TPA Legislation Said to Drive Ag Exports, Eliminate Emerging Trade Barriers
The Bipartisan Congressional Trade Priorities Act of 2014 would increase U.S. agricultural exports to global markets, including skyrocketing Asian economies, and tackle emerging trade issues, such as free digital exchange of information, witnesses told a Jan. 16 Senate Finance Committee hearing on the U.S. trade agenda (see 14011616). Passage of the legislation (here), the 2014 version of Trade Promotion Authority (TPA), would help secure pending trade pacts that could replicate market access advances achieved through other free trade agreements (FTAs), such as the Dominican Republic-Central America-United States FTA (CAFTA-DR), said Jim Allen, president of the New York Apple Association.
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“Ultimately free trade is best for every economy and FTAs open the door for increased commerce. The U.S. apple industry supports renewing the TPA,” said Allen. “A great example of a successful agreement that previously passed under TPA is CAFTA. The U.S. apple exports into those countries are now treated equally, as the other trading countries are. TPA could allow us to conclude trade talks and similarly level the playing field in Europe and Asia.” The Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, two FTAs the U.S. is currently negotiating, would build on the $140 billion a year the U.S. exports in agricultural products, said Allen.
The legislation would also significantly scale back foreign efforts to obtain U.S. intellectual property and global restrictions on the free flow of data, said Senate Finance Committee Chairman Max Baucus, D-Mont., a co-sponsor of the legislation. U.S. trade negotiators must grasp the importance of IP rights and the impact stringent protection has on an emerging, global economy, said Computer & Communications Industry Association CEO Ed Black in a press release on the hearing (here). The last TPA legislation, a law that Congress enacted in 2002 and expired in 2007, failed to address IP protection, said Black.
“The potential economic benefits of Internet related trade are immense,” said Black. “Yet businesses face numerous additional barriers today: impediments to cross-border data flows, mandates on the location and use of technology infrastructure, forced technology transfer, and unreasonable liability rules regarding third-party activity. These issues were not addressed when Congress last considered the issue of Trade Promotion Authority more than a decade ago, so much work needs to be done to ensure trade agreements reflect a balanced and pragmatic approach.” The legislation mandates the “accelerated and full” implementation of a World Trade Organization (WTO) Uruguay Round IP agreement, emphasizing the importance of enforcement. The bill also says free trade agreements should contain IP protection “similar” to U.S. law.
The IP priority is essential in an increasingly globalized commercial environment, said witness Elena Stegemann, Director of International Business, NuStep. “TPP will get rid of many of the barriers that make it hard for us to compete in some Asian markets. Also, the Trade Priorities Act will guide American negotiators to ensure that TPP protects Intellectual Property and trade secrets,” said Stegemann. “Even though we’re not a high-tech company per se, NuStep has made big investments in producing high quality, innovative products and it would be simply devastating for us to have our know-how stolen because we either didn’t have a trade agreement in place or because the agreement lacked strong protections that we need.”
The bill makes significant strides toward addressing other emerging commercial interests, as well, said Sen. John Thune, R-S.D. “Last December Senator Wyden and I introduced a Digital Trade Act which…modernizes basically our trade laws to reflect the internet enabled world which we now live and do business. And so I’m very pleased that this TPA legislation that we’re considering today includes a robust section on digital trade with provisions addressing nearly all the issues included in my bill,” said Thune, referring to S-1788 (here). “The TPA bill seeks to prohibit unjustified barriers to the free flow of data across barriers, as well as ‘forced localization’ policy.” The legislation ensures current WTO obligations on the digital trade and cross border data flow are maintained.
The inclusion of a currency manipulation provision in the legislation represents another step forward, said Sen. Chuck Grassley, R-Iowa, at the hearing. The bill says parties to a U.S. FTA should avoid manipulating exchange rates in order to gain unfair advantages. That language is sorely insufficient, however, said witness Larry Cohen, President of Communications Workers of America. Currency manipulation “has huge consequences in terms of jobs…where production occurs…the exporting of environmental issues to some other nation. We put it way at the top,” said Cohen. “The key is it has to be enforceable with major consequences. I think its good that its mentioned in this legislation but we believe the consequences of it have to be enforceable in the same way that the other provisions of a trade agreement would be enforced.” -- Brian Dabbs