Monday, October 29, 2012


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


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


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 – – 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.