WASHINGTON, Dec. 14-- The Trans-Pacific Partnership (TPP) agreement includes “new and innovative” proposals with the goal to create a model of how trade should be conducted in the Asia-Pacific region, said United State Trade Representative (USTR) Ambassador Demetrios Marantis.
Marantis testified before the House Ways and Means Committee’s Subcommittee on Trade during a hearing examining the progress of the TPP. Japan, Mexico and Canada recently expressed interest in joining the U.S. and eight other countries currently involved in forming the trade agreement. The Asia-Pacific region is significant for U.S. agricultural trade. Last year the TPP region received three fourths of our agricultural exports.
“Some are skeptical that Japan will really open its markets; skeptics think Japan will continue to use creative methods to keep out foreign goods and serviced while taking advantage of other countries’ TPP trade concession,” said Rep. Jim McDermott (D-Wash.). “That is clearly an unacceptable situation. We need to make sure we do not end up there if we do agree to Japan’s participation.”
Marantis said USTR is working with Congress and partner countries to determine if Japan is prepared to take on the high standard commitments expected in the TPP, including non-tariff barriers that are grounded in sound science, data protection and criminal enforcement of TPP standards.
USTR is accepting public comments on the acceptance of Japan and other nations into the TPP with a Jan. 13 deadline. Chairman Kevin Brady (R-Texas) said his goal is to finalize the entire agreement by the middle of next year.
“It would seem that it would not be possible to get everyone in umbrella by mid-year,” said McDermott, while Marantis emphasized the process could take many more months.
Trade leaders must also decide if any products are to be excluded from the trade agreement. Rep. Geoff Davis (R-Ky.) vouched for his state’s tobacco growers at the hearing.
“I want to be sure it is a comprehensive agreement,” he said. “If there would be an exclusion, it would be devastating.”
International business relations director for Cargill, Inc., Devry Boughner, also pulled for a comprehensive agreement that includes “all products and all sectors in all TPP economies.”
“Even though TPP may need to provide flexibility on phase-outs when needed, TPP should result in commercially meaningful liberalization, which means that all tariffs should be phased to zero and quotas eliminated,” she said.
Boughner and other private industry representatives testified that TPP should provide solutions for a range of longstanding trade issues, including standards for science and risk-based sanitary and phytosanitary (SPS) measures.
“The WTO rules on sanitary measures do help solve these problems, but it’s often not enough,” said Rep. Adrian Smith, (R-Neb.). “How are we going to ensure nations won’t keep out U.S. products?
Marantis told the Congressmen that the TPP is being designed to fully enforce the WTO SPS agreement, but “will go beyond” by putting policies in place to ensure transparency, regulatory commitment and requirements based on sound science.
“We are negotiating sector specific annexes to address non-tariff measures,” he said. “Including non-tariff measures in the area of agriculture to make sure our partners are transparent and their risk analyses are grounded in science.”
The USTR deputy also discussed measures the TPP will take on data protection and rule enforcement. The agreement will require each country to adopt criminal penalties to deter the theft of trade secrets a have processes in place to make sure trade partners have those measures on the books, he said.
“I think Japan, Canada and Mexico have noticed the unbelievable promise of the TPP in terms of growing jobs and access to market opportunities in the region,” he said. “We’re going have to best determine how we will ensure that Japan is up to the task to meeting the high standards.”
Boughner said Cargill would be able to reach 800 million customers with this agreement “if it is done right.” She added that each country applying its own food safety standards is a significant problem, particularly for the pork industry. She emphasized reaching for common agreement on food safety standards and an oversight process that can quickly assess whether countries’ import standards are based in sound science “within a matter of days, not months.”
The United States and its current TPP partners- Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam - completed the tenth round of negotiations this week in Kuala Lumpur, Malaysia. Combined, the current TPP partner countries are the fourth largest goods and services export market for the United States.
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