While President Barack Obama has indicated that he would press for congressional approval for Trade Promotion Authority (TPA) renewal as an aid in current United States trade agreement negotiations, House of Representatives Ways and Means Committee Ranking Member Sander Levin (D – Michigan) has stressed the need to continue to focus wholly on those negotiations.

In the US, Congress has the authority to regulate international trade, but the President has the authority to negotiate trade agreements with foreign governments. With the objective that US trading partners can be assured that concluded trade agreements would be fast-tracked through Congress, TPA would prohibit amendments to implementing bills for trade treaties and impose a timetable for their consideration.

TPA also requires the Administration to consult extensively with Congress during trade negotiations, and is currently being considered as a particular necessity given a perceived lack of transparency and concrete information surrounding the trade negotiations being undertaken at present – the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

On being asked during his recent meeting with the Business Roundtable whether he could get TPA passed so that the US Trade Representative Michael Froman could "have the clear support that he needs to drive these agreements," President Obama said that he would be talking to congressional leaders from both parties and "making a strong case on the merits as to why this has to get done."

However, Levin, who was an observer at the ministerial TPP negotiating round in Australia in late October this year, commented that his experience there "reinforced for me how TPP represents both a major opportunity and a major set of challenges. … This is really the largest multilateral negotiation that might succeed since the Uruguay round. And there are new issues that have never been negotiated."

In that case, he added, that, "at this critical juncture, the focus has to be right now on the substance of TPP and not passing a TPA. Because if you go down the list of these issues, there's no way for TPA to spell out what Congress thinks needs to be contained in an effective TPP."

Therefore, Levin wanted there to be set up "some structure so that there is regular consultation with the Committees of jurisdiction as the negotiations ensue. … Full discussion of what is in the documents, and of what is being proposed by the Administration, and what are the positions of other countries."

Apart from such measures as investment and dispute settlement, state-owned enterprises, environmental protections and worker rights, it was also pointed out by Levin that major outstanding issues remain to be resolved in the market access for agricultural and industrial products.

Although ongoing TPP discussions have concentrated on the insistence by Japan on maintaining its tariffs on its ultra-sensitive food products, a factsheet noted that Japan had "originally offered to reduce, but never eliminate, tariffs on imports of hundreds of agricultural products – far more carve-outs than the United States has ever accepted in a trade agreement," while "other countries are not engaging fully in agricultural market access negotiations even at this time."

In addition, though Japan has long had the most closed automotive market of any industrialized country, "key to the US ensuring that necessary changes take place in Japan is a provision relating to US tariffs on vehicles and trucks."

However, attention was called to the US' current approach that "any reduction to the US auto tariff will be tied to the longest period negotiated on any other product line between any two TPP parties, whether that tariff relates to automotive products or not, [and that] the Administration has not stated a specific period of time for when the phase-out would begin or when it would end."

Source: Tax News

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