Hillary, the enforcer in chief
With help from Doug Palmer and Megan Cassella
HILLARY, THE ENFORCER IN CHIEF: President Barack Obama’s zeal for negotiating trade deals could soon give way to Hillary Clinton’s campaign promises to enforce the ones we already have, Doug Palmer reports. The Democratic presidential nominee is promising to appoint a new “trade prosecutor” to go after countries that violate global trade rules — elevating enforcement from a second-rung status in U.S. trade policy to more of a starring role.
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But to critics, the plan is pure politics and raises more questions than it answers, while creating a potentially awkward situation for the next United States Trade Representative. The idea of creating a trade enforcement czar has floated around Washington for at least a decade. But Clinton’s supporters say its time has finally come, given the angst over trade agreements that helped fuel Donald Trump’s populist campaign and Sen. Bernie Sanders’ surprisingly potent, if ultimately unsuccessful, Democratic primary challenge. Read the full story here.
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WEEK AHEAD: TPP, TISA ON USTR’S SCHEDULE: It’s a busy week for top USTR officials with, U.S. Trade Representative Michael Froman starting out in Buenos Aires today for a meeting of the U.S.-Argentina Trade and Investment Framework Agreement Council, as well as bilateral meetings with various officials.
On Wednesday, Froman’s back in Washington for a closed lunch at the Brookings Institution, hosted by leading neoconservative Robert Kagan. Froman tops off his week with a Thursday breakfast meeting with ambassadors from all TPP countries.
Ambassador to the WTO Michael Punke will take the temperature of Trade in Services Agreement negotiations that are due to wrap up this week in Geneva. On Wednesday, Punke is scheduled to meet with fellow WTO ambassadors involved in the talks.
AFL-CIO’S THEA LEE: FROMAN BLEW IT ON TPP: The Obama administration could have won approval of the TPP if U.S. Trade Representative Michael Froman had paid more attention to concerns raised by unions and other left-leaning critics of the agreement, a top AFL-CIO official told Morning Trade.
Even now, Froman is trying to pave the way for a TPP vote after the election by resolving concerns that senior Republicans have raised about the agreement, rather than by addressing objections raised by unions and labor groups, argued Thea Lee, deputy chief of staff at the 12.5-million-member labor organization.
“I continue to think that Froman is making a serious tactical error,” Lee said. “He’s putting all of his eggs in the Republican basket — and, at the end of the day, the Republicans don’t owe him very much, they don’t owe President Obama very much and they haven’t been good allies.”
“I think he could have had TPP if he’d have paid more attention to his Democratic base and tried to be more responsive, more communicative, more respectful of the issues that consumers and women and environmentalists and unions and access-to-medicine folks have been raising,” Lee said. She bristled at the suggestion that AFL-CIO always finds some new excuse to oppose trade agreements, even when its concerns are addressed.
“That’s exactly the disrespectful attitude I’m talking about. That’s what [Froman] told us on the first day we met with him, and it just isn’t true. We supported the Jordan agreement. We stood down on the Peru agreement,” Lee said, referring to trade deals passed by Congress in 2001 and 2007, respectively. “But do we have a higher standard for a Democratic president than we do for George W. Bush? Yes, we do. … I don’t think that’s unreasonable.”
The Obama administration says it did listen to the union’s concerns, and the result is a trade deal that has the strongest labor and environmental protections of any trade agreement in history.
SIERRA CLUB: TPP NEEDS A ‘FUNDAMENTAL RETHINK’: Both Lee and Ilana Solomon, director of Sierra Club’s responsible trade program, said they believe they have the votes to defeat TPP if it’s brought to the floor in the lame duck. They also said the agreement is so flawed it would be hard for the next president to make it acceptable without throwing it out and starting over again.
“This is not about tweaking the TPP. We need a fundamental rethink,” Solomon said. “Let’s get this right, take the time, and if that requires starting from scratch, which I think it does, let’s do that.”
Lee added: “Our view is TPP needs a lot of work, and I don’t know if it’s really feasible to take that existing framework and fix it up.”
TOBACCO GROUP SLAMS WHO FOR MEDDLING IN TRADE RULES: When World Health Organization officials meet in India this week for the organization’s seventh Conference of the Parties, which kicks off today, they’re expected to discuss trade and investment issues, including international agreements and dispute settlement, according to the official agenda. But Japan Tobacco International is criticizing the organization for what it says is an attempt to interfere with how nations craft such deals, which would be an overstep of its official mandate.
JTI’s view is that the Framework Convention on Tobacco Control Secretariat, which is hosting the conference, has “manufactured a conflict with international trade and investment agreements by pretending they are obstacles to the implementation of the FCTC,” the group wrote in a press release. Geir Ulle, JTI’s director of international trade, told Morning Trade the idea that there is a conflict between trade and health — and that deals obstruct the implementation of the FCTC — is a “complete fallacy.” The group says the secretariat is pushing that idea simply to justify its efforts to exclude tobacco from trade agreements, as with the “tobacco carve-out” in the TPP.
Instead of the WHO regulating such issues, it should be left solely to the World Trade Organization to decide matters regarding trade between nations, Ulle said. He added that the JTI and other similar groups have goals in common with the FCTC and would like to contribute to the discussion surrounding such issues, but they feel they have been excluded.
“The FCTC Secretariat continues to recommend a flawed policy of excluding tobacco products and tobacco control measures from trade and investment agreements,” JTI said in its release. “Yet there is no evidence that such a policy will necessarily have public health benefits. Instead, it would create a negative precedent for ‘carving out’ other consumer products from the international trading system in the future. This will lead only to arbitrary and ineffective government over-regulation.”
RYAN WANTS TO KEEP HIS GAVEL: House Speaker Paul Ryan said he will run to stay on as speaker, dismissing gossip that he may step aside after Election Day. He said in an interview on Friday afternoon that “there’s a lot of unfinished work to do, and I think I can do a lot to help our cause and our country.” His decision to seek to retain the post — a vote would not come until January — could impact his ability to bring up TPP during the lame-duck session, as he tries to make peace with the conservative House Freedom Caucus, which has been more negative on the deal.
But Ryan could potentially support the Freedom Caucus’ demand that they be represented on his leadership team, a strategy that would give the Wisconsin lawmaker some leverage to push the conservative bloc to minimize its opposition to TPP. Talk of meeting their demand, however, is getting a mixed reaction from within the Republican conference. Many GOP members can’t stand the hardline group, which has obstructed a number of Republican legislative priorities, and it’s unclear whether a Freedom Caucus member could generate enough votes within the conference to win a leadership spot.
Separate from the internal machinations of his leadership fight, Ryan, a true believer in trade, wants to see the administration meet certain demands on TPP itself, such as clarifying protections for biological drugs and ensuring that market access concessions for dairy exports are fully implemented. If those are met, the deal could could potentially go forward for a vote.
SURVEY TROUBLING FOR TRADE: A new survey commissioned by Public Citizen, a leading anti-TPP group, found that opposition to trade and the Asia-Pacific deal grew over the course of the campaign. Democracy Corps and GQR — the two organizations that conducted the survey of 900 likely voters interviewed in late October — say it shows how the TPP could struggle for support if it is sent to Congress for a vote after the election.
“After hearing a simulated trade debate, 68 percent of Republicans say they are less likely to support a member of Congress voting for TPP, 34 percent with intensity,” according to an analysis of the results. “This changes the ball game long-term for Republicans. While this sentiment is strongest among Republicans, it spans the political spectrum. Overall, six out of 10 voters are ready to punish a ‘yes’ vote on TPP, saying they are less likely to vote for a member of Congress who votes to pass the TPP, and 28 percent [say] they are much less likely to vote for that member. That includes a plurality of Democrats who view TPP as a potential stain on President Obama’s legacy and want their member to vote no in the lame duck.” Read the full survey results here.
JAPAN MOVING AHEAD WITH TPP: As U.S. voters head to the polls on Tuesday, Japanese lawmakers in the lower house of the National Diet could be casting their votes to ratify TPP. The process, though, has not been without its controversies, even though Prime Minister Shinzo Abe’s Liberal Democratic Party, along with its coalition partner, is not expected to face any real opposition to a vote.
A lower house committee on Friday pushed the deal through for a vote early this week, after opposition Democratic Party lawmakers walked out of a session. Opposition members were infuriated by Agriculture Minister Yuji Yamamoto’s recent statements that the ruling party would ram the trade deal through parliament, and have strengthened their resolve to oppose the legislation.
The Democratic Party is considering submitting a no-confidence motion against Yamamoto on Tuesday, despite the likelihood of it being easily defeated by the ruling coalition. Abe’s government is working to complete ratification procedures in the upper and lower houses by the end of an extraordinary session of the Diet, scheduled to conclude Nov. 30.
‘STUCK ON THE SIDELINES’ IN HAVANA: U.S. businesses are calling attention to missed opportunities in nearly 400 economic development projects in Cuba that are largely out of reach for them because of the longstanding trade embargo. The Cuban government solicited investment in the projects at its annual Havana International Trade Fair last week.
“The new 2016 portfolio highlights the tangible and potentially lucrative opportunities for U.S. companies to play a leading role in modernizing Cuba,” Engage Cuba President James Williams said in a statement. “But despite recent regulatory changes, U.S. companies still face unnecessary hurdles and outdated restrictions related to Cuba. Until Congress fully lifts the embargo, American companies will be stuck on the sidelines as foreign competitors move in on Cuba’s growing markets.”
Williams’ business advocacy group, which is focused on strengthening trade relations with Cuba, joined about two dozen U.S. companies in Havana for the trade fair. The announced foreign direct investment portfolio includes 69 more projects than last year, including investment opportunities in agriculture, energy, biotechnology, health care and transportation. The U.S. trade embargo largely excludes U.S. companies from involvement in the projects, which Engage Cuba estimates are worth a total of more than $5 billion.
MORE FOREIGN TOURISTS CLEARED FOR TAKEOFF: Eleven airports, predominantly in Latin America and Western Europe, are the latest candidates for potential Preclearance operations for foreign travelers. The possible expansion, which is still subject to negotiations between the U.S. and the host countries, would mark Customs and Border Patrol’s first foray into South America under the program. The airports are located in nine countries, from Argentina and Colombia to Iceland and the United Kingdom. Kansai International Airport in Osaka, Japan, was also included in the group.
The airports announced Friday as part of the potential expansion follow 10 locations that DHS identified for Preclearance expansion in May 2015. The U.S. and Sweden signed off Friday on an agreement to bring Preclearance operations to the Stockholm Arlanda Airport, which was included in the first round.
— China is considering giving U.S. banks greater access to its market to run investment-banking businesses, The Wall Street Journal reports.
— Germany is pushing for an outcome at the World Trade Organization, Reuters reports.
— Antigua and Barbuda’s envoy to the U.S. makes an appeal for a settlement in its long-running trade dispute with the U.S.
— Nobel Prize winning economist Joseph Stiglitz said the Federal Reserve will probably not raise interest rates if Donald Trump wins the election, the Economic Times reports.
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