Monday, December 31, 2012

C. FRED BERGSTEN -- THE HAPPY WARRIOR



According to William Wordsworth, the “Happy Warrior”

“... is the generous Spirit, who, when brought
            Among the tasks of real life, hath wrought
            Upon the plan that pleased his boyish thought:
            Whose high endeavours are an inward light
            That makes the path before him always bright:
            Who, with a natural instinct to discern
            What knowledge can perform, is diligent to learn;
            Abides by this resolve, and stops not there,              
            But makes his moral being his prime care;...”
.....
            –  'Tis he whose law is reason; who depends
           Upon that law as on the best of friends;
           Whence, in a state where men are tempted still
           To evil for a guard against worse ill,                    
           And what in quality or act is best
           Doth seldom on a right foundation rest,
           He labours good on good to fix, and owes
           To virtue every triumph that he knows......
.....

December 20 saw the temporary “swan song” of a Washington institution – who, himself, started his own institution – C. Fred Bergsten, deciding it was time to step aside, but not retire, from his Peterson Institute for International Economics.

Mr. Bergsten said during a farewell/holiday part at the Institute that he would be back soon – but instead of doing the day-to-day business of running an institution he will be climbing the “ivory tower” and looking at ways to direct the Institute forward and wondering out loud about the economic future of the world.

Much of his work over the past 30 years – to his own admittance – had one eye on ways to attract capital, while maintaining intellectual honesty.  It was a tough job, but well accomplished.

My relationship with Mr. Bergsten started at the end of the Carter Administration – with me, a young trade reporter at the Bureau of National Affairs and he, an assistant treasury secretary for international affairs.  At that time Treasury had control over imports – from running the Customs Service to running a rapidly expanding imports program.

I remember calling his office at least twice a week over a three-month period to request an interview.  And twice a week I got a solid “no.”  But I was persistent and the emphatic “nos” continued to echo.  Until a few days after the 1980 election, which put an end to the Carter Administration.  I received a call from his office asking if I still wanted an immediate interview with the assistant secretary.  I responded “no thanks” for obvious reasons.

What the incident really told about the then-assistant secretary was that the phone call came on a day when there was at least a foot of snow on the ground and the government was closed.  I was headed home.

Mr. Bergsten wasted little time after his Treasury tenure in carrying out a dream of building a respectable international economic think tank.  He mentioned last week the effort started from scratch – literally nothing in the bank – a couple of chairs and old desks in a small office off Dupont Circle.

But the dream grew until the present, where the scrubby office grew into a modern four-story all-glass building on Massachusetts Avenue, just across from the monumental Brookings Institution.

The Institute grew over the next 30-plus years into a highly respected and honest nonpartisan economic research institution.  It published hundreds of books and monographs – many of which set the foundation for innovative and federal policies.  One monumental work was the economic benefits of a successful Doha Development Agenda and ongoing work on the Asia-Pacific Economic Cooperation and its TransPacific Partnership offspring.  Whoever was Director General at the World Trade Organization had a standing invitation as did top US trade officials.

  At every policy luncheon and some evening dinners – along with a host of informal get-togethers – were an array of thinkers on all sides of the topic at issue.  Those sessions had the effect of moving policy debates forward and creating comradery among otherwise rivals in the business.

Mr. Bergsten graciously opened the doors to the press – including WTD, to which we are thankful.

Having started my own modest publishing business, I have a lot of respect for what Mr. Bergsten accomplished.  It ain’t easy.  I know there were times when the former assistant secretary could have abandoned the effort to join the incoming Clinton Administration.  But he stuck with his dream.

The “swan song” event included a small gathering of his closest friends and colleagues – (most of whom could assume both descriptive).  All were unpretentious and all were influential policy movers in Washington – from high-ranking Administration officials to other – and competing – “think tank” chiefs.

WTD salutes C. Fred Bergsten and his three decades of work.


Wednesday, December 12, 2012

A "Right-On" Blog From the NFTC


Here's a "right-on" blog by National Foreign Trade Council Vice President Bill Reinsch -- who I almost always agree and have since the 1970s.  Jim Berger

December 7, 2012
Fear of Failure

The trade policy community is seized right now not only with Trans-Pacific Partnership (TPP) negotiations but also with the likelihood we will launch an equally significant negotiation with the European Union.

While a U.S.-EU negotiation appears to have significant support at the highest political levels, I detect less enthusiasm among the actual negotiators who would be charged with reaching an agreement. This should come as no surprise – these are the same people who have been beating each other up for more than 20 years on a wide variety of regulatory and standards issues with precious little to show for it. (If you have any doubts about that, I refer you to the infamous chicken episode of several years ago.)

In my view, this time will be different because of the competitive challenge China poses for both of us. If the Americans and Europeans can work together to develop common standards and regulations, our combined market power will help make them global standards. If we do not, then we risk seeing Chinese standards become the de facto global standard by virtue of their market power. In other words, as Ben Franklin said in a different context, "we must all hang together or most assuredly we will all hang separately."

Making progress on standards harmonization is also important because it is where the greatest opportunity for trade gains between the U.S. and EU lies. Aside from some peaks, tariffs are generally low, labor and environment issues are less divisive than with other countries, and, aside from agriculture, access barriers are less onerous than elsewhere. What American companies most often complain about is the thicket of regulations in the EU they must navigate through in order to sell their products and services, and European companies have the same complaint about us. So, progress in this area would have the double benefit of enhancing trade between two very large and highly integrated markets and of pursuing a common policy in dealing with the Chinese economic challenge.

So, what is holding us back? Apparently, it is fear of failure. Negotiators on both sides have said, privately, that these negotiations "cannot fail," meaning that we should not launch them until we are entirely sure they will succeed. Of course, 100 percent certainty is an elusive commodity in the best of circumstances, but in order to approach that in this case both sides have entered into extensive pre-negotiation discussions intended to assess the odds of failure. In the process, they have also settled on some confidence building measures, mostly in agriculture, which, if successfully completed, will presumably demonstrate to each side that the other is not only serious, but that it can deliver.

That may well work, but the process is disturbing nonetheless because it is tantamount to a negotiation before the negotiation. If we pre-negotiate everything, what is left to talk about once the "real" negotiation is launched? More important, the real question is what's wrong with failure? Being afraid to fail amounts to being afraid to risk, an attitude that runs counter to what most successful businesses are doing in today's hyper-competitive marketplace. America has been built on risk and on failure. We fail constantly, pick ourselves up, and try again. It's one of our endearing qualities, and we should remember it as we consider launching new trade negotiations. The price of not trying is far higher than the momentary embarrassment of failure.


Monday, November 12, 2012

THE SECOND TERM


Almost $6 billions of dollars were spent by the two political parties over the past year to pay for the Presidential and Congressional election contests – and the end result was essentially no change.  Barack Obama remains President; the House and Senate both have picked up a few Democrats.

But Republicans still control the House and Democrats are running the Senate – so don’t expect any easy answers for at least the next two years.

With no worries about getting re-elected in another four years, many Democrats in Washington are expecting – hoping – that President Obama will take a more active stance in promoting Democratic policies, including in trade.

But there is likely to be nothing new.  The domestically oriented President will stay on that track – perhaps turning even more inward looking.  Trade will not be a priority for the second term.

But, what’s the trade agenda for the second term?  Old stuff –

1)   As late as a few weeks ago in the heat of the political campaign, Mr. Obama told MSNBC news in an interview that he still intends to pursue a major reorganization of trade agencies – into a new Department of Business.  On paper, it may be a good idea, but analyses of similar past plans have shown rearranging boxes in an organization chart have very little real impact.

Congress is likely to kick that ball off Capitol Hill shortly after it is mentioned again in January’s State of the Union Address – as happened in January this year when the President first proposed it.  The rub is two-fold.  Essentially abolishing the US Trade Representative’s office – a creation of Congress and a darling of the powerful House Ways and Means and Senate Finance committees – simply won’t happen.

The broader problem is getting the half-dozen oversight committees in both chambers to give up their special jurisdiction over agencies like the US Export-Import Bank, aid and trade and the US Small Business Administration, along with USTR.

2)   The TransPacific Partnership – Entering its fourth year of negotiation among 11 Pacific/Asian nations very little has been seen.  Prospects – and attention from the White House – also appears to be fading.

After an optimistic scenario of reaching a final agreement was dashed in 2011, this year is coming to an end with another miss.  The United States this year had three consecutive negotiating sessions in the United States – with the serious intent to conclude an agreement before the end of the year.  That’s not a possibility.

There also have been indications expressed by negotiators of the growing frustrations with the lack of progress driven, they say, by an unrealistically tough “no-compromise” US negotiating stance.  Some delegations are restating their threat to abandon the effort – and turn to a host of other bilateral and regional trade efforts in waiting.

3)  European Union-US Free Trade Accord.  Former British Prime Minister Winston Churchill once had the idea of a United States of Europe, which would include the then free nations of Western Europe, the United States and Canada.  Since then a free trade agreement between the world’s two greatest economies has been an unattainable wish.  The same problem that thwarted similar efforts over the past half century exist today – different ways of doing things.

In practice, a commercial US-EU FTA already exists.  Duties on both sides have little effect on the amount and pace of transAtlantic business ties.  What is – and has been – the rub are the different approaches to domestic regulations, which make simple trading of goods and services across the Atlantic not so easy.  Those separate approaches are deeply rooted in domestic concerns over the health and safety of each’s citizenry.

Reaching a so-called “gold standard” FTA just ain’t going to happen this century.

4)  Export Controls Reform.  Since the ongoing effort to streamline US export controls involves only one government – albeit several agencies, that project is likely to come to fruition next year.  But as more than one US reform official told WTD, what is emerging is far from what former Secretary of Defense Robert Gates had in mind when he announced the objective over two years ago.

As of today, not all militarily critical goods and technologies are coming off the US Munitions List – which will continue to be jealously guarded by the departments of State and Defense.  Munitions list goods that do move over to the more commerce-oriented Commerce Department for review now fall into a category of its own – where exports would generally be allowed to 36 of the closest US allies.

Mr. Gates originally had in mind the transfer of all Munitions List goods to a single control list – arranged in an pyramid-shaped arrangement.  The pointed top would include “crown jewels” of US technology not available elsewhere in the world and would be prohibited from any kind export.  The middle tier would be license-able products and services to a score of friendly US buyers.  Goods and technologies in the broad-based third-tier would be freely exportable.

At this point in the reform, it is still uncertain whether there will be any real impact on US exports at all.

And then there’s Congress – which will also have its say.

Jim Berger


Monday, October 29, 2012

HERE'S YOUR HAT, WHAT'S YOUR HURRY?




The same US Trade Representative that authorized a $400-million annual bribe to Brazil to refrain from any retaliatory measures approved several times by the World Trade Organization over a too-ambitious US cotton support program last week rejected a good-faith effort to fix the problem.

A senior-level Brazilian came to town ready to compromise – to see if there could be a way forward to finally resolving the multi-year dispute.

Timing is important.  The House and Senate are getting into a long-awaited conference to craft a single multi-year farm bill – which was due on September 30.  There is no animosity against Brazil on Capitol Hill, with both staff and members anxious to work out a compromise.

USTR said “thanks, but no thanks” and sent Brazilian WTO ambassador Roberto Azevêdo packing.

Mr. Azevêdo had planned on a quiet visit to Washington.  He had scheduled a private meeting with the US-Brazil Business Council, but less than 24 hours before the event, he decided to open it to the press to have his say.  His message was short and stark – unless the United States commits to do what the WTO ordered it to do in a number of dispute panel determinations, Brasilia will have no choice but move ahead with some powerful sanctions.  There will be stiff duties on US imports as well as denial of intellectual property rights to some big US copyright holders – totaling upwards of $800 million annually.

Brasilia does not want to continue the dirty arrangement of handing over US taxpayers’ money to Brazil so its cotton growers and manufacturers can promote their own product in the world market in direct competition with US growers.

Mr. Azevêdo offered some strong hints at his Thursday presentation that Brasilia was willing to bend – for the first time – and settle on a practical solution.  It would involve some “tweaking” of the numbers in the current legislation – which he implied could be accomplished with a little help from the Obama Administration.

The answer was a simple “NO,” the ambassador told the business executives.

USTR in 2010 touted the arrangement with Brazil as the second major accomplishment for US trade policy.

The first involved a longstanding dispute over Brussels’ ban on imports of hormone-treated US beef.  As one of his first decisions in office, USTR Kirk agreed and let the woefully illegal WTO EU ban continue unchallenged to this day.

Another great negotiating tactic by USTR.

Jim Berger

Monday, October 22, 2012

COPYING OTHERS' MISTAKES


Imitation is the best form of flattery.

Last week the usually indubitable Washington Trade Daily broke a very, very Washington-centric story on a proposed reorganization of the Commerce Department’s international trade administration.

As any long-term or careful reader of WTD knows full well I – Jim Berger – tend to make very dumb mistakes – not big ones or earthshaking ones, but ones that show that I am not thinking right when I compose the story.  An example – the sun rises in the West.

The latest occasion of this softheadedness came in the reorganization story where I explained that any internal government reorganization plan must be reviewed by the respective House and Senate oversight committees before going ahead.

In the story I remarked that the Foreign Affairs Committee was the oversight committee on the House side for Commerce Department’s export promotion programs, and that the Senate Banking Committee was the counterpart oversight committee in the Senate.  Sounds good so far, except that I was wrong about the Senate – which came to me the first thing in the morning after the issue was published.  Actually, the Senate Commerce, Science and Transportation Committee has jurisdiction over export promotion (The sun actually rises in the East.)

Two days after the story ran in WTD, a very similar report appeared in Inside US Trade.  It is certainly not unusual for a publication to pick up on scoops left by its competition.  Except that Inside Trade made – published – the same mistake I made – naming Banking as the chief export promotion oversight committee in the Senate.

Obviously, the Inside US Trade writer made little effort or took any time to check what he or she was copying from us.

The only thing worse than a stupid mistake is a stupider one – in this case it is picking up an obvious error and not crediting WTD with making it.

So the next time you read “according to sources” in Inside US Trade, you can safely take it to mean the item came either directly from us or from one of its “sources” who read it in Washington Trade Daily.


Tuesday, October 16, 2012

MORE HAPPY RETURNS?


It hasn’t happened to me, but inevitably it will.  I suppose that a person facing his last weeks or months on earth is not very interested in celebrating an upcoming birthday.
The same is true for the office of the US Trade Representative, whose 50th anniversary came and went quietly last week.
The anniversary was “celebrated” only because the small Washington International Trade Foundation didn’t want the moment to go unnoticed and wanted to give a boost to the sagging morale at the agency.  So it went ahead with a modest stand-up reception at the Ronald Reagan International Trade Center, with some 250 attendees.  Aside from guest of honor, USTR Ron Kirk, the attendees included current and alumni of USTR – including four previous USTRs going back to the Reagan Administration.
Strict directives were set down by the USTR in order for the event to go forward.  Firstly, NO PRESS.  Apparently, the Administration did not want to bring any notice to the American public about the successes over the past half century of enhancing national growth through freer trade – at least not before a Presidential campaign debate next week which will focus on foreign policy.
Other USTR-mandated commandments for the event – no souvenirs of the occasion (specially printed napkins were not to be seen; apparently someone snuck in a decorated cake).  Invitations were the sole responsibility of WITF (which meant that USTR did not want its fingerprints on the occasion and that means the private nonprofit foundation was stuck with the bill).
(Go to USTR’s webpage – http://www.ustr.gov – and click on the 50th anniversary page.  Then click on upcoming 50th anniversary events and see what’s there – nothing.)

If a second-term President Obama has his way, USTR will not be around to note its 51st birthday.
The President is anxious to resurrect his year-old plan to streamline the half-dozen or so federal trade agencies into a single “Department of Competitiveness and Innovation” – or some such iteration of the Commerce Department.  Mr. Obama’s initial announcement of that scheme in his 2011 State of the Union Address was met with a chill on Capitol Hill.  Congress will eventually have to approve any such effort.
But President Obama intends to move ahead anyway – and probably waste at least two years fighting an unwinnable and silly battle.  Putting all the US trade promotion agencies in a single department perhaps makes administrative sense, but amounts to little more than rearranging the boxes in an elaborate federal government organization chart.
The White House plan would make USTR a bureau of the Commerce Department.
Fifty years ago President Kennedy established the Special Trade Representative to coordinate the operations of a growing number of export agencies while recognize the growing importance of international trade in a world still recovering from the Second World War.  At that time the State Department ran the trade show – and was beginning to be criticized for politicizing what should be an economic effort.
Aside from merging USTR into a Commerce Department stripped of other agencies – like the National Oceanographic and Atmospheric Administration, National Telecommunications and Information Administration and the Census Bureau – others, like the US Export-Import Bank, the Overseas Private Investment Corporation and the US Trade and Development Agenda, would be subsumed in the bureaucratic beast.  The US Small Business Administration would also become a bureau of Commerce.
But the other big trade “boys” which have significant numbers of professionals stationed abroad and have big budgets – the departments of State and Agriculture – would be no part of the reorganization.
Getting back to the party.  Among the 250 celebrants were some ranking US officials who have a lot to gain from the reorganization plan.  Of course, on hand was acting Commerce Secretary Rebecca Blank.  White House National Economic Council chief Gene Sperling – a likely successor to the downgraded USTR – was spied in the corner.
Also seen at the festivities was Leocadia I. Zak who heads up the tiny US Trade and Development Agency.  TDA’s budget is so small it cannot be found in the overall federal budget without a microscope.  Although not in attendance, OPIC President Elizabeth L. Littlefield last week made a remarkable statement – considering the burgeoning federal deficit and the Administration’s determination to cut it – telling business executives that if her agency were bigger it could do much more.
Joining the reconstructed Commerce Department would bump up both budgets significantly since their current levels are little more than pocket change even in Commerce accounting terms.
It seems that everyone involved have a lot to gain.  USTR Kirk is leaving at the end of the year, so nothing matters to him.  Left hanging is a crack, high intelligence-quotient professional staff, who see their mission as promoting free trade that will benefit everyone.
Lesson – There is nothing new under the sun, especially in Washington.

Wednesday, September 12, 2012

Another Example of Outrageous Behavior by the US Trade Representative's office


Here's I note just received a couple of hours ago from our correspondent in Geneva --

Jim,

There was a lunch for journalists with the four US ambassadors in Geneva, including Punke. But I was not invited and so I wrote the story the best I could based on second hand sources.

Best

Wednesday, August 29, 2012

THE WTO --- 2013 AND BEYOND

There are no expectations here in Geneva – regardless of who wins the Presidential election in the United States – that negotiating activity will be anywhere near as rapid and furious as it was during most of the previous 10 years of the Doha Development Agenda negotiations.

However, when World Trade Organization trade envoys return here next week from their traditional August recess, they will meet up with some unfinished business. For a start, they are expected to intensify ongoing negotiations on trade facilitation – a leftover piece of the moribund Doha round.

Trade facilitation remains an area of importance to industrialized countries, particularly the United States. A number of developing and some least-developed countries also view it as important – but for different reasons. The last round of TF meetings in July saw a huge turnout of officials from least-developed countries thanks to travel funds provided by the European Union and Norway.

So far, progress in the negotiations has been halting due to the continued wrangle over some very big trade-offs. Industrialized countries, for the most part, want binding commitments on a range of very specific disciplines – publication and availability of information, advance rulings, expedited appeal procedures, fees and charges, the release and clearance of goods aand expedited shipments and transit.

But developing countries want to see some promises from industrial countries on things like special and differential treatment – particularly on technical and financial assistence to implement their TF commitments. They also want more commitments on customs cooperation.

The next four months will show whether members are ready to enter into a give-and-take phase to advance the negotiations towards closure next year.

Some countries also might press for an honest discussion on "balance" issues within the TF negotiations and between TF and other areas, such as the "LDC package", "cotton" and agriculture export subsidies. China, India, Brazil and South Africa have already strongly suggested that it would be difficult for them to join the trade facilitation agreement without knowing the fate of the DDA negotiations.

The fact remains at this point that big developing countries still doubt the intentions of some industrialized countries over whether they would continue to embrace the Doha agenda if an agreement on TF is concluded.

Another priority for the United States is a plurilateral agreement on services liberalization. Washington has succeeded in mobilizing support for what it calls an international services agreement.

The United States has some powerful backers – including Mexico, Chile, Colombia, Peru, Costa Rica, Singapore, South Korea, Hong Kong, Pakistan, Taiwan and Israel, among others.

But in spite of several rounds of intensive technical meetings since last March, the plurilateral negotiations remain stillborn. It is without any defined or distinguishable features, particularly about the level of ambition concerning the coverage of sectors and the compatibility with the General Agreement on Trade in Services.

Opposition from some other big developing countries – including China, India, Brazil and South Africa – is more basic. They view the plurilateral effort as an attempt to poison the multilateral framework in general, and Doha negotiations in particular.

Next year will also be at least symbolically important for negotiators as the political process begins toward choosing the next Director General. Pascal Lamy, by the end of next year, would have served two full terms.

A former European Commission official and French technocrat, Mr. Lamy took over the WTO reins long ago in 2005. Unfortunately, Mr. Lamy was not able to bring the Doha negotiations to a close. Its final demise, expected to be pronounced next year at the December Bali ministerial meeting, will have been the first major multilateral trade negotiation to fail.

The Director General, however, is not to blame. He can only try to direct what the majors want – and do his best efforts to get members to go along. Unfortunately, the major players – particularly the United States – never really had their priorities set on a successful conclusion. That especially was the case during the second part of the Bush Administration and the last four years of the Obama Presidency in the United States.

Some here blame Mr. Lamy’s excessive emphasis on selective ministerial involvement which sidelined the majority of members – mostly developing and least-developed countries. In retrospect, some here say a more comprehensive envoy- and official-level involvement would have kept the oxygen flowing to the patient. It would have led to "agreed" compromises at the working level, reserving ministerial involvement to simple "yes’s" or "no’s".

Some also blame the French bureaucrat for remaining indifferent to calls for more democratic and decentralized functioning within the organization. That process inevitably led to low morale among Secretariat staff and member delegations. Institutional memory and plurality of views are two major ingredients of any big multilateral effort, such as Doha. But diplomats here – many playing the role of "Monday-morning quarterbacks" – see Mr. Lamy’s two successive terms as having eroded these "noble" conventions.

Already the political tussle for the top job has commenced. Most suspect the final contest will be one between a South American and African candidate. Neither continent has had a chance to lead the WTO or predecessor General Agreement on Tariffs and Trade.

Expectations remain high for US leadership after the November Presidential elections. With most diplomats here self-described as "die-hard" internationalists, few seem to savor the prospect of a conservative Republican becoming US President. They look forward to a second-term President Obama to shift emphasis away from persistent domestic economic problems – many of which have led to some questionable protectionist practices – to the international arena.

Should current chief White House international economic advisor Michael Froman become US Trade Representative, envoys here suggest movement beyond Trade Facilitation – perhaps leading to reinvigorated discussions on expanding duty-free treatment for much technology goods, like information and communications equipment.

With the recent entry of Russia into the world trade body, the BRICS – Brazil, Russia, India, China and South Africa – also are expected to assume a bigger role in WTO decisionmaking.

The least-common denominator for next year is that by the time of the Bali ministerial, there will be a Trade Facilitation agreement ready for final approval and the formal close to the ill-fated Doha round.

Optimists are suggesting that 2014 might see the launch of a new round of negotiations on sectoral agreements.

 

Ravi Kanth and Jim Berger

Thursday, August 16, 2012

TAKING REPORTING SERIOUSLY

Whether it’s the Financial Times, the New York Times, the Dubuque Telegraph Herald or a newsletter like Washington Trade Daily, reporting is serious business.
Mistakes can be made, but they must be inadvertent and quickly corrected. Otherwise, serious mistakes can have serious ramifications.
At a well-attended forum of the Woodrow Wilson Center for International Scholars last week which focused on the ongoing TransPacific Partnership negotiations, one Mexico participant – gladly not a negotiator or government official – explained that Mexico City, and especially members of the Mexican Senate, were perturbed over a comment by chief US negotiator Barbara Weisel.
In remarks in San Diego to the University of California’s Americas Institute at the beginning of the last formal round of TPP negotiations in July, Inside US Trade reported that the official stated that when – and if – Japan decides to the link up to an anticipated completed TPP agreement, the text would be opened for renegotiation.
The Mexican trade consultant said the problem seen in Mexico City is that while late-comers like itself and Canada would not be able to even discuss "agreed" aspects of an uncompleted agreement, Japan would have a "carte blanche" to essentially reopen the negotiations when it joins.
What Ms. Weisel said at the open forum was that any prospective new entrant to a final accord – including Japan – could bring to the "table" issues that are of particular interest to itself. If the other signatories agree, those issues could be subject to negotiation, possibly resulting in the changes to the final text.
The US trade official responded to a question from the audience about how Japan’s entry would be handled.
WTD took pity on the rooky trade reporter and told him what Ms. Weisel actually said. Writing wrote what he said he would write would result in a correction or retraction, we advised.
The reporter essentially told WTD to mind our own business. He said since the chief US negotiator had cited Japan as an example of what could happen when a new members joins, "she meant Japan." He was sticking to the story.
USTR staff told other reporters covering the negotiations that the Inside Trade story was wrong. Inside Trade never carried a correction.
Last week Inside US Trade was roundly congratulated at the Woodrow Wilson center event – including from its supposedly informed staff of experts – for having a major "scoop." In fact, the Inside Trade story was poop.
WTD – unlike Inside US Trade – takes it reporting responsibilities seriously.

Jim Berger

Tuesday, August 7, 2012

A LOT AT STAKE

The national election in the United States is still three months away, but all the attention – and news reporting – is turning to the campaign.
Trade – with the exception of the North American Free Trade Agreement a quarter of a century ago – has not been a major issue in any national campaign. For the most part, Democrats and Republicans see trade – both exports and exports – as good for the economy.

President Obama.

Candidate Obama is out in the hustings campaigning full time by mostly attacking his opponent rather than defending his accomplishments. That’s because there has been none. The recession continues strong and deep.
But recently Candidate Obama has grasped the catch-phase of wanting to be America’s "in-sourcing" President. He has continued to blast former Massachusetts governor and rich private businessman Mitt Romney as the "out-sourcing" candidate, who made his millions by helping US companies move overseas and taking jobs from Americans.

President Obama has little else to talk about when it comes to trade. His accomplishments over the past four years have been zilch.

When a Presidential candidate has to resort to the "trade" card in campaigning, you can assume that things are indeed desperate.

 
Now to Mr. Romney.

Apparently Washington Trade Daily had an impact on the Romney campaign a couple of months ago when it published a detailed interview with chief trade campaign advisor Carlo Gutierrez. His answers to our questions were extensive and detailed.
We learned that the article dusted up some controversy within the campaign between those – unlike Mr. Gutierrez – who want candidate Romney to steer away from details on specific issues until necessary.
Just last week Mr. Romney seemed to side with Mr. Gutierrez – and some others in the campaign – by mentioning in a speech in Golden, Colorado, that he would push for free trade with Latin America.
If Mr. Gutierrez – and WTD – is to be believed, expect a real business approach to economic growth, with a lot of focus on tax reductions and trade. Aside from the renewed approach to trade with Latin America – an idea first raised by President Reagan – you can expect Mr. Romney to re-start the nation’s trade engine. Mentioned by Mr. Gutierrez in the interview were closer US trade ties with the fast-growing economies of the Association of Southeast Asian Nations and even a free trade agreement with Japan.

How to tell.

The best scenario for President Obama is that the November 6 election outcome will be very close. But one thing is certain, whoever wins the Presidential "gold" will likely have to deal with a difficult and split Congress.

Political pundits often describe the second term of any sitting President as focusing on foreign policy. They suggest Mr. Obama would naturally turn to international economics and trade rather than repeat failed US military foreign adventures in exotic areas of the world.
What to look for –

US Trade Representative Ron Kirk will not be around for the second term – something he has already said.
Should the White House pick the President’s current chief international economic advisor, Michael Froman, for the post there is hope. There was a lot of "rumor" talk around Washington about a year ago that Mr. Froman – who has demonstrated a positive interest in a forward-moving trade policy – would replace Mr. Kirk at that time. But Mr. Obama is loathe to do away with any of his cabinet members – no matter how badly their performances. So Mr. Kirk stayed on.

(In fact, at that time a high-ranking US trade official asked WTD in confidence – and almost in desperation, but in earnest – when Mr. Froman was coming on board. WTD had no good news for that negotiator.)

If it’s Mr. Froman, you can expect somewhat of a turn around – which could be described as a resurrection from the moribund US trade policy of the past four years.
If it’s someone else – say current Deputy US Trade Representative Demetrios Marantis – look for more of the same in the second term.
A second-term President Obama might even leave the post vacant, since he is still personally committed to a "go-nowhere" plan to build a super trade department, essentially doing away with USTR.

If it’s Romney, look for retiring California conservative Republican David Dreier to assume the USTR post. The current House Rules Committee chair and strong free-trade advocate has been expressing those wishes to friends in Washington for quite some time.
Another big plus for a resurrected US trade policy would be the selection of Sen. Rob Portman of Ohio to be Vice President. Mr. Portman was President Bush’s US Trade Representative and is well respected by pro-trade advocates in the United States and foreign diplomats who knew him during his one-year stint from May 2005 to May 2006. Apparently, he is on Mr. Romney’s short-list of candidates.

Actually a lot hangs in the balance for US – and global – economic recovery.

Jim Berger

Friday, July 27, 2012

Here's WTD's Friday afternoon podcaste for July 27, 2012

Enjoy!

http://washingtontradedaily.com/2012wtdpodcast0727.mp3
The Obama Adminsitration Report Card -- nothing to be proud of.



President Obama’s first term is almost up – and WTD has decided to play the role of teacher and hand out a report card on the Obama Administration’s efforts on trade over the past almost four years.

Grades will be based on what has been accomplished – not what has been promised. Therefore expect to see a lot of "incompletes".

Also, grading is based on what actions the Administration had pledged to make – not what many expect should have been taken.

The areas for grading also pertains to aggressive US trade – promoting exports and market access – generally not on imports unless there is an impact on exports.

1. US Beef Hormones and EU QuotasF – Almost from day-one, brand new US Trade Representative Ron Kirk said he intended to impose stiff sanctions against the European Union for its consistent refusal to abide by a years-old World Trade Organization decision saying Brussels had no scientific reason to block imports of US beef treated with growth hormones.

On May 6, 2009 – after his first meeting with a foreign counterpart – then EU trade commissioner Catherine Ashton – Mr. Kirk announced his first big victory for US trade. It was an agreement – which came to full fruition at mid-year – where the EU agreed to increasingly raise its quotas on nonhormone-treated US beef in return for the United States dropping the sanctions threat.

Mr. Kirk agreed – and called it a great negotiating success. It was a great negotiating success for Brussels since the result was a continued ban on US hormone-treated beef imports from the United States – no change – in return for increasing the caps on nonhormone US beef, which US producers had been unable to fill then or since.

One action had nothing to do with the reaction.

2. EU Poultry BanF – One of the last actions of the outgoing Bush Administration was to impose stiff sanctions on the European Union for its refusal to import US poultry treated by chlorine baths in an anti-microbials treatment – a common practice in the United States. Brussels cut those exports off in 1997.

The Bush Administration had made the issue a top priority for its last TransAtlantic Economic Dialogue meetings – but made no progress. The new Obama Administration took the matter off its TransAtlantic Economic Council agenda and pigeon-holed it in the WTO agriculture committee in October 2010.



3. Doha Development AgendaF – From the first weeks of the Obama Administration, high-ranking US officials were frank that Washington had little time or patience to work on the conclusion to the almost decade-old Doha Development Agenda multilateral trade round in Geneva. New Agriculture Secretary Tom Vilsack was to first to publically comment early in his tenure to visiting foreign officials not to expect the Administration to pay any attention to the negotiations until the country gets out of the current economic recession. Guess what – the recession continues and the round is all but over.

Numerous academic studies during the interim have shown multi-billion dollar benefits of a new international trade agreement. They were probably underestimates.



4. Mexican TruckingC – After more than four years of wrangling with Congress on the issue of access for Mexican trucks on American highways – and reciprocal access for US trucks on Mexican roads – the Transportation Department developed a pilot program early this year, which has opened the US market to select Mexican drivers. Not sure – and few seem to care – about US access to Mexican highways.

The pilot project resulted in the gradual reduction of punitive Mexican tariffs – affecting some $2.4 billion in US exports – on more than 90 US-exported products because of US violation of commitments made in the North American Free Trade Agreement.



5. The Colombia Free Trade AgreementC – An already woefully belated US-Colombia free trade agreement handed to the incoming Obama Administration by the Bush Presidency in 2009 took another three years to approve and implement. It was finally and officially implemented on May 15 of this year.

While the Obama Administration dallied and delayed – and tried to pressure Colombia on non-related items like violence against union leaders there – US exports suffered as other major trading countries strengthened their own trade ties with the country.

6. The US trade agreement with South KoreaD – known as KorUS – had a similar fate. Washington refused to move the signed agreement to Congress at the behest of organized labor and a very small minority of House members.

A minor change in the auto provisions in the Bush agreement was finally worked out in "side discussions" in 2011 which created marginally better access for US auto exporters. The change came at the high price of Korea continuing high tariffs on US pork exports to the country – a natural trade.

During the long period of inactivity, Seoul had signed a giant FTA with the European Union – and with other big economies – further undermining the basis for increased US trade.

KorUS is the largest US free trade agreement since the North American Free Trade Agreement.

The agreement went into effect on March 15, 2012.

7. A US-Panama free trade agreement. – (I) – There was a similar story for the Panama FTA, with USTR Kirk himself and several other members of Congress urging quick consideration of the FTA by the end of 2010 at the latest. There are rumors that the accord will go into effect on October 1, this year, but nothing official.

8. AfricaC-minus – African leaders were ecstatic when President Obama – himself a man of color and with an African father – entered the White House. It took only a few weeks to temper that enthusiasm.

Credit should be given to Assistant US Trade Representative for Africa Florizelle Liser – with 10 years of career-building at USTR – for her efforts to move her own agenda by suggesting over the years concrete ideas for free trade agreements with the major countries along with innovative new ideas on promoting investment and US business opportunities there going beyond the Bush Administration’s historic African Growth and Opportunity Act.

But by mid-2009, USTR Kirk had sent a direct message to developing African economies to reform your ways, diversity out of apparel and stop asking the United States for more and more trade preferences. He called it a "tough love" strategy.

As an example, the USTR has refused to do anything on Capitol Hill to continue the important third-country fabric provision of the African Growth and Opportunity Act which allows African producers to use fabric from producers outside of the region – including China – to quality for duty-free access to the United States for their apparel. It is a major concern to the industry there. That provision is set to expire on September 30 – and has yet to be renewed by Congress.

Meanwhile, several apparel producers have abandoned the African market because of the uncertainties.

On broader market access-related issues, the Administration has been just as slow in following through on Ms. Liser’s suggestions.

Not until June of this year did President Obama call Africa the "next big market" and promise a broad-based trade and investment strategy for the continent. Here are the less-than-ambitious details: It includes the possibility of a bilateral investment treaty and a trade facilitation and customs arrangement with the East African Community. The focus, the Africans were told at the latest AGOA annual meeting, would be on intra-regional trade, not increased US market access.

Also announced was a new Trade and Investment Partnership initiative that could lead to an ultimate free trade agreement in the East African Community of Burundi, Kenya, Rwanda, Tanzania and Uganda.

The United States took pains to explain any such move would take years and years to accomplish.

Also late this year, the Obama White House took some steps toward closer economic and trade relations with South Africa in the guise of a new Trade and Investment Framework Agreement – but not re-launching a Bush Administration initiated US-Southern African Customs Union free trade agreement, which would include Botswana, Lesotho, Namibia, South Africa and Swaziland.

Too little and too late.



9. Bilateral Investment TreatyF – The US bilateral investment treaty program is an important tool to give US companies – and foreign firms as well – the confidence that their investments abroad, many in some risky markets, will be protected against things like expropriation and restrictions on the repatriation of profits. The Obama Administration from the beginning has refused to sign any BITs event though they are sorely needed and requested by major markets like Egypt, India, China and Russia.

Earlier this year, the Administration completed a three-year review of the existing model BIT – making only some tangential changes. In the interim, the BIT program stopped in its tracks. Preliminary negotiations have begun in some major markets, so says the State Department that runs the program. But no results yet.

8. US meat access abroad.D – An occurrence of mad-cow disease in late 2003 led to a almost immediate near global cut-off of US beef exports. Since that time the Bush Administration – followed by President Obama – made only half-hearted efforts to rebuild that market in key importers such as China, Japan, Taiwan and South Korea.

Even though the international body on animal health standards has declared the United State to be safe from Bovine spongiform encephalopathy, only a few markets have been partially re-opened despite US desires. Japan is the most closed – taking in US beef only from cattle of less than 20 months of age; South Korea limits its imports of cows of 30 months and less; China takes in no US beef; Taiwan’s Congress recently moved to open the door slightly. Japan late last year agreed to an internal review of its policies.

The Obama Administration has taken no hard actions to reopen those markets, essentially abandoning the lucrative markets to Australia.

Perhaps beef access should have been where the United States put its loudly-touted "enforcement" efforts.



9. Middle EastF – The Obama Administration signed a "strategic partnership" with Egypt in May 2009. But since then – and notably since the "Arab Spring" revolutions of a year ago – the United States has done nothing to advance any relationship with either the new governments or the people of the geopolitically important Middle East and North African region. In fact, it has intentionally made the relationship worse by publically announcing a "pivot" from the region to the more important Asian region shortly after the popular revolutions.

Perhaps Washington is more confident in dealing with "dictators" like former President Mubarak who it knew and could bribe rather than the democratic revolutions it cannot buy. Despite the "strategic" relationship with Egypt, the United States continues to shun – and at the same time damaging its own credibility as a responsible nation-state – even discussions of a bilateral trade agreement, which the new leaders in Cairo have pleaded for unashamedly from the beginning.

The best President Obama could do was lay out a new multilateral "engagement" plan that would encourage the growth of stable democracies and inter-regional as long as it didn’t cost anything.

All talk and no action.

10. Anticounterfeiting Trade Agreement.F – The jury is still out on the benefits of the controversial Anticounterfeiting Trade Agreement on which the Obama Administration devoted a lot of time and resources during its first two years in office. It is still unclear whether new authorities to close down "counterfeiting" websites, for instance, will hinder or help intellectual property distribution – and economic benefits – abroad.

So far Congress has decided not to deal with the sensitive a freedom-of-speech "hot potato". Parliaments in an increasing number of the dozen signatory nations are voting it down – including the European Union.

ACTA overall is simply a bad idea that won’t stand on its merits.

11. National Export InitiativeB – President Obama in his 2010 State of the Union address to Congress called on the nation to double exports by the end of 2014. Good sentiment, but little effort behind it. Like the "Export Now" initiative of the 1980s, US exports are being pushed by a weakened and declining dollar – not much more, including any innovative new programs.

Also of note is that the 2009 export base on which the outcome will be measured is the lowest in recent US history. Getting up from lying in the gutter is not that difficult; getting up and running is another matter.

What is the Administration doing to improve exports – creating a new White House Export Promotion Cabinet, relaunching the dormant President’s Export Council and sponsoring more trade missions.

The United States is well on track for doubling exports by that time – if the European Union market does not totally collapse – but what about the benefits of a strong dollar. Not a factor for this Administration, apparently.

12. Israel FTAF – In the middle of 2010 the Obama Administration decided it was time to upgrade and expand the US-Israel free trade agreement – the first ever signed with the United States. The 27-year-old accord covered only tariffs on goods, leaving out nontariff barriers, services and agriculture.

What has the United States done on negotiating an updated agreement? Nothing.

13. Export ControlsI – In early 2010 then Secretary of Defense Robert Gates noted that the Cold War was over and that the United States should sell more high technology goods and services abroad. So he directed a multi-agency export control reform effort that was suppose to address very restrictive controls of what were once militarily critical technology, taking the function out of the hands of the "defensive" State and Defense departments and hand it over to a more export-oriented Commerce Department.

The idea was to improve the US industrial and defense base by creating more opportunities for cooperation with major US allies and promoting innovation and development through exports.

Good idea.

That effort has been underway for the past two years and controls officials are hoping to have a big package wrapped up early next year.

But we will have to wait and see before giving it a grade. There is a lot of effort going into the reform process, but quite a few observers are now saying the effort over the past two years have weakening Mr. Gates’ original idea and looking now more like shifting deck chairs around on the Titanic.

14. Information Technology AgreementI – Another incomplete grade goes to the US effort to expand a decade-old World Trade Organization Information Technology Agreement which allows free trade among its 40-some signatories.

Talks began in earnest last year – after the collapse of the Doha Development Agenda negotiations – but apparently are not close to any agreement. The European Union – a major participant in the arrangement – would rather have a re-crafted agreement, which would bring on board the elimination of nontariff barriers to trade in information and communications technology goods and services.

The United States remains steadfast in calling only for modest changes – the additional of new products and the expansion of membership.



15. India Nuclear AgreementI – A lot of negotiating with India and Congress was expended over the past three years to allow US nuclear energy suppliers to enter the lucrative Indian energy market.

However the agreement is not yet fully in place for the United States – but not for other countries like Russia or France – because of India’s hesitancy to waive legal liability for US suppliers in case of any mishap.

No construction contracts have yet been issued to US companies.

16. Russia PNTRI – US companies may now have more difficulty getting or expanding in the Russian market unless Congress finally agrees to take the country off of the Cold War era Jackson/Vanik emigration trade restrictions law. Congress has yet to do so and the Obama White House has done little to convince Congress to do it.

It is now harder than ever to repeal Jackson/Vanik in an election year than in the previous two or three years, when the Administration ignored the issue.

One tangible issue hanging on removal of Russia was Jackson/Vanik is the years-long ban on imports of US poultry. Moscow last year agreed to reopen its market as soon as it received permanent normal trade relations.

Russia becomes a member of the WTO on August 22. Congress is set to recess next week until September with no action on permanent normal trade relations.

17. EU-US free trade agreement. – I – The United States and the European Union will have another go at some sort of transAtlantic free trade agreement with a final recommendations from a high-level officials group by the end of the year. Officials have played down prospects for a comprehensive agreement, saying they are looking at prospects for an FTA "with clear eyes."

18. Plurilateral Services AgreementI – Since the beginning of the year the United States has been expending a lot of energy in Geneva to create a plurilateral international trade in services agreement with some two-dozen like-minded participants. But there is a big divide on how inclusive that agreement would be – whether it would apply to all nations even though they have not signed onto its disciplines or only the 20-some current negotiators. The United States wants no "free riders."

19. Georgia FTAI – Early this year, President Obama himself – and to the surprise of many US trade officials – promised visiting Georgia President Saakashvili a look at a bilateral free trade agreement. What’s happened since – some discussion, nothing else.

 

EnforcementB+

(When this reporter discussed Washington Trade Daily’s recent in-depth report on the trade policy of a new Romney Administration – which contained a long list of positive trade initiatives, such as a US-Latin free trade agreement and ones with the Association of Southeast Asian Nations and Japan – a senior-level Obama trade official said Romney had not trade policy. The Obama Administration’s trade policy is "enforcement, enforcement, enforcement."

Reluctantly, WTD would have to give the Administration a "B+" on enforcement. From the beginning – at his Senate confirmation hearing in mid-2009 – then US Trade Representative-designate Ron Kirk said his policy would focus on enforcing US trade laws and international trade agreements.

Mr. Kirk has come pretty far – but it took a long time. Creation of the much-touted interagency International Trade Enforcement Center happened only a few months ago.

The number of export-related enforcement actions, however, have been few, with most still under appeal –

Perhaps what would have pushed the "B+" to a solid "A" would have been citing China under US law for keeping its yuan artificially low to gain trade. The Obama Administration, since the beginning in its semiannual reports to Congress, came right up to the line, but ultimately refused to cite the country. Citing China, essentially, would make the issue a matter of policy and force a negotiation – either bilaterally or multilaterally – on the very real issue.

Most academics and some prestigious economists agree, a strengthened renmimbi would help to increase trade with China – particularly imports – and bolster a weak domestic economy. It also would open a whole new US export market in the country – especially for US small- and medium-size businesses.

The United States gets an "A" for convincing the Philippines – via World Trade Organization dispute resolution – to do away with its discriminatory excise taxes on some brands of liquor, which come from abroad. Big deal.

The Obama White House just announced relaxation of US sanctions against Burma – now known as Myanmar. The move would also allow US foreign investment in the rapidly changing military-run country. WTD gives the White House an A for quick action mixed with some political courage in taking the move – unlike its actions in the Middle East.

But recently ranking US officials have been warning about moving too fast to welcome Myanmar into the family of nations.

Here are mentions of some imported-related actions – extracurricular activities – which the Obama Administration embarked on since 2009 –

1. imposition of punitive duties – without any indication of domestic industry – on Chinese-made auto tire imports.

2. a stiffening of Buy America laws in 2009.

3. a partial victory in the World Trade Organization this month over Chinese export restrictions on a number of raw materials used for industrial purposes. The United States argued that the restrictions have led to inordinately high prices of the commodities on world markets and wide-spread shortages – hence stemming US exports.

4. China’s indigenous innovation program. After bilateral pressure from the United States, China agreed to revise its controversial indigenous innovation program that favored government procurement of technologies that originated in Chinese development.

5. The United States is winning a subsidies challenge against the European Union in the development and launch of new commercial aircraft by Airbus. The EU similarly is winning the same argument in its case against US government support for Boeing.

6. The United States in 2010 won a case in the WTO against European Union import duties on products that Washington said should be covered under the duty-free Information Technology Agreement. Items included set-top boxes with communications functions, flat panel displays and multifunctional copying devises.

7. The United States won a case in the WTO aimed against China’s discriminatory policies that restricted the activities of international credit-card payment services in the country.

8. The United States in 2011 convinced Beijing to modify some of its industry support for its own wind energy power sector.

9. The United States last September asked China to discuss its high countervailing and antidumping duties on imports of US poultry and parts. US exports are down from $1 billion to less than $100 million, according to USTR.

10. The United States in March filed a formal WTO dispute settlement request against Chinese export restraints on rare earth and some other minerals that are critical in the manufacturing of electronic products.

11. The United States earlier this month brought a case to the WTO on the imposition of unfair Chinese antidumping and countervailing duties on imports of US-made automobiles – worth upwards of $3 billion.

The question is how many successful piece-by-piece enforcement actions equal a good trade policy. One former USTR told me recently that "enforcement is not trade policy."

Overall, the grades are nothing to be proud of.

Jim Berger

Thursday, July 19, 2012

The Flying Fickle Finger of Fate Award

WTD has embarked on a new – resurrecting the "Flying Fickle Finger of Fate" award to totally undeserving actors in US trade policy.

(Some background – the "Flying Fickle Finger of Fate"award was a regular part of the late 1960's, early 1970's Laugh-In show – a popular but silly and satirical hour-long program on the NBC network. The award was usually handed out by Dick Martin to mostly political folks in the Nixon Administration for really dumb decisions.)

WTD’s first Flying Fickle Finger of Fate award goes to the Washington International Trade Association which last evening gave its own Lighthouse Award to Inside US Trade exuberant chief editor Jutta Hennig.

What WITA does not know – or maybe does – is that Ms. Hennig spent most of the day yesterday at the Senate Finance Committee covering the mark up of a bill granting permanent normal trade relations for Russia, along with a handful of other trade-related legislation. And much of that time she spent in her usual verbose style disturbing other reporters, including this one, who were trying to listen by asking: "who is that?" "what are they doing now?" and "what amendment is that?" Decorum please!

WTD and Inside US Trade also went head-to-head last week on covering the latest meeting of the TransPacific Partnership negotiations in San Diego.

Inside Trade stories –

TPP Seen As New Key Venue for ACTA Enactment

USTR in Talks on Greater Access to TPP Texts for Congressional Staff

US Does Not Propose Expected SOE Language That Could Impact Temasek

US Touts Progress in San Diego

AFL-CIO Pushes TPP Partners To Include Migrant Worker Provisions in Deal

USTR Notifies Congress that Canada and Mexico Will Join TPP Talks

USTR Still Mulling Agriculture Group Demands for Full Enforceability of TPP SPS


WTD stories –

Working on TPP

TPP Negotiations in High Gear

A US Copyright Proposal

TPP Labor Chapter Progress

Pressing On in San Diego

Notifying Mexico on TPP

TPP and Transparency

Some ‘Significant Progress’ in San Diego

White House Notifies Congress on Canada

I’m not saying WTD deserves the WITA award or even wants it. We don’t accept awards – only payments for subscriptions and "free" lunches.

Not sour grapes. Just a little fun with a colleague I’ve known for some 25 years.

Jim Berger

Friday, July 6, 2012

Way to Go USTR

Someone here goofed at the planned Independence Day fireworks celebration – and all the fireworks from three barges went off at the same time. It was spectacular, but lasted only 30 seconds.

I was talking to one US negotiator here who also saw the beautiful fiasco. He compared the fireworks display to the end of the TransPacific Partnership negotiations going on here. He suggested that the slow but steady pace of the TPP negotiations might end the same way – with a lot of nose-to-the-grindstone negotiating leading eventually to a successful and spectacularly colorful and successful ending – all at once.

The word here is that negotiators from the nine-member states of the TPP – the United States, Peru, Chile, New Zealand, Australia, Singapore, Brunei, Vietnam and Malaysia – are moving steadily ahead in settling on a lot of the legal language in 22 of the 29 chapters in an eventual final accord. Work on the tougher issues will happen later in the year – and probably after US elections in November and Canada’s and Mexico’s formal entry into the talks in December.


There was another blow-up of sorts here ignited by Washington Trade Daily. About the only interest the US Trade Representative could drum up from the legitimate press was WTD’s entire staff of two, an early arrival and early departure of one reporter from Inside US Trade, a San Diego Examiner local events reporter – really working for a Public Citizen-type anti-TPP group and a local Associated Press reporter. Also invited and credentialed was a so-called "reporter" from Op-Ed News – who turned out to be an anti-TPP blogger, dominating the brief press meeting with the chief US negotiator.

After dominating nearly half of the allocated 30-minutes for a background press briefing with absurd and preplanned questions/statements against the TPP to the assistant USTR, leaving the chief US negotiating sitting dumbfounded all the while, I loudly protested saying that others should have an opportunity to ask questions. I was quickly put down by USTR’s chief press handler saying she was in charge of the press conference, not me. I stormed out in protest – igniting my own set of fireworks.

The long, incorrect and near libelous article published by OpEdNews concluded with "STOP TPP." Legitimate news outlet, USTR?

Another "legitimate" press outlet here credentialed by USTR is Geneva Watch – an operation owned by Dairy Farmers of Canada.

Good show USTR!

Jim Berger

Here's Friday Afternoon Podcast for July 6, 2012.

Enjoy!


http://washingtontradedaily.com/2012wtdcast0707.mp3

Wednesday, July 4, 2012

We're open for business at the 13th TPP round here in San Diego

NEGOTIATORS IN PARADISE -- BUT WHERE'S CANADA, WHERE'S MEXICO?


 

Riddle – When is a TransPacific Partnership negotiator not a TransPacific Partnership negotiator? When he or she is Canadian or Mexico.

WTD is covering the week-and-a-half long TPP negotiators in San Diego, where the United States is snapping the whip – making negotiators work "around the clock" to start wrapping up as much as possible so they can provide a decent report to their leaders in mid-September at the Asia-Pacific Partnership leaders’ meeting in Vladivostok.

But where’s Canada; where’s Mexico?

When the nine TPP nations – of the United States, Chile, Peru, Australia, New Zealand, Singapore, Malaysia, Vietnam and Brunei – "invited" the two big economies into the group in May, it was found later that the invitations were for the later in the year.

 But Canada and Mexico can’t even be observers. Nor, apparently, can they be stakeholders. Each formal round has hosted a semi-open event with interested stakeholders groups to show their wares and converse with interested delegations, the press and each other.

When WTD got here, we half expected that Ottawa and Mexico City would at least have a "table" at the stakeholder event. But neither flag is in sight.

(p.s. – The entire stateside staff of WTD – myself and my wife, Mary – is here to cover the event. It would have been very dangerous for me if I had left her behind in the suburbs of Washington, D.C. as the heat wave, with temperatures exceeding 95-plus degrees Fahrenheit and no air conditioning since the electricity has been off after a brief storm cut through the area almost a week ago. Thanks to the TPP and San Diego for saving my marriage!)

Jim Berger

Sunday, July 1, 2012

COWBOYS AND INDIANS

Not only does WTD have to worry about being right most of the time on what is happening behind closed doors at the World Trade Organization, but we have to contend with accusations from Deputy US Trade Representative Michael Punke in Geneva that we constantly side with the Indian point of view about almost everything that happens there.

Bunk!

Why does USTR make that assumption? Could it be that our correspondent in Geneva is named Ravi and is a citizen of India?

This accusation was again raised last week about a story we carried on negotiations regarding streamlined accession for least developed countries to the WTO. We were told a particular story was written from India’s point of view and failed to reflect the US position. In addition it was totally wrong, we were told.
Hold your horses Mr. Punke – himself a resident of the wild West state of Montana and a transplant from his native Wyoming via Washington, D.C.

While we never reveal our sources unless spelled out in our stories, our reporter did not get his information from Indian sources. Rather it came from a highly-placed and credible least- developed country negotiator who has been integrally involved in the sometimes testy discussions.

So upset was the deputy USTR about our story that the next day he told his fellow negotiators in a closed-door meeting that he wanted no information to leave the room, specifically saying he didn’t want WTD to know anything about what was being discussed.

Coincidentally, at the very moment that the Deputy US Trade Representative was giving out his command, a senior LDC negotiator was on his cell phone chatting with none other than WTD’s Ravi Kanth. The negotiator, being a forthright fellow, immediately announced to Mr. Punke whom he was talking to.
Mr. Punke, according to our sources in the room, immediately assured the negotiator that he was not pointing a finger at him – but at someone else he knew to be spilling the beans to WTD.

But USTR, indeed, is pointing a finger – at the Indian delegation they assume is feeding us information. They are not.

Maybe it’s the old story of the cowboys versus Indians.

Jim and Mary Berger

Friday, June 29, 2012

WTD's Friday Afternon podcast for June 29, 2012.

Enjoy!

http://washingtontradedaily.com/2012WTDPodcast0629.mp3

Always Too Little And Too Late For Africa

It’s not unusual in Washington trade policymaking to address the needs of the poorest countries of Africa – that also happen to be the biggest growing economies – too little and too late.

Last week a large delegation – for its size – of trade ministers, Geneva ambassadors and embassy officials from the so-called "Cotton-Four" countries of Burkina Faso, Benin, Mali and Chad were in Washington to lobby against subsidies to US cotton growers. Those contend – and the World Trade Organization agrees – that government subsidies contribute enormously to falling world prices for cotton. The result for growers in the four African countries is less income – and, by extrapolation – less national revenue to support infrastructure, health care and education.

The delegation held a press conference at the embassy of Chad to talk about the results of their mission. It came just as the full Senate was putting the finishing touches on a five-year farm bill – that extended the US cotton program, but changed its nature to an insurance program in which US cotton growers would pay to participate.

Observers, members of the Senate Agriculture Committee and the National Cotton Council say the change addresses WTO concerns as outlined in a case against the United State brought by Brazil.

But the Africans don’t see the difference. The old system was a combination of price supports and direct payments to cotton growers. The new program, they agree, is an insurance program, but they cite a Congressional Budget Office report that scores costs for both programs at about the same. If it walks like a duck and quacks like a duck, it must be a duck.

The delegation said over and over again that all they want is for governments around the world to stop subsidizing their cotton growers and give African farmers a chance to compete. It is that simple.

While waiting for questions and answers to be translated into English from French, this reporter indulged in the munchies placed around the table. One was a bowl of peanuts – another problem for Africa. Obviously, the peanuts were from Virginia, not groundnuts from West Africa. It is illegal to import peanuts into this country from anywhere in the world – another aspect of the old farm bill that was continued unchanged for another five years.

(p.s. – also on the table was a bowl of animal crackers – lions, elephants, etc. Nice touch.)

Jim Berger

Monday, June 18, 2012

THE DARK SIDE?

Let me just start out by saying I'm a lifelong bleeding heart liberal Democrat and proud of it.

But after recently sitting down for an interview with Republican Presidential contender Mitt Romney's chief trade policy advisor I'm feeling tempted to cross over to the dark side.

Listening to former Commerce Secretary Carlos Gutierrez talk thoughtfully and with depth about Gov. Romney's visions for a new trade agenda frankly had me a little excited, at least on a professional level. Naming China as a currency manipulator, multiple free trade agreements, trade promotion authority. At last, there would be something to write about.

Let’s face it, when it comes to trade, the Obama Administration has been a bore.

That’s because President Obama has never really developed his own trade agenda. Yes, he came into office in the midst of a recession of historical proportions that took his attention. Yes, he inherited three "hot potato" free trade agreements that the Bush Administration had never been able to get through Congress – and while there were purely political reasons why a then-Democratic controlled Congress refused to deal with the pacts, each FTA had its own problems that needed to be resolved.

After letting those FTAs sit on a shelf for three years, the White House last year did have a sudden burst of activity – albeit a somewhat reluctant one. The story told in business community circles – and by House Speaker John Boehner (R-Ohio) – is that President Obama only wanted to spend his political capital on the Korea FTA. But Republicans – and business – said it had to be all three or nothing and that meant there would be no renewal of Trade Adjustment Assistance for workers.

So all three FTAs – along with TAA and renewal of the Generalized System of Preferences program – were approved last October in what Administration officials now like to tout as an "historic" day for US trade policy.

Okay, so we had one exciting day. But what’s happened since then?

President Obama still has not enunciated a clear trade agenda. And of course, now that the campaign is in full swing, trade is the last thing he wants to talk about. Yes, he does talk about the importance of exports to the US economy and jobs. But I found myself agreeing with Mr. Gutierrez that the touting of exports seems to be mostly an "applause line", since it’s not being backed up by any major efforts to open new markets.

The White House has embraced the TransPacific Partnership as its big trade initiative. And the TPP certainly holds promise – but only when and if more and bigger economies join.

The Administration is eying a big prize – a trade deal with the European Union. But I also have to agree with Mr. Gutierrez that it’s probably the wrong time for those negotiations, given Europe’s growing economic woes.

And then? What else is out there on the Administration’s agenda?

Gov. Romney, on the other hand, is claiming he will keep multiple balls in the air when it comes to the trade agenda. He’ll be looking for FTAs with the Association of Southeast Asian Countries – a move that Mr. Gutierrez both will open new markets and makes sure China doesn’t dominate Asia.

Mr. Gutierrez suggested a Romney Administration would also resurrect the Bush Administration’s idea for a Middle East free trade arrangement – helping to provide economic stability to a volatile region as well as open markets for US exporters. He also would stitch the existing FTAs in this hemisphere together to essentially create the moribund Free Trade Area of the Americas.

I am a not a Republican.

But it sure would be interesting to have something to write about...

(You can listen to my interview with Mr. Gutierrez on this page).

Mary Berger

Friday, June 15, 2012

WTD interview with Carlos Gutierrez

Here's an mp3 sound file of an exclusive interview with Carlos Gutierrez -- Republican Presidential candidate George Romney's chief trade advisor.  It was made on June 11 and published in Washington Trade Daily on June 12.  Enjoy.

http://washingtontradedaily.com/gutierrezblog.mp3

Ex-Im Bank's Continuing Woes -- No Toilet Paper

The greatness of a man’s leadership is often measured in his ability to think and act on his feet.

What happened in the admittedly convoluted procedure of getting multi-year renewal of the US Export-Import Bank charter last month was a case in point. After nearly a year’s delay, Congress finally approved a compromise reauthorization bill for the Bank – which was finally deemed essential by everyone involved, including many of its critics.

Months before, the original deadline for renewal went by on October 2011. Congress extended the Bank’s charter through a series of short-term actions and did not take up full renewal until nearly May 30 this year. I was talking to Ex-Im Bank President Fred Hochberg well before the October 2011 deadline, congratulating him for his and his staff’s work in being available to members of Congress and working the process early on.

But I also cautioned him, informally, that he should not be overconfident when it comes to Congressional debates on international trade/aid agencies like his own. I remember telling him not to be surprised to see something unanticipated come at him "out of left field."

At that time there was a growing caucus of conservative Republicans in the House – known as the Tea Party – looking for some high-profile issue to pursue. They argued successfully that the government should not be using taxpayers’ money to fund an official export bank – essentially funding a welfare program for big American corporations.

I mentioned the Tea Party issue. He quickly dismissed my advice, saying – "not a problem."

Then another "left fielder" emerged in the debate. Domestic airline carriers – and their American Transport Association – had for a long time criticized the Bank for providing subsidized loans to foreign carriers without providing similar treatment for domestic carriers that buy Boeing aircraft.

But this year the debate took hold. The group and their Congressional backers – led by Delta Airlines – continued their criticism in the renewal debate saying the dual treatment undercut their bottom line and created an un-level playing field.

In combination with the Tea Party action, critics now had real traction in the debate.

It reminded me of the decades-ago coalition of US steel and textile sectors that successfully derailed Congressional consideration of some major trade-liberalization efforts in the 1980s and early 1990s.

The final Ex-Im Bank bill ended up with a number of "strings" attached relating to closer Congressional and public scrutiny of its activities and loans as well as a directive to the Administration to negotiate a global end to official export financing altogether.

All the while, Ex-Im chief Hochberg – (I think following political directives from the White House) – started up a highly vocal effort to blame the Republicans for the stalemate, instead of admitting to the Administration’s own dismal record of working with Congress on almost any issue.

Mr. Hochberg made it all worse – first by giving a series of interviews with Reuter news service blasting Republicans for trying to kill the Bank and put hundreds of thousands of American workers out of their jobs. He even participated in a couple of high-profile and well-publicized Capitol Hill press conferences with staunch Obama Democrats also anxious to score political points by blaming the Republicans.

Economically, it was a serious issue. So responsible House Republican and Democrat leaders joined hands to try to end the whole unnecessary brouhaha. Chief House Republican Leader, Rep. Eric Cantor of Virginia – whose conservative Southern Virginia district was one of birthplaces of the Tea Party movement – and liberal Democrat House Majority Whip Rep. Steny Hoyer (Md) – whose suburban Washington D.C. district has much invested in high technology manufacturing and exports – both worked hard and responsibly behind the scene to come up with a face-saving compromise.

Mr. Hochberg and his Congressional staff were left aside so as not to do any further damage.

So both sides reached a compromise only days before a final deadline when the Bank was sure to go out of business – at least temporarily.

The bottom line was that Mr. Hochberg was a simple White House soldier, following orders from the politico generals in the White House – with little concern for this own 80–year-old institution.

The Ex-Im Bank’s chief shortcomings in leadership showed up again just recently – at least in the view of this reporter.

Last week, at the occasion of a quarterly meeting of the Bank private-sector advisory committee, it was discovered – first hand by this reporter – that the men’s room on the 11th floor had no toilet paper. (Sources also told me that there was none in the ladies’s room).

In my opinion this situation was just as serious as renewal of the Bank’s charter.

Someone had the foresight to post written signs in the rest rooms that there was no toilet paper – a classic example of Washington bureaucratic theory in practice. It suggested using paper hand towels to do the job. (Obviously whoever wrote that message had no knowledge of plumbing.)

Not that my opinion means anything, but it seems to me that the President and Chairman of the Board of Directors of the US Export-Import Bank – wrapped into the personage of Fred Hochberg – should have had the authority, the foresight and the loose change in his pocket to direct one of his staff to visit the convenience store across the street to buy a couple of packages of paper to relieve the crisis, especially on the day the Bank’s advisory committee members would be using the restrooms. But for Washington, that was too easy of a solution and probably would have violated General Services Administration guidelines.

(An aside – If the Bank had been a union shop, there would have been no toilet paper crisis at all.)

Jim Berger