WASHINGTON, July 31, 2013- The new U.S. Trade Representative (USTR), Ambassador Michael Froman met with agricultural stakeholders and the U.S. Chamber of Commerce this week, providing his perspective on ongoing trade deals and accompanying challenges.
He spoke with Chamber of Commerce CEO Tom Donohue to discuss “The Next Step for the American Trade Agenda” in a public forum Tuesday.
Froman said he is “cautiously optimistic” that the trade negotiations of the Trans Pacific Partnership (TPP) that includes the U.S. and eleven other countries in the Asia Pacific region will be completed by the end of the year.
USTR recently completed the eighteenth round of negotiations on trade provisions that include “higher standards than any of us had in previous agreements.”
He also noted that the most recent inclusion of Japan into the partnership “makes TPP an even more important platform,” representing 40 percent of global GDP. Although several issues need to be resolved regarding market access, including for agriculture, Froman said Japanese trade authorities entered negotiations “having agreed that everything is on the table.”
Donohue questioned Froman about the Transatlantic Trade and Investment Partnership (TTIP), an ambitious free trade agreement between the United States and European Union. Donohue expressed his concerns about the state of the EU economy, noting that European central banks are suggesting the economy “could well be flat for the next ten years.”
“I hope that’s not going to happen for the simple reason that they’re our largest export partner,” Donohue said, also noting that a trade agreement with the Europeans would have to overcome tough regulatory differences.
Froman noted that both the U.S. and EU markets have high standards of regulations, but differences in those approaches create friction and trade barriers. “I think there’s a political will to address some issues that have never been addressed before,” he said. “Europeans view this as an important part of their overall growth strategy.”
However, “I don’t want them to export their problems to us,” he said. “TTIP needs to be just part of a strategy for them” to grow the economy. He said TTIP could help “drive structural reform” for the EU.
Froman said the first round of TTIP negotiations, completed this month, focused simply on laying out ideas and concepts, but the “real negotiations” will begin in October.
Regarding trade relations with China, Donohue noted that when recently he visited the nation, which has a new leadership, he heard “vigorous requests” during private meetings to move forward with a Bilateral Investment Treaty. He even heard “suggestions” that they were interested into getting into the TPP.
Froman noted that “China agreeing to start negotiations on a Bilateral Investment Treaty is potentially a very important development.”
However, he said “the devil is in the details” and expressed hope “that as they deal with their own domestic issues it has a positive effect on our bilateral relationship as well.”
Donohue also brought up budget issues with USTR, at one point jokingly calling it a “poor” agency. He also advocated for increased resources for USTR, adding that “in terms of what the government spends, it’s small change.”
Noting that a tight budget has a direct impact since the agency is “all people and travel,” Froman said USTR is in a budget situation “where we have to choose—can we send people to this negotiation?”
Also this week, USA Rice Federation reported that its president, Betsy Ward, attended an invitation-only roundtable discussion on agricultural trade with Froman and USTR Chief Agricultural Negotiator Islam Siddiqui this week.
According to USA Rice, Ward made a case for market access of U.S. rice in the ongoing TPP and TTIP negotiations.
“Enforcement is another critical industry trade issue that Ward highlighted in her conversation with Ambassador Froman,” according to USA Rice, which emphasized unbalanced support for rice producers in major international competitor countries like Thailand, Brazil and Vietnam.
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