U.S. Trade Representative Ron Kirk, in a major speech released July 16, promised a more effective use of resources to identify, monitor, and address trade problems adding President Obama would have more to say in the future on the administration's approach to trade.
“I came here to Mon Valley [near Pittsburgh, Pa.] because America's workers need to know that this Administration has their backs in the global trading system,” Kirk said. “These new enforcement measures will help Americans to receive the benefits promised by our existing trade agreements—the better paying jobs and economic growth that come home to America when our partners keep their commitments to trade fairly with the U.S.,” Kirk said in a release.
• spotting and addressing sanitary and phytosanitary trade barriers restricting agricultural producer trade;
• increased coordination among government agencies to respond to trade barriers;
and
• a closer commitment to observing and redressing substandard foreign labor practices.
Kirk also said that Obama would share more about the administration trade approach, but he did not say when that would take place. He said Obama was committed to an approach to trade that rejected protectionism and created opportunities at home and abroad and recognized that trade was essential to America's prosperity.
Existing Enforcement Through Monitoring
Kirk said that the administration already knew that for trade to reach its full potential, USTR needed to do a better job of enforcing U.S. trade agreements. Saying USTR would build on what worked, Kirk said that the administration would hold a magnifying glass up to monitor the actions of U.S. trading partners.
He said some of the best results to resolving trade problems had come from Special 301 and Section 1377 reports—the Special 301 report reviews problems faced by American companies dealing with intellectual property protections, and the Section 1377 reviews problems for U.S. companies in telecommunications. Both reports name problematic countries.
Kirk called Special 301 “one of our biggest, strongest enforcement tools.” He said the United States used the report to call out countries that provide safe haven for the theft of U.S. intellectual property and could miss out on new trade privileges and programs.
Applying Monitoring to SPSs, TBTs
“We're going to apply the lessons of those successful programs to address other, equally important trade barriers,” Kirk said. The same approach as Special 301 and Section 1337 will be taken for sanitary and phytosanitary barriers (SPS) that keep U.S. farmers and ranchers from marketing their products abroad and technical barriers to trade (TBT) that restrict exports by U.S. manufacturers, he said.
SPS measures are imposed by governments to protect human, animal, and plant health, such as from contaminants in food. TBT measures are standards-related measures such as product design or labelling and testing requirements imposed on agricultural and industrial products.
In a fact sheet, USTR said that the two public reports on SPS measures and TBT would bring greater attention and focus to resolving the problems, both on the part of the U.S. government and well as the governments of U.S. trading partners.
Kirk said that the United States needed to more strongly address SPS barriers across the board, as well as on a case-by-case basis, pointing to restrictive regulations slapped on American pork because of the H1N1 flu scare.
He said that technical barriers to trade were one of the biggest obstacles faced by U.S. manufacturers. “Now, we will seek out these barriers and tackle them head on,” Kirk said in his written speech.
More Than Paperwork
Kirk also said the reports would be more than paperwork, but would be used “in new ways to spur real actions with real impact for American works and businesses.” He said that he and Commerce Secretary Gary Locke had agreed that when a USTR report identified a trade barrier, the Commerce Department and USTR would “spring into action together.”
He said that USTR would also coordinate with the Departments of State, Agriculture, and Treasury. “At the same time, these officers serving abroad will constantly feed real-time, on-the-ground information back to USTR. They will give us early warning about potential trade barriers we can nip in the bud rather than just report,” Kirk said.
He said the administration would also continue to use U.S. antidumping and countervailing duty laws, as well as other legal remedies such as filing actions at the World Trade Organization and negotiations and diplomacy to resolve trade problems.
Labor Third Pillar of Plan
“To date, we have enforced our trading partners obligations only on a complaint-driven basis. Well, no longer,” Kirk said. He said that the United States had free trade agreements with 14 other countries, all which have labor provisions within them.
USTR in partnership with Labor Secretary Hilda Solis and Secretary of State Hillary Clinton will immediately identify and investigate labor violations before they can disadvantage American workers, Kirk said. He said that USTR would engage with government of other countries and if those governments can't or would not fix the labor problems, USTR would exercise legal options.
“These are the steps that USTR must take, and will take, to save American jobs and make trade work better for America's families,”
Kirk said. He said USTR could not take a single U.S. job for granted and would not, and that the USTR was seeking to hasten the U.S.'s economic recovery.
FTA Partners, Haiti, Peru, and China
A USTR factsheet said that some of the United States free trade agreement
(FTA) partners had not sufficiently monitored the labor practices of their domestic producers. The factsheet said that USTR would regularly monitor compliance with its existing 14 FTA partners to maintain a consistent flow of information on labor violations and would invoke formal dispute resolution if efforts to resolve violations were not successful.
USTR will seek to resolve issues through dialogue, technical cooperation, Labor Chapter consultations, and dispute settlement as necessary, the factsheet said. It said USTR was partnering with the Department of Labor to implement worker's right provision of the Haitian HOPE II Act, and effective implementation of Peruvian commitments to labor protections for temporary workers, subcontractors, and others.
It also said that the Obama administration was seeking to serve as a resource for nations seeking improve labor conditions, including seeking to enhance engagement with Chinese officials on fundamental labor rights, enforcement of China's labor laws, and other key-labor related issues.
Progress Already Made
Kirk also said that said that USTR had made progress on trade enforcement already, listing:
• a case against Chinese import restrictions on raw materials;
• an agreement with the European Union on expanding market access to U.S. beef producers;
• imposing a customs duty of 10 percent on lumber imports from Canada; and
• moving forward on an Anti-Counterfeiting Trade Agreement, addressing China-specific concerns through the U.S.-China Joint Commission on Commerce and Trade, and engaging other countries through the Special 301 report.
Baucus Applauds Food Focus
Senate Finance Committee Chairman Max Baucus welcomed Kirk's focus on ensuring food safety regulations are based on sound science and call for consistent action to enforce the Canadian Softwood Lumber Agreement with Canada. Baucus said Kirk echoed his longstanding position that strong enforcement was the key to opening markets and ensure a level playing field.
Baucus also said he looked forward to Obama laying out his international trade framework, so the U.S. Congress could begin to move forward on a robust U.S. trade agenda.
House Ways and Means Chairman Charlie Rangel (D-N.Y.) and Trade Subcommittee Chairman Sander Levin (D-Mich.) welcomed Kirk's renewed focus on trade enforcement. Levin said that USTR was sending a strong signal that expanding trade, enforcing existing agreements, and addressing unfair trade practices was equally important.
“We can both expand and shape trade, and indeed, that is what is required to maximize the benefits of globalization, minimize the downsides, and ensure that trade is a two-way street,” Levin said. He said the Kirk speech would help restore faith that the U.S. government was standing up for U.S. workers in the global marketplace.
Sen. Sherrod Brown (D-Ohio) said a focus on trade enforcement should not be mistaken for a new direction in trade policy and that there needed to a be thorough review of existing trade agreements. “Our trade strategy is broken. Wrong-headed trade agreements have shipped jobs overseas and undermined out domestic manufacturing strength,”
Brown said.
He urged the administration to support the Section 421 safeguard case against imported Chinese tires and a targeting of unfair Chinese subsidies through the use of U.S. countervailing duty and antidumping laws. The International Trade Commission recommended the president impose additional duties on Chinese tires, saying the imports were disrupting the U.S. tire industry. The president is scheduled to make a decision in the closely watched case in mid-September .
Brown also said that the administration should make it clear to U.S. trading partners that strong enforcement is not protectionism.
Rep. Phil Hare (D-Ill.), a member of the House trade working group, called on Kirk to throw out the three pending trade agreements negotiated under the Bush administration, and enact Rep. Mike Michaud's (D-Maine) Trade Reform, Accountability, Development and Employment Act (H.R. 3012). A hundred members of Congress have signed onto the TRADE Act, which would mandate trade pact reviews, establish standards, protect workers in developing nations, and restore congressional oversight of future trade agreements.
Enforcement Two Way Street, Business Says
The U.S Chamber of Commerce in a release said it agreed that trade agreements mean little if not enforced, but Chamber Senior Vice President for International Affairs Myron Brillian noted that “enforcement cuts both ways.”
“The United States has not always lived up to its own commitments under trade agreements, as we've seen in the case of cross-border trucking with Mexico,” Brilliant said. He said Mexican retaliatory tariffs had already cost thousands of American jobs and keeping U.S. trade commitments gives the United States credibility when we call on other trading partners to keep their own commitments.
Addressing the labor emphasis in the Kirk speech, Brilliant said the Chamber hoped that labor unions currently opposing free trade agreements would see how useful the FTAs could be and support passage of the Panama, Colombia, and Korea FTAs negotiated under the previous Bush administration.
The National Association of Manufacturers Vice President for International Economic Affairs said that U.S. manufacturers still faced too many unfair trade barriers with the continuation of subsidies, dumping, and counterfeiting. “Artificial standards and phony testing procedures are used too often to keep our products out,” Vargo said.
He said NAM would work with Kirk to increase trade monitoring by immediately setting up a procedure for NAM countries to be able to identify and notify USTR of foreign trade practices that seem to break the rules.
He also advocated for an aggressive approach to negotiating and passing FTAs in addition to stronger enforcement. FTAs with Colombia, Panama, and Korea need to be sent to Congress and passed into law, Vargo said.
“We can't enforce agreements until we have them—and we want more of these great agreements so American companies get a fairer deal in world trade and create more jobs at home. He said every day of delay was costing the United States more jobs.
New Direction or Other Pillars?
The Alliance for American Manufacturing said that Obama's determination in the Section 421 case on imported Chinese tires would be the first major test of Kirk's success on trade enforcement. AAM Executive Director Scott Paul said that Commerce Secretary Locke's comments on the unsustainable nature of the U.S. trade deficit with China combined with Kirk's speech led him to hope for a new direction on trade.
National Foreign Trade Council President Bill Reinsch told BNA that a comprehensive trade policy needed to have more than just enforcement and said NFTC looked forward to hearing about other aspects of the administration's policy. Reinsch said NFTC encouraged the administration to conclude World Trade Organization Doha round negotiations, pass pending free trade agreements, and take a leadership role in the trade of green technologies and introducing a new information technology agreement.
By Amy Tsui
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