Tag Archives: Trade policy

TPP: THE DA NANG ANNOUNCEMENT

“This is a remarkable achievement.”

Wendy Cutler
November 16, 2017

CONTEXT

Wendy Cutler is a Vice President of the Asia Society and the Managing Director of the Asia Society Policy Institute, the Society’s Washington Office. It was in November of 2015 that she left the government to take up those private sector/think tank roles. Before that, Ms. Cutler was a top USTR negotiator. She was the lead negotiator for KORUS, the U.S. free-trade agreement with South Korea and, as (Acting) U.S. Trade Representative, she was responsible for the TPP negotiations, especially the critical negotiations with Japan.

On Thursday,  November 16, Ms. Cutler was one of four panelists at GBD’s first public event on TPP since the United States withdrew from the agreement. She said a lot in short period of time.  Before turning to some of the highlights of Ms. Cutler’s presentation – including today’s featured quote – we would note these four dates in the life of TPP:

• September 22, 2008 – Then-U.S. Trade Representative Susan Schwab announces that the United States will join in the effort to negotiate a Trans-Pacific Partnership. Her statement is made at a meeting in New York with the trade ministers from Brunei, Chile, New Zealand, and Singapore or the P4.

• February 4, 2016 – Meeting in Auckland, New Zealand, representatives of the twelve countries that negotiated the Trans-Pacific Partnership Agreement (TPP) sign the agreement. The twelve countries are: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam

• January 23, 2017 – President Trump announces America’s withdrawal from TPP.

• November 11, 2017 – Meeting in Da Nang, Vietnam, the TPP 11 – that is the above 12 minus the United States – issue this statement on a revised TPP:

“Ministers are pleased to announce that they have agreed on the core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).” That’s the new name.

But now let’s return to some of what Ms. Cutler said last week. She told her audience she had eight points to make. A recording of her full presentation is available under the GBD Events tab of this website. If you listen to it, you will see that, here and there, we have ignored the numbers and shifted some observations from one segment to another.

On the Overall Effort.  Ms Cutler’s first point was the one quoted above. “This was a remarkable achievement.” As noted by another panelist, Atsushi Yamakoshi of Keidanren USA, America’s withdrawal from TPP came as a shock to the countries concerned and to the region. The first clear public effort to regroup and regain some momentum for TPP was the meeting in Chile back in March, a meeting which included not only the 11 TPP countries but also Korea and China. It was certainly not clear then, however, that the TPP 11 would be able to salvage the deal.

Japan’s Leadership. Ms. Cutler had high praise for all of the TPP countries but focused particularly on the leadership role of Japan. She herself had worked with Japan in the effort to bring them into the TPP negotiations, where they became an active participant. But being an active participant, she said, is far different from being a leader. And in the wake of the U.S. withdrawal, Japan was the leader. And she offered this illustration:

In TPP, remember, there were rules, and then there were market access commitments. These market access commitments are very detailed, and for Japan a lot of that was about what they were going to do on agriculture. … Japan had agreed in certain instances, particularly with respect to some very sensitive products, to what we called TPP-wide quotas. So, it was one number for all TPP 12.

The question, I am sure, that was under internal discussion [in Japan] was, do we keep that number for the TPP 11? Or do we somehow take a percentage out of that quota to reflect the U.S. exit from TPP? ….

I am sure that the Ministry of Agriculture probably wanted to reduce that quota. But if Japan was going to be the leader here, it needed to keep its market access commitments intact or else it would be a slippery slope. If Japan took some agricultural concessions off the table, others would follow. And that’s what leadership is about. And so, again, congratulations to Japan.

Suspended and Retained. The TPP 11 have agreed to suspend some 20 provisions of the original agreement, and naturally, as Ms. Cutler noted, the U.S. stakeholders who had argued for those provisions – provisions on things like the length of copyright protection and the treatment of certain pharmaceutical data – are unhappy that those elements have been suspended. But the suspensions are hardly the whole story. In Ms. Cutler’s words:

We need to remember everything that they kept in [the agreement]. .. That means labor, environment, the SOE rules [for state-owned enterprises], … the market access commitments, the digital commitments. And, in the areas where there were suspensions, they’re not suspending the whole chapter. … The TPP is largely intact, and all of the TPP 11 countries .. did a magnificent job in keeping almost all of the provisions intact.

More to Do—Canada. Brunei, Canada, Malaysia, and Vietnam all have outstanding issues, but the one Ms. Cutler highlighted was Canada—Canada and culture. When Canada joined the TPP 12, she said, it sought a broad carve out for cultural policies, but “that was not the outcome that was achieved” in the TPP agreement. Of course, in some respects the CPTPP is a new agreement, and Canada may again be seeking a broad carve out for culture. The weight she attached to that challenge was evident in her comment to the effect that “it may be necessary at some point to think about a TPP 10.”

Effect on RCEP. RCEP, the Regional Comprehensive Economic Partnership, is the other major trade agreement being negotiated in the Asia-Pacific Region. Anchored by the ten countries of ASEAN, the Association of Southeast Asian Nations, the negotiations also include Australia, China, Japan, India, Korea, and New Zealand. Ms. Cutler said that “This conclusion or near conclusion of the TPP Eleven, I think, provides important momentum to the RCEP negotiations.”

Without America – The Confidence Effect. Ms. Cutler’s point in this portion of her remarks was a serious one, but there was a sense of fun in her language. This is what she said:

The TPP 11 agreement, I think, really will build the confidence of TPP 11 members but also others in the region. … They must now feel like, ‘Wow. [We] can now do this without the United States.’ I would have loved to have been a fly on the wall for the negotiations. I’m thinking of all the different phases they probably went through. I would like to think there were times, particularly in the beginning, when they really missed the United States. But I also have to believe they probably had a stage in which – one night, a late-night meeting – where they were all kind of like laughing and thinking, ‘We don’t want to do this. Let’s take this off the table. The United States isn’t here.’ Kind of acting like kids with a bowl of candy.

But I think, by the end, while maybe they still miss us, I think they figured out a way to work together, to adjust to the new reality, and now to move forward.

TPP and China. Ms. Cutler was emphatic:

I think the TPP 11 agreement underscores that the TPP was never a U.S. conspiracy to contain China. If it had been, then TPP 11 would not have happened.”

A Personal Assessment. She said:

I get this question a lot: What does this mean to you personally?
My response is, I am so happy for the TPP 11. I think this deal is great for the region. I think it’s great for the multilateral trading system. I believe it’s a serious mistake for the U.S. to withdraw from TPP. And I think this is a decision we will come to regret.

On the New Name. As noted above, what used to be the Trans-Pacific Partnership or TPP, is now the Comprehensive Progressive Agreement for Trans-Pacific Partnership or CPTPP. Asked about the name in the question period, Ms. Cutler said:

It doesn’t roll of the tongue. I kind of like what Prime Minister Abe called it, and that was “Oceans 11.”

COMMENT

This is already a long entry, and, moreover, we know we will be returning time and again to TPP or CPTPP, and we strongly suspect we shall be sharing much more from last week’s event. So, we shall keep our comments to the one, absolutely de rigueur observation: Happy Thanksgiving!

SOURCES LINKS

Wendy Cutler Looks at TPP 11. This is a link to the audio recording of Ms. Cutler’s presentation at the GBD event TPP, AFTER APEC on November 16, 2017. This was the source for today’s featured quote (and most of the rest).

TPP, AFTER APEC is the page of the GBD website devoted to materials related to this event.

Official Statements takes you to the Ministerial Statement from the TPP 11 issued in Da Nang on November 11 as it appears on the website of the New Zealand Government.

Originally published on November 22 as TTALK Quote No. 66 of 217.

© 2017, Global Business Dialogue, Inc.

 

AN UNQUIET AUGUST

DOG DAYS?
by Joanne Thornton

As we approach what traditionally has been a month of recess in Washington, the policy agenda remains as hot as the weather. Unleashed by the Trump administration like a pack of greyhounds in the months following the president’s inauguration, several trade initiatives are now approaching decision points.

Section 232. An especially prominent one — the Section 232 investigation into whether steel imports are harming US national security — appears to have slowed its pace. Perhaps it will be subsumed within the exercise resulting from the president’s most recent executive order, directing the Defense Department to lead a nine-month study of the US defense industrial base. The same may be true of the Section 232 aluminum investigation.  And,

Trade Deficit. Even so, there are plenty of other impending reports and/or decisions that will keep trade mavens busy this summer. Two are overdue, and could pop up any day: an “Omnibus Report on Significant Trade Deficits,” now a month late.

Pipeline Steel. The other overdue report is a Commerce Department plan — technically due last Sunday — for use of American steel in pipelines.

Other upcoming items include:

Enforcement Priorities. This is a report to Congress by USTR on trade enforcement priorities, due by July 31 under Section 601 of the Trade Facilitation and Trade Enforcement Act of 2015 (PL 114-125). Essentially the latest iteration of the 1974 Trade Act’s “Super 301” instrument, the provision requires USTR to focus on “those acts, policies, and practices the elimination of which is likely to have the most significant potential to increase United States economic growth.”

China – The NME Issue. The Department of Commerce is reviewing its policies to determine whether China should continue to be treated as a “non-market economy” (NME) under US antidumping and countervailing duty laws. A finding is expected prior to mid-August, and it is widely anticipated that the Department will reaffirm current practice. Even if not surprising, such a decision would accentuate a deep rift with China. Beijing has challenged the use of NME methodology by the European Union and the United States in what USTR Robert Lighthizer has termed “the most serious litigation matter we have at the WTO right now.” Ambassador Lighthizer made that comment at a Senate Finance Committee hearing on June 21, and he asserted further that “a bad decision with respect to NME status for China . . . would be cataclysmic for the WTO. “

NAFTA Modernization. Mid-August also will see the formal initiation of NAFTA modernization negotiations, a process that the Trump administration hopes will produce more balanced trade among the three partners and a new and improved template for future free trade agreements.

Congress is watching and asserting its authority under Article 1 of the US Constitution. Stakeholders are having their say. While some further adjustments in direction and/or speed are possible, by summer’s end, America’s trade policy is likely to have been set on a transformative path.

First published as TTALK Quote No. 47 of 2017.

© 2017 The Global Business Dialogue, Inc.

 

 

COMMISSIONER BROADBENT HONORED

ON WINNING THE LIGHTHOUSE AWARD

“We’ll this is an interesting experience to have. Suddenly, you’re thinking, ‘I might know this person. I don’t know. …’

“I love you guys… . Thank you very much.”

Meredith Broadbent
July 12, 2017

CONTEXT

These brief comments from Commissioner Meredith Broadbent of the U.S. International Trade Commission followed almost immediately this sentence from her friend and colleague, the Chief Trade Counsel for the House Committee on Ways and Means, Angela Ellard:

“So, without further ado, we’re presenting the Lighthouse Award tonight to Meredith Broadbent.

***
But let’s back up a little bit. If there is a single event that brings the Washington trade community together each year, it is the Annual Awards Dinner of the Washington International Trade Association (WITA) and the Washington International Trade Foundation (WITF). It’s a tradition that has been going on for a while now. The Trade Prom that was held a little over a week ago, on July 12, was the 23rd. As for the men and women who are given awards, some of them are published in advance. Indeed, the fact that well known Congressional leaders are being given awards is part of the appeal, part of the advertising for the event. This year, for example, Congressional Leadership Awards were presented to Senator Jeff Flake of Arizona, a Republican, and to Congressman Rick Larsen from Washington, a Democrat.

There is one award, however,  that is a secret. Even the recipient has no clue. It is the Lighthouse Award.  In years past the presentation was a joint effort between Walmart’s Sarah Thorn and Caterpillar’s Bill Lane. Together, they turned those ten minutes of the Trade Prom into a routine that would have made George Burns and Gracie Allen envious. Bill Lane has retired, however, and so this year Sarah Thorn was on her own. In the end, she decided to call in assistance from one of the trade world’s big guns, Angela Ellard. Before she did, however, Ms. Thorn offered a few thoughts worth noting. Among other things, Sarah said:

“The Lighthouse Award is my favorite part of the Prom. It’s wonderful because we get to honor one of our own.”

“That’s who we should be honoring — people who are doing the hard work, who believe in trade, and are there consistently.”

After quoting from the Declaration of Independence,
“This country actually went to war partly for the ability to trade. That’s why we need trade warriors. That’s why we need people in the trenches thinking about trade, doing the right thing, and thinking about how trade benefits consumers and workers around the world.”

And then, a few sentences later, Ms. Thorn asked Angela Ellard to come to the microphone, to say a few words, and to present the award. Both Ms. Thorn and Ms. Ellard noted some of the basic career facts of the person they were about to honor:

Now a Commissioner at the U.S. International Trade Commission, Meredith Broadbent is a former Chairwoman of the ITC.

She has held the William M. Scholl Chair in International Business at the Center for Strategic and International Studies.

She served as the Assistant U.S. Trade Representative for Industry, Market Access and Telecommunications at a time when the world was still hopeful about the Doha Round.

She was on the staff of the House Committee on Ways and Means when Congress was writing the implementing legislation for NAFTA and the Uruguay Round.

And, from 2009-2010, she served as a volunteer Trade Adviser to the Global Business Dialogue.

Those are the bare bones of Ms. Broadbent’s biography. More important, in a sense, are the elements added by Sarah Thorn and Angela Ellard. Here is some of what Angela said:

“What is so impressive about [Meredith] is that, not only is she a very substantive person, very policy oriented, she thinks about all the people behind the particular problem she’s working on.”

“And she’s always worked on a very bipartisan basis, bringing excellence to the table and a lot of creativity.”

COMMENT

Your editor was not able to attend the Trade Prom this year. But we have been often enough to know what a fine event it is. WITA does a great job and provides a wonderful service to the Washington trade community. (And because we can’t always be there, we are awfully glad that portions of it are available on YouTube.)

So, we are not inclined to criticize the organizers — and certainly not for the choice of this year’s Lighthouse Award winner. On that score, they could not have done better. We do sometimes wonder, though, if there might be merit in giving the winners a day or two of advance notice and a little more time at the microphone. Yes, we would lose some of the fun of the surprise. But Lighthouse winners are people it would be good to hear from, especially in the setting of the Trade Prom.

In the circumstances, what Meredith Broadbent said was perfect: short, funny, affectionate, and sincere. Of course, we don’t know what she would have said if the setting had been a bit different. But we have heard her talk, and we suspect two themes would have emerged even more strongly, namely, the importance of trade and the importance of law — both the law of the GATT and other agreements and U.S. trade law.

But we are not quibbling. It was a wonderful ceremony, a wonderful award. Our sincere and heartfelt congratulations to WITA and to

                            Commissioner Meredith Broadbent!

SOURCES & LINKS

The Presentation is a link to the YouTube clip from the July 12 Trade Prom that includes the presentation of the Lighthouse Award. This was the source for today’s featured quote.

Highlights is the page from the WITA website with highlights from the Annual Awards Dinner, and

A Biography is a link to Commissioner Broadbent’s biography as it appears on the website of the U.S. International Trade Commission.

***

Originally published on July 21 as TTALK Quote No. 45 for 2017.

© 2017 The Global Business Dialogue, Inc.