USTR Testifies at Senate Hearing on President's 2010 Trade Policy Agenda

See today's ITT, 10030520, for BP summary of the Administration's 2010 Trade Agenda.

Highlights of Issues Raised by Committee

The following are highlights of the issues raised by Committee members regarding the Administration's 2010 trade agenda:

More details, benchmarks needed on National Export Initiative. Chairman Baucus (D) endorsed the Administration's goal of doubling exports within the next five years, but expressed serious concern about its failure to provide detailed plans and benchmarks for achieving that goal. The USTR was requested to appear before the Committee twice a year to report on the Administration's progress in meeting its goal.

Ranking Member Grassley (R) expressed concern that the Administration has given the relevant executive agencies six months to submit plans on how they will spend export promotion money, given that the President has already requested this money in his FY 2011 budget. He warned about the potential for waste in such a top-down spending mandate.

Outstanding FTAs should be sent to Congress. Many Committee members urged the Administration to send Congress the three outstanding free trade agreements (Colombia, Panama, and South Korea) as soon as possible. The USTR stated that it wants to send agreements that are going to be passed by Congress.

Colombia. The Administration has received comments on labor issues related to the pending Colombia FTA and that the review of those comments is almost completed. The USTR stated that within the next few months, the U.S. will provide Colombia with guidance on changes it needs to make to move the FTA process forward.

(See ITT's Online Archives or 07/29/09 news, 09072920, for BP summary of the USTR's request for comments on labor issued for the Colombia FTA.)

Panama. Panama is making progress on addressing the problem issue - tax information exchange - in its pending FTA.

(See today's ITT, 10030520, for details on the outstanding issues for the pending Korea FTA.)

Establishment of ROZ program still a priority. Two Committee members pushed the Administration to explain why Reconstruction Opportunity Zones for Pakistan and Afghanistan are not part of the Administration's 2010 trade agenda. The USTR expressed support for the ROZ program and noted that it is still an Administration priority for 2010.

(On June 11, 2009, the House passed a bill (H.R. 1886) to create ROZs along the Pakistan-Afghanistan border. The Senate has not yet acted on H.R. 1886 or its own ROZ bill (S. 496). See ITT's Online Archives or 08/06/09 news, 09080615, for most recent BP summary on ROZs.)

No Administration position on Haiti legislation. During the hearing, the sponsors of S. 2978, the Renewing Hope for Haiti Act, urged the Administration to support the legislation as a way to rebuild the Haitian economy. H.R. 2978 would provide short-term relief to Haiti's apparel sector.

According to the USTR, the Administration hasn't yet taken a position on S. 2978. The USTR stated that the Administration wants to ensure that Haiti aid efforts do not allow other countries, such as China, to gain unfair access to the U.S. market. He noted the announcement of the Administration's new "Plus One for Haiti" program to encourage U.S. brands and retailers to work toward sourcing 1% of their total apparel production from Haiti.

(See ITT's Online Archives or 02/04/10 news, 10020425, for BP summary of S. 2978. See ITT's Online Archives or 02/17/10 news, 10021715, for BP summary of the USTR's announcement of the Haiti Plus One program.)

U.S.-China trade concerns include IPR, drywall, VAT, etc. Several Senators raised issues concerning the U.S. trade relationship with China, including issues related to intellectual property right protection, drywall imports from China, China's value added tax (VAT), China's industrial policies, China's restrictions on U.S. poultry, etc.

The USTR stated that the Administration is taking a holistic approach to such issues and the issues are being addressed in U.S.-China Joint Commission on Commerce and Trade (JCCT) and the Strategic and Economic Dialogue (SED) meetings. The next JCCT meeting is in Beijing in May 2010.

Other issues of concern. Other issues raised in the hearing include (partial list):

Cuba. The Administration is willing to move beyond the 50-year old embargo and has recently loosened restraints on certain travel to Cuba. The USTR notes that a decision on changes to the trade embargo against Cuba rests within the State Department's broader Cuba strategy.

BITs. The Administration has been conducting an exhaustive review of Bilateral Investment Treaty policies (including labor issues) which the USTR hopes is close to being completed, but that no official decision has been made.

Export funding. Senator Baucus noted that the Administration's FY 2010 budget provides funding for the Commerce and Agriculture Department export promotion activities, but does not include USTR funding for these efforts.

Jurisdiction over catfish. The USTR responded to concerns about the Administration's position on inspection jurisdiction for catfish by stating that it is working on the issue and want to ensure that any position adopted does not give other countries a basis for retaliation against U.S. exports.

Senate Finance Webcast of hearing available at http://finance.senate.gov/sitepages/hearings.htm.

Chairman Baucus' opening statement available at http://finance.senate.gov/hearings/statements/030310mb.pdf.

Ranking Member Grassley's opening statement available at http://finance.senate.gov/hearings/statements/030310mb.pdf.

USTR Kirk's written hearing statement available at http://finance.senate.gov/hearings/testimony/2010test/030310rktest.pdf.