On March 1, the Obama Administration sent Congress its Trade Policy Agenda for 2010. In it, the Administration uses very strong rhetoric to underscore the critical role of trade in supporting American exports, jobs and economic growth, including global economic recovery. The Administration notes that despite last year’s recession, the “world decisively rejected a protectionist panic,” that to “improve American prosperity, we must match other counties in seeking new international markets aggressively” and that “collectively, the community of nations has to break down long-standing barriers to trade and investment as well as newer impediments that obstruct trade and slow economic integration.” However, in contrast to its agenda for 2009, the Administration is less concrete about when and how it will take many actions to achieve those goals.
Highlights of the Trade Policy Agenda include key commitments to:
- Support and strengthen a rules-based trading system. The US strongly supports an ambitious and balanced Doha trade agreement that liberalizes three core market access areas: agriculture, goods and services. The Administration states in no uncertain terms that the advanced developing economies must “accept responsibility commensurate with their growing economic influence,” and highlights sector-specific goals in manufacturing — for chemicals, electronics, health care products and industrial machinery — and in services —for financial services, information and communications technology, distribution, energy and express delivery. The G20 Leaders’ call to complete Doha is referenced in the Agenda, but their deadline of 2010 is not. While the deadline is noted in the longer report chronicling 2009, the Agenda also states that “the challenge in 2010 will continue to be how to translate the expressions of political will, into concrete and specific details.” Taken in combination, this could be the first official hints that the deadline will be missed.
- Enforce American rights in the rules-based trading system. The Office of the US Trade Representative (USTR) will strengthen its monitoring and enforcement of US trade rights, bring cases at the World Trade Organization (WTO) as necessary, and increase its focus on non-tariff barriers that hinder US exports. Specifically, discriminatory “barriers that are co-mingled with legitimate rules for important social purposes such as privacy, consumer protection, and food safety,” particularly in agriculture will be scrutinized. Additionally, USTR will fully enforce labor and environmental rights in trade agreements — which could be controversial with US trading partners.
- Enhance US growth, job creation and innovation. The Administration aspires to deepen US engagement with major emerging markets such as China, India, Brazil and Russia, as well as with the Asia-Pacific region and the European Union (EU). The Agenda highlights the challenges US companies face in China and the Administration’s goals for the US-China Joint Commission on Commerce and Trade (JCCT), the US-India Trade Policy Forum and the Bilateral Investment Treaty (BIT) negotiations. Notably, regarding Russia’s WTO accession negotiations, the Agenda describes Russia’s “apparent reversal” of plans to accede as a customs union with two neighbors, and indicates that the Administration awaits “clearer signals on [Russia’s] trade plans in 2010.” This explicit admission of uncertainty regarding Russia’s intentions is unusual and does not bode well for Russian accession prospects this year. The Administration will also negotiate the Trans-Pacific Partnership (TPP) agreement with the Asia-Pacific nations of Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam — and other nations are expected to join. The US-EU trade relationship is highlighted, with the goal of minimizing friction in the health and safety regulatory sphere, particularly with new technologies. Finally, the Administration will advance intellectual property rights by negotiating the Anti-Counterfeiting Trade Agreement (ACTA).
- Work to resolve outstanding issues with pending FTAs and build on existing agreements. The Administration believes that the pending free trade agreements (FTAs) with Panama, Colombia and Korea can bring significant economic benefits for the United States. However, the outstanding issues with each country (Panama — labor and tax laws; Colombia — labor laws and violence against union officials; and Korea — autos and beef) must be resolved before the Administration will work with Congress on a time frame to submit these FTAs for consideration. This is in contrast to 2009 where the Administration pledged to “promptly” address these issues, moving the Panama FTA “relatively quickly,” and establishing benchmarks for progress on the Colombia and South Korean FTAs. Finally, the Administration is working to conclude its BIT review “expeditiously” — focusing on the “proper balance of investor and government rights,” and the “adequacy of investor protections in markets featuring a prominent role for state-owned enterprises (SOEs) — with the goal of resuming negotiations with (among potentially others) “China, India, Vietnam, and Mauritius.”
- Facilitate progress on national energy and environmental goals. The Administration supports “fast-tracking action with willing partners to advance the WTO's work on liberalizing trade in innovative, climate-friendly goods and services...such action could make an important contribution to both [Doha] and the global climate negotiations.” This can be viewed as explicit support for completing part of the Environmental Goods and Services Agreement negotiations (EGSA) outside of the Doha Round.
- Foster stronger partnerships with developing and poor nations. The Administration supports expanding trade opportunities to stimulate market-led growth in the least developed nations. Opportunities created by open markets and preferences, such as the Generalized System of Preferences, require complementary measures, including technical assistance and market-based and rule-of-law reforms at home to maximize benefits.
- Reflect American values in trade policy. The Administration will consult with Congress, partner with small businesses, continue innovative outreach with new media tools and widen the scope of stakeholder input to ensure as broad a cross-section of views as possible, consistent with widely accepted views on open government.
For further information on the Administration’s Trade Policy Agenda for 2010, or any other matter raised in this Client Alert, please contact Timothy J. Keeler at firstname.lastname@example.org or Tiffany L. Smith at email@example.com.
Learn more about our Global Trade practice.