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USTR Ambassador Froman Spells Out U.S. Trade Agenda Before Congress

On Thursday, Michal Froman, Ambassador for the Office of the United States Trade Representative, testified before the House Committee on Ways and Means regarding the Obama administration’s trade agenda for 2014.

Froman linked the U.S. trade agenda to Obama’s domestic economic agenda, especially the stimulation of job creation. He said, “The core of the Obama Administration’s economic strategy is to create jobs, promote growth, and strengthen the middle class. Our trade and investment policy contributes significantly to that strategy by opening markets for Made-in-America exports, leveling the playing field by raising standards and enforcing our trade laws and our trade rights.”

Froman continued, “Done right, trade policy creates opportunities for American workers, farmers and ranchers; manufacturers and service providers; innovators, creators, investors and businesses — large and small. The Obama Administration has a strong record of success in promoting U.S. exports and creating jobs here at home. Over the past four years, U.S. exports have increased to a record high of $2.3 trillion in 2013. In fact, a third of our total economic growth is attributed to this increase in U.S. exports.”

“Exports mean jobs. Each $1 billion in exports supports 5400-5900 U.S. jobs. 11.3 million Americans now owe their jobs to exports — an increase to 1.6 million jobs in the last 5 years — and those jobs pay 13-18 percent more on average than non-export related jobs.”

Froman also discussed the U.S. participation in major, outstanding trade agreements, especially the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP), that should deliver new opportunities to American businesses as a consequence of eliminating barriers to trade.

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“In 2014, we will work to conclude negotiations on the TPP agreement. TPP is currently being negotiated among 12 countries in the fastest growing region in the world representing nearly 40 percent of global GDP and a third of global trade. “We are working to ensure that the final agreement will provide comprehensive market opening for goods and services; strong and enforceable labor and environmental standards; innovative commitments on intellectual property rights; groundbreaking new rules designed to ensure fair competition between State-owned enterprises and private companies; and for the first time, obligations that will address the issues of the digital economy. We are also working to complete parallel negotiations with Japan to address longstanding issues related to autos, insurance, and other non-tariff measures.”

“And building on last year’s successful launch, we expect to make significant progress this year toward a T-TIP agreement with the European Union. This will strengthen the world’s largest trade and investment relationship.”

One central purpose of U.S. ambitions regarding trade, according to Froman’s testimony, is support for the nation’s manufacturing interests. “U.S. manufacturing plays a key role in our economy today and in the future. As American manufacturers increase our capacity to produce more advanced and value-added goods, consumers around the world continue to place a high value of products Made in America. In 2012, the United States exported nearly $1.4 trillion in manufactured goods, which accounted for 87 percent of all U.S. goods exports and 61 percent of U.S. total exports. In 2014, the Administration aims to build on the strength of our manufacturing sector.”

Of the many issues Froman addressed, he singled out the protection of intellectual property, particularly important to TPP discussions. “The United States is an innovative economy, and the Obama Administration is committed to protecting intellectual property (IP), which is vital to promoting and encouraging innovation and creativity. Millions of American jobs rely on IP, and we will continue to use our trade agenda in 2014 to defend the IP rights of our creators and innovators while supporting the freedom of the Internet, encouraging the free flow of information across the digital world, and ensuring access to medicines, particularly by the poor in less developed economies.”

Just last week, the U.S. won a contentious legal case against China before a World Trade Organization (WTO) tribunal and Froman touted that as an example of the U.S.’s strong position on trade enforcement. “The Obama Administration has also placed an unprecedented emphasis on trade enforcement. Since 2009, the Administration has filed seventeen WTO complaints, and doubled the rate of cases filed against China. In fact, just last week, the United States scored an important victory for America’s workers and manufacturers and for upholding WTO rules on fair access to raw materials that are essential for maintaining U.S. manufacturing competitiveness. Through our ongoing enforcement agenda, we are leveling the playing field for key agricultural producers in Wisconsin, Georgia, and Oregon, aircraft workers in Kansas and Washington State, and manufacturers of wind turbines in Ohio and hi-tech batteries in Michigan.”

Finally, Froman spoke about two brewing controversies regarding U.S. trade: the criticism that current free trade agreement talks lack transparency and the potential expiration of the president’s trade promotion authority. Froman pledged to open up discussions more and solicit the input of a wide spectrum of stakeholders. “We are increasing the diversity of trade policy input we receive through the creation of the Public Interest Trade Advisory Committee (PITAC) to include stakeholders focused on consumer, public health and other public interest issues. And, consistent with the statute, the Administration is soliciting qualified candidates to serve on the ITACs, our industry advisory committees, to ensure that they are representative of industry, agriculture, services and labor interests.”

Froman advocated trade promotion authority as an essential executive instrument in the settlement of important negotiations. “Finally, let me say a word about Trade Promotion Authority (TPA). The last TPA legislation was passed over a decade ago. Much has changed since that time. There has been the May 10th, 2007 agreement on labor, environment, innovation, and access to medicines. There has been the emergence of the digital economy and the increasing role of state-owned enterprises in the global economy. These issues should be reflected in the statutory negotiating objectives of a new TPA bill.”

Froman continued, “We have heard from many that TPA needs to be updated. We agree. The Administration welcomed the introduction of bipartisan TPA legislation in January and look forward to working with this Committee and Congress as a whole to secure trade promotion authority that has as broad bipartisan support as possible. We also look forward to renewing Trade Adjustment Assistance (TAA) which expires at the end of this year as well.”