Amb Froman appeared in public hearings before the U.S. Senate Finance Committee and House of Representatives Ways & Means Committee on Jan 27 to discuss the administration’s trade policy. His opening statement at the Senate hearing focused on the Trans-Pacific Partnership (TPP) and a proposal for renewing trade promotion authority (TPA), which would grant broad authority to negotiate trade agreements with just a “yes or no” vote by Congress. He said, “he previous TPA legislation was passed over a decade ago and we agree with the Congressional voices that an update is necessary. The global economy has changed significantly since 2002 and Congressional views on labor, environment, innovation, and access to medicines need to be memorialized while the rise of the digital economy and the increasing role of SOEs need to be addressed. … these issues should be reflected in a new TPA bill.”
Committee Chairman Hatch emphasized the importance of TPA, as well as IP, digital trade, SOEs, and real access to markets for U.S. exporters. Ranking Member Wyden highlighted implementation and enforcement of commitments, a free and open internet to support SMEs access to global markets, and transparency. Two House Democratic leaders proposed “a path forward” and “getting to yes.” However, there are a number of opponents, especially in the Democratic Party
Chairman Orrin Hatch’s (R-Utah) opening statement highlighted the importance of passing the TPA. He said, “the time for TPA is now. TPA is how Congress tells the administration and our negotiating partners what a trade agreement must contain to be successfully enacted into law. And, TPA empowers our negotiators to get the best deal possible for American workers.” He did not mention, as Senator Ron Wyden has in his statement introducing the “Congressional Oversight of Trade Negotiations Act, that Article I, Section 8 of U.S. Constitution gives Congress, not the Executive Branch, the power to ” … regulate Commerce with foreign nations … .” Senator Hatch said in a separate speech that, “hile there may be some changes, I think the fundamentals we will be discussing today will be substantially the same as in the BiPartisan Congressional Trade Priorities Act of 2014.”
In his statement, Senator Hatch emphasized the importance of global markets to U.S. economic growth and employment: “Today 95 percent of the world’s consumers live outside the United States. These potential customers account for 92 percent of global economic growth and 80 percent of the world’s purchasing power. To maintain a healthy economy, we need the opportunity to sell American products in those markets.”
Senator Hatch said, the TPP ” … must achieve a very high standard for the protection of intellectual property, including twelve years of data protection for biologics, and strong copyright and trademark protections. The intellectual property provisions of TPP must also effectively address the theft of trade secrets and ensure effective implementation and enforcement of IP obligations. Provisions to enhance digital trade and address state-owned enterprises are also critical, as is real market access for U.S. exports.”
Ranking Member Ron Wyden’s (D-Oregon) opening statement emphasized the importance of (1) implementation and enforcement of commitments by TPP member, (2) keeping a free and open internet, “the shipping lane of the 21st century,” (3) transparency in keeping Congress informed about the details of the TPP. He also mentioned (4) SOEs reform, (5) labor and environmental issues, as well as (6) innovation and access to medicines.
In the House of Representatives, one of the most powerful Democrats on trade offered a ray of hope, seeking to draw attention away from TPA, a controversial proposal that would allow approval of the TPP with little congressional oversight.
And the leader of the House Democrats said she would like to find a way to approve TPA while meeting the concerns of many Democrats that major new free-trade deals harm U.S. workers.
Rep. Sander Levin (D-Mich.), ranking member of the Committee on Ways and Means, with jurisdiction over trade agreement legislation, presented an eight-page list of proposals for the TPP talks that include rules on currency and worker rights as well as demands for Japan to open its market to U.S. automobiles and farm commodities. Levin emphasized the importance of the Trans-Pacific Partnership. “We need to get it right,” the Michigan Democrat said. “And to get it right, we need to know what’s in it.”
Levin said he and his Republican counterpart, Ways and Means Chairman Paul D. Ryan of Wisconsin, told the administration it needs to “shape up on transparency. They have to join hands with us.”
But he did not criticize TPA. Instead, he said, “I see it differently. I think the focus should be on TPP. Once we get TPP in good shape in terms of its outcome, then we talk about the next step.” Levin’s list of “outstanding issues” did not address Internet freedom, although he said that, “data flow issues are a concern to us.” Levin said he would circulate his list of issues among Republicans and Democrats, to “try to get all of us to keep our eye on the ball, which is a TPP that has outcomes that will bring about strong bipartisan support.”
Specifically, Levin mentioned provisions to increase agricultural exports to Pacific countries, access to Japan’s auto market, the inclusion of currency manipulation safeguards in the trade deal, and enforceable worker and environmental standards — something which Levin said was the biggest problem with the North American Free Trade Agreement.
The leader of the Democrats in the House, Nancy Pelosi (D-CA), said the TPP contents worry many Democrats, who want safeguards against currency manipulation, as well as high standards for labor and environmental protections, and that the administration’s trade negotiators should protect U.S. workers. “I hope to see a path to yes,” but the burden is on the Administration to demonstrate that this is good for American workers, she said.
While the leaders of the Democratic Party, both in the Senate and the House of Representatives are making an effort to cooperate, some other Democrats, are strongly opposed to trade agreements in general, and the TPP in particular. For example, Senator Bernie Sanders (I-Vermont), recently wrote a letter to USTR Froman complaining that Congress has “little or no knowledge as to what is in the TPP.”
Testimony by Ambassador Michael Froman before the U.S. Senate Finance Committee , Jan 27, 2015 (pdf file)
USTR Michael Froman Testimony before the U.S. Senate Finance Committee, Jan 27, 2015 (C-SPAN Video)
Generally speaking, Republican lawmakers vote in favor of trade agreements, while Democratic lawmakers usually vote against.
For example, when the U.S. Congress approved Trade Promotion Authority in 2002, the House of Representatives vote was about 215 For, 212 Opposed. By party: Republicans 190 For – 27 Opposed; Democrats 25 For – 183 Opposed.
And when the U.S. Congress voted to ratify Vietnam’s accession agreement to the WTO and provide “Permanent Normal Trade Relations,” the vote failed to pass on the first effort on Nov 13, 2006, and it was not until Dec 8, 2006 that it was passed on the second effort. On both votes, a majority of Democrats voted against, while a majority of Republicans voted for.