[A2k] FT: US trade debate prompts fears of delay in talks

Thiru Balasubramaniam thiru at keionline.org
Mon Jan 20 06:04:15 PST 2014


http://www.ft.com/intl/cms/s/0/60506de0-7f9c-11e3-b6a7-00144feabdc0.html


January 20, 2014 9:04 am

US trade debate prompts fears of delay in talks

By Shawn Donnan in London

A heated debate over trade <http://www.ft.com/topics/themes/Trade_disputes> in
the US Congress risks stalling two trade negotiations that cover 70 per
cent of the global economy, senior international officials have warned.


For President Barack Obama the key to sealing both the Trans-Pacific
Partnership<http://www.ft.com/cms/s/0/8c253c5c-2056-11e3-b8c6-00144feab7de.html?siteedition=uk>
and
a deal with the EU is securing so-called fast-track authority. It gives the
White House power to negotiate trade deals and limits Congress’s ability to
intervene in nitty-gritty details once talks are concluded.

If Mr Obama fails, it would scupper his ambitious second-term trade agenda.
He has already hit stumbling blocks as he missed his self-imposed aim to
reach a preliminary agreement with TPP members by the end of 2013. It would
also threaten US-led efforts in Geneva to update the rules for the $4tn
annual trade in services around the world.


After months of haggling, Congressional leaders this month introduced a
bipartisan bill to grant Mr Obama what is formally known as Trade Promotion
Authority<http://www.ft.com/cms/s/0/bc0e78ea-7955-11e3-91ac-00144feabdc0.html>
(TPA).
But it is already facing opposition from many
Democrats<http://www.ft.com/cms/s/0/fcc7adfe-7b9c-11e3-a2da-00144feabdc0.html>
and
criticism from Republicans who want Mr Obama to do more to bring his own
party into line.


In an interview with the Financial Times, Ildefonso Guajardo Villarreal,
Mexico’s economy minister, said governments in the TPP talks, in which it
is a member, were unlikely to offer any significant concessions until they
were sure Mr Obama had fast-track authority and any agreement could get
through the US Congress.


“We have to wait until we really get a better sense of how things evolve.
>From a negotiating point of view . . . things will go along slowly until
that happens,” Mr Guajardo Villarreal said, adding he believed the Obama
administration would eventually secure fast-track authority. “If they are
able to send a strong signal of support from Congress that will make it
easier for us to finish the deal.”


The TPP negotiations are further along than the EU talks so the immediate
impact is likely to be greater on those talks. But a senior European
official said officials in Brussels were bracing for a TPA debate that
could last through this year and would inevitably affect negotiations.
“Without TPA we will always feel very reticent to show our real red lines,”
the official said.


Administration officials remain confident that they can get the bill
through Congress and Michael Froman, the US trade representative, said
there was no reason for the fast-track debate in Washington to affect the
progress of any trade negotiations.


“Every TPP partner has domestic politics, from elections to legislative
battles over various policies that could impact the agreement,” he said.
“We trust our partners to manage their own domestic processes, and we will
be working with our Congress to pass broadly supported trade promotion
authority here. In the meantime, there is no reason talks should slow.”


The bill is raising concern among negotiating partners. It would require
the administration to include mechanisms to address currency manipulation
in agreements, a sore point for TPP partner Japan. It also would require
any deal the US enters to have strict, environmental, labour and
intellectual property rules.


EU officials are concerned about a section of the bill which would give
some members of Congress the right to attend negotiations. The concern in
Brussels is that it could cause the European parliament to request the same
access and thus add a political element to the complex negotiations.


Deborah Elms, an American TPP expert at Singapore’s S. Rajaratnam School of
International Studies, said the concerns of other TPP countries over the
conditions in the bill, particularly on currency, should not be
underestimated.


But, above all, she said, President Obama needed to send a signal in this
month’s State of the Union address that he was prepared to push for
fast-track authority.


“You have two big negotiations that are a bit stuck waiting for Congress to
move,” she said. “This is the time [to spend political capital]. Your whole
trade agenda is stuck unless you get [fast-track authority] very soon.”


TPP negotiations<http://www.ft.com/cms/s/0/22256554-618b-11e3-b7f1-00144feabdc0.html?siteedition=uk>
in
Singapore stalled last month over the failure of the US and Japan, the two
biggest economies in the TPP talks, to agree on market opening measures on
agricultural and other products. A plan by TPP ministers to meet as a group
on the sidelines of this week’s World Economic Forum in Davos has been
abandoned and ministers are now expected to next meet for negotiations in
Singapore on February 22.


Japan and the US are expected to meet at Davos. “Unless Japan and the
United States make certain progress within January, it will be difficult to
finalise the whole [TPP negotiations],” Akira Amari, the Japanese minister
leading the TPP talks, told reporters in Tokyo last week.


In an interview in London, Ryosei Tanaka, Japan’s vice minister for the
economy and trade, said: “Each country has their own political difficulties
to overcome but all in all the extent of the negotiations have come a long
way. We just have to persevere and put all of our efforts into concluding
the negotiations.”



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