Trade Facilitation Agreement hailed as boon to U.S. exporters
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WASHINGTON, July 23, 2014 - While multilateral trade agreements may seem a thing of the past, Deputy U.S. Trade Representative Michael Punke says that at least one new trade deal - about to be implemented around the globe- will mean big savings in time and money for U.S. exporters.
Punke was the lone witness at a House Ways and Means subcommittee hearing last week, focused on the Obama administration's trade policies and relations with the World Trade Organization (WTO). Many panel members made a point of congratulating Punke on a landmark accord reached in December to complete the Trade Facilitation Agreement (TFA). Punke said in his testimony the TFA was “the first successful conclusion of multilateral trade negotiations in the two-decade history of the WTO.”
“The TFA is a huge accomplishment for the WTO, reestablishing that its members can reach significant multilateral outcomes,” Punke said of the unanimous agreement during his opening statement. Negotiations to implement the deal continue.
The TFA, reached in Bali, Indonesia, creates binding commitments across more than 150 WTO members to expedite movement, release and clearance of goods, improve cooperation among WTO members on customs matters, and help developing countries fully implement the obligations. The agreement will increase customs efficiency and effective collection of revenue, and help small businesses access new export opportunities through measures like transparency in customs practices, reduction of documentary requirements, and processing of documents before goods arrive.
It's estimated the deal will reduce trade costs by as much as 10 percent in developed countries and 13 to 15 percent in developing countries.
Rep. Adrian Smith, R-Neb., asked Punke about the potential for action against countries that refuse to lift age-based restrictions on U.S. beef despite scientific evidence that such restrictions are unnecessary. Punke didn't elaborate on the potential for WTO actions, but did discuss the kind of trade regulations he and others are working toward.
“We are dedicated in this administration and at USTR that international rules on trade be based on science,” said Punke, who is also the U.S. ambassador to the WTO. “We're pursuing that principle across numerous issues including our efforts to promote beef exports, and we will very much continue to do that.”
Rep. Lynn Jenkins, R-Kan., asked if the Transatlantic Trade Investment Partnership (T-TIP) was the best option to force the European Union (EU) into WTO compliance on sanitary and phytosanitary (SPS) issues. Punke emphasized that having as many tools as possible to promote healthy trade could only benefit the U.S.
“I think that T-TIP does provide another opportunity for us to pursue this conversation with Europe, and we're doing that,” Punke said. “We are not where we need to be yet in terms of results, but we are at the table and using every one of the tools that we have at our capacity to try and achieve a science-based result.”
Punke also made reference to last week's T-TIP negotiations in Brussels and said that there were specific agenda items related to SPS issues such as beef hormones and biotech traits in crops. In an official statement on the USTR website, Punke's boss, USTR Michael Froman, made no mention of SPS issues, but said negotiators on both sides “worked productively … to identify paths forward across the negotiations.”
Punke said he is optimistic about the U.S. position in the current trade negotiations.
“We are at the center pivot of an effort to make the WTO a more productive place,” Punke said, pointing towards potential trade agreements across the Atlantic (T-TIP) and Pacific (Trans-Pacific Partnership) oceans. “I really see us as being very well positioned right now if we can consummate those agreements.”
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