Providing its views on the Obama administration’s trade policies and outlook, USCIB submitted written testimony to a February 9 hearing in the House Ways and Means Committee, calling on the administration to “pursue an active trade and investment agenda to open global markets.”

USCIB commended the administration for finalizing the U.S.-Korea free trade agreement, for pledging to double U.S. exports over five years, and for moving forward on the Trans-Pacific Partnership negotiations. It also said efforts to improve enforcement of existing trade agreements, especially through the World Trade Organization, had been helpful.

But much more could be done to open global markets for U.S. business, according to USCIB.  The testimony stated: “The key elements of a trade and investment agenda should include: completing the Free Trade agreements with Korea, Colombia and Panama; concluding an ambitious Doha Agreement in the World Trade Organization; moving forward with the Trans-Pacific Partnership negotiations to reach a high-standard trade framework; identifying new bilateral and multilateral trade initiatives with significant economic partners; addressing ongoing U.S.-Chinese trade and investment issues; accelerating work on investment treaties that will ensure protection of U.S. business investments in other countries; and aggressively promoting U.S. exports of clean technologies and environmentally-friendly goods and services.”

USCIB urged the administration to act “quickly and decisively” and to undertake new trade initiatives with leading trading partners in the near term.

On March 1, U.S. Trade Representative Ron Kirk released the Obama administration’s trade agenda.  “This agenda reflects our commitment to a job-focused, comprehensive trade policy that benefits American businesses and workers as well,” he said.

This week Mr. Kirk said his office had finished preparing the Korea free trade agreement for submission to Congress.  He also stated that the Colombia and Panama FTAs will require “weeks or months” of additional work to finalize, and that the administration intends to press ahead and seek approval of just the Korea pact at this time.  Trade proponents on Capitol Hill and in the business community have urged that the Colombia and Panama pacts be quickly finalized so that Congress can consider the three FTAs at the same time.

Staff contact: Rob Mulligan

USCIB Testimony on the Administration’s Trade Agenda

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USCIB and other industry groups have written to U.S. Treasury Secretary Timothy Geithner to argue against calls by some academics to change capital control rules in U.S. trade and investment agreements.  Presently, U.S. free trade agreements and bilateral investment treaties generally preclude the imposition of capital controls, except in extraordinary circumstances.  But some have argued that broader use of such measures may be needed in light of the 2008 financial crisis.

In the letter, the business groups argued that U.S. investment treaties and trade agreements already permit governments to take necessary action, including capital controls, to ensure the safety and soundness of their financial systems.  “That flexibility is more than sufficient to allow countries to take necessary actions to deal with a financial crisis,” the letter stated.

“Moreover, the critics advocating these changes inaccurately characterize the United States as some sort of outlier in including these rules in their trade agreements and BITs.  In fact, most Western European, Canadian and Japanese investment treaties (which are far more numerous than U.S. agreements) have long included similar provisions requiring the free flow of capital.  Most of those agreements are not as flexible as U.S. trade agreements and BITs because they do not contain the prudential flexibility found in U.S. agreements.”

According to USCIB Vice President Stephen Canner, the industry letter is timely in light of next week’s upcoming round of talks under the Trans-Pacific Partnership initiative.

Staff contact: Stephen Canner

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