03/28/2014 10:16 AM
“We will continue to defend American manufacturers and workers, especially when it comes to leveling the playing field and ensuring that American manufacturers can get the materials they need at a fair market price.”
– Ambassador Michael Froman
In standing up for American workers and businesses, the United States won a World Trade Organization case against China’s export restraints on rare earth products. These rare earths, which include tungsten, molybdenum, and 15 other minerals, are used in everyday products, including automobiles, cell phones, and even energy efficient light bulbs. China had established export quotas on these materials which unfairly hurt American manufacturers, since it artificially raised prices for the rest of the world but lowered prices for Chinese producers. The WTO panel found that export restrictions cannot be imposed to conserve natural resources if the domestic use of those same materials is not also restricted.
The U.S. Trade Representative (USTR) is committed to take action whenever necessary to protect the high-quality middle class American jobs supported by trade, and this WTO panel victory shows that a level playing field is required to participate in the global trading system. The full statement by U.S. Trade Representative Michael Froman can be seen here, but this is what others are saying:
“This is excellent news for Ohio and American manufacturers. Manufacturing is the backbone of the American economy. But in order for our industry to compete, it needs a level playing field. That means holding countries like China accountable when they violate trade policy by hoarding rare earth and other materials. The World Trade Organization’s decision will help protect American businesses and the jobs they support.”
- Senator Sherrod Brown, (D-OH)
“Manufacturing is an important part of Ohio’s economy, and I’m pleased that the trade court has ruled against China’s blatantly discriminatory behavior that hurts Ohio workers. I will continue to strongly support efforts to ensure that Ohio workers are able to operate on a level playing field around the world.”
- Senator Rob Portman, (R-OH)
“The World Trade Organization’s decision sends a strong message to China that its mercantilist trade restrictions on rare earth elements have no place in the 21st Century. Today’s ruling is a clear win for the United States, for rules-based trade, and for American high-tech manufacturing jobs that depend on a stable supply of these products. I intend to ensure the United States continues to make enforcing global trade rules a clear priority.”
-Senator Ron Wyden, (D-OR)
“Through the aggressive efforts of the Obama Administration, the WTO has struck down China’s efforts to block our companies from having access to key inputs. Our high-tech industries, from smartphones to medical equipment to wind turbines, depend on access to these rare earths and other chemicals. Holding China accountable, and enforcing the rules of international trade are vital to U.S. businesses and workers and key to trade expansion efforts. China must get the message that our government, backed by our workers, won’t stop pressing until China abandons its penchant for promoting its domestic industries at the expense of those of its trading partners.”
- Representative Sander Levin (D-MI)
"Today's ruling is great news for American manufacturers and researchers building the next generation of advanced technologies. China clearly violated WTO rules, and I applaud the U.S. Trade Representative for taking this enforcement action against China's illegal export restrictions of these critically important raw materials. Today's victory is a reminder of how important trade enforcement is, and we need to continue cracking down on other countries' anti-competitive practices, like currency manipulation, to help American workers and businesses compete and win in the global economy."
- Senator Debbie Stabenow, (D-MI)
“The U.S. Trade Representative (USTR) has been aggressive and determined to confront China about its export limits on rare earth minerals and other materials. Those products are critical ingredients in a broad range of items across the manufacturing sector where worker’s jobs depend on fair trade practices and a steady market supply. China’s policies have had a direct impact on U.S. production and employment.”
- Leo W. Gerard, President, United Steelworkers
“This decisive ruling by the WTO confirms that China cannot impose export quotas, export taxes, and other restrictions on these raw materials. We urge China to promptly comply with the WTO’s decision and remove these trade-distortive export restrictions.”
- Alan H. Price, Partner and Chair of the International Trade Practice, Wiley Rein
"NEMA supports non-discriminatory national policies toward trade in raw materials and minerals, and we believe the WTO panel's decision is consistent with that principle. NEMA understands China's national interest in protection of its environment, but trade measures such as export quotas and export tariffs do not appear to be particularly suited to protecting the environment, while such measures do tend to support economic protectionism. We commend the efforts of the U. S. Trade Representative's Office, the Government of Japan, and the European Union in bringing this dispute to the WTO and successfully resolving it under the auspices of the WTO's dispute resolution process."
- Evan R. Gaddis, President and CEO, National Electrical Manufacturers Association (NEMA)
“This WTO action is a step in the right direction, and we’re pleased USTR took the initiative in 2012 to launch a rare earth minerals case. China’s export restraints on rare earth minerals have contributed to the loss of American production and jobs, particularly in advanced technology products. These restrictions have also raised important national security concerns about a reliance on foreign suppliers for our military supply chain. These metals are used in crucial missile guidance systems and aircraft components, and it is troubling that we are almost entirely reliant on the Chinese government for access to them. The administration must aggressively enforce existing trade laws to ensure China complies with [the] ruling while we work to expand our domestic production and processing of rare earth materials.”
- Scott Paul, President, Alliance for American Manufacturing (AAM)
“This decision illustrates that China cannot continue to manipulate the global trading system by promoting its own industry to the detriment of U.S. and other global manufacturers. These metals include critical raw materials for steelmaking, and the export restrictions clearly favor Chinese producers already dealing with a massive overcapacity in steelmaking. This is yet more proof that China deliberately evades its obligations as a WTO member. The Chinese government knew in 2001 when it joined the WTO that it could not impose export quotas on these elements, and it did so anyway. We are pleased to see the U.S. government working with our allies to address China’s unfair trade practices and hope that the vigorous enforcement of the global trade rules continues.”
- Thomas J. Gibson, President and CEO, American Iron and Steel Institute (AISI)
03/27/2014 9:30 AM
We view engagement with Congress, stakeholders, and the public to be a central component for ensuring that our trade policy is consistent with both our economic interests and our values. We have taken an approach of extensive consultation in developing U.S. proposals regarding investment in our negotiations. We continue to solicit feedback on this, and other issues, to ensure that the United States – and our trading partners – can regulate in the public interest while creating stable frameworks for protecting investments.
As both the largest single-country source of investment and the largest recipient of investment in the world, the United States has every reason to get investment agreements right.
Unfortunately, there is a large amount of misunderstanding in the public debate regarding ISDS, which we have addressed here. We believe an open and ongoing public debate will help assuage concerns and lead to a better policy.
As part of our ongoing consultations, the United States has published and sought public comment on our model investment agreement, which we use as a basis for our international investment agreement proposals. The U.S. model agreement has been developed, reviewed, and revised through years of extensive consultations with the Congress, stakeholders, and the public, and represents a balance among diverse policy interests.
This week, we were pleased to see the EU undertake a similar set of consultations.
The most recent review of the U.S. model investment agreement took place during 2009-2012. Follow the links below to see some of the elements from our public consultative process, which include:
- A Federal Register notice soliciting public views on the model agreement. Written comments were submitted by 36 individuals and organizations, including non-governmental organizations (NGOs), business groups, Members of Congress, individual companies, and private citizens.
- A public meeting at which interested parties were invited to present views on the model agreement. Presenters at this meeting included legislators, NGOs, business organizations, individual companies, and legal professionals.
- Recommendations from the State Department’s Advisory Committee on International Economic Policy (ACIEP), an Investment Subcommittee which was constituted for the purpose of providing input on the model U.S. investment agreement. The Subcommittee – comprised of representatives from academia, labor groups, environmental and public interest organizations, legal experts, and the business community – presented a report that contained both consensus recommendations and detailed summaries of divergent viewpoints on the major issues addressed in international investment agreements, including definitions of key terms, substantive standards and obligations, and the rules and procedures for investor-state dispute settlement.
- Extensive consultation on our negotiating objectives for T-TIP specifically, including with respect to investment. As we do for all trade agreements, including the TPP agreement, prior to launching T-TIP negotiations, USTR initiated a 90-day consultation period involving numerous opportunities for comment. As part of these consultations, USTR solicited public comment on T-TIP negotiating objectives generally, and specifically on “relevant investment issues that should be addressed in the negotiations.” Over 300 submissions were received in response to this notice, representing a broad range of stakeholder views.
- T-TIP consultations included a two-day hearing, during which members of the public were invited to express views on T-TIP policy issues and negotiating objectives. Over 60 organizations and individuals presented testimony at this hearing, including several who spoke directly to investment issues.
- Extensive public consultations conducted by the U.S.-EU High Level Working Group on Jobs and Growth (HLWG) were conducted in advance of launching the T-TIP negotiations. Dozens of submissions were received from members of the public in response to USTR’s request for comment during the HLWG process, including several that spoke directly to investment rules, and USTR negotiators discussed investment with stakeholders in dozens of meetings.
These issue-specific consultations on investment policy and T-TIP, respectively, have been supplemented by a formal advisory committee system established by Congress through which USTR receives stakeholder input on an ongoing basis on all aspects of U.S. trade policy and negotiations. Representing labor, environmental, business, and state and local government interests, these 28 committees of 700 private citizen advisors provide input and advice on the full range of trade policy issues, including in the T-TIP – a stakeholder advisory system that has no parallel in the world. The valuable input of this advisory system will be soon be supplemented by a new Public Interest Trade Advisory Committee (PITAC) that will provide a mechanism for regular input from experts on issues such as public health, development, and consumer safety. USTR is currently soliciting nominations for membership on the PITAC, as well as on our Industry Trade Advisory Committees, so that we can continue to receive stakeholder advice during negotiations.
The consultations the Administration has undertaken in the development of international investment policy and negotiating positions with respect to T-TIP, and the ongoing engagement through the formal advisory committee system, only account for a portion of the day-to-day engagement with stakeholders, legislators, and members of the public that USTR undertakes on a regular basis. For example, we have created forums around our negotiating rounds to provide stakeholders with an opportunity to provide input directly to negotiators from the United States and other countries.
In the coming months, we will continue to maintain the high level of inclusiveness and public engagement that have been a hallmark of U.S. trade negotiations. We recently released a detailed description and explanation of U.S. objectives in the T-TIP negotiations and we are currently soliciting additional public input to USTR on all aspects of our trade policy, including T-TIP.
In addition, USTR is announcing today that we will host a stakeholder engagement session in conjunction with the Fifth Round of T-TIP negotiations in Washington later this spring, during which members of the public will have an opportunity to make presentations to and engage directly with negotiators.
The Facts on Investor-State Dispute Settlement: Safeguarding the Public Interest and Protecting Investors03/27/2014 9:00 AM
As the Obama Administration promotes trade and investment agreements, we work closely with Congress, stakeholders, and the public to ensure that our trade agenda advances our economic interests and reflects our values. One of our core values is promoting the rule of law. In our agreements, we want to ensure that the United States and partner countries are able to regulate in the public interest as they see fit.
We also seek to ensure that Americans investing abroad are provided the same kinds of basic legal protections that we provide in the United States to both Americans and foreigners doing business within our borders. One element we use to achieve that goal is investor-state dispute settlement (ISDS). ISDS creates a fair and transparent process, grounded in established legal principles, for resolving individual investment disputes between investors and states.
There are a lot of myths out there suggesting that ISDS somehow limits our ability – or our partners’ ability – to regulate in the interest of financial stability, environmental protection, or public health. Some have even suggested that a company could sue a government just on the grounds that the company isn’t earning as much profit as it wants.
These assertions are false.
The United States promotes provisions in our trade agreements that protect our right to regulate in the public interest while promoting higher standards in many partner countries in areas ranging from labor and environment to transparency to anti-corruption.
Over the last 50 years, nearly 3,200 trade and investment agreements among 180 countries have included investment provisions, and the vast majority of these agreements have included some form of ISDS. The United States entered its first bilateral investment treaty (BIT) in 1982, and is party to 50 agreements currently in force with ISDS provisions. The United States has been a leader in developing carefully crafted ISDS provisions to protect the ability of governments to regulate, to discourage non-meritorious claims, and to ensure a high level of transparency.
Our approach to ISDS has helped establish higher global standards and strengthen arbitration procedures through clearer legal rules, enhanced safeguards, and transparency throughout the ISDS process. As a country that plays by the rules and respects the rule of law, the United States has never lost an ISDS case. In our current negotiations, we are working to expand upon this approach to ISDS, in ways spelled out in the Model BIT that the Obama Administration released in 2012 following an extensive period of public comment and consultation.
Here are eight facts you should know about ISDS provisions under U.S. trade agreements. These provisions are different – and stronger – than the provisions in many other investment agreements in which the United States is not a participant. It’s important to understand how U.S. agreements differ from other agreements that do not meet the same standards.
Provide basic legal protections for American companies abroad that are based on the same assurances the United States provides at home.
Investment protections are intended to prevent discrimination, repudiation of contracts, and expropriation of property without due process of law and appropriate compensation. These are the same kinds of protections that are included in U.S. law. But not all governments protect basic rights at the same level as the United States. Investment protections are intended to address that fact. Our agreements provide no new substantive rights for foreign investors. Rather, they provide protections for Americans abroad that are similar to the protections we already provide Americans and foreigners alike who do business in the United States.
- Protect the right of governments to regulate in the public interest.
The United States wouldn’t negotiate away its right to regulate in the best interest of its citizens, and we don’t ask other countries to do so either. Our investment rules preserve the right to regulate to protect public health and safety, the financial sector, the environment, and any other area where governments seek to regulate. U.S. trade agreements do not require countries to lower their levels of regulation. In fact, in our trade agreements, we require our partners to effectively enforce their environmental and labor laws and to take on new commitments to increase environmental and labor protections.
- Do not impinge on the ability of federal, state, and local governments to maintain (or adopt) any measure that they deem necessary.
Under our investment provisions, no government can be compelled to change its laws or regulations, even in cases where a private party has a legitimate claim that its basic rights are being violated and it is entitled to compensation.
- Do not expose state or local governments to new liabilities.
Under our Constitution and laws, investors frequently exercise their rights in U.S. courts. For example, in recent years, the U.S. government has defended hundreds of cases in U.S. courts under the Constitution’s “takings clause,” which requires compensation for expropriations. State and local governments have likewise defended many such claims. By contrast, the United States has only been sued 17 times under any U.S. investment agreement and has never once lost a case. In some instances, we have even received compensation for having had to defend against a case in the first place. In any disputes arising under our trade agreements, the federal government assumes the cost of defending the United States, even if they relate to state and local issues.
- Provide no legal basis to challenge laws just because they hurt a company’s profits.
Our investment rules do not in any way guarantee a firm’s rights to any profits or to its projected financial outcomes. Rather, they only provide basic rights – like non-discrimination and compensation in the event of an expropriation – that are already consistent with U.S. law. Our investment rules seek to promote standards of fairness, not protect profits.
- Include strong safeguards to deter frivolous challenges to legitimate public interest measures.
The United States has proposed additional safeguards that include stricter definitions than are in most investment agreements of what is required for successful claims, as well as mechanisms for expedited review and dismissal of frivolous claims, payment of attorneys’ fees, consolidation of duplicative cases, and transparency. These are some of the strongest safeguards in any of the nearly 3,200 investment agreements around the world.
- Ensure fair, unbiased, and transparent legal processes.
The United States is committed to ensuring the highest levels of transparency in all investor-state proceedings. Investment arbitration hearings under recent U.S. trade and investment agreements, as well as all key documents submitted to investor-state tribunals and tribunal decisions, are public. Recent U.S. trade and investment agreements also give NGOs and other non-parties to a dispute the ability to participate by filing amicus curiae or “friend of the court” submissions, similar to non-parties’ ability to make filings in U.S. courts.
- Ensure independent and impartial arbitration.
Investor-state arbitration is designed to provide a fair, neutral platform to resolve disputes. The arbitration rules applied by tribunals under our agreements require that each arbitrator be independent and impartial. These rules permit either party in a dispute to request the disqualification of an arbitrator and the appointment of a new arbitrator if necessary to ensure the independence and impartiality of all tribunal members.
The United States has been a leader in developing ISDS provisions that protect the ability of governments to regulate, discourage frivolous claims, and ensure a high level of transparency. Through extensive work with stakeholders, legislators, and the public we will continue to ensure that the United States remains at the forefront of innovative trade policy.
US and Peru continue engagement on Environmental Protection within the US-Peru Trade Promotion Agreement03/22/2014 10:45 AM
Last week, representatives from USTR traveled to Lima, Peru for bilateral meetings to further strengthen implementation of the Environment Chapter and Annex on Forest Sector Governance of the United States - Peru Trade Promotion Agreement (PTPA). USTR staff were joined by representatives from the U.S. Department of State, U.S. Forest Service, and U.S. Agency for International Development (USAID).
Since entry-into-force of the PTPA in 2009, Peru has made substantial progress to improve environmental protection, particularly with respect to forest sector governance. The United States has worked closely to support Peru in those efforts through robust environmental cooperation programs. To maintain momentum and address remaining challenges, the United States and Peru regularly meet to advance progress on a range of environmental issues, particularly those related to the forestry and wildlife sector. The meetings included discussion of Peru's draft Forestry and Wildlife Regulation, finalization of documents necessary to set up an environment secretariat to receive submissions on environmental law enforcement from U.S. and Peruvian stakeholders, and coordination on environmental cooperation programs aimed at building capacity for environmental prosecutors to investigate and prosecute forestry and wildlife crimes, and to combat anti-corruption in the forestry sector.
As part of the U.S. commitment to transparency, the U.S. Delegation also hosted a roundtable discussion with a range of Peruvian stakeholders, including representatives of native communities, and members of civil society, academia, and industry.
These discussions provide invaluable input as to how the PTPA is working to benefit the environment, and where future efforts may be focused to address pressing environmental issues.
For more information about PTPA environmental issues and progress, please visit: http://www.ustr.gov/peru-tpa/environment.
03/17/2014 12:41 PM
Note: This is a cross post from the U.S. Mission to the European Union blog. To see the original post, please click here.
The Transatlantic Trade and Investment Partnership – commonly known as T-TIP – is one of the major focuses of our work here at the U.S. Mission to the European Union. While the transatlantic relationship between the United States and the EU is certainly far broader, dealing with a very wide array of foreign policy, security, humanitarian, and economic issues of mutual interest around the globe, T-TIP is a fitting topic for the first entry for our new blog. We just completed the fourth round of negotiations last week, and it, along with the ongoing situation in Ukraine, consumed most of our attention. Not only did many colleagues from Washington come to town, but we also held events for a group of visiting economic journalists from EU member states with representatives of consumer groups, SMEs, and others.
Having worked on the negotiating teams for many free trade agreements in the past, I was impressed to see the expansion of possibilities for NGOs, consumer groups, and other members of civil society to interact with the negotiators themselves, not only between rounds, but also during them. This highlights, as U.S. Trade Representative Michael Froman and EU Trade Commissioner Karel De Gucht said last month, that both the U.S. and the EU agree “on the important role the public has in continuing to shape our negotiations’ objectives.” -James Wolfe, Spokesman at the U.S. Mission to the EU
For a brief readout of the fourth round, please read on:
For anyone who follows the transatlantic relationship, the buzzword last week was T-TIP. Scores of negotiators from the U.S. and EU were in town for the fourth round of talks on the Transatlantic Trade and Investment Partnership, but they weren’t the only ones. Hundreds of our citizens – from environmental, consumer and other non-governmental organizations, from labor unions, companies and academia, the media and others – also converged on Brussels for a stakeholder event that was held Wednesday.
Everyone there got more than an earful. During a non-stop 3 ½-hour session that took place in four rooms, divided by theme, some ninety participants detailed their T-TIP views and expectations on a wide array of subjects.
Stakeholder events have become a staple of each T-TIP round, whether they’re held in Washington or Brussels. In the front rows – some in spaces with standing room only – this time around were the two chief negotiators, Assistant U.S. Trade Representative for Europe and the Middle East Dan Mullaney and EU Chief Negotiator Ignacio Garcia Bercero, and/or members of their teams, asking the presenters direct questions.
Many of the speakers at Wednesday’s event – and at an EPC think tank panel the day before on how T-TIP could help small businesses benefit from global trade – echoed common themes. In particular, T-TIP should eliminate unnecessary and duplicative regulations while ensuring high, uniform standards, they said. The round ended on Friday with a press conference by the two chief negotiators.
More here on what the U.S. is looking for in the T-TIP + USTR Froman’s statement on the conclusion of the fourth round and a joint document on potential opportunities for small and medium-sized enterprises.
Joint US-EU Document Highlights Benefits of the Transatlantic Trade and Investment Partnership (T-TIP) for Small and Medium-Sized Enterprises03/14/2014 2:49 PM
Today the United States and the European Union issued a joint document on potential opportunities for Small and Medium-sized Enterprises under a Transatlantic Trade and Investment Partnership (T-TIP) agreement. To view the report, please click here.
To learn more about T-TIP, visit http://www.ustr.gov/ttip .
03/14/2014 1:27 PMAt the close of the fourth round of Transatlantic Trade and Investment Partnership (T-TIP) negotiations in Brussels, the United States and the European Union issued a joint report on potential opportunities for Small and Medium-sized Enterprises under a T-TIP agreement. To view the report, please click here.
T-TIP: A Detailed View of Negotiating Objectives and Benefits and a New Opportunity to Provide USTR with Feedback03/11/2014 10:37 AM
This week, U.S. and EU negotiators are in Brussels for a fourth round of Transatlantic Trade and Investment Partnership (T-TIP) negotiations. An ambitious and comprehensive agreement will expand significantly U.S.-EU trade and investment ties, leading to increased economic growth and jobs in the United States.
Today, as part of our ongoing efforts to engage the public and solicit feedback on U.S. trade negotiations, USTR released a detailed subject-by-subject view of our T-TIP negotiating objectives. We encourage anyone who is interested to review our objectives and the other information provided and to provide feedback on the T-TIP negotiations (or on any other trade or investment initiative) to USTR by sending an email to email@example.com. We continue to believe that U.S. trade and investment policies are made stronger when they are shaped by the broadest possible input.To learn more about the Transatlantic Trade and Investment Partnership, please visit www.ustr.gov/ttip