Washington Insider- Monday

Looking Forward on Trade

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Froman Says End of Year is Target for Trans-Pacific Trade Deal

U.S. Trade Representative Michael Froman says negotiators continue to hope to complete work on the Trans-Pacific Partnership (TPP) free trade agreement "as soon as we possibly can," and deliver it to Congress by the end of the year. Discussions with other TPP nations will take place in the coming weeks, and when the time is ripe, a chief negotiators' meeting and a ministers' meeting will be called to try to bring the agreement to a close, he said.

TPP negotiators have gone through all of the U.S. priority areas of export interest and have found the best way to achieve commercially meaningful market access, Froman said. "Obviously the preferred way is tariff elimination, but there are other ways to achieve that as well," he added. "There's tariff reduction or the expansion of quotas, or improving the quality and quantity of access — those are all tools that we're using to ensure that our exporters have commercially meaningful market access to foreign markets," he said.

Under fast-track rules, once the trade deal is delivered to Congress, both houses are required to vote on the measure within a limited number of days. And the agreement cannot be filibustered or amended. Thus if the 12 nations conducting the TTP talks can conclude the free trade agreement by Thanksgiving, Congress will be forced to vote on the deal before turning to the politics of the 2016 election year.


Rubio, Cruz to Oppose Confirmation of U.S. Ambassador to Cuba

Republican Sens. Marco Rubio of Florida and Ted Cruz of Texas –– both of whom are sons of Cuban immigrant fathers and both of whom are running for the GOP presidential nomination –– say they will block any effort by President Obama to gain Senate approval for a new U.S. ambassador to Cuba. Obama announced July 1 that the United States and Cuba had agreed to reopen embassies in each other's capitals.

Cruz says he would block any Cuba ambassadorial nominee and work to stop any new funds for embassy construction in Havana "unless and until the president can demonstrate that he has made some progress in alleviating the misery of our friends, the people of Cuba."

Rubio, chairman of the Foreign Relations Committee's Democracy and Human Rights Subcommittee, said he would oppose the confirmation of a U.S. ambassador to Cuba until progress is made on human rights, repatriation of U.S. terrorists and fugitives harbored in Cuba, addressing certified uncompensated property claims and removing restrictions on the movements of U.S. diplomats in Cuba.

Opposition to normalizing relations with Cuba is expected to figure prominently in both senators' presidential campaigns over the coming months. However, with the public beginning to warm to the idea of ending the more-than-50-year economic embargo on the communist island nation, it remains to be seen how valuable continued opposition may be in the coming election.


Washington Insider: Looking Forward on Trade

It has not always been easy to tell who was on which side of the recent national trade debate among the big urban dailies, since they often simply covered the "horse race," even citing simple assertions as gospel much of the time. Several of the left-of-center publications pushed things quite a bit in order to raise questions about whether recent and proposed deals have favored corporations too much.

So, it is interesting now that the dust has cleared a little to note that the Washington Post is reflecting approvingly on the outcome and prospects of trade in the future.

WaPo thinks, for example, that congressional passage of trade promotion authority will empower the president's negotiators to cut the most advantageous trade agreements possible with 11 other countries in the Pacific Rim because all parties now know that the final deal cannot be undone by amendments or a filibuster in Congress. And, says the Post, that fact is worth celebrating.

Then, the paper digs a little into the recent fight. It says that the president "absorbed a political beating from core constituencies of his Democratic Party, which accused him, unjustifiably, of selling out American workers in the interest of multinational corporate profits." This is important, WaPo says, because his willingness to stand up to this criticism "fortifies hopes that the Great Recession of 2008 will not lead to a global wave of protectionism, like the one that accompanied, and exacerbated, the Great Depression."

In addition, the Post thinks the president's performance sets an example for leaders of the other countries in the proposed Trans-Pacific Partnership, especially Prime Minister Shinzo Abe of Japan, who has already taken political risks just to join the TPP talks and will have to take more to wrap-up a deal.

The Post thinks that "pressing Japan to open its chronically closed markets is just one of the key U.S. TPP goals that the passage of trade promotion authority will facilitate. Others include ensuring that the pact's proposed investor dispute settlement system adequately protects U.S. regulations from unjustifiable litigation, that the intellectual property rights of American drug makers are protected with due consideration for the health needs of the poorer TPP countries and that the pact truly promotes more openness in Vietnam, both political and commercial."

If those considerations can be dealt with, then the United States should reap benefits both economic and strategic; the TPP promises to knit the United States and East Asia closer together, on pro-American terms, the newspaper says.

Overall, the Post does not completely swoon over the president's accomplishments — at least not without a qualm or two over giving him as much authority as TPA does. At the same time, it notes that the opponents of trade promotion authority wildly exaggerated their concerns. At the end, it argues that if the president's team does indeed fail at the bargaining table, despite its new powers, then Congress will have an opportunity to vote the deal down. For its part, however, the Post "hopes and expects that the administration will succeed."

It is important to remember that agriculture has an enormous stake in the ongoing trade negotiations in both the Pacific and in Europe, and that debates that mainly focus on politics rather than economics can mean huge dangers to important potential U.S. markets.

An important hurdle has been passed with the vote to grant the president TPA. The next steps, including the completion of negotiations with the 11 current trading partners and, possibly with China — as well as some even heavier lifting with regard to Europe — will be increasingly important and should be watched carefully as they unfold, Washington Insider believes.

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