Friday, March 30, 2012

Jackson-Vanik, Russia and Leaky Dishwashers

When you see a small puddle of water at the bottom of your automatic dishwasher, you don’t stand by and say "that’s not so bad" or "I’ll take a look at it later." Later might mean a burst hose and a big mess across the floor.

Undersecretary of State for Economic Growth, the Environment and Energy Bob Hormats found himself in that situation last week at a House Foreign Affairs subcommittee hearing on US trade relations with Europe.

From the very beginning of the Obama Administration in early 2009, a big deal was made of reviewing the "mistaken" policies of the preceding Bush Administration. On the trade front, it was a wholesale review of an almost complete updating of a model Bilateral Investment Treaty – which was last revised in 2004.

Under the tutelage of the State Department – along with the US Trade Representative’s office – the Administration held open public hearings on a new model treaty and then turned the whole review over to a private-sector economic policy advisory committee within State. After several weeks of drafting a long report, the industry-academic-lawyer-labor-nongovernmental organization committee came up with extensive recommendations, with an equally extensive minority report written mostly by the business side of the committee.

The rub is how much emphasis should be put particularly on labor provisions in any binding and enforceable treaty. Labor – obviously – wants strong guarantees in any treaty, which at least matches Congressional intent in a May 20, 2007 "letter" to the Bush Administration. Business, led by the National Association of Manufacturers, insists that no country would negotiate any such agreement with the United States as long as there are peripheral labor provisions included.

The model treaty has sat motionless within the Administration since.

And the United States has been unable to negotiate bilateral investment guarantees with such major markets as China, India, Brazil, Indonesia and Vietnam – along with Russia.

Getting back to the hearing, subcommittee chairman Rep. Dan Burton (R-Ind) asked Mr. Hormats what the Administration intends to do to get back the billions of US dollars invested in Russia’s once private Yukos oil company. Moscow recently nationalized the huge oil company.

Mr. Hormats sat, scratched his head and said only that the United States is watching the outcomes of compensation talks between Russia and other countries that have investment treaties.

WTD Friday Afternoon Podcast for March 30, 2012


Thursday, March 15, 2012

The TPP Negotiations, Transparency and the Public's Right to Know

Here's an excellent article on the "secret" negotiations which just took place in Melbourne, Australia, on the TransPacific Partnership. Also raises the question of the differences between the negotiators and the so-called "stakeholders" and, might I add, the press -- and the public's right to know.

Wednesday, March 14, 2012


We covered a speech by Commerce Department Undersecretary for International Trade Francisco Sánchez earlier this week at the Johns Hopkins School for Advanced International Studies.
An anxious group of graduate students and – for some reason – a large contingent of press from Taiwan wanted to know about some big policy issues, including the TransPacific Partnership Agreement. The Taiwanese press asked questions about the state of affairs between the United States and Taiwan on beef trade and the status of the Trade and Investment Agreement.

Mr. Sánchez responded that he knew nothing about the beef issue and was aware of the TIFA agreement, saying that TIFAs are "good things". The undersecretary has always been open to the press – especially Washington Trade Daily – but has been difficult to contact. It’s not because of disinterest, but because he spends much of his time out of the country.

But what Commerce’s chief international trade official really knows about i selling US goods and services abroad. He had just returned from a selling mission late last week from Japan and Vietnam.

Mr. Sánchez is probably the most "traveling" Commerce Department overseas salesman in history.

Here’s a run-down of his selling missions over the past two years (and I may be missing a few) –

earlier this month – a business visit to Vietnam and Japan;

late February – a mission to India;

earlier in February – a trip to Afghanistan;


December – participation in a democracy forum in Indonesia;

November – headed up a clean energy mission to India;

earlier in November – trade mission to the United Arab Emirates;

October – accompanied a biotechnology mission to China and Hong Kong;

September – participation in the U-Turkey Business Council meeting;

June – participation in the Joint Committee on Commerce and Trade in China;

June – a visit to Colombia and Brazil;

early June – a visit to Spain to participate in an Ibero-Latin American business forum;

early May – a business visit to Honduras;

May – a post-Obama visit to Brazil;

early April – an education trade mission to Vietnam and Indonesia.

Keep up the good work, Mr. Sánchez.

Jim Berger

Friday, March 9, 2012

Here's Today Friday Afternoon Podcast for March 9, 2012 from Washington Trade Daily

Transparency and Mr. Kirk

Toward the end of the Senate Finance Committee’s hearing on the Administration’s trade agenda this week, US Trade Representative Ron Kirk and Oregon Democrat Ron Wyden – who chairs the international trade subcommittee – got into a somewhat testy exchange over the level of transparency in the ongoing TransPacific Partnership negotiations.

Sen. Wyden’s primary concern centered on the issue of Internet freedom. The Administration needs to understand how important this issue is to Americans – something that should be clear after public criticism basically took down two Administration-backed intellectual property protection bills, the Stop Online Piracy Act and the Protect IP Act. The ongoing public ruckus in Europe over ratification of the Anticounterfeiting Trade Agreement shows this is a global concern, the senator said.

The senator urged the Administration to make any TPP negotiating texts dealing with Internet freedom available to the public.

Mr. Kirk countered that the TPP is seeking to promote the free flow of information and should not be confused with the hated SOPA, PIPA or ACTA. He also made the argument against publicly releasing TPP text. Releasing documents in the middle of a negotiation, when text is continually evolving, would hinder talks and give countries pause about negotiating with the United States, he responded.

The USTR concluded his committee appearance by defending the Administration’s record on transparency – saying that no White House has been more open.

That may be true, but apparently it doesn’t extend to dealing with the press.

As soon as the hearing was over, Mr. Kirk headed to the podium to chat for a few minutes with Mr. Wyden – the last senator standing – and then headed into the backroom committee office. The trade press – all the usual suspects, well know to Mr. Kirk, supplemented by a fairly substantial contingent of Japanese press who have been pursuing the USTR since Tokyo started talking about joining the TPP – took their usual position out in the hallway in front of the door that senators and staff normally exit.

Mr. Kirk opened the door, took one look at the waiting crowd and slammed it shut. A few minutes later he popped out of another door down the hall, obviously intending to avoid facing reporters. That, of course, prompted a stampede of journalists and Japanese camera crews running down the hall of the Dirksen Senate Office Building second floor.

The end result? Mr. Kirk still ended up surrounded by a crowd of reporters, since he had to wait for an elevator.

Is sneaking out a back door in hopes of avoiding reporters an example of a transparent and open Administration?

Of course, Mr. Kirk is under no obligation to talk to reporters and I have sympathy with someone not wanting to answer any more questions after spending two hours being grilled by US senators. But why not just say so? Why try to hide or avoid? Why not just walk out the door and say "sorry, I’m not taking any questions today." Of course, reporters will still try to ask questions, but that’s what we’re supposed to do. No one is obligated to answer.

But trying to sneak away from the press after touting the Administration’s openness?

Mary Berger