The 2014 U.S. Trade Agenda
On March 4, President Obama released an ambitious trade agenda (http://www.ustr.gov/about-us/press-office/press-releases/2014/March/Presidents-2014-Trade-Policy-Agenda-Commitment-to-Bolstering%20Middle-Class-Values) for the coming year that includes the conclusion of a multilateral trade deal with 12 Pacific Rim countries, advancing a bilateral agreement with the EU, and a renewal of the “fast track” negotiating power known as Trade Promotion Authority. The Administration laid out these priorities as part of a grand strategy to level the global playing field for American businesses and workers by removing barriers to trade and investment. SEMI supports these ambitious goals and continually works with Congress and the Administration to ensure that high standard, comprehensive trade pacts represent the best interests of its members.
The Administration first signaled a foreign policy pivot toward Asia in 2012 and since that time has ramped up economic and security considerations in the region. A central element of this strategic shift, the Trans-Pacific Partnership (TPP), could boost annual U.S. exports by $124 billion in a pact that would cover approximately one-third of global trade. TPP would accelerate global economic growth while providing significant commercial gains to the countries a party to the agreement, including the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. However, conclusion of the agreement is anything but imminent. “Behind-the-border” issues such as intellectual-property protection, environmental and labor standards, investor-state dispute settlement rules remain contentious. Later this month, President Obama will travel to Asia to discuss commercial issues with heads of state from Japan, South Korea, and Malaysia. Resolution of TPP will be atop the list of issues to be addressed.
Similarly, President Obama’s trip to Europe last week put a central focus on the Trans-Atlantic Trade and Investment Partnership (TTIP). This time last year the U.S. and EU announced that they would seek a free trade agreement to ostensibly eliminate all tariffs on bilateral trade and create the largest free trade zone in the world by 2015. With the framework now in place, both countries now look to make significant progress on the text of this agreement. TTIP will ultimately modernize trade rules related to regulatory and standards systems for these two partners but more importantly, the agreement offers a unique opportunity to act as a precedent-setting mechanism for future trade negotiations globally. The next round of negotiations will likely be held in May in Washington. SEMI’s public policy team will continue to play an active role in the consultation process and provide industry input to the U.S. Trade Representative’s negotiating team.
Both of these agreements have the potential to bring huge benefits to American workers and businesses but they won’t be seen until U.S. negotiators receive the final piece of the puzzle: Trade Promotion Authority (TPA). Earlier this year, legislation was introduced to grant this authority to the Administration in order to put trade agreements on the fast track to congressional consideration. Under TPA, the President could negotiate agreements with other countries that would then be submitted to Congress for an up-or-down vote with no amendments. TPA is based on the common-sense idea that the executive and legislative branches of our government need to work together on trade agreements. However, not long after President Obama called for Congressional approval of TPA in his State of the Union address, Democratic leaders in both the House and Senate voiced opposition to the legislation. With U.S. negotiators hamstrung, the Administration is currently redoubling efforts to persuade Congressional Democrats of the necessity for TPA. SEMI is also engaged with a broad-based group of advocates to push for TPA approval. It is imperative that Congress and the Administration work together to further U.S. trade and investment with the hope that TPA legislation will soon be enacted.
On April 3, the Congressional committees of jurisdiction on trade (Senate Finance and House Ways & Means) will hold hearings on the President’s 2014 trade agenda, in which many of these issues will be thoroughly discussed. You can tune-in live via C-SPAN at http://www.finance.senate.gov/ and http://waysandmeans.house.gov/. SEMI is an active member of Washington-based coalitions supporting TPP, TTIP, and TPA. For more information on trade policy and how it may affect your company, please contact Taylor Sholler (Tsholler@semi.org).
April 1, 2014