US-India Agreement could revive Trade Deal.

                                                   Comments Due by Nov. 24, 2014

India and the United States reached an agreement on Thursday over food stockpiles, removing a major obstacle to a global trade deal that has been stalled for months.

The pact, which precedes a meeting this weekend of the Group of 20
major economies, allows India to continue its extensive food subsidy
program. In settling the dispute, India returns to the negotiating table on a
broader trade package.

That package, first agreed upon at a World Trade Organization meeting
in December in Bali, Indonesia, is the first significant global trade deal since
the creation of the W.T.O. nearly two decades ago. Aimed at facilitating the
movement of goods across international borders, the agreement focuses on
easing customs procedures, reducing red tape and upgrading border
infrastructure.

Proponents of the deal argue that it would add $1 trillion to the global
economy and create 21 million jobs. Critics, though, have noted that it
would require a substantial investment from developing countries to
upgrade their ports and borders.

But talks on the trade package reached an impasse in July when India
said it would veto the global trade deal unless a dispute over its food
security program was resolved. Since then, India has faced resistance from
other member countries for stalling a critical agreement.

Michael B. Froman, the United States trade representative, said that
President Obama and Prime Minister Narendra Modi of India had discussed
the issue during Mr. Modi’s visit to Washington in September in light of the
“mounting crisis of confidence” facing the W.T.O. after the trade deal was
derailed. “In recent days, officials of both governments worked intensively
and reached an agreement that should give new momentum to multilateral
efforts at the W.T.O.,” Mr. Froman said in a statement.

India views the stockpiling as core to its food security and its efforts to
feed millions of its impoverished citizens.

The Indian government buys food, including grain, from its farmers
and stockpiles it for a public distribution system, where it is sold at
government-run stores at subsidized prices. The food subsidy program,
which has often been criticized as ineffective, is available to 75 percent of
India’s rural population and 50 percent of the urban population, according
the National Food Security Act introduced last year.

W.T.O. rules say that subsidizing more than 10 percent of the grain
produced for food in a country distorts the market for trade. But India
wants to do away with that cap. Countries including the United States and
Pakistan have expressed fears that India was accumulating too much grain
and that it might eventually release the surplus on the world market,
lowering prices for other producers.

In Bali, W.T.O. members had agreed to a temporary solution in which
developing countries would not be penalized for breaching their subsidy
levels until a permanent solution was found by 2017. Indian officials,
though, were concerned that the issue had been sidelined and wanted talks
on the issue to progress.

India and the United States have now agreed on a “peace clause,” which
protects member countries from being legally challenged under W.T.O.
agreements until a permanent solution is found on the stockpiling issue.
The clause will keep India safe from accusations that it subsidizes too much
grain beyond 2017. A timeline for negotiations on stockpiling was also set
giving India the assurance that the issue will be dealt with promptly.
“India and the United States have resolved their differences on public
stockholding of food,” Nirmala Sitharaman, India’s commerce minister, said
on Thursday at a news conference in New Delhi. The move, she said, paves
the way for India to ratify the global trade deal.

“This breakthrough represents a significant step in efforts to get the
Bali package and the multilateral trading system back on track,” Roberto
Azevêdo, the director general of the W.T.O., said in a statement. “It will now
be important to consult with all W.T.O. members so that we can collectively
resolve the current impasse as quickly as possible. Implementation of all
aspects of the Bali package would be a major boost to the W.T.O., enhancing
our ability to deliver beneficial outcomes to all our members.”

Analysts said the agreement with the United States would improve
India’s negotiating position at the G-20 meeting and in other global talks.
“It is a move ahead both for multilateralism at the W.T.O. and for India,
which was being viewed as obstructionist,” said Rajrishi Singhal, a senior
geoeconomics fellow at Gateway House, a foreign policy research group in
Mumbai.
(NYT 11/14/14)

US Trade Policy and the Republican Win

                                                  Comments due by Nov. 17, 2014

The Republican party has won majority in the Senate, possibly providing an opening for two pending U.S. free trade agreements. The U.S. is currently engaged in negotiations on two international pacts.

Republicans have traditionally been more supportive of trade agreements because of the potential to increase economic growth and business, while Democrats have been wary that such policies could negatively impact domestic jobs, labor standards and environmental regulation. The Obama administration has negotiated two such agreements – the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership – but the president hasn’t found backing from Senate Democrats, the chamber responsible for approving trade agreements.

Sen. Mitch McConnell of Kentucky, likely the new Senate majority leader, said Wednesday in Louisville that Republicans and President Barack Obama share an agenda on trade.

“I’ve got a lot of members who believe that international trade agreements are a winner for America and the president and I discussed that right before I came over here,” McConnell said. “I think he’s interested in moving forward. I said, ‘Send us trade agreements, we’re anxious to look at them.’”

Obama also made reference to trade agreements Wednesday in his own postelection press conference, saying it was one area in which Democrats have a “real opportunity” cooperate with Republicans.

Current Senate Majority Leader Harry Reid made clear earlier this year he would not support passage of legislation that would fast track free trade agreements through the chamber after a deal has been reached by international partners. The Trade Protection Authority, which expired in 2007, means the Senate votes a simple yes or no on trade deals – no amendments or modifications are allowed.

“That’s what the world’s looking for in terms of America’s ability to negotiate seriously,” says Yukon Huang, a senior associate at the Carnegie Endowment. “They don’t want negotiate something and later on find it’s going to be renegotiated in the context of congressional discussions.”

Reid said in January, "I think everyone would be well-advised just not to push this right now” of pursuing the Trade Protection Authority.

Some took these comments to mean that passing the legislation before Tuesday’s midterm election would be disadvantageous for Democrats, but that Reid could pursue the agenda in the remaining lame duck session.

Miriam Sapiro, a former deputy U.S. trade representative and visiting fellow at the Brookings Institution, said now the election is over she hopes Reid will be open to the possibility of advancing a trade agenda by passing the Trade Protection Authority, also know as fast-track authority, and thus boosting the chances of a successful Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership.

“These can be tough votes for members because there is concern about potential job loss,” Sapiro says. “In the past, trade agreements have led to growth in net number of jobs. But sometimes there can be particular jobs that are no longer as competitive. There is a legitimate concern of how do you help retrain workers that might be effected by a trade agreement?”

The Trans-Pacific Partnership is an agreement being negotiated by the U.S. and 11 other countries in the Pacific, but notably does not include China. The U.S. and the European Commission are negotiating on the Transatlantic Trade and Investment Partnership.  

Even if the Senate doesn’t advance a trade agenda in the remainder of 2014, the pending agreements are likely to find support among the Republicans in the next session of Congress. Sen. Orrin Hatch, R-Utah, the likely new chair of the Senate Finance Committee, which is responsible for shepherding trade policy, supports the current agreements. 

The fact that the Trans-Pacific Partnership doesn’t include China is also a selling point, says Huang.

“If China were a part of the [Trans-Pacific Partnership], it would probably get much more scrutiny and concern about whether the agreement is in America’s interests. So that removes that element that’s always been very, very contentious,” Huang says.

China isn’t party to the negotiations because when they were initiated, it was unwilling to accept the standards the agreement required on issues like the role of state-run enterprises and intellectual property. Huang says China has since informally requested to join the negotiation process but “essentially was old it was too late.” Negotiations will continue at next week’s Asia-Pacific Economic Cooperation meeting in Beijing, but may not dominate the agenda because of China’s absence.  

Negotiations for the Transatlantic Trade and Investment Partnership lag behind those of its Pacific counterpart, because negotiations only began in 2013. Europe and the U.S. have a lot of work to do in terms of reaching complimentary standards that would allow a free-trade agreement to move forward, says Sapiro. Things like how to build automobiles, rules for the export of animal products, and regulations for how goods are produced differ between the continents and complicate imports.

Another potential barrier to passage of both of the agreements is U.S. agricultural policy, which heavily subsidizes farmers. These price controls, also put in place domestically in Europe and Japan, make it difficult to ensure the countries are on an even playing field in the global economy. Countries have a hard time selling cuts to subsidies domestically.

“America does have a problem in terms of protecting its farm belt and it has a cost for everybody,” Huang says. “But the degree of protection and barriers are even more significant in Japan and Europe so that if there is a mutual understanding and agreement America stands to gain in the process rather than lose.” (US News)

EU-US trade agreement

                                               Comments due by  Nov 9, 2014

2014 should be a transformational year for the transatlantic partnership. The United States and the European Union continue to slog through an underwhelming economic recovery, while conflicts from Ukraine to Iraq to North Africa have forced themselves onto to-do lists in Washington and Brussels. Much like in 1945 or 1989, the decisions made today by President Barack Obama and European leaders will have ramifications that reach far beyond the shores of the North Atlantic.

NATO commanders and strategists conferred recently in Britain to discuss ways to reestablish peace in the face of these threats. This week, European and American negotiators are meeting in Washington on a very different issue: How to jumpstart economic growth and create high-quality jobs on both sides of the Atlantic. Understanding that economic prosperity and international security are inextricably linked, the world’s two largest economic powers – the United States and the EU – are working to establish the Transatlantic Trade and Investment Partnership to set a global gold standard of free trade and regulatory cooperation. Clearly, the trade partnership is not just about economics; as geopolitical tensions across the world worsen, it is vital to show a united transatlantic front bridging security, politics and commerce.

Other nations are watching closely as the United States and the EU negotiate a comprehensive agreement designed to spur growth and send a strong message: The democratic free market economic model can still deliver. Alternative systems that emphasize a greater role of government control and little room for democracy are arising in much of the world. It is crucial that the United States and Europe regain their economic dynamism. Nothing less than our future global leadership and credibility is at stake.

Economic ties across the Atlantic already run deep. Over $2 billion in goods and services crosses the ocean each day, and over 13 million American and European workers already owe their jobs to transatlantic trade and investment. Still, the time is right to deepen our engagement. The United States and Europe will not constitute almost half of global gross domestic product forever. This may be our last and best chance to preserve the kinds of high standards in product safety, digital and data privacy and environmental and labor protections that our citizens justifiably hold dear.

Given its global ramifications, the Transatlantic Trade and Investment Partnership should not be viewed as just another trade agreement. If successfully negotiated, the partnership could provide the platform for another century of transatlantic prosperity. We must not fail. After all, if we cannot agree with our closest partners, what incentives will China, Brazil, India and others have to return to the global negotiating table?

Without question, there are major challenges to overcome, particularly in Europe. Americans and Europeans do not agree on everything; just look at the fallout from last summer’s National Security Agency revelations or differing opinions on the safety of genetically-modified foods. Government leaders have struggled to find a path forward on vital issues like financial regulatory cooperation. The two sides must find a way to partner on energy as Russia continues its aggression in Ukraine. Europe faces a serious threat to its energy supply, but thanks to the shale gas revolution, the United States can eventually become a key partner as the continent diversifies its supply

Public opinion polls show that a majority of Europeans and Americans believe in the idea of an integrated transatlantic market, but that majority erodes when asked to adapt their own rules and regulations to make it a reality. The devil, then, is in the details. It is up to negotiators to find solutions which make it easier to do business across the Atlantic, invest and hire workers without lowering standards. Congress and the European Parliament must then consider the agreement on its merits before approving it.

We should not let our relatively minor disagreements stand in the way of the most significant strategic opportunity in decades to strengthen the economic foundations of the transatlantic alliance. In today’s gridlocked political environment, Republicans and Democrats alike have indicated their willingness to support an agreement that strengthens the U.S. economy and strengthens the transatlantic partnership.

Research from the Atlantic Council, conducted in partnership with the British Embassy in Washington, and the Bertelsmann Foundation, shows that every U.S. state gains jobs and increases their exports once an ambitious agreement is implemented. In all, close to 750,000 U.S. jobs will be added due to increased trade alone. A necessary first step requires the administration and Congress to work together to secure Trade Promotion Authority, which will strengthen the U.S. government’s ability to negotiate an ambitious agreement.

One needs to look no further than the hundreds of millions of people lifted out of poverty over the course of recent decades to realize just how linked peace and prosperity have become. International trade and global economic engagement have given hope and opportunity to countless young people who otherwise might have considered dangerous religious fanaticism or insular nationalism as alternatives. In order to prevent a lost decade of economic stagnation in Europe, fight against a rising wave of political populism and reengage a generation of unemployed youth, the United States and Europe desperately need the kind of deficit-neutral stimulus that only the Transatlantic Trade and Investment Partnership can provide.

Transatlantic leaders have responded strongly together to the global threats represented by Russia and the Islamic State group. Now, leaders must invest time and energy in support of this transatlantic partnership. Only a vibrant, competitive and prosperous transatlantic economy will extend our security and global strategic influence well into the future. This will require hard work and difficult political decisions to inspire and lead an informed public debate on the merits of expanded transatlantic commerce. The Transatlantic Trade and Investment Partnership represents a rare chance to put the U.S.-European economic relationship on par with our mutual commitment to transatlantic security. Let us hope that our leaders do not miss this historic moment.