[CTC] Administration Engages With Financial Services Firms On TPP Objections

[Arthur Stamoulis]

Administration Engages With Financial Services Firms On TPP Objections
Inside US Trade
Posted: December 03, 2015

The Obama administration last month began engaging with U.S. financial services firms about their objections to two aspects of the Trans-Pacific Partnership (TPP), without providing any indication on whether it is willing to seek clarifications to the agreement in order to address them, according to informed sources.

The first aspect is the fact that language in TPP prohibiting governments from requiring data be stored on local servers does not apply to the financial services sector. The second is a provision that allows Malaysia to maintain a screening mechanism under which it can block foreign investments in financial services on the broad grounds that they are not in the best interest of Malaysia.

Officials from the Treasury Department and the Office of the U.S. Trade Representative met with financial services industry representatives on Nov. 20 for a discussion that focused on the server localization ban, but did not provide any indication whether the administration was willing to change its opposition to the ban in TPP or future trade agreements, sources said.

Treasury has opposed the inclusion of language in trade agreements that would ban server localization requirements for the financial services sector, under the argument that it wanted to preserve space to impose such requirements in the future.

The meeting consisted largely of industry representatives rehashing their objections to the U.S. approach, 
and U.S. officials offering an explanation of why they believed they had been addressed, according to these 
sources.

Industry representatives offered a mixed reaction to the meeting, with some expressing frustration that the case of the industry had already been laid out multiple times, while others viewing it as a positive development that the administration is engaging on the issue, sources said.

USTR has historically been more sympathetic to the industry's position than Treasury, although sources said the administration officials delivered a common position at the Nov. 20 meeting.
 
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