Unraveling the Mysteries of U.S. Trade Policy Formulation in the Executive Branch:

What Lies Behind the Acronyms and Spirited Debates?

Marideth J. Sandler, CEOSandler Trade LLC

202-350-4303sandler@sandlertrade.com

http://sandlertrade.com

WITA-GWU Intensive Trade Seminar

2

Sandler Trade, LLC.• Our goal is to make international trade really happen• We provide embassies, companies, and others strategic

advisory services to expand export penetration and to safeguard preference opportunities and trade policies

• We expand emerging economies’ trade, including through focused market linkages, data analysis, trade show maximization, and use of FTAs and preference programs

• We know import and other regulations (CBP, FDA, CSPC…)• We are strong advocates in the Exec branch and on the

Hill• We are USTR grads and comprise an multinational team

that speaks 10 languages

3

Webinar Content

• Alphabet soup: acronyms govern trade• How the Executive Branch formulates and executes

international trade policy • Statutory foundation for responsibilities • Trade-related agencies: what do they do? • Free Trade Agreement negotiations, including

Private sector and Congressional roles • Upcoming legislative agenda • Resources and links to know

4

Alphabet Soup

5

Alphabet Soup• POTUS• NSC/NEC• USTR• DOL• DOS• USDA• DOC• DHS/CBP• USITC• TPRG/TPSC• ACTPN• APAC/ITAC

• IFAC• LAC• FTA• TPA• TAA• MTB• BIT• GSP• AGOA• CBI• NEI• APEC

• TPP• TTIP• TISA• TF• TIFA• IPR• Special 301• WL/PWL• AD/CVD• FTZ/EPZ• HTSUS• FRN

6

Executive Office of the President:NSC, USTR, OMB, NEC, etc.

Executive Branch

Executive Office of the President:NSC, USTR, OMB, NEC, etc.

President: Barack ObamaVice: Joseph BidenTerm: 4 YearsLimit: 2 yearsElected by: Electoral College

Members: 15 (heads of depart.)Nominated by: President

7

The Congress, President and USTR

• In 1934, U.S. Congress delegated to the President (POTUS) authority to negotiate trade agreements, leading to creation of the GATT, WTO, IMF and FTAs.

• Trade Act of 1974 created time-limited “fast track” FTA negotiation and approval authority, re-named trade promotion authority (TPA) in 2002; last expired 7/2007.

• President delegated to the Office of the U.S. Trade Representative (USTR) development, coordination and negotiation of U.S. international trade, commodity, and direct investment policies and agreement negotiations, oversight and enforcement.

• National Security Council (NSC), and National Economic Council (NEC) established in 1993, help POTUS oversee trade policy.

8

USTR• The USTR is an Ambassador and Cabinet member who

serves as President’s principal trade advisor, negotiator, spokesperson and representative to WTO.

• USTR is in the Executive Office of the President. Through an interagency structure (TPRG & TPSC), USTR coordinates trade policy within the Administration and, through consultations with Congress and private sector advisory committees, frames issues for Presidential decision.

• Consultation with 28 appointed industry and special interest advisory groups: ACTPN, APAC, 16 ITACs, LAC, TEPAC, ATAC, TACA, IGPAC

• Federal Register Notices (FRNs): regulations.gov

9

Department of Commerce• Mission: make U.S. businesses more innovative at

home and more competitive abroad• Multiple bureaus and functions: weather, patents,

exports, standards, fish management, data, census, etc.

• Key trade functions: – antidumping and countervailing duty investigations– sectoral and functional expertise– expert support for USTR trade negotiations– trade compliance monitoring– management of industry trade advisory committees– export promotion and advocacy

10

Other Key Trade Policy Agencies• Department of State (DOS)• Department of Agriculture (USDA)• Department of Treasury (Treas)• Department of Labor (DOL)• Ex-Officio: U.S. International Trade Commission

(USITC or ITC): an independent agency– Administers U.S. trade laws within its mandate– Website with U.S. export and import data/Maintains

U.S. Harmonized Tariff Schedules (HTSUS)– Does independent trade studies pertinent to FTAs,

regulatory decisions, tariffs, U.S. competitiveness

11

Interagency Review Process: Led by USTR

19 agencies provide advice to USTR in developing and coordinating implementation of U.S. trade policy; operates by reaching consensus on issues/decisions:– 90 Subcommittees (e.g., Special 301, GSP) recommend to:– Trade Policy Staff Committee (AUSTR/DAS): if consensus on

the decision - is final determination; if not goes to…– Trade Policy Review Group (Deputy USTR/Deputy or

Assistant Secretary): if consensus, is final decision; if not, goes to…

– Principals (Cabinet): if consensus, is final decision; if not goes to the…

–President for THE final decision

USTR Trade Programs

• Reciprocal Free Trade Agreements (FTAs): w/20 countries

• Trade and Investment Framework Agreements (TIFAs): 48 TIFAs (and many other agreements)

• Unilateral Preferences: Generalized System of Preferences (GSP), African Growth & Opportunity Act (AGOA), Caribbean Basin Initiative (CBI)

• Bilateral Investment Treaties (BIT): with 40 countries

12

13

Enforcement Mechanisms

• WTO consultations and dispute settlement• FTA consultations and dispute settlement• Special 301 (Intellectual Property Rights (IPR)

Review): Notorious Markets; Priority Watch List (PWL) 13 countries; Watch List (WL) 26 countries

• Mandatory GSP Criteria: Worker Rights, IPR, Investor Protections

14

FTA Negotiation Process• Country requests FTA; need support of industries and labor • Interagency consensus to launch negotiations (assess impacts

of a comprehensive FTA, likelihood of success, etc.)• President notifies Congress of intent to negotiate (90 days)• During wait, USITC report; Hill and ITAC consultations begin

(2002-2007: 1,605 consultations with Hill); public comments • Negotiations occur in “rounds” between the parties• Prior preparation and internal approval by the Administration

of proposed text – shared with Congress and advisory committees – bracketed text changes after each “round”

• Negotiations conclude – toughest issues resolved at the end; may include side letters

15

FTA Approval Process• President notifies Congress of intent to sign (90 days)• Environmental reviews, advisory committee reports, USITC

FTA economic impact report• Once FTA negotiations end: attorneys do legal scrub of text,

followed by Presidential announcement and signing • During course of FTA negotiation and especially after signing,

Embassies, private sector associations, NGOs lobby Congress• Getting FTAs through Congress: “little to do with agreement

substance and everything to do with U.S. politics”• Fast track or TPA: up/down vote approval authority essential• Fast track approval procedures (must occur within 90 days)

16

President Obama’s ActionsSince being in office, President Obama has:• Pushed through approval of three FTAs (Panama,

Colombia, Korea)• Re-launched the Trans Pacific Partnership and added

partners – Malaysia, Mexico, Canada, Japan • Launched the Trans Atlantic Trade and Investment

Partnership Agreement (TTIP) between the U.S. and EU• Launched Trade in Services Agreement (TISA) talks • New AGOA review launched• Emphasis on enforcement and reciprocity

17

USTR Negotiating Agenda• Trans Pacific Partnership Agreement (TPP)• Transatlantic Trade and Investment

Partnership (TTIP)• Trade in Services Agreement (TISA)• Agreement on Trade Facilitation (TF)• Information Technology Agreement (ITA)• Participation in Strategic and Economic

Dialogue (S&ED) with China and with India• Doha Round -- WTO Ministerial in Bali

18

Key Congressional Trade CommitteesThe Big Four: • Senate Finance Committee (Chair: Sen. Baucus (D-MT);

Minority: Ranking Member: Sen. Hatch (R-UT)– Subcommittee on International Trade, Customs and Global

Competitiveness (Sen. Wyden (D-OR); Sen. Isakson (R-GA))• House Ways and Means Committee (Chair: Rep. Camp (R-MI);

Ranking: Rep. Levin (D-MI))– Subcommittee on Trade (Rep. Nunes (R-CA); Rangel(D-NY))

Senate Leadership: Majority Leader Sen. Reid (D-NV), Minority Leader, Sen. McConnell (R-KY)

House Leadership: Speaker Boehner (R-OH); Majority Leader Cantor (R-VA); Minority Leader Pelosi (D-CA)

19

2013-14 Congressional Trade Agenda• TPA – expired in 2007• GSP – expired in July 2013• ATPA – expired in July 2013 (only remaining beneficiary

was Ecuador – no renewal plans)• TAA – first created in 1962; expires in Dec 2013• AGOA – expires in September 2015• Customs Modernization Act - waiting• Miscellaneous Tariff Bill…is waiting (600 tariff

suspensions expired 1/1/13, MTB procedural reforms)• Trade, however, is not the only thing facing Congress

20

Trade and the Legislative Agenda• Fall 2013 Legislative Agenda

-- Syria-- Debt Ceiling-- Sequestration-- Budget-- Tax Reform-- New Federal Reserve Chair

-- Tax Extenders

21

Trade Policy Tips• U.S. Government focuses on getting things done rather than

building relationships; you may be different• Sequestration may mean that staff are in the office less• Ask questions, even if you know the answer; you will find out more

than just the answer you need• Meet your deadlines• Keep current: e-newsletters (agencies and companies), Facebook,

LinkedIn, Twitter, blogs• Know which agency really is in charge or makes the decision

(despite what others may claim)• What you see is not always what it is, so….• Keep asking questions and solicit opinions

22

Web Resources• Glossary of Acronyms:

http://www.ustr.gov/about-us/trade-toolbox/glossary-trade-terms• U.S. Trade Representative (has e-newsletter)

– http://www.ustr.gov/about-us/press-office/22press-releases/2012/september/ustr-press-office-week-ahead-september-10-25

• Department of Commerce: www.commerce.gov

• U.S. International Trade Commission: www.usitc.gov

• Congressional Research Service: https://opencrs.com (also: J.F. Hornbeck paper on “Congress & Trade,” April 2011)

• Guide to U.S. Government: http://bensguide.gpo.gov/

• Other: sandlertrade.com, wita.org, globalcommunicators.com

23

Where to Look For…• Trade policy – ustr.gov; trade.gov• Import regulations – cbp.gov• Import data:

http://dataweb.usitc.gov/scripts/tariff_current.asp• Tariff schedules, trade studies - USITC.gov; census.gov;• Legislation -- thomas.loc.gov;• Submitting comments -- regs.gov• Federal notices -- federalregister.gov• Can’t attend a hearing but want to listen - hearings are

webcast – go to Committee websites

24

Thank you!