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PRESS BRIEFING BY USTR AMBASSADOR RON KIRK AND DEPUTY NATIONAL SECURITY ADVISOR MIKE FROMAN ON U.S.-EU TRADE NEGOTIATIONS
Via Conference Call
9:45 A.M. EST
MS. GUTHRIE: Good morning, everyone, and thank you for joining the call. This is Carol Guthrie. I am the Assistant U.S. Trade Representative for Public and Media Affairs. And with us today we have U.S. Trade Representative Ron Kirk and Assistant to the President and Deputy National Security Advisor for International Economics Michael Froman. They will be speaking on the record today, quotable by name, about the President’s announcement last night in the State of the Union that the United States will indeed launch negotiations with the European Union toward a transatlantic trade and investment partnership.
We do not anticipate using the whole hour on this call, but we will have Ambassador Kirk speak briefly first, followed by Mr. Froman. And then we will take your questions for about 20 minutes.
With that, we will turn it over to Ambassador Kirk.
AMBASSADOR KIRK: Good morning. Thank you all for joining us. I'd like to believe that most of you saw the President’s State of the Union address last night, in which President Obama laid out a very ambitious but thoughtful and common-sense plan to keep America’s economic recovery going strong, to make America a magnet for jobs and manufacturing, equip Americans with the skills that we need to succeed in this competitive global economy, and make sure that every American who works hard and plays by the rules has an opportunity to a decent living. And all of this contributed to a smart and thoughtful deficit reduction that aids our economic recovery.
Last night, the President also highlighted, as he has done in a previous State of the Union address, the critical role that trade -- a smart, fair, balanced trade policy can have in aiding our economic recovery and job creation, and in particular, the President announced -- and notified Congress at least verbally -- of our intent to launch negotiations with the European Union toward a Transatlantic Trade and Investment Partnership.
The President based this decision on recommendations of a high-level working group on jobs and growth which the President and leaders of the European Council and Commission asked be created a little bit over a year ago to study all of the ways we might further expand the deepest and strongest economic partnership in the world.
The working group was chaired by myself, along with EU Trade Commissioner Karel De Gucht, and the decision of President Obama and Presidents Van Rumpuy and Barroso reflect their joint conviction that our economic relationship can be even more productive and help create even more jobs, trade and growth between the European Union and the United States.
President Obama has always believed that a comprehensive agreement with the European Union and the United States could yield significant increases in U.S. exports and further our success under his National Export Initiative while supporting additional jobs here in the United States, boosting growth and strengthening us for the competitive challenges for decades to come.
The high-level working group recommended that the EU and the United States pursue a very high-standard agreement with ambitious disciplines across a broad range of areas, including pressing for full elimination of tariffs, which in most cases are reasonably modest between our two economies, but making substantial progress on tackling and reducing non-tariff areas and addressing liberalization in areas of service investment, labor and the environment, among other issues.
We also recommended that the United States and the EU seize the opportunity to develop new disciplines in emerging areas that have confronted trade, such as the involvement of state-owned enterprises and increasing use of localization measures as barriers to trade. We believe that progress in these areas among others not only would help liberalize trade between our two economies but also help strengthen the global trading system and allow us to devise common approaches to issues of common interest.
In the course of our work we have consulted extensively with congressional stakeholders, in particular our committees of jurisdictions, but we've also consulted with a broad range of stakeholders across the perspective including representatives of business, environmental groups, labor, and consumer groups as well.
Having had the privilege of spending the last four years as our U.S. Trade Representative, I've had the opportunity to speak with Americans all across this country about how we could craft a trade policy that was more responsive to their needs and concerns, and one of the lessons we've learned is that engagement of our stakeholders is one of the smartest investments we can make and we think help lead to our ability to pass free trade agreements with historic margins of support, as well as extend Permanent Normal Trade Relations status to Russia. And we're going to continue that stakeholder engagement as we move forward in this exciting new venture.
At that point, I'd like to stop and turn it over to the President's assistant for international economic matters, Mike Froman.
MR. FROMAN: Thank you, Ambassador Kirk. Let me just -- I think the Ambassador covered it well. Let me just add a few points. This is potentially a very big deal. Between the U.S. and the EU, we account for almost half of global GDP. We account for one-third of the total trade in goods and services globally. There are 13 million jobs in the U.S. and the EU supported by our already deep trade and investment relationship. And to determine how big of a deal it would be will depend on whether we're able to achieve the highest level of ambitions.
As Ambassador Kirk laid out, our intent is to negotiate a comprehensive agreement, tariffs and non-tariff barriers, and very importantly, looking at the regulatory barriers and the barriers that our different standards pose to further integration of our economy. And if we're able to make progress in addressing those -- and it's our intent to do so, and we believe the political will is there on both sides to do so -- this could both help dramatically increase jobs and growth in the United States as well as in Europe, further integrate our economies and help set global rules that can help strengthen the multilateral trading system as well.
The reason we haven't had a trade agreement like this between ourselves in the last several decades isn't because no one has thought of it. It's because there have always been issues that have tripped us up. And what Ambassador Kirk and his team have done over the last year, working with the European Commission, is to identify what those issues were and how we might be able to bridge the gap. And we think that the stars could well be aligned given developments on both sides of the Atlantic for us to be able to resolve issues that have been difficult to resolve before. And that is what we'll be turning ourselves to next.
Q Hi, it's Howard Schneider with The Washington Post. This may seem like a stupid question, but I know throughout the working group report and in this conference so far, the use -- the phrase "free trade agreement" isn't being used, as opposed to high-level investment and partnership. Is there any significance in the fact that you aren't calling this an FTA?
AMBASSADOR KIRK: I think we are framing the agreement as one that is more representative of what we're doing, because it is so much broader than trade. It covers trade and investment, similar to our Trans-Pacific Partnership. But it's an opportunity for us to address in a comprehensive way a number of areas that sort of frustrate this relationship from being what it is. We're looking at regulatory coherence. We're looking at non-tariff barriers and so many others. So it allows us to have a much more comprehensive view.
And I would note for you, Howard, if you will recall that was the direction that we got from our leaders a year ago in this high-level working group on trade and growth and investment. So it's a little bit broader than that.
Q Yes, I had a question about -- on looking at the regulatory issues and how those would be tackled, and using an ongoing mechanism for STS issues or TBT issues, how much of the actual regulatory coherence, regulatory negotiations do you expect to resolve? How many of the issues do you expect to resolve in the talks themselves? And how many of these are going to be sort of pushed off to this ongoing mechanism? And kind of, maybe can you explain what that mechanism involves and how that’s going to be formed? And when do you expect to formally notify Congress about negotiations? Thank you.
AMBASSADOR KIRK: Do you want to tell us which of those three questions you want answered? (Laughter.) We'll let you get away with -- the when would be, obviously, we follow our decision to launch an FTA is not intuitive; it's a very deliberative process. It begins with our notifying Congress of our intent and then beginning the process with them. But you can argue you couldn’t have any more notice than what the President gave in his State of the Union to Congress last night. But over the next several weeks we'll make a decision on when we formally submit that letter and move that process.
I'll ask Mike Froman to speak more on the work we've done on regulatory convergence through the Transatlantic Conference. But in terms of your question of how much we'll do, that’s what these next 18 months are going to be about. We want to take the opportunity to solve problems as efficiently as we can. And to some degree, we're aided by the fact that now we think we have an historic opportunity, as Mike previously has said, to address some of these legacy issues that we know are frustrating. And if we can find the will, obviously the optimum would be to address them through the trade agreement. If we're unable to do that, we have an ongoing, very robust dialogue with the European Union on issues of regulatory cooperation.
I'll let Mr. Froman speak to that.
MR. FROMAN: I think the only thing I’d add is that we're just at the beginning of the negotiation now. And we've spent the last year talking about how we might go at these various issues, including the SPS and TBT issues. And some of them may be addressed through process changes; some may be address through substantive changes. And that’s what the next, as the Ambassador said, that’s what the next 18 months or so will be spent on, is fleshing that out and making as much progress as we possibly can.
Q Hi. I wanted to sort of go back to Howard's question and just ask how will this agreement be different from a traditional U.S. FTA? I mean, how is it different from sort of the traditional FTA model?
AMBASSADOR KIRK: Well, a lot of that will depend on what we get accomplished, Mary. But you’ve heard us say one of the deciding factors, for example, for us in going forward with the Trans-Pacific Partnership is we want to begin to craft agreements that respond to the world of trade and global commerce today.
The model that we have built on the last 15 years served us well. For example, when we did NAFTA 15 years ago, there wasn’t a labor chapter. You didn't have issues related to intellectual property. We certainly didn't have the degree of business conducted over the Internet and data transfer and others. We want to take advantage of this opportunity to work with Europe to not only further liberalize trade between the European Union and the United States, but as we said, also address some of these new generational issues that are beginning to crop up.
So it’s an opportunity for us to have an agreement that reflects the reality of doing business today. And we don't want to be handcuffed in any way by operating on a model that doesn't allow us to do that.
MR. FROMAN: And I think just to -- this Transatlantic Trade and Investment Partnership -- TTIP -- is really about both figuring out better ways of integrating our own economies, but also working together to help establish global rules, areas --working together in areas of common interest vis-à-vis the broader multilateral trading system. And so it is broader than the traditional FTA, as the Ambassador said.
Q Can you give us some of the next steps that we can anticipate? For example, when will we get the working group report, the final report? And any other things that you can tell us about the ongoing negotiations -- when would the negotiations potentially start, for example?
MR. FROMAN: So the working group report is out. I think the link to it on the joint statement -- it’s been on the website since 6:30 a.m. or so this morning or 7:00 a.m. this morning.
The next step, as the Ambassador said, is for us to notify Congress, which starts a 90-day period, and for the European Commission to seek a mandate from its member states, a formal mandate to negotiate the agreement. And once those two processes are completed we can begin formal negotiations.
Q Can you set -- there’s been a lot of concern from agricultural groups and members on the Hill about the agricultural issues with the EU being pushed off and not taken care of in part of the agreement. It sounds like you contemplate doing a lot of those through this mechanism, setting up a system to handle that later. Are you confident you can get support from the Hill by not resolving them as part of the negotiations?
MR. KIRK: Well, Paul, let me say this. One of the reasons that we have used a year in these intensive discussions through our high-level working group was to a have a very frank and candid assessment of each of our ambitions as well as addressing some of the legacy issues like agricultural access and having strong disciplines on sanitary and -- vital sanitary standards, which are part of every agreement the United States negotiates.
And we have been very transparent in terms of our desire to have that be a part of the agreement and we have addressed a number of issues of importance to the ag community throughout that process. But that will be part of the negotiations going forward.
But I do want to clear up one thing and make it plain -- no decision has been made to leave that apart and deal with that later. Nothing is further from the truth.
MR. FROMAN: Right. Quite the opposite. I just want to correct you, Paul. I think you’ve got it exactly backwards. We are not only not putting off ag issues past the agreement, but we are resolving them before the negotiations are completed. So during this one-year process, we worked to resolve some outstanding issues, and we expect to continue to do that in parallel with the negotiations.
And so nobody should be under any impression that we are not going to be resolving agricultural issues, including the SPS issues both in the negotiation and in parallel to the negotiation while the negotiations are going on.
Q I have two questions. The first one is what do you mean by the internal processes and how long do you expect it to last? And how long will you complete the whole partnership negotiation? And second is do you have similar plans to negotiate a partnership with other trade partners in the near future?
MR. KIRK: Well, Peter, again, as we’ve stated a number of times, our process to launch an FTA is very prescriptive. We are required by statute to provide notice to Congress in writing, in addition to the verbal notice of our intent to launch the agreement that the President made. But that is more administrative, and we anticipate that would be done reasonably soon.
And then, as I noted, we then have 90 days to confer with, in particular, our committees of jurisdiction. And at the same time, we will publish a notice in the Federal Register, as we have done when we’ve launched every other trade agreement, that gives all stakeholders an opportunity to express both their desires for what should be covered in the agreement that has raised any issue of concern they would like for us to address.
At the end of that 90-day period then, we obviously take some time to review the Federal Register notices, and all of that helps shape what formally will be the negotiating parameters of what we see.
But we have made no secret of our ambition, as the President said, to have a comprehensive agreement covering all matters related to trade and investment.
In addition to this, as I think you know, we have been involved for about 18 months, intensively now, in what is the largest plurilateral trade negotiation in the world through the Trans-Pacific Partnership, and we remain absolutely committed to working with the other 157 members of the World Trade Organization to find the best way to move forward in our mutual ambition to have a multilateral trade-liberalizing agreement. And we are hopeful that when we meet in Bali for our ninth ministerial meeting later this year that we can move forward at least on trade facilitation, which there seems to be a growing consensus of support for.
And the United States announced our intent several weeks ago to work with a number of like-minded partners on a global services agreement that would liberalize trade and services. And we have been working with a number of partners as well on an amendment and expansion of our information and technology agreement within the WTO as well.
But let me just say this. President Obama has made it plain that the United States welcomes, believes in, and wants to be a part of a global competition for products and services and jobs. But we also recognized to do that we have to have agreements that are fair and balanced and give American exporters the same free access to other markets as we've freely granted to the world. And we will use every possible avenue and venue available to us to advance our economic interest and support job growth here at home.
Q This is Jim Landers of the Dallas Morning News. I've heard talk about this as being an opportunity to set some rules that will then sort of sweep in the rest of the world, as far as the way certain things will be done when you talked about strengthening the multilateral system and whatnot. Are you going to try to get anything through these talks that gives you sort of a framework for intellectual property protection and working to get beyond where we've been able to go so far with the WTO on that score?
AMBASSADOR KIRK: Well, Jim, I think one of the advantages we have with this potential trade agreement, comprehensive agreement with the European Union is that our economies are two of the more similar and advanced in the country. We share a very strong mutual need to have the strongest intellectual property rights discipline because our economies are equally rooted on innovation, and research and development. And so, obviously, we think this is an area where we have common interests and shared ambitions.
And we will seek as strong of a protection for intellectual property rights as we can get. And to the degree that that then could become a platform by which we might be able to further the need to have strong IPR disciplines in other, whether it's a bilateral or multilateral venues, that would be a real value added of what we are able to negotiate in this Transatlantic Trade and Investment Partnership.
MR. FROMAN: The only thing I'd add is whether it's the TPP or the TTIP, our goal is to achieve high standard, 21st-century style trade agreements, trade investments that advance the global trade agenda, and to introduce into the bloodstream of the multilateral trading system new disciplines and new standards for conducting international trade. And we think that this exercise with the European Union presents a very good opportunity to do just that.
Q This is Jessica Stone with CCTV, can you hear me?
AMBASSADOR KIRK: Yes, Jessica, we can.
Q I guess piggybacking on what the previous reporter was asking about multilateral trade, how does TPP compare to what you're talking about here? And is this really about creating a system where China needs to have the same trade standards that everyone else does and this might be a way to get there by doing it first with the EU?
AMBASSADOR KIRK: Well, I would add -- I think that your question about China's ambitions would be more appropriately addressed to China. I think what our announcement does is validate and further President Obama's conviction that one of the strongest ways to grow our economy is to make sure that goods, products, services that are made, created, innovated in the United States find the opportunity to find their way into hands of consumers all around the world. And that is a way to grow jobs here.
You may recall that it was three years ago, President Obama in the State of the Union launched our National Export Initiative with an express goal to double U.S. exports, knowing that if we did so, we could create almost 2 million jobs. At the time, I think some scoffed at the idea. But the reality is that our exports have grown explosively during this period of time. Exports are very much contributing to our economic recovery. And we think some of the economic data shows that it's helped to create almost a million jobs of those 6 million jobs that have been created.
The President is a firm believer in the multilateral global trading system, but the President also acknowledged that the United States will not wait for others to move forward and that we will work with like-minded partners in whatever venue that we can. That's what led to our decision to join the Trans-Pacific Partnership as the subset of the ambition of the 21 members of APEC, but it also led to our decision to move forward with what has been a long-desired ambition of many in the European Union and the United States to build on and further expand the most explosive trade and investment partnership in the world between the United States and Europe.
So our ambition is solely related to the President’s commitment to drive economic growth and create jobs here, and not at all related to how it might affect China or any other member of the World Trade Organization.
Q I’d like to ask about two things which were not -- I didn't see in the report. You already said on agriculture that you want to finally eliminate all SDS barriers, but what about GMOs? It seems that the European Union has already said that they're not going to include GMOs. So can you clarify on that?
And the other area was cross-border data flows -- is that in this? Or is that just in the services plurilateral? Or what’s going on there? Thanks.
AMBASSADOR KIRK: I’ll only say to you again that one of the reasons that we have been as deliberate as we have been over the past year -- and I hope I’m not sounding repetitive -- is an acknowledgement of what Mr. Froman referenced. There is a reason we have not launched an effort of this nature in the past because of some of these historic difficult issues that have frustrated our ambition.
The United States has been very transparent about our desire to move forward in a comprehensive manner. And for us, that means everything is on the table across all sectors, including all across the agricultural sector. Whether it’s GMOs or other issues, we want to deal with many of these nontariff barriers that frustrate our trade. And we certainly would include the issue of cross-border data flows as one of those next-generational issues that should be addressed at all.
And we think if we’re going to do this, if we’re going to take advantage of the political will that it feels is building throughout Europe and the United States to do this, we should be ambitious and we should deal with all of these issues so that we can fully realize the potential of a comprehensive agreement of this nature.
Q I just want to follow up on that because President Barroso said this morning that basic accords governing hormones and livestock and GMOs won't be part of the talks. So I'm just wondering -- I mean, are we already starting to see some friction between the two sides?
MR. FROMAN: I think Commissioner De Gucht has also said that nothing was being excluded. And I think there are a number of ways of pursuing issues like biotech or like data services -- data flows as part of the services discussion. And that will be the subject of the negotiation.
So we haven't even started the negotiation yet. Everything is clearly on the table. And we understand there will be sensitivities of issues on both sides, and part of what we'll be working through over the next 18 months is how best to make progress in the context of those sensitivities.
Q Hi, there. I was wondering if you could kind of clarify the timing of this. You said you wanted to get it done on “one tank of gas." What does that mean exactly? Does that mean within 18 months? Does that mean in two years? What's the exact timeframe? And can you give us a clear sense of, from the U.S. point of view, what you expect to be the main sticking points, just maybe one or two, in the negotiations?
MR. FROMAN: I think in terms of the "one tank of gas," yes, you're right, we said that we want to go down this road -- if we're going to go down this road, we want to get it on one tank of gas. We don’t want to spend 10 years negotiating what are well-known issues and not reach a result.
I believe that our counterparts in the European Commission have noted this morning that they would like to get it done over the life of this Commission, and this Commission, I believe, turns over at the end or near the end of 2014. And so that’s the timeframe that we're offering. And we know it's ambitious but these are well-known issues and we've spent much of the last year working with each other to help identify how we might be able to address some of the outstanding issues.
Q And on the main sticking point?
MR. FROMAN: Oh, I don’t think I'm going to get into details of the negotiations. I think they're -- I mean, there are issues on both sides that have been historically challenging, and we're going to work our way through that with our conference.
MS. GUTHRIE: And with that, we’d like to thank everyone for joining this morning’s call. As a reminder, this has been on the record with Ambassador Kirk and Mr. Froman, and we will be releasing a transcript later today. Please direct all questions to the USTR press office. Thank you.
END 10:18 A.M. EST