cqr u.s. trade policy - cato institute · 2016. 10. 20. · the general agreement on tariffs and...

U.S. Trade PolicyWill new regional trade agreements create American jobs?

After more than four years without pushing for new

free-trade agreements, President Obama has decided

the time is ripe for America to again push for a

more liberalized international trading system. The

United States is negotiating two massive regional free-trade pacts

— one with 11 Asian and Pacific Rim countries and the other

with the 28-member European Union. Together, the 40 countries

comprise the lion’s share of the world economy. meanwhile, the

world Trade Organization is languishing on the sidelines as negoti-

ations over a slew of new regional agreements overshadow the

wTO’s decade-long effort to broker a single global trade agree-

ment. Hopes for the regional pacts have reignited debates on

whether free trade creates or costs U.S. jobs and helps or hurts

human rights. Looming over the debates is booming China, whose

conglomerates — most owned and subsidized by the state —

have conquered markets in both developing and developed nations.

A cargo container is transferred from a ship to a truck inMiami on Aug. 8, 2013. The Obama administration is

negotiating two big trade pacts it hopes will create U.S. jobs by expanding exports.

CQ Researcher • Sept. 13, 2013 • www.cqresearcher.comVolume 23, Number 32 • Pages 765-788

RECIPIENT Of SOCIETY Of PROfESSIONAL JOURNALISTS AwARD fOREXCELLENCE � AmERICAN BAR ASSOCIATION SILvER GAvEL AwARD

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THE ISSUES ....................767

BACKGROUND ................773

CHRONOLOGY ................775

CURRENT SITUATION ........780

AT ISSUE........................781

OUTLOOK ......................783

BIBLIOGRAPHY ................786

THE NEXT STEP ..............787

THISREPORT

Published by CQ Press, an Imprint of SAGE Publications, Inc. www.cqresearcher.com

766 CQ Researcher

THE ISSUES

767 • will expanding free tradecreate jobs for Americans?• Can U.S. firms competewith state-owned companies?• Does expanding free tradehelp promote human rightsand democracy?

BACKGROUND

773 Evolving Trade Policyfree trade replaced mercan-tilism in the 1800s.

774 Eliminating TariffsThe General Agreement onTariffs and Trade helped toreduce global tariffs for near-ly 50 years.

777 Globalization BacklashOpposition to free tradegrew as job outsourcing in-creased.

CURRENT SITUATION

780 Declining DeficitThe U.S. trade deficit fell inJune to its lowest level sincelate 2009.

780 Trade TalksNegotiations will focus onagriculture, regulation andathletic shoes.

782 Congressional ActionGetting two trade pactsthrough Congress may be atough sell.

OUTLOOK

783 Change in ChinaThe Chinese will realizeeventually that state-sponsored enterprises stifle innovation, says anObama trade official.

SIDEBARS AND GRAPHICS

768 Proposed Trade PactsCover 40 CountriesTwo proposed agreementsinclude countries in Asia andEurope.

769 Most Americans Back Foreign TradeNearly 60 percent say foreigntrade fosters U.S. job growth.

771 Top U.S. Trading Partners:Canada, Mexico, ChinaU.S. exports to Pacific tradepact countries were worthfive times more than exportsto China.

772 U.S.-European Trade PactWould Be World’s LargestTreaty would affect significantslice of the global economy.

775 ChronologyKey events since 1789.

776 Tiny Nanoparticles HaveBig Trade ImplicationsU.S. and EU differ on labelingnanoproducts.

778 Will the World Trade Organization Survive?Regional trade deals imperilthe 159-nation wTO.

781 At Issue:Have regional and bilateraltrade agreements usurped thewTO?

FOR FURTHER RESEARCH

785 For More InformationOrganizations to contact.

786 BibliographySelected sources used.

787 The Next StepAdditional articles.

787 Citing CQ ResearcherSample bibliography formats.

U.S. TRADE POLICY

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U.S. Trade Policy

THE ISSUESf or decades, the Euro-pean Union (EU)banned imports ofAmerican hormone-treatedbeef because of concernabout the safety of growthhormones to humans.

The U.S. government com-plained to the world TradeOrganization (wTO) that theban violated free-trade rulesbecause the EU could notprove the hormones wereharmful to consumers. ThewTO agreed.

To settle the dispute, theEU said it would continueto ban imports of hormone-treated beef, but agreed toallow up to 45,000 metrictons of hormone-free U.S.beef to enter its 28 mem-ber countries duty-free eachyear — a special exceptionavailable only to Americanbeef exporters. The UnitedStates then lifted retaliatorytariffs it had imposed on EUproducts.

Since the compromise wasreached, U.S. shipments of non-hormone-treated beef to theEU have soared to $200 mil-lion this year — three timeswhat they were before the deal wasstruck in 2009. The agreement, origi-nally scheduled to expire in August,was extended last month for twomore years. 1

“The duty-free quota represents acompromise that allows U.S. beef toenter the market,” says Joe Schuele,director of communications at theDenver-based U.S. meat Export fed-eration, but “we still maintain that thehormone ban has no scientific basis.”

Such agreements show “what wecan accomplish with practical, problem-

solving approaches to trade barriers,”U.S. Trade Representative (USTR) michaelfroman said. 2

Currently, American and Europeantrade negotiators are focusing on amuch bigger trade deal. On July 8, theylaunched talks for a comprehensive bi-lateral free-trade agreement, called theTransatlantic Trade and Investment Part-nership (TTIP), between the UnitedStates and the 28-member EuropeanUnion. If they succeed, it would be thebiggest bilateral free-trade pact ever, af-fecting 40 percent of the global econ-

omy. It would also breathenew life into the U.S.-Europerelationship, which has flaggedas both sides have nervouslyeyed the faster-growingeconomies in Asia. 3

meanwhile, the United Statessince 2009 has been negotiat-ing the Trans-Pacific Partner-ship (TPP), a multilateral tradepact among the United Statesand 11 Asian and Pacific na-tions. TPP is scheduled to becompleted by the end of thisyear. (The other participantsare Australia, Brunei, Chile,Canada, Japan, malaysia, mexi-co, New Zealand, Peru, Singa-pore and vietnam.)

President Obama has twoprimary motives in advancingsuch agreements: to create U.S.jobs by expanding exports andto steer global trade rules inways favorable to the UnitedStates and other free-marketeconomies. with the U.S. econ-omy finally getting some mo-mentum after the 2007-09 fi-nancial crisis, Obama believesthe time is ripe for furthermarket openings.

John murphy, vice presi-dent for international affairsat the U.S. Chamber of Com-merce, says 38 million Amer-ican jobs depend on trade

and that “the potential to create morejobs through trade is huge.”

The two sweeping trade pacts couldalso help the United States competewith China, whose state-sponsoredcapitalism has made it a global eco-nomic superpower. 4 The Chinese gov-ernment’s propensity to provide cheapgovernment loans for exporters, subsi-dies to develop new technologies anda low currency exchange rate have pri-vate sector-dominated countries suchas the United States crying foul, alleg-ing China has created an unlevel in-

BY BRIAN BEARY

Getty Im

ages/B

loom

berg/Jun

ko Kimura

Farmers in Tokyo protest Japan’s participation innegotiations over the U.S.-proposed Trans-Pacific

Partnership on Oct. 26, 2011. Japanese farmers say thepact would unfairly benefit U.S. exporters and allow

exports of genetically modified foods. President Obamaalso is seeking passage of a free-trade agreement withthe 28-member European Union. If passed, it would be

the biggest bilateral trade pact ever, affecting 40 percent of the global economy.

768 CQ Researcher

ternational playing field. 5 As a result,China’s state-owned enterprises distort in-ternational trade by giving unfair advan-tage to the subsidized firms, critics say.

Amid these developments, the 18-year-old world Trade Organization isstruggling to remain relevant. The wTOwas created in 1995 as the primaryforum for liberalizing trade worldwideby reducing barriers to free trade andarbitrating trade disputes. But thewTO has taken a battering since itsflagship project — a new round of

trade negotiations launched in Doha,Qatar, in 2001 — died a slow andpainful death. (See sidebar, p. 778.)

As the wTO floundered, countrieshave rushed to conclude bilateral andregional trade deals — more than 250since the wTO was created. 6 Thisyear alone, accords have been com-pleted between Canada and Jordan,Chile and malaysia and the EU andCentral America. 7

This new “competitive liberalism” ap-proach to trade — in which countries

compete with one another to concludethe most advantageous trade deals —makes sense in today’s economy, whereproducts are assembled in multiple coun-tries, according to Ari van Assche, aprofessor of international business atHEC montréal, a major Canadian busi-ness school. The new trade deals tackleissues such as removing restrictions onforeign investment, harmonizing regula-tions and scrapping tariffs on importedintermediate goods (those midway alongthe production process). 8

U.S. TRADE POLICY

Proposed Trade Pacts Cover 40 CountriesThe United States and the 28-member European Union began talks on July 8 on a comprehensive free-trade agreement, the Transatlantic Trade and Investment Partnership (TTIP). If successful, the treaty would be the largest bilateral free-trade pact in the world, affecting 40 percent of the global economy. Meanwhile, the United States and 11 Asian and Pacific Rim countries have been negotiating since 2009 on a multilateral trade pact known as the Trans-Pacific Partnership (TPP). The Obama administration says the two treaties would create American jobs and help the United States compete with China, whose state-sponsored capitalism has made it a global economic superpower.

Source: Office of U.S. Trade Representative

Countries Participating in Two Major Trade Pacts

C A N A D A

M E X I C O

P E R U

CHILE

SWEDEN

FINLAND

DENMARK

UNITED KINGDOM

IRELAND

FRANCELUXEMBOURG

GERMANY

POLAND

SPAINPORTUGAL

CZECH REP.

AUSTRIA

ITALY

SLOVEN

IA

CROATIA

SLOVAKIAHUNGARYROMANIA

GREECE

CYPRUS

VIETNAM

MALAYSIA

BRUNEI

A U S T R A L I A

NEWZEALAND

J A P A N

HAWAIIAN ISLANDS

A R C T I C O C E A N

P A C I F I C

O C E A N

N O R T H

A T L A N T I C

O C E A N

I N D I A N

O C E A N

U N I T E D S TAT E S O F A M E R I C A

A R C T I C O C E A N A R C T I C O C E A N

S O U T H

A T L A N T I C

O C E A N

SINGAPORE

ESTONIA

LATVIA

LITHUANIA

NETHERLANDS

BELGIUM

BULGARIA

P A C I F I C

O C E A N

ALASKA

TPP countries

TTIP countries

Included in both trade pacts


Carla Hills, who served as U.S.trade representative for PresidentGeorge H. w. Bush from 1989-1993,charges that Obama did not embracethis new reality as enthusiastically ashe should have in his first term. “we[the United States] were sitting on thesidelines for three years,” she said.“Now we are playing catch-up, andwe are choking on the issues.” 9

Obama initially was reluctant to ne-gotiate new trade agreements, in partbecause of rising resentment towardsuch treaties that began in the 1990s.many Americans blamed the 1994 NorthAmerican free Trade Agreement(NAfTA), which eliminated trade bar-riers among the U.S., Canada andmexico, for the outsourcing of manu-facturing jobs from the United Statesto lower-wage mexico. That trade agree-ment, negotiated behind closed doorsas are most trade deals, caused a surgeof public anger in the United States,especially after the public learned moreabout its contents when Congress de-bated whether to ratify it or not.

A recent poll suggests Americans aremore receptive to the European tradetalks, with 58 percent supporting increasedtrade with the EU. Experts attribute thatattitude to the fact that both the U.S. andEU have similar wage levels and work-er protection rules, making it less likelythe agreement would trigger outsourcingin either direction. 10 Public sentimentabout the trans-Pacific treaty remains large-ly untested. 11

In addition, experts say, the open-ness with which the two treaties arebeing negotiated could help to buildpublic support. But that support couldplummet if the new deals are seen asbeing cooked up secretly, NAfTA-style. Consequently, the administrationthrew open at least some of the doorsto the talks, inviting more than 100stakeholders, journalists and negotia-tors to a three-hour networking eventin July 2013 at the white House Con-ference Center during the openinground of the trans-Atlantic talks.

Image aside, a big question stillhaunts the talks: will the trade dealscreate jobs for Americans? In the 1950sand ’60s, the U.S. economy clearlybenefitted from free trade. But sincethen it seems that other countries —Japan in the 1970s and ’80s, and Chinain the 1990s and 2000s — have bene-fitted more.

Supporters of the new agreementsclaim the pendulum is swinging backin favor of the United States. After adecade in decline, U.S. manufacturingis slowly reviving, with 500,000 jobsadded in the past three years, com-pared with 5 million jobs lost between2000 and 2009. 12

On the downside, the U.S. tradedeficit — created when imports ex-ceed exports, usually resulting in lostdomestic manufacturing jobs — has

mushroomed since the 1990s, reaching$535 billion in 2012. 13

But that figure can be misleading,noted marc Levinson, manager for trans-portation and industry analysis at thenonpartisan Congressional ResearchService. 14 Trade statistics are “in-creasingly problematic,” he said, be-cause they take insufficient account ofthe globalized nature of manufactur-ing. for example, if someone importsa computer, it counts 100 percent asan import even if it contains electronicchips patented in the United States,deriving part of its value from insidethe country, he explained.

Any U.S. trade deal will have to beapproved by Congress, where attitudesabout trade are mixed. Rep. Ted Poe,R-Texas, said the expansion of exportsexpected under the trans-Pacific trade

Source: “Americans Shift to More Positive View of Foreign Trade,” Gallup, Feb. 28, 2013, www.gallup.com/poll/160748/americans-shift-positive-view-foreign-trade.aspx

Most Americans Back Foreign Trade

Nearly 60 percent of Americans think foreign trade will help the economy. In 2011 and 2012, as the economy struggled to recover from the recent steep recession, the public was evenly divided on trade. Views on trade have largely tracked the status of the U.S. economy over the past decade, with Americans more likely to see it as an economic opportunity from the robust mid-1990s through the early 2000s and as a threat during the worst years of the recession.

“Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports

or a threat to the economy from foreign imports?”

Opportunity for economic growthThreat to the economyBothNeither

0

10

20

30

40

50

60%

Opportunity for economic growth

2013Feb.7-10

2012Feb.2-5

2011Feb.2-5

2009Feb.9-12

2008Feb.11-14

2006Feb.6-9

2005Dec.9-11

2005June24-26

2003Nov.14-16

2002Feb.4-6

2001Feb.1-4

2000May

18-21

2000Jan.

13-16

1994Nov.28-29

1992Sept.11-15

(Percentage of Americans)

770 CQ Researcher

deal would be good news back homein Houston, a major export hub.

Rep. Brad Sherman, D-Calif., strucka more critical note, however. “wehave been traveling this road for 20years, and we [still] have the largesttrade deficit in the world,” he said,adding that “the definition of insanityis doing the same thing over and overagain and expecting another result.”

As lawmakers, trade negotiators,labor leaders and business executivesdiscuss the pending trade agreements,here are some of the key questionsbeing debated:

Will expanding free trade createjobs for Americans?

Experts generally agree free-tradeagreements expand trade, but starkdisagreement persists about whetherthat translates into more jobs at home.

Both the European and Pacific tradeagreements will find “new markets forgrowth” of American exports, creatingjobs in the United States, says Joshuameltzer, a fellow in global economyand development at the Brookings In-stitution, a washington think tank. Hebelieves the trans-Pacific trade dealwould have greater potential than theEuropean pact to create jobs here be-cause the Asia-Pacific markets arenewer, largely unexploited territoriesfor American companies.

Carol Guthrie, spokeswoman at theOffice of the U.S. Trade Representa-tive, estimates that each $1 billion inadditional exports supports more than5,000 jobs. The trans-Atlantic trade pact(TTIP) “will serve to expand our ex-ports to the EU by further loweringtariffs and removing red tape andbringing our regulatory environmentscloser together,” she says. The Pacifictreaty, she says, will “increase U.S. in-volvement in supply chains in the com-petitive markets of the Asia-Pacific, low-ering tariffs and creating rules to makesure that American firms and workersare not undercut or disadvantaged whendoing business in the region.”

The EU’s trade spokesman, JohnClancy, says, “It is evident that the TTIPwill create jobs.” He cited a study show-ing that €119 billion ($157 billion) isexpected to be added to the EU econ-omy just by eliminating tariff and reg-ulatory barriers. “we are convinced theU.S.-EU trade pact will be a win-windeal in terms of jobs.” 15

Indeed, there seems to be consen-sus among experts that additional jobscreated by the trans-Atlantic pact wouldbenefit both economies, because theyboth have similar wage levels and rulesfor protecting workers and investors.

But Lori wallach, director of Glob-al Trade watch, a program of thewashington-based consumer advocacygroup Public Citizen, thinks neitheragreement will help the U.S. job mar-ket. “we are replicating a model ofthe last 20 years that has led to ourtrade deficit exploding and has costus 5 million manufacturing jobs,” shesays. “That’s 25 percent of total U.S.manufacturing jobs.”

Citing the NAfTA experience, whichshe believes led to a hemorrhaging ofU.S. manufacturing jobs, she says today’sfree-trade agreements invariably bol-ster the rights of investors, who oftenare given incentives to relocate jobsabroad. In NAfTA’s case, those jobswent to Canada and mexico, she says.The agreements also will cost service-sector jobs, she says, through clausesthat guarantee the free movement ofdata, which effectively bar countriesfrom requiring that computer serversbe located in their home territories.That leads to offshoring of engineer-ing, actuarial and computer program-ming services, she says.

with average vietnamese wages, forexample, only about a third of Chinesepay levels, the offshoring problemwill be especially relevant to the trans-Pacific agreement, wallach says. Shesays trade accords should stop estab-lishing dispute panels presided over byprivate-sector trade lawyers because suchpanels invariably side with investors, to

the detriment of working conditions andhuman rights.

California Rep. Sherman said thegrowing trade deficit has displaced2.8 million American jobs in recentyears. In 2012, nearly two decadesafter NAfTA became effective, the Unit-ed States ran a $31 billion goods tradedeficit with Canada and a $62 billiongoods trade deficit with mexico, com-pared to a deficit before NAfTA of$10.8 billion with Canada and a sur-plus of $1.7 billion with mexico. 16

And just a year after a U.S.-SouthKorea free-trade agreement entered intoforce, the United States experiencedits highest-ever trade deficit with SouthKorea — $2.5 billion in may 2013. 17

However, Ed Gerwin, a free-tradeadvocate from Third way, a conserv-ative washington think tank, pointedout that oil imports, which compriseabout a third of all imports, are themain contributor to the U.S. trade deficit.The United States actually runs a tradesurplus in manufactured and agricul-tural goods, Gerwin noted. 18

But Celeste Drake, a trade and glob-alization specialist at the AfL-CIO, theumbrella federation representing a largesector of U.S. organized labor, saidNAfTA has cost the United States700,000 jobs, China’s accession in 2001to the wTO cost 2.7 million U.S. jobs,and the U.S.-Korea deal 40,000 jobs,so far. 19

“we are concerned that TPP [theTrans-Pacific Partnership] could repeatthe mistakes made with NAfTA,”Drake said, citing for example, Japan’srefusal to open its car sector to for-eign competition. To prevent negativeimpacts, Drake recommends insertingprovisions such as retaining “buyAmerican” government procurement reg-ulations, opening markets only on areciprocal basis and preventing cur-rency manipulation.

“The U.S. cannot afford another tradeagreement that hollows out our man-ufacturing base and adds to our sub-stantial trade deficit,” she concluded.

U.S. TRADE POLICY


Can U.S. firms compete withstate-owned companies?

In recent years Chinese state-ownedbanks have provided extremely gener-ous loans to huge state-owned compa-nies on terms that no commercial bankwould grant. This oft-criticized practicegives Chinese companies an unfair ad-vantage when they compete with pri-vate foreign companies in internationaltrade, say competing companies andtheir governments.

And that is not a small problem:In China, the world’s second-biggesteconomy after the United States, thegovernment owns 37 of the largest 40companies. Such enterprises not onlybenefit from cheap loans but oftenenjoy monopolies in their home mar-kets, making them extremely hard forprivate companies to compete againstin the global marketplace.

The wTO has been ill-equipped toreferee disputes between countries onthis issue because its rules were craftedin the 1990s, before China’s meteoricrise. (See “At Issue,” p. 781.)

“It’s a real problem,” U.S. TradeRepresentative froman has said. whileevery country has some companiesthat are state owned or operated insome form, he said, the challenge isto prevent them from having a dis-torting impact on the market whenthey compete with private companiesin selling their products or services inthe international market. 20

The Chamber of Commerce’s mur-phy calls the rise of state capitalismand state-owned enterprises “increas-ingly worrisome” and insists it be ad-dressed in the trans-Pacific trade pact.

Robert Zoellick, former U.S. traderepresentative (2001-2005) and presi-dent of the world Bank (2007-2012),has suggested that the trans-Pacific pactbe used as leverage on this issue,given that China is not part of thepact yet but might like to join. 21

However, some believe complaintsabout state-owned companies killingoff private competition are overstated.

michael Blanding, a Boston-basedinvestigative journalist and author, notedthat the number of companies con-trolled or owned by governments isdeclining — in China, as well as inRussia, Australia, Canada, france andJapan. It is becoming more common,he wrote, for governments to keep aminority share in companies. 22

But Heriberto Araújo and Juan PabloCardenal, China-based journalists whohave written a book on the subject, con-tend that China’s command-and-controlindustrial policy enabled it in 2012 toovertake the United States and becomethe world’s largest trading nation (asmeasured by the sum of exports andimports). 23 The Chinese government alsonow controls oil and gas pipelines fromTurkmenistan to China and from South

Sudan to the Red Sea. The government-owned Chinese firm Cosco manages themain cargo terminal in Greece’s largestport, Piraeus; and a Chinese sovereignwealth fund, C.I.C., has a 10 percentstake in London’s Heathrow Airport. 24

Beijing’s reach even extends to theArctic. Greenland has awarded a Chinesefirm the contract to exploit its enormousmining resources — using Chinese work-ers who will earn less than the mini-mum wage — because no one elsecould match China’s investment offer. 25

Change may be on the horizon.Brookings’ meltzer believes China is inthe process of curbing its subsidizationof domestic industry. “China has a mixedeconomic model,” he says, meaning thatit is partly free-market oriented and part-ly state-controlled. “And Chinese officials

Top U.S. Trading Partners: Canada, Mexico, China

Canada and Mexico spent more buying U.S. products in 2012 than any other countries, but the United States spent more importing goods from China and Canada than from anywhere else. The value of U.S. goods sold to the 11 countries negotiating the Trans-Pacific Partner-ship (TPP) trade agreement with the United States was more than five times the amount the United States sold to China in 2012.

* Does not include trade in services or investments.

** Reflects totals for the 11 countries negotiating with the United States to form the Trans-Pacific Partnership trade pact. The countriesare Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Source: “Top U.S. Trade Partners,” Foreign Trade Division, Census Bureau, U.S. Department of Commerce, www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_003364.pdf

Top U.S. Trade Partners, by Total Value of Goods,* 2012(in $ billions)

U.S. Exportsto:

U.S. Importsfrom:

Can

ada

Mex

ico

Chi

na

Japa

n

U.K

.

EU-2

8TP

P-11

**

Chi

na

Can

ada

Mex

ico

Japa

nG

erm

any

EU-2

8TP

P-11

**

$292.5$215.9

$110.5$70 $54.8

$265.7

$689.1

$425.6

$323.9$277.6

$146.4 $1.8.7

$381.6

$843.2

772 CQ Researcher

are discussing reform to redress the im-balance created by relying too muchon government investment and notenough on private consumption to growthe economy, meltzer says.

According to the EU’s Clancy, theTrans-Pacific Partnership could be acatalyst for such reform, while theU.S.-EU trade pact can also serve as“a laboratory” for how to deal withthe issue. He hopes the EU and Unit-ed States can “define and further de-velop the international rule book” onstate-owned enterprises.

The first task will be to define whata state-owned enterprise is, he says,and then negotiators will have to agreeon what constitutes noncompetitive be-havior. As these discussions lead tocommon understandings, it could helpthe wTO develop fair rules for globaltrade involving state-owned and sub-sidized companies, he believes.

Something needs to be done, arguedthe AfL-CIO’s Drake, because under ex-isting trade law the United States can-not take action against a foreign state-owned enterprise that uses governmentsubsidies to establish a factory in theUnited States and then produces

products below the cost of a U.S. firm.for instance, she said, a Chinese state-owned company, Tianjin Pipe, recentlybroke ground on a $1 billion facilityin Texas to produce seamless pipe totransport oil and gas. 26

But as U.S. Sen. Jeff flake, R-Ariz.,notes, the United States provides farm-ers billions of dollars a year in gov-ernment subsidies. In fact, he said, forthe past three years the United Stateshas spent $150 million a year subsi-dizing Brazilian cotton farmers to com-ply with a wTO ruling requiring theUnited States to either stop subsidiz-ing American farmers or subsidizeBrazilians farmers as well. 27

Thus, Drake predicted, there wouldbe “strong resistance” among the otherPacific negotiating partners to includinga provision in the treaty allowing coun-tries to enact laws aimed at blockingforeign state-owned companies fromkilling off domestic competition. 28

Does expanding free trade helppromote human rights anddemocracy?

Proponents of free trade have oftenargued that opening up global markets

eventually leads to democracy. when acountry opens up to outside manufac-turers, their argument goes, prices forgoods and commodities fall, leading tohigher living standards. As citizens be-come wealthier they begin to demandgreater personal freedom and push foran end to human rights abuses.

But experts disagree over what im-pact the European and Pacific region-al trade agreements will have on humanrights and democracy in the real world.

In the case of the European pact,it is less of an issue because the twonegotiating partners represent mostlymature democracies with relatively highrankings on human rights.

within the trans-Pacific pact, how-ever, one of the negotiating partnersis vietnam, which regularly is accusedof using child labor and paying sub-poverty wages in its textile sector, whichemploys 2 million people. In addition,the nongovernmental watchdog groupworker Rights Consortium has re-ported that some factory owners, toavoid paying maternity benefits, forcefemale employees to sign contractsin which they agree not to becomepregnant. 29 The average wage forworkers in vietnam’s footwear indus-try is $124 a month, well below theestimated $220 it takes to buy foodfor a family of three; the governmentprosecutes those who try to form in-dependent labor unions. 30

“vietnam is the dictatorship of theproletariat,” said U.S. Rep. DanaRohrabacher, a conservative Repub-lican from California. He doubts viet-nam would become freer if the Unit-ed States traded with it more, adding,“It didn’t work with China.” 31

free-trade critics such as Rohrabach-er complain that China’s trade-fueledeconomic prosperity has led to littleprogress toward democracy.

CNN political analyst fareed Zakariaalso pointed out recently that China’sauthoritarian capitalist model has en-abled it to allocate money earned fromits massive trade surplus for long-term

U.S. TRADE POLICY

U.S.-European Pact Would Be World’s Largest

The Transatlantic Trade and Investment Partnership (TTIP) between the United States and the 28-member European Union would be the biggest bilateral free-trade pact in the world, affecting 40 percent of the global economy. The Trans-Pacific Partnership (TPP) being negotiated among the United States and 11 other Asian and Pacific Rim countries would dwarf the 1994 North American Free Trade Agreement (NAFTA) among the United States, Canada and Mexico.

Sources: Brock R. Williams, “Trans-Pacific Partnership (TPP) Countries: Compara-tive Trade and Economic Analysis,” Congressional Research Service, June 10, 2013, p. 5; World Economic Outlook, International Monetary Fund, April 2013; CIA World Factbook

Comparison of Trade Pacts, by Population and GDP

Trade Agreement No. of Countries Population GDP

TTIP 29 821 million $33 trillionTPP 12 792 million $28 trillionNAFTA 3 465 million $19 trillion


domestic infrastructure projects. wereChina a democracy beholden to vot-ers, he argued, it would have had touse more of that money to subsidizeconsumer goods. 32

But Brookings’ meltzer predicts thatdemocracy will come later to China,as higher living standards brought aboutby increased trade gradually fomentgreater popular demand for freedom.

USTR spokeswoman Guthrie says thePacific and European trade pacts willaddress “many trade-related priorities suchas development, transparency, workers’rights and protections, environmental pro-tection and conservation.”

And the AfL-CIO’s Drake noted thatthe United States obtained some com-mitments on improved labor rights inprevious trade pacts and that some ofthose commitments have become pro-gressively stronger. for example, shesaid, if U.S. negotiators use the Peru-vian free-trade agreement signed in 2006as a floor of minimum standards, thetrans-Pacific pact could become a vehi-cle for strengthening workers’ rights. 33

However, labor rights in mexico de-teriorated after passage of NAfTA, sheargued, and an action plan on laborenshrined in the 2012 U.S.-Colombiafree-trade agreement “is not makingmuch difference on the ground.” 34

Public Citizen’s wallach pinpoints an-other problem with free-trade agree-ments: They take decisions out of thehands of elected officials by locking intreaties that do not allow lawmakers tochange a word. for instance, the Euro-pean Parliament in July 2012 rejectedan Anti-Counterfeiting Trade Agreement(ACTA), approved earlier by the wTO,because EU lawmakers were excludedfrom the talks. Yet, wallach predicts thatmuch of ACTA’s substance will be in-serted into the U.S.-EU trade pact.

EU trade spokesman Clancy saysnegotiators have learned from the ACTAexperience and “the aim is to be moretransparent as we work through theU.S.-EU areement. for example, theEU side has published its initial posi-

tion papers on different areas, such asservices and investment.”

wallach also worries that investor-state dispute settlement panels, whichhave been suggested for the trans-Pacific and European pacts, would havea detrimental impact on the environ-ment and conditions for workers. Judgesare replaced by trade lawyers on thepanels, which rule on legal battles be-tween governments and investors oversuch issues as local minimum-wage lawsand bans on mining toxic chemicals. 35

Because of who presides over them,the dispute settlement panels’ decisionsoften are skewed to favor investorsover governments, argues Public Citi-zen, a consumer group that has com-piled a database of such cases broughtunder NAfTA. The suits include casesfiled by a tobacco manufacturer, a windenergy firm, a high-fructose corn syrupproducer and a metal smelter. In the80 documented cases, governmentsended up paying $405.4 million to in-vestors in compensation settlements forlost profits arising from local laws thatrestrict foreign investment. 36

furthermore, says wallach, even if theinvestor loses a case, the government —and thus the taxpayers — ends up pay-ing huge legal fees. As a result, some-times the mere threat of an investor fil-ing such a case leads a government toditch a planned law, wallach says.

BACKGROUNDEvolving Trade Policy

w hen the United States was found-ed, mercantilism was the pre-vailing trade philosophy. 37

Conceived in Europe in the late mid-dle Ages, mercantilism held that ex-ports were good because they broughtgold and silver into a country, whileimports were bad because they did not

add value to the economy. Character-ized by high import duties, mercantil-ism encouraged governments to con-trol foreign trade in order to promotenational security and motivated muchof Europe’s colonial expansion duringthe 16th to 18th centuries. for exam-ple, the state-sponsored Dutch East IndiaCo., which greatly increased Dutch tradewith modern-day Indonesia in the 1600sand 1700s, helped the Netherlands ac-cumulate great wealth.

By the late 1700s, however, newertheories about free trade, developedby Scottish economic philosophersDavid Hume and Adam Smith, werebeginning to supplant mercantilism.Hume and Smith maintained that pri-vate enterprise paved the way towardmore freedom and wealth and that itwas better for states if their neighborsalso became wealthy trading nations.Their ideas were slowly distilled intoconcrete policies in the 1800s, andgovernments began to reduce tariffs— notably the United Kingdom re-pealed duties on grain imports in 1846.

The United States, from its first pieceof trade legislation — the 1789 TariffAct under which relatively mild tariffswere introduced — pursued a mixedapproach on trade policy. The moreindustrialized North supported tariffs topromote domestic manufacturing, whilethe agricultural South pushed for elimi-nating tariffs to encourage cotton, riceand tobacco exports. The North-Southsplit on trade helped precipitate theCivil war (1861-1865).

By the late 1800s, with U.S. industrybooming, an era of high tariffs was dawn-ing. Custom duties averaged 57 percentin 1897 and accounted for half of allfederal revenues. After briefly decliningin the early 1900s, tariff rates rose rapid-ly again during world war I (1914-18)and throughout the 1920s, when de-pressed farm prices created protectionistpolitical pressures.

Throughout this period, the Republi-cans, the dominant party in the North,pushed protectionist measures in Con-

774 CQ Researcher

U.S. TRADE POLICY

gress and fought fierce battles with themore free-trade-oriented Southern De-mocrats. The last time Congress imposedimport duties was in 1930 through theSmoot-Hawley Tariff Act, which estab-lished tariffs averaging 59 percent onsome 20,000 products. Europe retaliatedby raising its tariffs on U.S. products,causing world trade to decline to a thirdof its 1929 level. 38 This trade war helpeddeepen the Great Depression in the early1930s, as U.S. exports and importsslumped to early 1900 levels.

Since that economic nadir, every Amer-ican president has resisted protectionism.President franklin Delano Rooseveltpushed the Reciprocal Trade AgreementsAct through Congress in 1934, whichtransferred authority for setting tariff ratesfrom Congress to the president.

During the 1930s, the United Statespassed important labor legislation, suchas the 1935 National Labor Relations Act,which protected the right of collectivebargaining, and the 1938 fair LaborStandards Act, which forbade employ-

ment of children under 16 years of ageduring school hours and established aminimum wage. During world war II(1939-’45), trade flows were determinedmore by military alliances than by com-mercial factors.

Eliminating Tariffs

I n 1946, as Europe and East Asia layin ruins, the new U.S. president, HarryS. Truman, threw his weight behind aninternational conference convened inGeneva to expand world trade. It ledto the signing of the General Agree-ment on Tariffs and Trade (GATT) by23 countries on Oct. 30, 1947.

Over the next half-century, GATThelped to reduce tariffs on manufac-tured goods worldwide. It also estab-lished international rules imposing so-called anti-dumping duties on importsto protect domestic industries. “Dump-ing” is a predatory pricing policy inwhich manufacturers attempt to putcompetitors out of business by sellingtheir products at below cost. UnderGATT, trade disputes could be medi-ated, but there was no mechanism forenforcing GATT agreements.

Two other international institutionswere conceived at the same time tohelp forge a more liberalized eco-nomic order: the International mon-etary fund (Imf) to regulate exchangerates and the world Bank to provideloans to developing countries. 39

GATT made progress during“rounds” of negotiations to cut tariffs.Notable successes were the KennedyRound (1962-1967), named after Pres-ident John f. Kennedy, and the TokyoRound (1973 to 1979).

By the late 1960s, however, pro-tectionist sentiment was on the riseagain in the United States after thestellar postwar recovery of westernEurope and Japan made them serioustrade rivals, notably in the auto andsteel sectors, where they were begin-

Continued on p. 776

South Korean Kias are unloaded in Brunswick, Ga., on, Aug. 16, 2013. Whilethe United States continues to import toys, cars and steel from big Asian

producers, it also is expanding market share in fields such as financial services,software and engineering. However, the U.S. is still running a $414 billion deficit

in the amount of goods imported vs. those exported.

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Chronology1776-1934U.S. gains independence fromGreat Britain, emerges as theworld’s leading trading nation.

1789U.S. Tariff Act imposes relativelymild tariffs on imports.

1846United Kingdom repeals duties onfood imports, signaling the rise offree trade.

1861U.S. Civil war begins, pitting in-dustrial North against agriculturalSouth on slavery as well as divi-sions over trade policy.

1930U.S. Smoot-Hawley Tariff Act im-poses tariffs averaging 59 percenton 20,000 products. world tradeslows, deepening the Great De-pression.

1934Reciprocal Trade Agreement Actlets president set tariff rates.

•

1947-1993World trade becomes freer astariffs are reduced, eliminated.

1947Twenty-three countries sign GeneralAgreement on Tariffs and Trade(GATT), aiming to boost trade byreducing tariffs. It eventuallyachieves its mission, while expand-ing membership.

1974Trade Act gives president so-calledfast-track authority to submit tradeagreements to Congress for a singleup or down vote.

1978China’s new leader, Deng Xiaoping,opens his country of some 1 billionpeople to world markets.

1991After Soviet Union collapses, Russiaand former communist-bloc coun-tries embrace free-market capitalism.

1993President Bill Clinton signs NorthAmerican free Trade Agreement(NAfTA) into law, liberalizing tradeamong U.S., Canada and mexico.

•

1995-2008A backlash against free tradedevelops in Europe and the Unit-ed States as companies outsourcejobs to lower-wage economies inAsia and Latin America.

1995GATT is reconstituted into theworld Trade Organization (wTO).

1999At a November meeting in Seattle,wTO members fail to agree tonew round of trade-liberalizationtalks after the city is rocked byprotests by grassroots organizations.Talks finally begin in Doha, Qatar,in 2001.

2001China joins wTO, gaining greateraccess to global markets, which itfully exploits to become theworld’s second-largest economyafter the United States.

2008The financial crisis and a deep re-cession create strong protectionistpressures. After years of lacklusterprogress, wTO’s Doha Round oftalks collapses.

2009-PresentBilateral and regional free-trade pacts become more popu-lar as the WTO fails to delivera new world-trade agreement.

2009President Obama signs off on an$80 billion government bailout andrestructuring package to preventthe U.S. auto industry from bank-ruptcy.

2010U.S. participates in talks for a massiveregional trade agreement, the Trans-Pacific Partnership, with 11 Asianand Pacific Rim nations.

2011Congress approves free-tradeagreements with Colombia, Pana-ma and South Korea after Obamafinally submits them, marking theend of a four-year gap in promot-ing new trade agreements.

2012Swayed by a grassroots campaignagainst it, European Parliament re-jects an Anti-Counterfeiting TradeAgreement (ACTA) negotiated atthe wTO by a group of mostlyadvanced economies that includesthe United States.

2013United States and European Unionbegin talks on the TransatlanticTrade and Investment Partnership.. . . Japan, the world’s third-largesteconomy, joins in the Trans-PacificPartnership free-trade talks, scheduledto conclude in December. . . .Brazilian Roberto Azevêdo be-comes the first Latin Americanhead of the wTO.

2014U.S.-EU trade pact scheduled tobe completed in October.

776 CQ Researcher

ning to expand their exports to theUnited States.

Under the 1974 Trade Act, the U.S.president was granted so-called fast-track authority to conclude trade agree-ments and submit them to Congressfor a single yea or nay vote withoutthe possibility of amendments.

meanwhile, communist countries —where trade with the United States waslimited — watched as capitalist economiesoutpaced their own. many decided they

needed to adapt their economic mod-els to avoid falling behind.

China was the first to change course,when in 1978 leader Deng Xiaopingopened the world’s most populouscountry to global trade. Communist viet-nam began transitioning to a socialist-oriented market economy in 1986. Thecollapse of the Soviet Union in 1991led Russia and the Eastern bloc coun-tries to embrace their own versions offree-market capitalism. 40

During the GATT Uruguay Round

(1986-1994), tariffs were reduced evenfurther, and the decision was made totransform GATT into the world TradeOrganization, with the power to en-force trade agreements and settle dis-putes. with tariffs already at histori-cally low levels, countries beganredirecting their energies toward re-moving nontariff barriers, such as reg-ulations on manufacturing standardsand government subsidies.

In 1985 the United States for thefirst time agreed to remove all trade

U.S. TRADE POLICY

Continued from p. 774

Tiny particles and machines — so small they are invisi-ble to the naked eye — may trigger a dustup in U.S.-European trade relations.Nanotechnology — the science of creating molecule-size

machines and materials — involves the use of particles lessthan 100 nanometers long, or 80,000 times smaller than thewidth of a human hair.*

Nanoparticles are used in foods, beverages, toys, electricalappliances, beauty products and a wide range of other con-sumer and industrial products. for instance, nanotitanium makessunscreen invisible when applied to the skin, nanocrystals en-hance the clarity of liquid crystal display screens and silver ionskill microbes and control odor in washing machines.

Such nanoproducts are made by U.S. and foreign manu-facturers and traded worldwide. But the United States and Eu-ropean Union (EU) differ on how to regulate them, present-ing a dilemma for trade negotiators.

The nanotech industry has been growing rapidly, especial-ly in the past decade. The United States has been the marketleader, according to Hilary flynn, a senior analyst at Lux Re-search, a Boston-based research and consultancy firm special-izing in emerging technologies, with sales of nano-enabledproducts worldwide projected to soar to $650 billion in 2015,up from $10 billion in 2004. 1 flynn estimates that about 540,000U.S. manufacturing jobs depended on nanotechnology in 2010,a figure she expects to grow to 3.1 million by 2015. 2

And Europe is catching up fast, with revenue from nano-enabled products projected to surpass the United States by2015. The number of products containing nanomaterials soldin the European Union reached 475 in 2010, up 300 percentfrom a year earlier, according to the European Consumers’ Or-

ganisation, a Brussels-based group of 41 independent consumerorganizations from 31 European countries. 3 Asian and Pacificcountries also are beginning to develop nanotech products.

However, some scientists warn that nanotechnology posesenvironmental and health risks, especially for workers or con-sumers breathing in the tiny particles. Consumer groups wantproducts containing nanotech ingredients regulated and labeled,even though the products themselves may already be regulat-ed. 4 without regulation, consumers become the industry’sguinea pigs, the groups say.

“[H]undreds of products [are] on sale on the European mar-ket containing nanomaterials without any assessments . . . of therisks that these may pose to public health,” said monique Goyens,managing director of the European Consumers’ Organisation. “weneed to put an end to this public-safety ‘Russian roulette.’ ” 5

The U.S. food and Drug Administration (fDA) regulatesnano-ingredients contained in food, cosmetics and veterinaryand tobacco products, while the U.S. Environmental ProtectionAgency (EPA) has jurisdiction over nanoproducts used in in-dustrial chemicals and pesticides. So far, the fDA’s position hasbeen that nanoproducts do not need to be labeled.

But the European Union has been sympathetic to environ-mentalists’ concerns. The EU embraces the “precautionary prin-ciple” under which products are kept off the market until man-ufacturers prove they are safe. In the United States, the approachvaries depending on the sector being regulated. for industrialchemicals, for example, the regulatory burden lies with the EPAto show risk, whereas with pesticides it is up to manufactur-ers to show they are safe.

Beginning in July, the EU required that all nanomaterials incosmetics be labeled. But the leading U.S. cosmetics industrylobby, the Personal Care Products Council, contends that suchlabels are an unnecessary burden on manufacturers. BecauseU.S.-made cosmetics have been tested and approved by the

Tiny Nanoparticles Have Big Trade ImplicationsU.S. and EU differ on labeling nanoproducts.

* A nanometer is one-billionth of a meter.


tariffs with another country when itsigned a free-trade agreement with Is-rael. In 1988 a U.S.-Canada free-tradeagreement sowed the seeds forNAfTA. Adding mexico to the pactwas controversial, because many inthe United States worried — whichlater proved warranted — that do-mestic manufacturing would head southof the border to take advantage oflower wages and production costs.

After a fractious debate, Congressratified NAfTA in November 1993 by

a vote of 234 to 200 in the House,and by 61-38 in the Senate. PresidentBill Clinton signed the measure intolaw on Dec. 8, 1993. 41

Globalization Backlash

T he 1990s marked the beginning ofa new era of globalization charac-terized by an increasingly integrated glob-al economy — spurred in part by therapid growth of the Internet and marked

by an upsurge in free trade and thefree flow of capital and access to cheap-er overseas labor markets. Countries inAsia and Latin America — includingChile, China, mexico and South Korea— enjoyed robust growth, often fueledby a surge in exports.

Booming exports helped Chinalift nearly 600 million citizens out ofpoverty in the 1990s and 2000s,while extreme poverty in vietnamfell from 64 to 17 percent between1993 and 2008. 42

fDA, it said, there is no need to test each individual ingredi-ent separately.

moreover, the council’s representative told a public hearingon a pending U.S.-EU free-trade pact in may that if the EU re-quires nano-ingredients to be labeled, it will set a precedentbecause when the EU makes policies, “other countries tend toreplicate them.”

Lynn Bergeson, a lawyer who helps U.S. companies get theirnanotech innovations approved by regulators, says labeling nano-ingredients would “not necessarily impart information that isuseful to the consumer who wants to know if there is an en-hanced risk associated with it.” Nevertheless, she notes, someU.S. nanotech companies have voluntarily labeled their prod-ucts to reduce the risk of being sued in states that generallyhave strong consumer protection laws.

At a networking event during the U.S.-EU trade talks in July,Karen Hansen-Kuhn, international program director at the min-nesota-based Institute for Agriculture and Trade Policy, a non-governmental group promoting sustainable farming, urged theUnited States to adopt the EU’s precautionary principle on nan-otech foods. She said some 2,000 food products containnanoparticles, citing as an example nanotitanium, which is usedin donuts as a coloring in powdered sugar coating. 6

But Bergeson doubts the nanosector will become a newheadache in trans-Atlantic trade relations. The industry is work-ing to educate both American and European consumers on theissue, she says, and there is already some common ground be-tween European and American regulators, such as in the pes-ticides sector.

many people watching the progress on the U.S.-EU tradepact say that how the two sides handle the nanotech issuecould have a major impact on the industry’s development. Oth-ers say it could set the stage for future global regulation ofnew technologies. Hansen-Kuhn said the situation is urgent.

“more research needs to be done before this enters ourfood system — not after,” she argued. 7

— Brian Beary

1 Hilary flynn, “U.S. Continues to be a Nanotech Leader, but Losing Groundto EU and Emerging Economies,” Powerpoint presentation, NanotechnologyCaucus Briefing, washington, D.C., Nov. 15, 2011.2 Ibid.3 Sophie Petitjean, “Nanomaterials products triple,” Europolitics, Oct. 25, 2013,www.europolitics.info//nanomaterials-products-triple-art285257-12.html. forbackground, see David masci, “Nanotechnology,” CQ Researcher, June 11, 2004,pp. 517-540.4 Ophélie Spanneut, “Nanomaterials: Case-by-case approach to safety as-sessment,” Europolitics, Oct. 3, 2012.5 Petitjean, op. cit.6 Andy Behar, “Study the use of nanoparticles in food,” CNN, feb. 14, 2013,www.cnn.com/2013/02/14/opinion/behar-food-nanoparticles.7 Hansen-Kuhn was speaking at a stakeholders’ conference on July 10, 2013,organized by the Office of the U.S. Trade Representative to coincide withthe launch of the opening round of negotiations on the Transatlantic Tradeand Investment Partnership in washington, D.C.

A technician at the nanotechnology firm temicon GmbH inDortmund, Germany, examines a microscreen used in themedical technology and foodstuffs industries. Foods,

beverages, toys, electrical appliances and beauty productscontaining nanoparticles are made by U.S. and foreignmanufacturers and traded worldwide. U.S. and EuropeanUnion regulators differ on how to ensure they are safe,however, presenting a dilemma for trade negotiators.

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China got another big boost in2001, when it was allowed to join thewTO despite lingering concerns aboutits dismal human rights record andwidespread fears that its huge pool ofcheap labor would allow it to seri-ously undercut competitors.

meanwhile, buoyed by NAfTA,mexico boosted its trade with Cana-da eightfold, energizing its auto, elec-tronics, aerospace and medical de-vices sectors. 43

It was during this period that theword “outsourcing” entered the pop-ular lexicon, commonly used to meanmanufacturers in high-paying advancedeconomies shifting production to lower-wage countries such as mexico orChina. while outsourcing generatedheavy criticism at home because of thejob losses, defenders of globalized pro-duction stressed that it lowered prices

for consumer goods, greatly benefittinglow-income populations worldwide.

But anti-globalization sentiments grewas globalization increasingly becameassociated in the United States and Eu-rope with job losses and backslidingin worker, consumer and environmen-tal protections. Some companies — in-cluding major retailers such as Nike —were paying sub-poverty-level wagesto overseas workers, and unregulatedmining and dumping of toxic chemi-cals were harming local environments.

when the wTO met in Seattle inNovember 1999 to start a new roundof trade liberalization talks, the city wasrocked by protests organized by grass-roots organizations from around theworld. for a while, Seattle resembleda battle zone: 500 protesters were ar-rested, and massive property damageoccurred. Delegates from the wTO’s 135

member countries left the city withouteven launching a new round of talks.

In July 2001 the G8 world eco-nomic summit in Genoa — attendedby leaders of the eight largest globaleconomies — attracted 150,000 anti-globalization protesters. Italian policestormed a school where about 100demonstrators were sleeping, leadingto mass beatings even though the pro-testers had been peaceful. Elsewhere,police shot dead a 23-year-old pro-tester during street clashes. 44

Organizers held the next big wTOmeeting in Doha, Qatar, a remote, au-tocratic state in the Persian Gulf, to makeit harder for protesters to mobilize. TheDoha Round of trade talks was launchedin 2001, but it failed to make progress.This was less because of anti-globalizationopposition, however, and more becauseemerging economies such as Brazil,

U.S. TRADE POLICY

“we’re not dead yet.” michael Punke, the U.S. am-bassador to the world Trade Organization (wTO),did not quite offer a ringing endorsement of theGeneva-based body in July. 1 But if the wTO is not dead, thereare many who believe it to be on life support — at least asa forum for eliminating trade barriers.

The pessimism largely stems from the failure of the wTO’sso-called Doha Round of talks to lower global trade barriers. Thetalks, which began in Doha, Qatar, in 2001, stalled in 2008. while“there is no monopoly on disappointment in the Doha Round,”Punke said, “if the wTO members have not exactly shroudedthemselves in glory, they have at least kept the ship afloat.”

The wTO was created in 1995 as a reincarnation of theGeneral Agreement on Tariffs and Trade (GATT), the 1947 treatythat sought to reduce trade tariffs between nations. GATT’s re-markable success led to great expectations for the wTO, whichhas the additional power to enforce trade agreements and ad-judicate disputes.

But trade liberalization efforts were spectacularly derailed whenthe wTO’s flagship project, the Doha Round, collapsed afteremerging economies such as China and India grew increasinglyassertive and refused to accept the terms pushed by the moreindustrialized countries. Now, the organization has decidedly down-sized its ambitions for the upcoming wTO ministerial meeting,scheduled for this December in Bali, Indonesia.

According to U.S. Trade Representative michael froman, thequestion is, “Can we land a small package?” at the Bali meet-ing. That “package” would be composed of separate agree-ments designed to streamline border and customs proceduresand expand trade in services and information technology prod-ucts. 2 If those efforts fail, it will be “very difficult” for the wTOto move forward, froman warned.

Recent events give little cause for optimism. with support frommore than 70 countries, the wTO agreed in 1996 to abolish tar-iffs on information- and communication-technology products. Butthis summer’s talks to expand that agreement to cover new prod-ucts such as DvDs, video cameras and video game consoles suf-fered a setback, further sapping confidence in the wTO’s ca-pacity to deliver deals. froman said he was “extremely disappointed”that the talks were suspended after China proposed excluding106 products from the agreement’s scope.

Some believe the proliferation of bilateral and regional tradeagreements, forged in national capitals rather than at wTOheadquarters in Geneva, further undermines the organization’sauthority. (See “At Issue,” p. 781.) The latest examples are twomajor regional pacts currently under negotiation: the Trans-Pacific Partnership, which involves the United States and 11Asian and Pacific Rim countries, and the Transatlantic Tradeand Investment Partnership between the United States and theEuropean Union.

will the world Trade Organization Survive?Regional trade deals imperil the 159-nation forum, say some trade specialists.


India and China began to drive harderbargains with the United States and theEU. for example, they refused to givein to trans-Atlantic demands that theyopen their markets on a reciprocal basis.

Regional Pacts

T he financial crisis of 2008 led tothe demise of the Doha Round, asthe recession that gripped the UnitedStates and Europe from late 2007 to2009 triggered rising protectionist de-mands. The global appetite for a com-prehensive world-trade agreement seemedto have evaporated for the time being.

Governments for the most part man-aged to resist resurgent protectionism,however, and the trade liberalizationagenda found a new forum — or fo-rums. Countries began signing new bi-

lateral and regional free-trade pacts.The EU and Asia were especially ac-

tive on this front. for example, since2000 China has sought free-trade dealswith India and South Korea and final-ized pacts with the ASEAN trading blocof 10 Southeast Asian nations. In theUnited States, President George w.Bush had initialed free-trade agree-ments with Colombia, Panama, Peru andSouth Korea in the mid-2000s but man-aged to get Congress to ratify only thePeru deal before leaving office in Jan-uary 2009.

President Obama, responding topressure from labor unions and otherconstituents within his DemocraticParty, tweaked the deals with Colom-bia, Panama and South Korea beforefinally sending them to Congress. Allthree agreements were approved inOctober 2011.

meanwhile, the U.S. share of exportsto rapidly growing East Asia plummet-ed 42.4 percent between 2000 and 2010as the United States fell behind otheremerging and advanced economies inforging new trade agreements withcountries in the region. for instance,at the same time, Russia’s share of ex-ports increased by 50 percent, Aus-tralia’s by 42.7 percent and Saudi Ara-bia’s by 28 percent. 45

But it was not all bad news forthe United States on trade. After adecade of job losses, U.S. manufac-turing has been recovering since 2009,with half a million jobs added inObama’s first term. 46

As a case in point, USTR froman re-cently toured a New Balance runningshoe factory in maine, noting that “theyare employing more than ever before”and “making improvements to the

However, former U.S. Trade Representative Carla Hills, whonegotiated the North American free Trade Agreement (NAfTA)for President George H. w. Bush, put a more optimistic spin onthe trade regionalization trend. 3 She recalled how in 1990 manyin GATT were despondent when the Uruguay Round of tradeliberalization talks hit a roadblock. But after the United States,Canada and mexico agreed to the North American free TradeAgreement (NAfTA) in December 1992 (Congress ratified it ayear later), GATT negotiators were inspired to get things mov-ing again. The Uruguay Round recovered and a deal was con-cluded, which led to the establishment of the wTO.

Hills suggested that regional agreements being negotiated couldbe partly integrated into the wTO framework. for instance, theU.S.-EU pact could adopt the wTO’s dispute-settlement mecha-nism rather than creating its own. Hills pointed out that the wTO’sdispute-adjudication panels have “put a ceiling on retaliation” bygovernments over perceived violations of trade rules. “If we didnot have that, we would have the law of the jungle,” she said.

As for Europe, America’s biggest trading partner, EU tradespokesman John Clancy insists “the multilateral [i.e. wTO] routeis by far our preference” in solving trade disputes. But deals ne-gotiated outside of the wTO, he says, can become “an embryoof real international standards” that could then be transposedinto a multilateral setting. Privately, most trade officials admit thatthe current situation, in which dozens of free-trade pacts are

being concluded by a dizzying constellation of countries, is notoptimal.

But who is to say the wTO, having taken many unexpect-ed turns in recent years, will not surprise again? On Sept. 1Brazilian Roberto Azevêdo became its new director general, thefirst Latin American to head the organization. His daunting chal-lenge: to restore the wTO’s reputation as the premier venuefor forging a world of freer trade.

“The wTO and the multilateral trading system are at an im-portant crossroads,” Azevêdo said in his welcome message. “Thechoices that the wTO’s 159 members make in the comingmonths will determine the path we take as we set out togetherto strengthen and support the multilateral trading system.” 4

— Brian Beary

1 Speech at the wTO’s Trade Negotiating Committee, Office of the U.S.Trade Representative, Geneva, Switzerland, July 22, 2013, www.ustr.gov/about-us/press-office/speeches/transcripts/2013/july/amb-punke-wTO-tnc.2 Speech at a discussion on the U.S. trade agenda, U.S. Chamber of Com-merce, washington, D.C. July 30, 2013; www.uschamber.com/webcasts/next-steps-american-trade-agenda-2.3 Hills was a keynote speaker at a discussion on “A North America-EuropeanUnion free Trade Agreement?” woodrow wilson Center for InternationalScholars, July 26, 2013, www.wilsoncenter.org/event/north-america-european-union-free-trade-agreement.4 “Roberto Azevêdo takes over,” world Trade Organisation, Sept. 1, 2013,http://wto.org/english/news_e/news13_e/dgra_13aug13_e.htm.

780 CQ Researcher

U.S. TRADE POLICY

production process.” froman’s trip wasdesigned to showcase a major successstory in this sector and to counter theoft-heard narrative about the supposeddecline of American manufacturing.

Such success was a vindication ofObama’s policy of enforcing tradelaws more aggressively, having brought18 trade complaints before the wTOthus far, froman said. 47 Similarly, theObama administration claimed creditfor helping to revive the Detroit-basedU.S. auto sector with an $80 billiongovernment bailout and restructuringpackage for General motors andChrysler in 2009. 48

CURRENTSITUATION

Declining Deficit

T he generally positive trajectory inthe U.S. economy continues. Inearly August the Obama administrationannounced a significant rise in exportsand manufacturing output and a declin-ing trade deficit and unemployment rate.Between may and June, the monthly tradedeficit fell 22 percent, to $34.2 billion,its lowest one-month deficit since thefall of 2009. However, an imbalance be-tween the goods and services sectorscontinues, with the United States run-ning a $414 billion deficit (January toJuly, 2013) in the amount of goods im-ported vs. the amount of goods ex-ported and a $134 billion surplus in ser-vices exported. 49 Thus, while Americanscontinue to import lots of toys, cars andsteel from big Asian producers like Chinaand Japan, they also are harnessing theirhigh-skilled workforce to expand marketshare in fields such as financial services,software and engineering.

meanwhile, between July and Au-gust the jobless rate fell from 7.4 per-

cent to 7.3 percent — its lowest levelsince Obama took office. 50 In total,7.5 million jobs have been created inthe past 42 months, the white Househas pointed out, but economists saysome of the unemployment declinerepresents people who have simplystopped looking for work. 51

“we’re exporting more to all sortsof different countries,” wrote RyanAvent, economics correspondent forThe Economist. The declining tradedeficit “didn’t come from just one setof products or one set of countries.”moreover, he said, the export surgesuggests that the recovery is “sus-tainable,” and “less based on govern-ment support . . . [or] borrowing andconsumption.” 52

while U.S. economic growth picksup, China’s extraordinary growth rateis beginning to taper, as rising wagescause China to lose its competitiveedge, and global demand for its ex-ports slows. 53 Even so, the latest Imfforecast says the U.S. economy will growby nearly 2 percent in 2013, comparedto almost 8 percent for China.

Trade Talks

T he successful launch of U.S.-EUtrade talks in July was almostthwarted by a spat over U.S. govern-ment spying. In may former NationalSecurity Agency (NSA) computer spe-cialist Edward Snowden revealed thatthe United States, as part of its counter-terrorism efforts, had monitored theemails of millions of Europeans. Therevelations caused consternation amongEU governments and the European Par-liament. 54 Historically protectionistfrance — which has more misgivingsabout the trade pact than the EU’sother big economies, Germany andthe U.K. — initially called for post-poning the talks. Ultimately the frenchbacked down after the Germans andBritish insisted that the agreed timetablebe honored. The EU and United States

instead set up a separate working groupto discuss the data-privacy implicationsof the NSA spy programs.

Trade representative froman expectsthe “most challenging part” of the talksto be the discussions on regulatorycooperation. There are major differ-ences between the U.S and EU sys-tems in this area, he noted, with U.S.standard-setting bodies mostly private-sector based, whereas in Europe theytend to be quasi-governmental. 55

Agriculture will be one of themost sensitive sectors. U.S. produc-ers of genetically modified (Gm)food and feed hope to reduce thetime it takes to get their products ap-proved by the EU, but they are prag-matic enough to realize that expect-ing a complete overhaul of the EU’sGm labeling and tracing laws is un-realistic. U.S. farmers also hope tostymie EU efforts to extend specialprotection to products such as Greekfeta cheese. “Geographic indication”protection rules aim to prohibit U.S.producers from using certain geo-graphical terms (such as “Camembert”cheese) on their labels because theAmerican-made products are not ac-tually made in those regions.

Audio-visual services are anotherhot button issue, with france particu-larly keen to ensure that its system ofquotas, which limit the number ofnon-french-language movies that canbe screened in cinemas and on tele-vision in france, be preserved. In talksearlier in 2013 among EU memberstates, Paris managed to get some re-assurances to this effect. However, itremains something of a bone of con-tention, and the EU says it has theright to return to its member govern-ments during negotiations to ask forits mandate to be extended to coverthe audio-visual sector. 56

In Europe, the U.S.-EU pact “is theonly show in town,” said michael Geary,a fellow at the woodrow wilson In-ternational Center for Scholars in wash-

Continued on p. 782

no


At Issue:Have regional and bilateral trade agreements usurped the WTO?yes

yesKENT H. HUGHESDIRECTOR, PROGRAM ON AMERICA ANDTHE GLOBAL ECONOMY, WOODROW WILSONINTERNATIONAL CENTER FOR SCHOLARS

WRITTEN FOR CQ RESEARCHER, SEPTEMBER 2013

t he world Trade Organization (wTO) is under attack, notfor what is has done but for its failure to deal with newchallenges to international trade. Regional trade and bilat-eral trade agreements have surged as a result. Beyond specificrules, large trade imbalances, currency manipulation and signifi-cant investment incentives all demand action. There is a risk ofa weakened wTO or one that becomes increasingly irrelevantto global trade.

There is promise, however, in the ability of bilateral andregional free-trade agreements to develop new governing rulesfor international trade that can, in turn, create a new structurefor the wTO.

The current structure of trade rules is based on the as-sumption of competitive free markets with limited interventionby national governments. with the rise of Japan, an alternateapproach to growth has arisen, often referred to as the EastAsian miracle. China is now practicing its own variant of thisapproach.

State-owned and state-influenced enterprises now play asignificant and growing role in international trade. Currenciesare kept undervalued — acting as a subsidy to exports and abarrier to imports. Generous tax and other subsidies are usedto attract high-technology factories and research facilities fromthe United States and other advanced industrial countries.Rampant intellectual property theft, the impact of trade on theenvironment, labor and the distribution of the fruits of globalgrowth all raise concerns.

Instead of attempting to fashion new rules at the 159-memberwTO, small clusters of countries can work on developingrules that will eventually command global respect. The ongo-ing Trans-Pacific Partnership trade negotiations are exploringrules for state-owned enterprises, intellectual property anddigital data and may explore the reality of undervalued cur-rencies. The recently launched Transatlantic Trade and Invest-ment Partnership holds out the potential for harmonizing ahost of regulatory rules that could become a global, wTO-sanctioned standard.

Regional trade negotiations can be a laboratory for traderules that will revitalize the wTO. Jagdish Bhagwati, the emi-nent trade economist from Columbia University, has decriedthe proliferation of free-trade agreements as a spaghetti bowlof international trade. Adding the experimental sauce of re-gional trade agreements can make that spaghetti bowl a tastymeal for a 21st-century wTO.no

DANIEL IKENSONDIRECTOR, HERBERT A. STIEFEL CENTERFOR TRADE POLICY STUDIES, CATOINSTITUTE

WRITTEN FOR CQ RESEARCHER, SEPTEMBER 2013

s ince the world Trade Organization was born in 1995, multi-lateral negotiations to reduce trade barriers have borne nofruit, while bilateral and regional trade agreements haveflourished. Some 216 such “preferential” deals have come into forcesince 1995, with dozens more at various stages of negotiation.

Preferential agreements — especially large ones expected tobreak new ground, such as the Trans-Pacific Partnership (TPP)and the Transatlantic Trade and Investment Partnership (TTIP)— may slightly reduce the wTO’s profile, but they are unlike-ly to marginalize the institution or undermine respect for it.

The wTO’s legislative (negotiating) leg may be broken, butits executive and judicial functions continue to work rather well.Despite having occasional misgivings about the wTO’s variousimperfections, most governments benefit from its existence, recog-nize its importance to the global trading system and appreciateits utility for resolving grievances. Even parties to preferentialagreements — such as the United States, Canada and mexicowithin the North American free Trade Agreement (NAfTA) —continue to rely on the wTO to help resolve disputes, eventhough NAfTA has its own dispute-settlement mechanism. That’sin part because the wTO system, with its 463 disputes-worth ofjurisprudence, is — by and large — perceived as fair and ob-jective. moreover, wTO agreements provide rules and standardson issues such as dumping and government subsidies, whichsome preferential agreements, such as NAfTA, do not address.

wTO member countries account for 97 percent of theworld’s trade, so it is unlikely that the organization will besupplanted as the best forum for delivering liberalization to thebroadest group of countries. As more preferential agreementsare concluded, increasing the volume of trade subject to multiplesets of rules, standards and disciplines, the imperative of harmo-nizing and “multilateralizing” the best of these agreements underthe wTO’s roof will grow compelling. Businesses and others af-fected by the rules of trade frequently express preference formultilateral liberalization because, among other reasons, fewersets of distinct rules enable greater economies of scale in pro-duction and lower administrative and compliance costs. Thegreater the number of noodles in the so-called spaghetti bowl,the greater the cost of compliance and accounting.

The proliferation of preferential agreements is a response tothe failure of the Doha Round to deliver results. Rather thanbeing ends in themselves, these agreements represent a compe-tition in liberalization from which the seeds of best practiceswill be harvested and planted under the wTO.

782 CQ Researcher

ington. Dogged by a jobless rate of11 percent, Europe sees the treaty asa way to inject growth into its stagnanteconomy, he said. 57

EU and U.S. neighbors — Canada,mexico, Switzerland and Turkey — areexcluded from the talks, causing worryin those countries that the U.S.-EU dealwill undo recent progress in integratingthemselves into trans-Atlantic trade.Thus, when Turkish Prime ministerRecep Tayyip Erdogan visited the whiteHouse in may, he asked Obama ifTurkey could join the pact. But wash-ington’s priority is to get the U.S.-EUdeal finished as soon as possible and“then we can deal with other coun-tries,” said froman. 58

In July the scope of the Trans-Pacific Partnership was expanded sig-nificantly when Japan, the world’sthird-largest economy, joined theother 11 nations at the negotiatingtable. 59 Some observers now spec-ulate that China may eventually join.

In August, negotiators held their19th round of talks in Brunei. whiletheir goal remains to conclude a pactby the end of 2013, it is unclear howclose they are to meeting this goal be-cause they have been so tight-lippedabout the finer details of the negoti-ations. This is causing growing alarmand anger among parliamentariansand grassroots activists. According tomaira Sutton, global policy analyst forthe Electronic frontier foundation, aSan francisco-based advocacy groupfor Internet users, “heavy criticism bylawmakers, opposition leaders and civilsociety groups from around the worldis mounting” against the deal. Suttonnoted that lawmakers in Peru, Chile,New Zealand and Canada were tryingto force the debate out into the openbut that trade officials continued tohold secretive meetings — sometimesnot even telling the stakeholders theyare taking place. Her organization isconcerned that the pact will tightencopyright protections and weaken data-

privacy norms in ways that will beharmful to Internet users. 60

Chinese officials have expressed in-terest in learning more about the pact,according to USTR spokeswomanGuthrie, and “we have been pleasedto share that information.” She addsthat pact members “look forward topotentially expanding the platform byworking with other economies that arewilling to adopt TPP’s commitments.”But even if the United States were togive China the green light, the otherTPP participants would have to agreeunanimously.

Among the TPP participants, viet-nam has been vocal in wanting toforce the United States to eliminateimport tariffs on footwear. Such tariffsprotect the U.S. athletic footwear in-dustry, but lower-paying vietnamesefootwear manufacturers want to com-pete freely in the U.S. market. 61

Regardless of what happens withthe Pacific trade pact, the Obama ad-ministration seems determined to con-tinue pursuing China at the wTO overalleged violations of trade rules. In thelatest case, the United States markeda victory on Aug. 2 when the wTObacked washington in a case involv-ing duties imposed by Beijing on U.S.exports of broiler chickens.

The future of U.S.-China relationsmay not be entirely adversarial, how-ever. for instance, froman seems opento concluding a bilateral investmenttreaty with China. Such an accordshould require that foreign investorsare treated the same as domestic ones,with only a few sectors, which he didnot specify, excluded, he said. 62

The Obama administration is alsotrying to ramp up trade links with sub-Saharan Africa. In August 2013 fromanwent to Ethiopia to take part in talksaimed at updating a preferential tradearrangement called the African Growthand Opportunity Act (AGOA), first es-tablished by Congress in 2000. Set toexpire in 2015, AGOA allows thousandsof African-made products to enter the

U.S. market duty-free. President Obama’sgoal is to achieve a “seamless renew-al” of the agreement. 63

Congressional Action

P resident Obama’s plans to con-clude the two trade pacts willcome to nothing, of course, if Con-gress decides to block them.

In a recent exchange on Capitol Hill,froman said “we stand ready to workwith you to craft a bill” to renew theTrade Promotion Authority, the law giv-ing the president fast-track authority ontrade pacts, which expired in 2007. 64

But observers say Obama will haveto twist arms within his own party tosecure renewal, and Democrats whostill believe free-trade agreements costU.S. jobs will probably try to extractconcessions from him in return fortheir support. As for the Republicans,although they have backed free-tradedeals in recent decades, a 2010 Pewpoll showed that since Obama tookoffice, Republicans have become lesssupportive of such pacts, with only28 percent believing they are good forthe United States. 65

Congress is unlikely to renew thefast-track law unless it also extends until2020 the Trade Adjustment AssistanceAct, which provides unemploymentbenefits and re-training for workers ad-versely affected by expanded trade.

Also expected to be bundled intothe fast-track package is the Gener-alized System of Preferences (GSP).It provided duty-free entry to Amer-ican markets for up to 5,000 prod-ucts from 127 developing countries,but Congress allowed the 37-year-oldprogram to expire on July 31. Con-gress must decide whether the GSPshould continue to apply to all de-veloping countries, since today’s topbeneficiaries — India, Thailand, Brazil,Indonesia and South Africa — haveall progressed from low- to middle-income countries.

U.S. TRADE POLICY

Continued from p. 780


Public Citizen’s wallach believes theObama administration hopes to suppresspublic opposition to its trade deals inpart by rebranding them. for instance,when first conceived in the 1990s, theU.S.-EU pact was called TAfTA (theTransatlantic free Trade Area), but it hassince been rechristened to avoid awk-ward parallels with NAfTA.

As for the Pacific pact, there havebeen no major opinion polls askingAmericans specifically about those ne-gotiations, according to Bruce Stokes,director of the Global Economic Pro-gram at Pew Research Center’s Glob-al Attitudes Project. 66 In fact, he noted,there has been relatively little newscoverage of the trans-Pacific pact inthe United States, in contrast to Japan,where it is widely publicized.

OUTLOOKChange in China

A s the two big regional trade dealsdraw closer to conclusion, tradeis expected to become more of a hot-button issue in the United States.

“The grassroots are not buying”the administration’s sales pitch aboutthese deals creating jobs, says PublicCitizen’s wallach, but “the elites ofboth parties are.” The question, asshe sees it, is how quickly lawmak-ers will catch up with their con-stituents.

Of the two deals, the trans-Pacificpact is likely to generate the most con-troversy. when the U.S. Senate confirmedfroman as U.S. trade representative bya 93-4 vote in June, one of the four op-posing senators was consumer-rightschampion Elizabeth warren, D-mass.She was irked by froman’s refusal tosend her a draft negotiating text ofthe Pacific treaty.

The AfL-CIO’s Drake argued on be-half of organized labor that if the new

trade deals are to avoid repeating pastmistakes, U.S. negotiators must drawsome red lines, including:

• Retaining “buy American” laws thatallow governments to give preferenceto U.S. products and services when mak-ing purchases;

• Eliminating subsidies to state-owned enterprises;

• Granting market access only ona reciprocal basis; and

• Establishing rules on food and toysafety and on currency manipulation. 67

Polls indicate the U.S.-EU treaty willbe an easier sell to Congress. Supportfor removing all remaining tariffs onEuropean-U.S. trade in goods standsat 48 percent. Pew’s Stokes has noted,however, that “if history is any guide,inevitable frictions will erode publicsupport as adversely affected interestscomplain, while those that stand tobenefit are less vocal.” 68

Stokes suggests the pact is part ofa U.S.-EU strategy to offset the rise ofChina by establishing common techni-cal and regulatory standards that wouldbecome global business norms. 69 If theU.S.-EU agreement is concluded, it alsocould pave the way for an even big-ger regional pact.

for instance, former trade repre-sentative Hills has called for the U.S.-EU pact to be enlarged into a NorthAmerican-EU free-trade agreement,bringing mexico and Canada onboard. This “would have a lot of ben-efits” by building on NAfTA’s successin integrating supply chains, she con-tended. 70 Turkey can be expected topush for something similar, given thatits 1995 customs union with the EUmeans that it will, in any case, haveto apply whatever tariff regime is agreedto under the Transatlantic Trade andInvestment Partnership.

As for what will happen to state-owned enterprises in emerging economiessuch as China, Craig Allen, deputy as-sistant secretary for Asia at the U.S. In-ternational Trade Administration in theDepartment of Commerce, predicts “they

will dramatically restructure” as the Chi-nese government begins to realize thatthe state-sponsored economic model sti-fles technological innovation. Allen saysreforming the state-owned sector willbe key to helping China escape the“middle-income trap,” in which devel-oping countries grow rapidly for awhile but then hit a ceiling that keepsthem a tier below advanced economies.

meanwhile, revival in the U.S. man-ufacturing sector is creating optimismabout future growth prospects. Ac-cording to Gene Sperling, director ofthe National Economic Council in theObama administration, “the wind is atour back now” as manufacturers whoset up shop elsewhere in the early2000s are returning home. “we are up500,000 jobs,” he said, adding that theadministration’s priorities are to mod-ernize infrastructure, harness energysupplies and better enforce interna-tional trade rules. 71

The administration’s buoyant mood hasyet to fully filter down into the generalpublic, however, which remains anxiousabout the state of the economy. Askedto account for this disconnect, The Econ-omist’s Avent said it was because “we’rein such a deep hole, and the road outhas been so long and slow that we stillhave a ways to go.” 72

Notes1 Brian Beary, “Transatlantic beef trade agree-ment extended,” Europolitics, Aug. 28, 2013.2 “U.S. Trade Representative froman, Secretaryof Agriculture vilsack Announce Continued EUmarket Access for American Producers of High-Quality Beef,” press release, Office of the Unit-ed States Trade Representative, Office of theUnited S

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