support to transitional governments. But it will not create jobs. ?

This week the Tunisian finance minister told a Washington audience that his country wants to become a knowledge-based economy and called for business-to-business linkages, especially in IT. This is the challenge of true engagement to which the American public and private sectors must once again rise.

Saturday, September 24, 2011

WTO's Winning "Academy Awards" Video -- ugh!

It’s not easy writing an interesting story about an ongoing trade negotiation.

WTD spent a full 10 days in Chicago earlier in the month to try to get something on the progress of the TransPacific Partnership negotiations – just about the only trade game the United States has going.

The top stars of the show were career trade negotiators – many with experience in Geneva – where hardly ever a word is spoken to the press. They understand their own back and forth banter but generally have a hard time putting what they mean into plain words that the public can understand.

TPP participates are the United States, Chile, Peru, Australia, New Zealand, Singapore, Vietnam, Brunei and Malaysia.

Despite the secret nature of the negotiations – which is quite understandable since the TPP negotiations are about mid-way to completion and very sensitive – host US Trade Representative urged press to attend. So we went – but not many others.

There we were along with Inside US Trade – who was there for the first three days of the negotiations. Coming for the end were Washington reporters from Reuter and Bloomberg news service. Also on hand for the three official press availabilities were Chicago-based reporters from the Bureau of National Affairs, the Associated Press, a local television station and reporters from two or three Japanese news outlets.

The concluding press conference was led by Assistant USTR Barbara Weisel and attended by the other seven of the eight lead negotiators. The Chilean negotiator took an early plane home.

The press conference opened with a short and rather stiff statement – read in the quiet but quite pleasant voice of Ms. Weisel – outlining in minimal terms where progress was made and where more is needed.

WTD reported that aspect in its September 16 issue –

Ms. Weisel said many chapters – including customs, technical barriers to trade, telecommunications, government procurement and new issues on small- and medium-sized enterprises, regulatory coherence, competitiveness and development – are moving toward closure. Progress also was made – but more is needed – on some complex chapters, including intellectual property and investment.

In an effort to put a little life in that description for our readers, WTD asked Ms. Weisel and the other negotiators if there was any particular area of progress which was perhaps surprising or unanticipated when they gathered more than a week earlier for the talks.

The answer – following a moment of silence – was spoken by Ms. Weisel, who said she had just said where the progress was.

None of the other commented except New Zealand’s negotiator – who speaks "New Zealand" in a heavy accent and mumbles. It took quite a few listenings of the tape to find out that he essentially added nothing.

The beginning set the pace and substance of the half-hour session. There were some questions on labor to the Vietnam delegate and a lot of questions from the Japanese press about prospects for Tokyo joining the talks.

WTD wrapped up the session asking if the delegation could give an indication of when the TPP might conclude. They are expected to send a detailed account of the negotiations by the time of the November APEC Leaders’ meeting in Honolulu and have another negotiating session in Lima next month.

The answer from Ms. Weisel – "We working as hard as we can to conclude a comprehensive agreement"

What an experience.

Jim Berger

Tuesday, September 13, 2011

The TPP and the FTAs

More than 200 professional trade negotiators in Chicago this week and half of last week are slogging through what is expected to be a comprehensive and extensive Asia-Pacific TransPacific Partnership free trade agreement – if stars align correctly in the coming months.

The TPP participants are the United States, Peru, Chile, Australia, New Zealand, Brunei, Singapore, Malaysia and Vietnam. For the most part the negotiators are keeping their noses buried in some 20-plus topics – ranging from market access, textiles, government procurement to new issues like access for small and medium size enterprises, streamlining of national customs procedures and "access to medicines."

What is unmentionable here, but on the top of everyone’s thoughts is the fate of the long-pending US free trade agreements with South Korea, Panama and Colombia. They were all negotiated and completed by the Bush Administration but has languished without action for over two years by the Obama Administration. Once promised to be passed by Congress by the end of July, officials and interested – and optimistic – members of Congress now don’t expect to see action before December.

For the career – and non-political – negotiators here the FTAs are none of their business. In the negotiating rooms are concentrating on TPP issues. But outside – in the hallways and over lunch and dinner breaks – talk quickly shifts to the FTAs, WTD was told by several participants here. One participate explained it in simple terms – hard decisions on the most important aspects of the TPP negotiations cannot be made until the final fate of the FTAs is settled. Who wants to expend the time making offers and giving concessions in TPP without knowing whether the one major player in the talks – the United States – will follow through on those commitments, asked one participant.

TPP negotiators will stick to discussing some sensitive issues in the talks and perhaps negotiate some resolutions on technical matters. But nothing significant will occur in the coming months because of the FTA morass in Washington – further delaying conclusion of the TPP talks until well into 2012.

There also were some 250 "stakeholders" – more familiarly known as lobbyists in Washington parlance. They are talking about the details of TPP, but also are keeping their eyes and discussions focused on the FTAs. They are as perplexed over the procedural system in Washington as the negotiators. None of the "stakeholders" – many of whom have spent entire careers in the trade arena inside and outside of Washington – understand the reasons behind the morass in Washington. All they know if the FTAs situation does not result in action soon, TPP talks will collapse.

Jim Berger

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