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TRANSCRIPT: Press Conference Call with USTR Michael Froman on Trans-Pacific Partnership Meetings

August 23, 2013

AMF: Thanks, Andrea and good afternoon there, everybody. I am en route back from Brunei, where we’ve had a series of meetings over the last several days with the ASEAN countries, the East Asia Summit countries, and very importantly the last two days, the TPP Ministerial. This follows on consultations in Tokyo earlier in the week with TPP’s newest participant. All of this is directed toward ensuring that TPP countries are focused on the remaining issues that need to be addressed before being able to complete the agreement at the Leaders’ direction this year.

Meetings were extremely productive, ministers really rolled up their sleeves and worked through a number of outstanding issues, and left Brunei giving their chief negotiators and negotiating teams clear instructions about what was expected of them over the course of the next week or so in Brunei at the TPP negotiating round and also laying out the path forward between now and the Leaders Meeting in Bali in early October.

As I said, we made good progress. There are still of course sensitive issues left, and it’s not surprising that the final stages of negotiation, as we enter the endgame, that those are the issues that are left on the agenda. But I was impressed by the dedication, workman-like attitude of all of the delegations and their commitment to work through these issues in order to achieve a comprehensive, ambitious, high-standard 21st century agreement that we’re all working toward.

With that I’m happy to take questions and Andrea will moderate questions.

Speaker: So we are ready to take questions now please.

Speaker: Hi Ambassador Froman, this is Brian Wingfield at Bloomberg News. Thanks for doing this call. Since the tobacco proposal came out the other night, you received some criticism both from the business community and from anti-smoking groups, the latter saying the proposal was weak and the former saying it might open up a Pandora’s box for other issues that might come up during the trade talks. I wonder if you could respond to that and why you introduced it at this stage in the negotiations.

AMF: Thank you. Let me say what the tobacco proposal does and doesn’t do. In every previous trade agreement, tobacco has been treated just like any other agricultural product, with no distinction between it and any other product. For the first time, in a trade agreement, where we recognize the public health components of tobacco; and the proposal that we intend on tabling in Brunei will both make clear that the provisions of the trade agreement that allow countries to regulate for the health and safety and environmental protection of their people, will apply to tobacco as well. But it also introduces, importantly, a new step in dispute settlement that requires health authorities to be brought in and consult with each other before any dispute settlement procedure is taken. So we think it strikes the right balance, recognizing that there are public health issues around tobacco, and we want to make sure that countries can regulate on a scientific basis in the interest of public health, and that those health authorities will be consulted before any challenge to a tobacco-related regulation might take place. And on the other hand, we don’t want to create a precedent where we’re excluding any particular agricultural product or other product from the negotiation. I think to, a great degree, the proposal illustrates the broad range of views that are [inaudible] sound in any negotiating proposal. In this case, we received a lot of feedback last year, from a wide range of interests; we take that feedback seriously, we consult with stakeholders, and we try to come up with a balanced proposal that addresses everybody.

Speaker: Hi Ambassador Froman, this is Adam Behsudi from Inside U.S. Trade. You mentioned in your meetings on TPP that you all are on a path between now and the Leaders Meeting at APEC. Can you explain with any more detail what that plan is, what the schedule is, would there be an intercessional in Mexico in September? Can you provide more detail on that?

AMF: We started the 2-day ministerial that we just had in Brunei, that’s leading to a weeklong negotiating round in Brunei. Different groups are scheduling intercessional meetings over the course of September as appropriate, and then in the run-up to the Leaders meeting in Bali, several trade ministers will have their own APEC-related meetings; and this will be an opportunity for them to get together and talk about TPP as well. One of the key outcomes of meetings in Brunei is that the ministers recently very much engaged over the course of the meetings here to ensure that the work groups are narrowing issues, resolving sensitive issues, and teeing up issues that require a critical level of guidance as appropriate.

Speaker: Hi this is Mary Berger with Washington Trade Daily. Ambassador, I’m wondering if, as you’re getting closer to the end of these negotiations, where does Trade Promotion Authority fit into this? Do you feel like you need to have TPA in order to make the final decisions to close negotiations, or can you do without it?


AMF: Thank you. Well as the President noted in Chattanooga last month, TPA is an important tool. There is work going on in Congress in relevant committees on TPA. And we are engaged in that process. Japan’s getting ready to be a palpable work group, their issues. In the meantime, negotiations continue, and of course, throughout this process, we have consulted actively with our committees of jurisdiction and other relevant committees on their issues at every stage in this negotiation. And so, they are reviewing every proposal [inaudible], for the last two and half years we’ve engaged very directly, proactively with our Congressional colleagues to ensure they understand what it is we’re proposing and we’ve gotten their feedback and there are no surprises as we move forward.

Speaker: Hi this is Len Bracken, Bloomberg BNA. I’m trying to understand the tobacco proposal with just a little bit more detail. We had a conference call earlier today and John Murphy was saying the implication is that other products wouldn’t be able to be regulated. I wonder if you could give us language to describe how tobacco could be regulated differently than other products under your proposal.

AMF: Well what this does is, in all of our trade agreements it is made clear that all countries have a right to regulate in the interest of the health, safety, and environmental protection of their people. And what this, one of the parts of the proposal makes explicit, is that it includes regulation regarding tobacco. It doesn’t cut any other products out, it just underscores that tobacco has a public health nexus, and that nexus is being recognized for the first time, explicitly, and recognizes that the action that might be taken by regulators, dealing with tobacco use and harms, would fall in that provision that countries can regulate. It doesn’t have any effect on any other product. All it does is make absolutely explicit, that public health education [inaudible] tobacco, and the right of countries and their health authorities to regulate its use is [inaudible].

Speaker: Hi Kristi Ellis with Women’s Wear Daily. Thanks for the call. Ambassador Froman, the yarn forward rule of origin in textiles is an outstanding issue. How far apart are the countries on a yard forward rule, and are flexibilities like tariff preference levels and cut & sew rules on the table?

AMF: Well this has always been one of the most sensitive trade issues in any negotiation, including this one. We have made clear that the yarn forward rule is at the center of our proposal, and we are working with the other countries, negotiating with them, to allow that principle. There is still of course progress and more work to do, and that’s what negotiators will be working on for the next week.

Speaker: Hi Ambassador, this is Doug Palmer with Reuters. Do you expect this agreement to be completed by the Bali Summit, or will there have to be further negotiations after that? My second question is: is the U.S. making offers this round or in the coming month on sensitive products like dairy and sugar?

AMF: Doug, as we’ve always said, the leaders have agreed and given us direction to try and complete negotiations. That is our objective after all. At the October Leaders meeting that is an important milestone, that happens to be a good opportunity for leaders to get together to address any outstanding issues and assess where we are and the direction on remaining issues to their negotiators. With regard to particular offers, as noted, there is a lot of work to be done still, every country has sensitive products. We’re beginning to consult with our stakeholders, Congress, and others, as we figure out how to address sensitive issues, and not surprisingly, sensitive issues tend to be dealt with closer to the end of negotiations. We’re engaged with our trading partners on a range of issues, including some of their sensitive issues across the board.

Speaker: Thank you. Two questions: one, how’s the weather, two, what input has the tobacco industry offered to you as far as the proposal or input in conversations with Congress on this? This is Derrick Cain, reporter with Agri-Pulse.

AMF: How’s the weather? Well I’m in the Dubai airport at the moment, on the way back from Brunei, so it’s nice and warm here. The tobacco proposal, like any other proposal, received a broad range of stakeholder input. We proposed and refined our proposal with a broad range of input, from public health groups, as well as from the business community, agricultural groups, and Capitol Hill. Our job is to take all of that into consideration, and try to come up with a balanced approach that addresses a broad range of American interests in these negotiations.

Speaker: Hi this is Ben Weyl from Congressional Quarterly. The message coming out of the Chamber of Commerce today, is essentially one of concern that negotiators are moving too quickly, that in order to conclude an agreement by the end of the year, you’d be watering down the high standards of the proposed agreement. What’s your response to that?

AMF: I haven’t seen that particular statement. This is the 19th round of negotiations; we’ve been negotiating for 2 and a half years. Anybody who’s been involved in a negotiation knows that, as you mentioned, in the final period there is more intense activity. So we are not rushing this agreement to meet a particular deadline. We had a whole discussion in Brunei centered around how to achieve and maintain a high standard, ambitious, comprehensive 21st century agreement, including new disciplines on new issues, that we all set out to achieve [inaudible].

Speaker: This is Ikki Yamakawa with Asahi Shimbun, Japanese paper. In Tokyo, at the conference, some Japanese reporters reported about Japanese [inaudible] not ending 85% of the elimination tariff rate, but you said that we need to be more ambitious. So the goal of the elimination should be over 90% or 95%. What is your thought on that?

AMF: Well, the TPP Leaders agreed back in November of 2011, that the goal of the negotiation was a comprehensive agreement that included the elimination of tariffs. We have a process now underway, with the TPP partners beginning to table offers of increasing levels of ambition, toward that objective. And I think the 85% offer was a good initial step in that direction towards a comprehensive agreement.

Speaker: Hi Ambassador, this Julianne von Reppert Bismarck calling from AmLex. I just wanted to follow up on Doug Palmer’s question about dairy and sugar. When you say that these are going to be dealt with close to the end of negotiations, do you mean that you are not going to be discussing them at this particular round?

AMF: Well we’re discussing a broad range of issues and working through how to best deal with them, including sensitive issues that every country has. So those discussions are ongoing, but they tend to come up towards the end of the negotiation.

Speaker: Thank you everyone for joining the call today.

AMF: Thank you.