Statement to the World Trade Organization General Council by Deputy U.S. Trade Representative and U.S. Ambassador to the WTO Michael Punke
World Trade Organization
November 26, 2013
“Thank you, Director General, for your report today – as sobering as it is – on where we stand. We join others in appreciating your efforts in attempting to facilitate a deal for the upcoming 9thMinisterial Conference in Bali.
“I must say it is with a great deal of sadness that I deliver this statement today. Like others, at 10 p.m. Sunday night we were hopeful that eight-weeks of round-the-clock toil by Members could lead to the first multilateral trade deal in two decades – the first multilateral trade deal in the history of the World Trade Organization. But by 7 a.m. Monday morning, it appeared that the deal was no more. Today, we’re worried – alongside so many in this room – that a once-in-a-generation opportunity may have slipped our grasp.
“A local friend of mine who lives nearby but doesn’t know anything about international trade told me last week that he had ‘noticed lately that it seemed like the lights were on a lot more at the WTO.’ I thought it was a great metaphor.
“I’ve been in Geneva for three and a half years, and many times last week it was striking to me how alive this institution felt: bustling hallways; excited clusters of conversations swapping rumors between meetings; empty vending machines – even the ones that sell really bad coffee; Room W with text up on the big screen and negotiators filling every seat. It felt like a place where things happen. It’s the first time I’ve felt that way during my tenure in this town.
“Equally striking is the interest of global stakeholders in what we’re doing. They are calling and emailing, skeptically at first to say, ‘Is a deal really possible?’ Later with cautious hope, often after learning about particulars of the deal, to say, ‘Good luck – this would be good for the multilateral trading system.’
“The United States is among that vast majority of WTO Members who have worked hard to have a deal for Bali. We care about this institution. We seized this chance to keep the negotiating rooms busy; to earn the attention of stakeholders around the world. It has been, if not always a pleasure, a privilege to work shoulder-to-shoulder with distinguished colleagues over the last several weeks and months. By now, we know each other very well. We particularly appreciate the efforts of the many in the waning moments who worked together to bridge the gaps, to consider creative options for resolving issues, to bring us closer together rather than finding new ways to drive us apart. I appreciate the wise and generous remarks of the distinguished Chairman of the Africa Group. I send my thanks right back to Omar [Morocco], thanks Wayne [Jamaica], thanks Syafri [Indonesia], thanks Shanker [Nepal], and Wafaa (Egypt). And thanks to so many others.
“Despite all this effort and good faith, we’re not there yet. In an organization that operates by consensus, a small handful of Members can keep the majority from achieving success. The least common denominator can become the de facto highest common denominator. Sadly, that’s what appears to be happening.
“We’re skeptical that those who appear to be refusing to reach agreement can now be convinced by another long night of negotiation. Indeed, we agree with the assessment of the Director General that the Geneva process has run its course. Further work here, even if there were time, would run the risk of yet more hostage-taking.
“Nor do we agree with those who expect magic solutions to emerge though negotiations by Ministers in Bali. How would that work? Are we really proposing to put texts up on the screen and ask a plenary session of our 159 Ministers to find words where we could not? Would the Membership accept a Green Room, where thirty Ministers cut a deal while 129 wait outside in the hallway?
“Having learned the hard way from previous ministerials, all of us have said for months that Bali cannot be a negotiating session. Nor should this body contemplate rewarding the intransigent few with new concessions. We took the Director General seriously when he said that we’ve been in the end game – and we left our best offer on the table. In pursuit of an agreement with our trading partners here, we demonstrated our flexibility on tough issues including Section 2, and in that case, with willing partners, we all found agreement together.
“People in this room know that the United States negotiated hard, but it did so in a spirit of problem solving, making principled compromises when necessary to help solve a puzzle that has blocked negotiating progress for a decade. And having made those tough compromises, the United States stands by the deals we reached together.
“I have heard some suggestions of taking a couple of weeks after Bali to tie up negotiations. But I think we all know that won’t work. We have known for two years that Bali would be a moment of reckoning. What we cannot decide by then will not fall suddenly into place in the weeks thereafter.
“Like others in this room, we’re not sure about the path forward. Like others, we will use the next few days to consider carefully the next steps.
“After having a taste of the potential of this institution when we work together, after holding actual texts in our hands – it seems hard to contemplate going back to the quiet, dark hallways of the old WTO. But that is a prospect that is present again and we know it all too well.
“The United States will look for answers with those who are working to keep the lights switched on.”
DATE: November 24, 2013
This evening, chief negotiators for the 12 Trans-Pacific Partnership countries have reported significant progress after six days of intensive meetings in Salt Lake City, Utah.
Working with key subject-matter experts, the lead TPP negotiators resolved a substantial number of outstanding issues across the talks, including with regard to intellectual property, cross-border trade in services, temporary entry, environment, market access, state-owned enterprises, investment, financial services, sanitary and phytosanitary issues, government procurement, labor, e-commerce, legal issues, technical barriers to trade and rules of origin.
The work of the chief negotiators this week has significantly narrowed the number of issues to be addressed directly by the TPP Ministers at their upcoming meeting in Singapore.
Discussions among TPP negotiators will continue in the coming days to further set the stage for a productive meeting among the TPP Ministers in early December.
Q: When was the Interagency Trade Enforcement Center (ITEC) established?
A: On February 28, 2012, the President signed Executive Order 13601 establishing ITEC to enhance enforcement of U.S. trade rights and domestic trade laws.
Q: What is ITEC’s mission?
A: ITEC is charged with fighting for American workers, farmers, ranchers, and businesses by bringing a more aggressive “whole-of-government” approach to addressing unfair trade practices around the world. ITEC will be supported by the Departments of Agriculture, Homeland Security, Justice, State, and the Treasury, as well as the intelligence community. The personnel from these agencies will enhance U.S. trade enforcement capabilities and facilitate increased engagement with foreign trade partners at the World Trade Organization (WTO) and elsewhere through the creation of an expanded team of language-proficient researchers, subject matter experts, and economic analysts. ITEC is designed to help leverage and mobilize resources and expertise across the federal government to develop trade enforcement actions that will address unfair foreign trade practices and barriers that could otherwise imperil our nation’s export promotion and job recovery efforts.
Q: How is ITEC different from existing trade enforcement programs?
A: ITEC is unique in that it constitutes a more dedicated “whole-of-government” approach to addressing unfair trade practices and trade barriers. This new approach will provide a primary forum within the federal government to bring together experts from executive departments and agencies to coordinate trade enforcement. ITEC will permit a sustained focus on particular issues not possible previously.
Q: Doesn’t the U.S. government already have the capacity to address unfair trade practices and trade barriers?
A: A priority of the Administration is to better leverage the government’s trade enforcement activities by focusing its existing resources to address unfair trade practices and foreign trade barriers more effectively. ITEC will link, leverage and align both existing and new resources more efficiently across the executive branch and with stakeholders. The key here is efficiency. ITEC’s goal is to build upon existing capacity to give U.S. companies, workers and producers every chance to compete on a level playing field in today’s global marketplace.
Q: How many people will be working at ITEC at any given time?
A: By October 2012, ITEC had more than a dozen full-time and part-time staff and that number should increase substantially by the end of FY13. These figures are subject to change as issues, priorities and available funding change.
Q: How do you determine the issues for priority attention and action?
A: The Director and Deputy Director, along with the various offices within USTR, and in cooperation with other agencies will examine various trade issues and will establish priority projects for investigation. As is currently the case, a variety of factors will be taken into account in setting those priorities, including economic impact of the issue, systemic impact of resolution on international trading practices, ability to document and demonstrate the problem, available resources, and broad trade goals.
Q: Is ITEC’s purpose to bring more trade remedies and WTO cases against Chinese products?
A: ITEC’s purpose is to help ensure that all of our trading partners play by WTO rules and abide by their obligations, including commitments to maintain open markets on a non-discriminatory basis, and to follow rules-based procedures in a transparent way.
Q: What countries will ITEC be working on?
A: ITEC will be addressing trade enforcement issues originating in a variety of regions across the globe. It is USTR policy not to discuss publicly cases that it is developing to avoid giving advance notice to governments overseas.
Q: What will the role of ITEC be in administering domestic trade laws?
A: The Department of Commerce has statutory responsibility for administration of the antidumping and countervailing duty (AD/CVD) laws and will continue to administer them. The International Trade Commission (ITC) will continue to make injury determinations with regard to all AD/CVD investigations and sunset reviews. ITEC was not intended to duplicate the efforts that are assigned by statute to particular agencies. ITEC will be looking for areas where it can add value to the work already being done.
Q: What will the role of ITEC be in dealing with circumvention of antidumping and countervailing duty orders?
A: Import Administration’s Customs Unit and U.S. Customs and Border Protection will continue to take the lead on issues related to circumvention of antidumping and countervailing duty orders. Deliberate evasion of AD/CVD duties by providing false information in a customs declaration constitutes customs fraud, and is a breach of U.S. law, punishable by fine or imprisonment. In addition, the National Intellectual Property Rights Coordination Center (NIPRCC) plans to step up enforcement of commercial fraud laws related to evasion of antidumping and countervailing duties.
Q: Will ITEC be involved in “self-initiation” of antidumping or countervailing duty cases?
A: Antidumping and countervailing duty investigations may be initiated as the result of a petition filed by a domestic interested party or at the Secretary of Commerce's own initiative. Self-initiation of such investigations has been a very rare occurrence. However, should the Secretary of Commerce request ITEC assistance in such a self-initiation, ITEC will provide support as appropriate.
Q: How will ITEC engage with the NIPRCC and the Intellectual Property Enforcement Coordinator (IPEC)?
A: The NIPRCC’s focus is on the law enforcement response to IPR theft, primarily coordinating investigation and prosecution of IPR infringers under the criminal laws of the United States. The NIPRCC also is a key participant in international cooperation on criminal enforcement activities involving various other partner governments and international police organizations such as Interpol and Europol. ITEC’s focus is enforcement of U.S. rights under trade agreements across a wide set of issues – including intellectual property. ITEC has and will continue to coordinate with the NIPRCC and the IPEC.
Q: Will ITEC serve a rapid response function, including with respect to identifying subsidies in overseas markets?
A: ITEC will be focusing on enforcement of U.S. rights under trade agreements which require some time to investigate, develop, and coordinate. However, to the extent ITEC becomes aware of issues requiring a rapid response through its monitoring or outreach functions, it will bring such issues to the attention of that part of USTR or another agency best positioned to take more immediate action.
Q: How will ITEC help small and medium-sized enterprises? What is the difference between what ITEC does and what the Trade Compliance Center at the Department of Commerce does?
A: Small and medium-sized enterprises (SMEs) are encouraged to continue to report their specific market access problems to the Trade Compliance Center (TCC) at the Department of Commerce. If the TCC is unable to resolve an issue, especially when it has noted a trend, the TCC will report the problem to ITEC. By leveraging the expertise of the TCC, ITEC will have a head start on dealing with trade issues that are affecting SMEs. Small and medium-sized enterprises may also work through their associations to bring industry-wide problems to the attention of ITEC.
Q: How will ITEC interact with other parts of USTR that may already be engaged in working on an issue of concern to certain companies or industries?
A: ITEC is in close contact with the various offices within USTR. USTR sector experts and negotiators are aware of ITEC activities and vice versa to ensure full coordination. Parties which have been working closely with USTR offices on issues of concern should continue to do so.
Q: What role will ITEC play in section 301 cases?
A: Interested persons may file petitions with USTR under section 301 of the Trade Act. Depending on the nature of the petition, ITEC may be involved in doing additional research during the 301 investigation phase. It is important to note that, although USTR can initiate a section 301 investigation itself, USTR does not need to do so in order to initiate WTO dispute settlement action. With regard to the majority of WTO dispute settlement actions, we anticipate that ITEC will be doing some of the same types of research that outside parties would typically do themselves in order to file a 301 petition.
Q: What role will ITEC play in section 201 cases?
A: Section 201 investigations will continue to be carried out by the International Trade Commission, which has statutory responsibility for implementing this section of U.S. trade law. Although it is a historically rare occurrence, the President or USTR can request the ITC to conduct a section 201 investigation. ITEC may have a role in providing information that can be used to inform the decision as to whether the President or USTR should make such a request.
Q: Will ITEC monitor the new free trade agreements to ensure that trading partners are not erecting new non-tariff barriers that would limit the benefits U.S. companies are supposed to gain from the agreements?
A: While ITEC will monitor certain issues, it does not have the staff to monitor every aspect of every FTA. ITEC continues to work with other offices within USTR to ensure compliance with FTAs and will continue to request that industry and companies bring problems to ITEC’s attention.
Colombia is an important market for U.S. textiles and apparel. The U.S.-Colombia Trade Promotion Agreement opens new market access opportunities for U.S. textiles and apparel manufacturers and strengthens customs enforcement mechanisms to verify claims of origin and deny illegal customs circumvention. Qualifying U.S. textile and apparel exports to Colombia would receive duty-free treatment immediately upon implementation of the Agreement.
Tariffs: Colombian textile and apparel tariffs currently average 18.3 percent. Qualifying U.S. textile and apparel exports to Colombia would receive duty-free treatment immediately upon implementation of the Agreement.
Textile Specific Safeguard: A special textile safeguard mechanism will provide for a temporary return to MFN tariffs if a surge in imports under the Agreement is shown to be causing or threatening to cause serious damage to domestic industry.
Rules of Origin: The Agreement contains a “yarn-forward” rule of origin, meaning that qualifying textile and apparel products must be produced using U.S. or Colombian yarns and fabrics. This rule of origin ensures that the benefits of the Agreement accrue to U.S. and Colombian producers.
Elastomeric Yarn Requirement: Consistent with other free trade agreements, elastomeric yarns must be sourced from the region for textiles and apparel products to qualify for duty-free entry.
Streamlined Processes to Address Commercial Availability: A special commercial availability (“short supply”) determination process will help yarns or fabrics that are deemed not commercially available in the region to be used in the production of apparel.
Customs Enforcement: Specific textile customs cooperation language will help prevent transshipment and circumvention of the rules of origin of the Agreement.