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Michael Froman Takes Over as USTR, Inheriting Contentious TPP and EU Negotiations

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Michael Froman has been confirmed by the U.S. Senate as the next U.S. Trade Representative, putting him in charge of negotiating two major trade deals pursued by the Obama administration – the Trans Pacific Partnership (TPP) and a new free trade agreement with the European Union.

“Mike has been my closest adviser on a broad range of international economic issues and will continue to play a key role on my economic team,” Obama said.

“He’s trusted and well-respected by our partners around the world, and for the last several years, he’s been a driving force behind our international economic agenda.  In his new position, Mike will stay focused on our primary economic goals – promoting growth, creating jobs and strengthening the middle class.  And he will continue to help open new markets for American businesses, level the playing field for American workers, farmers and ranchers, and fully enforce our trade rights.”

Froman was working as deputy national security advisor for international economic affairs at the White House. He played an important role in shaping Obama’s trade agenda, often working with former USTR Ron Kirk.

The TPP negotiations include several tough issues surrounding textiles and apparel that must be resolved. Froman is trying to have those negotiations concluded by the end of 2013.

The TPP could have a major impact on manufacturing and outsourcing. It includes a yarn-forward rule of origin, which requires duty-free apparel to be made of fabric supplied by the US and other TPP countries. This move is supported by the domestic apparel industry but opposed by many apparel importers, who often source fabric from China, which is not a signatory.

Negotiations with the EU, which are primarily about harmonizing trade policies and regulations, will begin the week of July 8th in Washington.

A dispute over denim tariffs could be one of the first items on the agenda. At the end of April, the EU increased the tariff on US-made girl’s and women’s denim jeans to 38 percent, in retaliation for a WTO case the EU won against the US in 2008. This more than tripled the tariff. And caused an outcry among US denim makers.

 

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