[CTC] Treasury Poised To Unveil TPP Data Fix; Coalition Plans Letter Campaign

[Arthur Stamoulis]

 INSIDE US TRADE
Treasury Poised To Unveil TPP Data Fix; Coalition Plans Letter Campaign
April 28, 2016

The Treasury Department has signaled to the financial services industry that it plans to unveil next week its proposal for addressing their complaints about being excluded from a ban in the Trans-Pacific Partnership (TPP) on local data storage requirements, according to informed sources.

The proposal as discussed informally will not seek to change the TPP or seek a side letter to it, but instead offers to address the issue prospectively in future trade agreements, they said. According to these sources, the proposal seems to fall short of explicitly prohibiting parties in future trade deals from imposing local data storage requirements on financial services firms.

Treasury Secretary Jack Lew last month signaled he was more likely to go with a prospective approach of dealing with this issue in future trade agreements, instead of addressing it through a TPP side letter.

If Treasury floats the fix next week, it would represent the first time the Obama administration has come forward with a specific proposal for addressing one of the three key complaints raised about the TPP by industry.

The most prominent one is the complaint championed by Senate Finance Committee Chairman Orrin Hatch (R-UT) that the duration of the market exclusivity period for biologic drugs is too short. In addition, the tobacco industry has complained about anti-tobacco measures being carved out from investor-state dispute settlement.

On the biologics and other intellectual property issues, the administration has engaged with Hatch, but these efforts have been lagging despite what one source said were the clear sign posts that Hatch's staff has laid out.

The discussions between the administration and Hatch have not been “at the level of depth and intensity that would lead to a breakthrough any time soon,” one private-sector lobbyist said. This is despite the fact that White House Chief of Staff Denis McDonough has been involved and that time is of the essence if the administration wants to prepare for a vote in a lame-duck session, sources said.

A lame-duck session, if it were to occur, would likely consist of four weeks: one week after the election and before Thanksgiving recess and three weeks until the Dec. 16 adjournment date. That was the schedule laid out in the 2016 calendar circulated by House Majority Leader Kevin McCarthy (R-CA), which also said the post-election schedule is subject to change.

To pass the TPP in both the House and the Senate in such a short timeframe will require a lot of preparatory work that partially hinges on addressing the issues that have been raised, sources said.

With the administration-Hatch talks lagging and the anti-trade rhetoric in the presidential nomination fight showing no sign of abating, skepticism about a lame-duck TPP vote seems to be growing among congressional staff, business groups and administration officials, pro-TPP sources said.

For a TPP vote to occur in the lame-duck, the traditional scenario of trade being bashed in election campaigns only to have Congress vote in favor of a trade agreement after an election would still need to apply. But sources said there is an increasing uncertainty among staff and administration officials whether that traditional scenario still holds.

This is contrary to the message that President Obama conveyed in Germany this week that once the political fight of the primaries settles down in the U.S., Congress will be able to move forward on TPP (see related story).

In this situation, the administration is working very hard to generate enough outside pressure on Congress to move on TPP by getting business to step up lobbying and sending letters to Congress demanding a vote this year. Administration officials are “desperate” to get business to do more to drum up support TPP, one pro-TPP lobbyist said.

But business is trying to straddle the line of doing enough to stay on the administration's good side while not running afoul of the warning by congressional leader not to interfere with their handling of the TPP.

In the context of that dynamic, the U.S. Coalition for TPP this week launched a quest for signatures for letters to be sent to members of Congress from businesses in every state underscoring the benefits of TPP for their state and urging a vote this year, according to emails sent by members of the coalition and obtained by Inside U.S. Trade.

“As congressional leaders and the administration work to address some outstanding issues and agree on a path to a successful vote this year, we urge you to encourage that effort and express your support for moving forward on a strong, market-opening TPP this year,” the draft letter says.

The letter is open to all companies, businesses and associations, according to the e-mail soliciting signatures. It urges companies with multiple locations across the United States to agree to be a signatory to each letter. The deadline for signing the letters is close of business on May 13.

The e-mail says that final letters will contain “customized” data on a given state's exports of agricultural and manufactured goods as well as services that the coalition will provide.

On the other side of the debate, 700 members of the United Steelworkers Union (USW) this week urged members of Congress to oppose the TPP, which it said Congress is “expected to consider” later this year. The item was the top issue on the USW agenda during its annual conference this week, according to an April 27 announcement.

In addition, 161 family farm, faith and rural groups urged members of Congress in an April 27 letter to oppose the TPP on the grounds that it would open the door to increased agricultural imports that would displace or or drive down the price of U.S. farm products. This damage would outweigh what the group said would would likely be “modest” benefits for U.S. agriculture exports.
 
 
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