[CTC] Hatch Signals Potential TPP Changes; Ryan Withholds Final Judgment

[Arthur Stamoulis]

Inside US Trade

Hatch Signals Potential TPP Changes; Ryan Withholds Final Judgment

Posted: October 07, 2015 
Senate Finance Committee Chairman Orrin Hatch (R-UT) on Wednesday (Oct. 7) repeatedly signaled the possibility <http://insidetrade.com/node/150377> that the Trans-Pacific Partnership (TPP) deal as announced may have to be changed to be satisfactory to Congress, as he questioned whether it meets the negotiating objectives laid out in the fast-track law in such areas as intellectual property protection for biologic drugs, shielding tobacco regulations from investor-state challenges, and labor commitments. 

He noted that the Obama administration and 11 other trading partners over last weekend reached “what they believe will be the final agreement on the terms” of the TPP.  He questioned whether there will be sufficient congressional support for “this agreement,” though he stopped short of declaring his outright opposition.

“Before I can support the TPP deal struck in Atlanta, I must be convinced that the TPP is a balanced agreement that complies with the TPA law and that it has clear, implementable rules that our trading partners will follow,” he said.  

He said a “strong TPP agreement” is essential for advancing the U.S. economic and strategic interests in the Asia-Pacific, and that the U.S. must get  such an agreement “right.” 

Two business sources this week speculated that the criticism of TPP by Republicans generally in favor of free-trade agreements, as well as the lukewarm reactions by some business groups, may be an effort to create leverage for negotiating side agreements to the TPP.  

Separately, House Ways and Means Committee Chairman Paul Ryan (R-WI) emphasized that he supports “very good” FTAs in an interview with MSNBC. “I have yet to decide ... if this is a very good free trade agreement because I haven’t read it yet,” he said. 

“I’m hopeful, but there are some concerns I have with some of the provisions in here, and quite frankly, we want to see what it is on net [benefit]…but it’s going to take some time to scrub through this agreement, to render final judgment," he added.

One business observer said this week that if the U.S. dairy industry comes out opposing the TPP deal, Ryan would have a problem supporting it in light of his constituency, given that Wisconsin is the second-largest milk producer in the U.S. The National Milk Producers Federation and the U.S. Dairy Export Council in a joint statement withheld judgment on the deal. 

Both Ryan and Hatch, along with the ranking members of the congressional trade committees, told the administration in a Sept. 30 letter that they were critical of the deal as it was emerging and urged the officials not rush into an agreement in Atlanta.

Hatch also called on President Obama to release the full text of the TPP to allow a detailed review by Congress before formally notifying Congress of his intent to sign the agreement. This request comes as there are clear indications <http://insidetrade.com/node/150353> that the administration wants to submit the formal notification of its intent to sign the TPP deal in a matter of days. 

The administration seems to be planning the release of the full text of the agreement earlier than the 30 days post-notification that is required under the fast-track law. As of mid-week, U.S. officials were still in Atlanta reviewing the TPP text, sources said. Officials so far have held off on holding detailed industry briefings on the TPP, but may do them by the middle or end of next week, sources said.  

“Under our TPA law, the President must inform Congress of his intent to sign an agreement at least 90 days before doing so,” triggering a “period is an essential part of congressional consideration of the deal,” Hatch said.

Congress established the 90-day period to have ample time to review the substance of a trade deal before the President signs it, Hatch noted. “In order for that review to take place, Congress must have access to the full text of the agreement, including annexes and any side agreements, before the President provides his 90-day notice,” he said. 

On data exclusivity for biologics, Hatch has insisted on including 12 years of protection, in line with U.S. law, but U.S. negotiators agreed on five years of data exclusivity.

The final deal on biologics would require TPP countries to comply with either of two options, the first of which is to provide at least eight years of exclusivity, sources said. The second option is to provide five years of exclusivity, and have additional regulatory measures that effectively extend that protection further. 

“It is not immediately apparent whether the agreement contains administrable and enforceable provisions to protect intellectual property rights [(IPR)], similar to those found in U.S. law,” Hatch said. “This is particularly true with the provisions that govern data exclusivity for biologics.”

Included in TPA is a principal negotiating objective that the U.S. “further promote adequate and effective protection of intellectual property rights, including through ... ensuring that the provisions of any trade agreement governing intellectual property rights that is entered into by the United States reflect a standard of protection similar to that found in United States law.” 

Hatch also appeared to criticize implementation periods for IPR obligations, saying U.S. trading partners must implement IPR obligations before TPP enters into force. He said that before Congress can approve a deal, it would need “detailed assurances that our trading partners will live up to all commitments and a clear road map as to how the administration intends to hold them accountable.”

The Peruvian Minister of Foreign Trade and Tourism said on Oct. 6 that Peru has secured a 10-year transition period <http://insidetrade.com/node/150357>  to implement TPP biologics data exclusivity obligations. This means that Peru has 13 years to pass legislation to implement its TPP obligations on biologics.

In addition to biologics, Hatch also said that provisions on agricultural market access appear to fall short of TPA-set standards. This is an apparent reference to a carveout of tobacoo products <http://insidetrade.com/node/150325> from protection under the investor-state dispute settlement (ISDS) mechanism. 

The TPA law lays out a principal negotiating objective "to obtain competitive opportunities for United States exports of agricultural commodities in foreign markets substantially equivalent to the competitive opportunities afforded foreign exports in United States markets and to achieve fairer and more open conditions of trade in bulk, specialty crop, and value added commodities."

Committee report language states that the ISDS mechanism should be available to all investors, without discrimination against a given product or a given sector. 

Hatch also claimed that TPP is potentially “overreaching on labor commitments,” an apparent reference to the enforceable labor consistency plans the U.S. is negotiating <http://insidetrade.com/node/150294> with Vietnam, Malaysia and Brunei. These plans would be subject to the TPP's dispute settlement provisions, and in the case of Vietnam, one of its labor obligations is linked to to its market access benefits.


-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20151008/3f644e43/attachment.htm>