[CTC] QFRs: The President's 2013 Trade Agenda
Arthur Stamoulis
arthur at citizenstrade.org
Wed Apr 10 13:53:52 PDT 2013
For Immediate
Release
: Contact
: Maggie Henderson (202) 454-5108
April 4, 2013
Obama Administration Targets Numerous Public Interest Policies of TPP
Countries in 2013 U.S. National Trade Estimate Report
New Report Indicts Health, Financial, Religious and Other Sensitive
Policies as “Trade Barriers” to be Eliminated, Spotlighting
Contentiousness of TPP Negotiations
WASHINGTON, D.C. – The Obama administration has just released a report
that takes aim at a litany of sensitive domestic policies in countries
currently negotiating the Trans-Pacific Partnership (TPP), identifying
the policies as “trade barriers” that the United States seeks to
eliminate. The target list of TPP nations’ domestic policies,
published in the 2013 National Trade Estimate Report by the Office of
the U.S. Trade Representative (USTR), offers unusual insight into why
negotiations over the sweeping, 11-nation deal are contentious and
have repeatedly missed deadlines for completion, said Public Citizen
today.
The 406-page USTR report indicts a wide array of public health
policies, financial regulations, politically sensitive manufacturing
and agricultural policies and even religious standards as “trade
barriers” that should be dismantled. USTR levies such criticism
against policies in all current and prospective TPP negotiating
parties, including New Zealand’s popular health programs to control
medicine costs, an Australian law to prevent the offshoring of
consumers’ private health data, Vietnam’s post-crisis regulations
requiring banks to hold adequate capital, and Canada’s standards
requiring cheese to be made from milk.
For Malaysia, a predominantly Muslim country, the USTR report
admonishes the government for “requiring that slaughter plants
maintain dedicated halal facilities and ensure segregated
transportation for halal and non-halal products.” Instead, the report
suggests that the government should conform its notions of Islamic
meat-processing requirements to those established by Codex
Alimentarius, an international food standards body at which
multinational food corporations play a central role. USTR also takes
issue with restrictions on importation of pork and alcohol in this TPP
negotiating country where three out of every five consumers are Muslims.
“Even before the Obama administration’s not-so-diplomatic target list
of other countries’ domestic policies, the Trans-Pacific Partnership
was on rocky ground, with negotiators from many countries rejecting
U.S. demands to expand patent monopolies for foreign pharmaceutical
corporations and to subject their financial, health and environmental
policies to foreign investor challenges before international tribunals
empowered to order government compensation,” said Lori Wallach,
director of Public Citizen’s Global Trade Watch. “By openly listing
the domestic policies in other TPP countries that it wants dismantled,
the Obama administration can only intensify growing public concern
about the TPP in these countries.”
USTR reserves some of its most detailed policy critiques in the
National Trade Estimate Report for Japan, which recently announced its
intent to join the TPP negotiations. The report devotes 16 pages to
castigating food labeling policies for providing too much information
to consumers, outlining how exactly the country should restructure its
public insurance system, urging the government to grant tax benefits
to foreign universities, and bemoaning Japan’s preference that its
military equipment be made domestically. (The United States has
similar rules on military procurement.)
The report also takes aim at Japan’s agricultural policies,
recommending, for example, the weakening of protections for domestic
rice farmers because “Japanese consumers would buy U.S. high quality
rice if it were more readily available.” The political party of
Japanese Prime Minister Shinzo Abe, backed by powerful farmer groups,
has approved a policy position that would require the country to
exclude rice, wheat and barley, beef and pork, sugar and dairy
products from tariff eliminations in the TPP. In contrast, the USTR
report explicitly names all but one of these sensitive sectors (sugar)
as high-priority targets for liberalization.
For several TPP countries, USTR’s National Trade Estimate Report
encourages the adoption of copyright enforcement measures akin to
those proposed under the Stop Online Piracy Act (SOPA) that was
defeated in the U.S. Congress. For example, the report notes that the
Obama administration “has also urged Chile…to amend its Internet
service provider liability regime to permit effective action against
any act of infringement of copyright and related rights.”
When addressing some TPP countries, the USTR report accuses national
governments of broad corruption or even incompetence. For example, the
report states that two of Peru’s three federal branches of government
lack the “impartiality” or “expertise” required to fulfill their
responsibilities.
USTR also chooses to mount public criticisms against TPP countries for
“trade barriers” that are so specific in definition and trivial in
consequence as to seem motivated by comically narrow U.S. corporate
interests. For example, the report lambasts Singapore’s import
restriction for “non-medicinal chewing gum,” Canada’s high tariff on
“breaded cheese sticks,” and Peru’s refusal to import “cars over five
years old.”
Among the report’s hundreds of pages, the following commentaries on
TPP countries are some of the most revealing:
Vietnam
· USTR cites Vietnam’s “new regulations aimed at improving the
capital position of the banking industry” as a new form of trade
restrictions. The report particularly blames new capital adequacy
requirements for causing “difficulties” for banks.
· USTR takes note of Vietnam’s decision to block importation
of “cultural products deemed ‘depraved,’” listing the policy as a
“nontariff barrier.”
· The report targets Vietnam’s ban on the shipment of certain
products through the country en route to other destinations. These
“barriers to trade” include restrictions on the trans-shipment of
“hazardous waste items,…frozen animal by-products, and offal.”
· The report states that the “United States continues to urge
Vietnam to undertake more aggressive actions to combat the rising
problem of intellectual property infringement, including digital
piracy.” Such urging, according to the report, has produced initial
government conversations with Internet service providers about
cracking down more on content that “rights holders” (e.g. U.S. media
corporations) see as infringements – a key component of the Stop
Online Piracy Act (SOPA) defeated in the U.S. Congress.
· The report concludes its remarks on Vietnam by casually and
categorically accusing the country of “widespread official corruption
and inefficient bureaucracy.”
Singapore
· Despite praising Singapore for having “the second lowest
rate of software piracy in Asia,” the report still alleges that the
country has “insufficient deterrent penalties for end-user software.”
· The report notes that despite Singapore’s increasing
allowance for foreign ownership of domestic banks, “Singapore has
indicated that it will not allow foreign controlling stakes or
takeovers of its three major local financial institutions.” That is,
the report lists Singapore’s unease with foreign takeovers of its most
critical banks as a barrier to trade.
· The report bemoans the fact that most “foreign law firms
with offices in Singapore cannot practice Singapore law…” The report
takes note of the fact that even when permitted to practice law in
Singapore, foreign law firms are not allowed to litigate in
Singapore’s courts based on their understanding of Singaporean law.
· The report singles out Singapore’s taxes on alcohol, tobacco
and motor vehicles, noting that they are imposed “for social and/or
environmental reasons.” While USTR does not explicitly call for the
dissolution of these taxes, it apparently finds cause to highlight the
measures in a report devoted to unwelcome trade barriers.
Peru
· USTR levies a series of blanket accusations against the
Peruvian government, lambasting two of the three federal branches. The
report plainly states, “Both U.S. and Peruvian firms remain concerned
that executive branch ministries, regulatory agencies, the tax agency,
and the judiciary often lack the resources, expertise, or impartiality
necessary to carry out their respective mandates.” The report gives no
further arguments to support the unabashed questioning of the federal
government’s fairness and competency.
· USTR notes that a data privacy law in Peru “has caused
concern among companies dependent on cross-border data flows.” Those
companies, according to the report, are particularly concerned about
Peru’s requirement that consent must be obtained from Peruvians before
acquiring their confidential information.
· The report cites Peru’s disinterest in U.S. used goods as a
trade barrier, “including used clothing and shoes (except as
charitable donations), used tires, cars over five years old, and heavy
trucks (weighing three tons or more) more than eight years old.”
New Zealand
· USTR channels “strong concerns” regarding the Pharmaceutical
Management Agency (PHARMAC), the New Zealand government agency that
administers the country’s successful medicine cost-containment
policies. These concerns, the report notes, come from “U.S.
stakeholders,” – that is, U.S. pharmaceutical companies who have long
opposed New Zealand’s programs to contain medicine costs. USTR accuses
PHARMAC of not providing these “stakeholders” with adequate
“transparency, timeliness, and predictability.” In addition, the
report takes issue with the fact that PHARMAC is expanding its cost
containment policies into sectors, such as medical devices, that
previously went “unregulated.”
· The report notes that “rights holders” (e.g. U.S. media
corporations) are somewhat supportive of New Zealand’s new law to
crack down on allegations of online copyright infringement. But the
report then expresses annoyance with the fee that U.S. media
conglomerates have to pay under the law to take action against an
alleged infringement. The onerous fee required is $21.
Mexico
· The first investment barrier cited by the report is that
“Mexico’s oil and gas sector remains largely closed to private
investment…” USTR acknowledges that this is because “the Mexican
constitution mandates state ownership of hydrocarbons.”
· USTR sees fit to spotlight the Mexican laws that prohibit
“foreign ownership of residential real estate within 50 kilometers of
the nation’s coasts.” The report frames the inability of U.S. citizens
to buy up Mexico’s coastland as an “investment barrier.”
· The report offers Mexico unsolicited advice for how to
change its government procurement policies, including a recommendation
that state-level procurement transparency standards be “harmonized…to
avoid corruption and foster competition.”
Malaysia
· The report admonishes the government of this predominantly
Muslim country for “requiring that slaughter plants maintain dedicated
halal facilities and ensure segregated transportation for halal and
non-halal products.” Instead, the report suggests that the government
should conform its notions of Islamic meat requirements to those
established by Codex Alimentarius, an international food standards
body at which multinational food corporations play a central role.
· USTR also takes issue with Malaysia’s restrictions on
importation of pork and alcohol, products traditionally forbidden for
the three out of every five Malaysians who are Muslim.
· The report states, “the U.S. Government continues to raise
concerns about the procurement process in Malaysia.” The stated
concern is that “Malaysia has traditionally used procurement to
support national public policy objectives.” The particular objectives
provoking USTR consternation include “encouraging greater
participation of bumiputera [ethnic Malays and indigenous groups] in
the economy, transferring technology to local industries, reducing the
outflow of foreign exchange, creating opportunities for local
companies in the services sector, and enhancing Malaysia’s export
capabilities.”
Chile
· The United States has, according to the report, “urged Chile…
to amend its Internet service provider liability regime to permit
effective action against any act of infringement of copyright and
related rights.” Similar provisions were soundly rejected by the U.S.
public and Congress as part of the ill-fated Stop Online Piracy Act
(SOPA), due to widespread concern that the provisions would enable a
sweeping crackdown on user-generated content, stifling innovation and
restricting Internet freedom.
Canada
· The report conveys concerns of the U.S. pharmaceutical
industry, mentioning the Notice of Intent filed last year by U.S.
pharmaceutical corporation Eli Lilly, in which the company announced
plans to use NAFTA’s investor privileges to directly challenge
Canada’s entire patent policy. This investor-state attack was launched
in response to Canadian courts’ invalidation of a patent on an Eli
Lilly medicine for which the firm had not met Canada’s patentability
standards. USTR also notes another recent patent invalidation – for
Pfizer’s Viagra – that has yet to produce a NAFTA investor-state case.
USTR’s inclusion of these cases could be intended to provide political
backing for the U.S. corporate challenges to Canadian patent law,
which have generated wide-spread consternation among public health
officials.
· The report takes issue with Canada’s policy that major
foreign investments and acquisitions must be reviewed to ensure that
they offer a “net benefit” to the country. This standard, according to
USTR, is “overly broad.”
· USTR laments that Canadian provincial policies to control
alcohol distribution “greatly hamper[] exports of U.S. wine and
spirits to Canada.” The report particularly blames “province-run
liquor control boards,” which enact policies closely resembling those
used by U.S. state-level counterparts, such as the Pennsylvania Liquor
Control Board.
· After describing a Canadian project to consolidate a wide
array of federal government data, the report criticizes a stipulation
that companies involved in the consolidation will not be permitted to
move the government data outside of Canada. USTR implies that the
Canadian government should not have qualms with the offshoring of a
wide range of government data because doing so aligns with “today’s
information-based economy.”
· The report blasts Canada’s popular supply management program
for sensitive dairy and poultry products. While the program provides
support and stability to Canadian farmers, USTR explains that it
“severely limits the ability of U.S. producers to increase exports to
Canada…”
· USTR singles out one item as an illustrative example of U.S.
“dairy products” that have been particularly impaired by Canada’s
import barriers: “breaded cheese sticks.”
· The report disparages Canada’s “compositional standards for
cheese,” which USTR blames for blocking U.S. “dairy” products from
being sold in Canada. The primary standard that USTR cites as
concerning is Canada’s establishment of “a minimum for raw milk in the
cheese making process.”
Brunei
· The report chastises Brunei for a military procurement
process that does not “publically disclose” the rationale behind all
military contract decisions.
Australia
· USTR expresses frustration with Australia’s resistance to
the offshoring of its citizens’ private data to foreign countries via
cloud computing and offshore storage. The report particularly singles
out Australia’s new law barring offshore storage of confidential
health records. USTR urges “a risk-based approach to ensuring the
security of sensitive data as opposed to a geographical one.” However,
the same paragraph notes that Australia’s reticence is indeed based on
risk, as the country “cites the U.S. Patriot Act” as “presenting a
legal and regulatory risk associated with cloud computing.” U.S.
lawyers have long expressed similar concerns – that the Patriot Act
threatens the data privacy of U.S. citizens. The report does not
attempt to defend the Act.
· In its remarks on Australia, the report devotes an entire
section to “Blood Plasma Products and Fractionation.” In no unclear
terms, the report states, “The United States remains concerned about
the lack of an open and competitive tendering system for blood
fractionation in Australia.” USTR apparently would like U.S. companies
to have an equal chance to separate the blood of Australian citizens.
Japan (likely future TPP partner)
· The report expresses disapproval of Japan’s food labeling
policy, which “mandates that all ingredients and food additives be
listed by name along with content percentages, and include a
description of the manufacturing process.” In a time when consumers
are demanding ever more information about the products they consume,
USTR complains that Japan’s progressive labeling policy is
“burdensome” and “risks the release of proprietary information to
competitors.”
· The report is careful to state that “the U.S. Government
remains neutral as to whether Japan Post [a state-owned postal,
banking and insurance conglomerate] should be privatized.” Still, USTR
makes clear that “the U.S. Government continues to monitor carefully
the Japanese government’s postal reform efforts.” USTR further
clarifies that such monitoring is far from “neutral,” stating that the
U.S. government will continue “to call on the Japanese government to
ensure that all necessary measures are taken to achieve a level
playing field between the Japan Post companies and private sector
participants in Japan’s banking, insurance, and express delivery
markets.” Thus, while USTR respects Japan’s decision over whether its
single largest public entity should be privatized, USTR is eager to
remind Japan that the entity should be stripped of the standard
preferential treatment that governments typically channel through
public entities to benefit consumers.
· USTR chastises Japan for not opening all of its military
procurement contracts to foreign companies. The report expresses
annoyance for Japan’s “general preference” that “defense products and
systems be developed and produced in Japan.” National security
arguments apparently have no standing “when a foreign option exists
that could fulfill the requirements more efficiently, at a lower
cost…” (Unless those arguments are made in the United States – U.S.
Buy American laws cover military procurement.)
· According to the report, the U.S. government is “urging[]
the Japanese government to work with foreign universities to find a
nationwide solution that grants tax benefits comparable to Japanese
schools.” Why should the government provide private, foreign
universities the same sort of tax breaks that it affords to Japan’s
own schools? According to USTR, meeting this rather anomalous request
is necessary for the foreign schools “to continue to provide their
unique contributions to Japan’s educational environment.”
· USTR accuses Japan’s government of using policy advisory
groups that are too often “opaque,” noting that “nonmembers are too
often not uniformly offered meaningful opportunities to provide input
into these groups’ deliberations.” The critique mirrors, nearly word
for word, criticisms levied against USTR itself for administering a
non-transparent and exclusive official trade advisory system comprised
almost entirely of corporate representatives. USTR continues by urging
Japan “to ensure that ample and meaningful opportunities are provided
for all interested parties, as appropriate, to participate in, and
directly provide input to, these councils and groups.” U.S.
stakeholder groups have continually made the same recommendation to
USTR to open the closed-door trade advisory system, though
“meaningful” changes have yet to be seen.
· USTR takes aim at Japan’s politically sensitive rice import
policies, calling them a “highly regulated and nontransparent” system
that “limits meaningful access to Japanese consumers.” The report
laments that most U.S. rice under the system does not reach Japanese
consumers, and argues that they “would buy U.S. high quality rice if
it were more readily available.” To substantiate this claim of
Japanese consumers’ unrealized preference for U.S. rice, the report
cites “industry research.”
· In quick succession, the report individually targets Japan’s
policies on rice, wheat, beef, pork and dairy products, taking issue
with tariffs, quotas, and state distribution systems. These targeted
agricultural sectors are among the most politically sensitive in the
country, and have been named by Japan’s ruling Liberal Democratic
Party as sectors that must be excluded from tariff eliminations in the
TPP.
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