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 Volume 23, Number 143                              Monday, July 21, 2014

Trade Reports International Group

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Sixth TTIP Round Concludes

    US and European Union negotiators on Friday finished up their sixth formal week-long round of talks in Brussels for a transatlantic trade and investment partnership agreement, with both sides saying a lot of technical progress was made – with some expectation that more text-based negotiations would occur during the next round (WTD, 7/11/14).

Much of last week’s work was technical but both sides said it was essential to prepare the ground for the political decisions that would need to be taken at a later stage of the negotiations.

Neither side mentioned when the next round would be, but it is expected to be in September in Washington.

Detailed discussions were held in most of the areas of a future accord, commented the two chief negotiators – the EU’s Ignacio Garcia Bercero and Assistant US Trade Representative for Europe and the Middle East Daniel Mullaney.

The United States remains strongly committed to the full elimination of tariffs, volunteered USTR’s Mullaney.  But there apparently was little discussion of the offers that remain on the table.

There was serious discussion on the initial services and foreign investment proposals.  Mr Mullaney pointed out that Washington put forth a comprehensive services offer based on a “negative” list.  The EU offer was a mix of “negative” and “positive” approaches.

The US offer includes a broad range of subjects – including e-commerce, telecommunications and financial services market access, commented Mr. Mullaney.  But the United States continues to oppose inclusion in TTIP of banking regulations, in direct contradiction to the EU stance.

Services

On services, there were detailed discussions on the basis of the offers that have already been put forth.  The objective, said Mr. Bercero, is for both sides to go beyond what are contained in their bilateral and regional free trade agreements as well as multilateral commitments.

Focused discussions took place on professional requirements in each territory – in areas related to architecture and accountancy.

Negotiations on a controversial investor-state dispute settlement mechanism will not resume in earnest until the new European Commission has a chance to evaluate the results of its public outreach on the topic.  Mr. Bercero said a more detailed EU position would be forthcoming probably in November.

Both sides continued work on a state-to-state dispute mechanism on the basis of a consolidated text.  Progress was made in bringing positions closer together, Mr. Bercero stated.

Negotiators also focused on the area of government procurement, but no offers were exchanged.  Both sides want substantially improved market access to government procurement opportunities at all levels of government on the basis of national treatment.  Discussed were opening up procurement in each other’s federal entities, conditions attached to the use of federal funds for procurement by non-federal entities and measures applied at the sub-federal level.

Mr. Bercero stated that the high-profile procurement issue suffers from somewhat of a misperception among the public.  While the EU is asking for equal treatment in sub-federal entities in the United States, it equally is focusing on all levels of US government procurement.

USTR’s Mullaney pointed to one directive of the high-level working group report which set the framework for the TTIP negotiations – calling for a substantial increase in market access in both sides’ procurement market.  He suggested that the often-criticized US procurement market is not as closed as many think.  Given all the exceptions in the World Trade Organization Government Procurement Agreement taken by the EU, the US market is actually larger, he said.

Mr. Bercero suggested that the procurement market access aspect of the TTIP should be just as ambitious as the tariff chapter.

While there is technical work still to be done, Brussels expects that over the next few months a clear understanding can be reached on “what are the concrete objectives we want to achieve in TTIP and what are the steps that the regulators on both sides will need to take to fulfill these objectives within the time frame of the TTIP negotiations,” Mr. Bercero stated.

Officials from regulatory bodies on both sides of the Atlantic participated in last week’s talks.

Negotiators made significant headway in nine areas for closer regulatory cooperation –

 ●        textiles – where the two sides had technical discussions on areas like labeling provisions, requirements for consumer safety and standards;

●        chemicals – where there was an exchange of information on procedures, processes and criteria for the potential areas of cooperation.  “Reflections” can now move to how to put this into practice;

●        pharmaceuticals – the two sides continued discussions focusing on each’s respective systems, such as Good Manufacturing Practices; pediatrics, bio-similars and generics;

●        cosmetics – discussions have focused on processes for regulating ingredients, labeling, standards and guidelines and alternatives to animal testing;

●        medical devices – both sides focused on Unique Device Identification, Regulatory Product Submission and a Medical Devices Single Audit Program;

●        cars – the two sides are well advanced in all key areas of the sector, in particular concerning their regulatory systems, the scope and approach for equivalence of existing technical regulations as well as with respect to cooperation under the 1998 agreement on motor vehicles in international fora and on future regulatory and research plans;

ICT

●        ICT – the two sides exchanged analyses on some specific topics of information and computer technology, such as e-health, encryption, e-accessibility, enforcement and e-labeling;

●        engineering – the EU side presented a paper on its engineering industries.  Discussions took place on machinery and electric and electronic products;

●        pesticides – the two sides had initial exchanges on possible specific areas for cooperation.

Mr. Bercero and his USTR counterpart agreed that there is now a road in sight for setting down how both can provide easy access to each others’ test data and share information on their respective regulatory processes.

A TTIP accord will allow regulatory bodies on both sides of the Atlantic to pool resources and strengthen oversight, in areas like medical devices while simultaneously enhancing controls over unsafe products, Mr. Mullaney said.

Both sides also are striving for the highest achievable standards, insisting again that the agreement will not impact on already-existing regulations protecting the public or the environment.  Mr. Mullaney said that TTIP can set the “highest” standards; it will then to be up to the respective regulatory bodies to implement those standards in separate rule-makings.

The USTR official also said that closer cooperation would lead to better results over controlling trade in counterfeit products – such as medicines, car brakes and airbags.

Discussions also were held on sustainable development/labor and environment, energy and small- and medium-size enterprises.  The nature of the discussions, commented Mr. Bercero, varied from area to area.  The United States wants labor and environmental provisions in the accord to be fully enforceable, said Mr. Mullaney.

Mr. Bercero said that negotiators were beginning to finalize consolidated texts in areas such as SMEs and trade facilitation.  The official noted special attention to recommendations related to trade facilitating rules of origin and doing away with unnecessary duplication of regulatory requirements.  He cited the European business sector’s calls for simplifying customs procedures.  Easy access to information on regulatory requirements and other conditions for export, through a web portal, is of crucial importance for SMEs, he agreed.

On sanitary and phytosanitary issues, both sides are expected to table textual proposals before the next round, according to Mr. Bercero.  “Very intensive” discussions were held on what might potentially be the elements of final SPS chapter.  Washington and Brussels have essentially finalized internal work, but is some more outside consultations are needed.

Both sides also discussed energy trade last week.  But it is still undecided whether a separate chapter would be needed.  Mr. Mullaney suggested a separate chapter would be redundant if it contained the same across-chapter principles.  Would a separate chapter on energy be seen as favoring that sector, he asked.  He said it was purely an “architectural” question.

At a minimum, suggested USTR’s Mullaney, a final TTIP would make it easier for the United States to approve export licenses for the shipment of liquified natural gas to Europe.  Exports of crude oil is still prohibited by law.

      



G-20 – A Missed Opportunity?

Geneva – Group-of-20 trade ministers came away from their annual summit in Sydney on Saturday with a less-than-confident feeling that differences have been overcome on the future of a World Trade Organization post-Bali agenda, WTD has learned (WTD, 7/18/14).

There was no breakthrough – as had been hoped – over the finalization of the draft protocol of the new Trade Facilitation Agreement and resolution of “best endeavor” outcomes on agriculture and development – also agreed to in Bali.

Several members – including Australia, the United States, the European Union, Japan, Canada, France, Germany, Britain, China, South Korea and Mexico – called for concluding the work on the Trade Facilitation on schedule by July 31.

US Trade Representative Michael Froman tweeted from Sydney – “Talking about post-Bali agenda while failing to implement the TFA isn’t just putting the cart before the horse, it’s slaughtering the horse.”

India and South Africa said that they could only join the consensus on the protocol once they have complete confidence that the remaining issues in the Bali package are fully addressed – concerning development and agriculture, including permanent solution for food security, said sources who took part in the meeting.

Agriculture and Development

India, South Africa, Argentina and Brazil said issues pertaining to agriculture and development have not been squarely addressed in tandem with the Trade Facilitation protocol.  And not addressing it head-on is raising a “crisis of confidence” in the world trade body.

Despite the continued standoff, other countries will step-up their efforts in the next nine days to see how India and others can be brought on the board to adopting the protocol by July 31.

“The priority over the next nine days is to seek a satisfactory solution to the concerns that a couple of countries have with the pace  of the reforms,” Australia’s trade minister Andrew Robb told reporters, according to a Reuters report from Sydney.

Argentina reminded the industrialized countries that the Trade Facilitation Agreement does not bring about “development” but would contribute to market access for the major exporting countries.

Failure to adopt the TF protocol – which would bring the Bali agreement into force by mid-2015 – would have serious repercussions for the global trading system and further delay a conclusion to the Doha Development Agenda negotiations, stated one industrialized country in Sydney.

WTO Director General Roberto Azevêdo underscored the need to adopt the protocol by the end of the month.  He also urged members to hasten work on the remaining decisions of the Bali package.

Some industrial nations tried to assure developing-country participants about the need to address the remaining issues in the Bali package without delay, but they were not willing to provide “specific” commitments sought by India and South Africa on agriculture and development, one participant confided to WTD.

At the conclusion of the one-day event, Australia’s Mr. Robb emphasized the need to work on all issues in the Bali package.  The TF protocol should be approved without delay, he added.

Prior to the ministerial discussions, the United States and India held a bilateral meeting in which there was a frank discussion on the each other’s priorities.  Washington apparently sought New Delhi’s cooperation in adopting the TF protocol, but India remained resolute over the food security and other developmental issues, WTD was told.

Several other members, including the WTO Director General, held meetings with India’s new commerce minister Nirmala Sitharaman.

The G-20 meeting also discussed a new Organization for Economic Cooperation and Development report on a system of global value chains.

      



Looking Into Ex-Im Bank Corruption

The House Oversight Committee will conduct an investigation into allegations of corruption at the US Export-Import Bank – just when Congress is weighing whether to reauthorize the Bank’s charter (WTD, 7/18/14).

Committee Chairman Darrell Issa (R-Calif) and subcommittee on economic growth, job creation and regulatory affairs chairman Jim Jordan (R-Ohio) wrote to Bank President Fred Hochberg last week advising him of the investigation.

The probe was prompted by a Wall Street Journal article last month reporting that four Bank employees had either been fired or suspended since the beginning of the year for allegedly accepting gifts or cash payments from companies seeking financing from the Bank (WTD, 6/25/14).  “The committee is concerned that the breadth and seriousness of the allegations may suggest a broader culture of corruption at the Bank,” the lawmakers wrote.

The lawmakers are seeking all documents and communications related to the four cases and relating to the Bank’s policy concerning employee ethics and compliance.

      



Rev. 4 or No – In New Doha Negotiations

Geneva – Doha farm trade negotiations chair John Adank acknowledged in a fax to members last week that “all elements” within the Doha Development Agenda agriculture negotiations are “inter-related,” but he remains unsure as to how to proceed in treating the 2008 draft revised modalities and its overall trade-distorting domestic support provisions in formulating the post-Bali work program, WTD has learned (WTD, 7/17/14).

After six months of consultations with members, the chair asked members how they wanted to move forward in the two areas of domestic support and market access.

“A range of members consider the Rev. 4 text the most viable way forward and the basis for a final agreement,” the chair stated in a three-page fax sent to members last Tuesday.

Almost all developing and least-developed countries and some industrialized countries have demanded Rev. 4 as the basis for negotiations.  But the United States and some other industrialized countries – including the European Union – “place emphasis on the need for various aspects of negotiations, as reflected in the text, to be reconsidered and have underlined the need for new ideas or approaches,” the chair recounted.

Mr. Adank suggested bypassing the debate on the integrity of Rev. 4 which underlines the compromises struck during the Doha agriculture negotiations on several difficult issues. Members, said Ambassador Adank, should “focus more on exploring in greater detail key areas where convergence is lacking if we are to arrive at agreed modalities.”

In domestic supports – in which members agreed to “substantial reductions in trade-distorting domestic support” – the chair highlighted that the only new concepts that emerged in the Doha negotiations is “Overall Trade Distorting Support” along with “new limits” for product-specific aggregate measurement of support, product-specific “blue box limits” and a new overall limit to “blue box” supports.

For the last several months, ideas have been mooted to drop the reduction commitments for subsidies based on overall trade-distorting domestic support because one major industrialized country will not be in a position to accept the 2008 benchmarks, several trade envoys told WTD.

“The way in which those elements are dealt with will collectively reflect objectives relating to both ambition and flexibilities for members and, in some cases, specific groups of members,” the chair argued.

Ambassador Adank posed four questions to get a clearer sense of the views of members.  They include –

 ●      How do you see these various elements in the domestic support pillar now particularly as they relate to level(s) of ambition, flexibilities, and the contributions envisaged for different members? and

●      If you consider that some aspects/elements from past negotiations need to be reconsidered while still achieving the stated mandate, what alternative approaches would you suggest?

●      Some members have suggested that a “simplified approach” to market access might achieve an appropriate level of ambition, while providing general flexibility for members?  What would/might such an approach involve?  What would this mean in terms of outcomes compared to approaches evolved in the past?

●        Do you see any other ways of assisting in achieving the stated mandate?

‘Substantial Improvements’ in Market Access

Regarding “substantial improvements” in market access, the chair’s communication mentioned a framework based on a tiered formula – higher levels of reductions for higher-tariff items and cuts based on reciprocity for industrialized and developing countries – and flexibilities for sensitive products  for industrialized countries along with sensitive and special products for developing countries.

Ambassador Adank stated that “some members continue to see the approach evolved in the past as remaining viable, subject to the resolution of various outstanding issues.”  A large number of developing and least-developed countries have called for the continuation of the tiered formula approach at the most recent agriculture negotiations committee meeting.

The chair admitted that the tiered-approach “created complexity without achieving adequate improvements in market access and has suggested a need to consider simplified approaches.”  The EU is the main proponent for a simplified approach.

Mr. Adank will hold an open-ended informal meeting on July 23 to address the issues.

      



Around the Globe

            ●      India is preparing to veto the World Trade Organization’s (WTO) trade facilitation agreement, in a stubborn effort to seek a negotiating space for public stockholding in food grain and food subsidies, the Business Standard reported (see related report this issue).  If it does, it will be the only country in the entire WTO membership to stop the deal from getting implemented.

“The way things are moving, there is no way we can agree to the trade facilitation agreement being pushed by the developed nations at WTO within the prescribed deadline. Food security has always been India’s main concern and this time we are not going to concede,” a top-ranking official involved in the negotiations, who did not wish to be named, told Business Standard.  The issue of public stockholding and food security has domestic compulsions here as the issue is largely political. And, for a new government that came to power after winning a landslide victory, the issue of livelihood of its poor and marginal farmers is a political trump card.

Eleventh hour negotiations to win Indian approval for a breakthrough global trade pact may not have succeeded in the end despite initial signs of progress, sources involved in the discussions said on Saturday according to a Reuters news service report.  India is the most prevalent among a group of developing nations angry at rich countries for failing to address their concerns about a deal on trade facilitation – struck by WTO member states in Bali last year – that must be detailed by a July 31 deadline.

Proponents believe the deal could add $1 trillion to global GDP and 21 million jobs.  But India’s Trade Ministry said on Wednesday it would “find it difficult” to support the protocol unless it was satisfied that adequate emphasis is being placed on negotiations about food security and other issues important to poor countries -sparking furious negotiations at the G20 Trade Ministers meeting in Sydney.  Three officials involved in the negotiations, speaking under the condition of anonymity in order to speak frankly, expressed exasperation with what they described as a history of erratic behaviour on the part of the Indian trade team that made it difficult to trust.

India has not provided any clear description of exactly what changes it would like made to the agreement, they said, although it would not matter anyway because no concessions were on offer given how difficult the negotiations had proven to conclude the first time round.  The Indian demands appear to have shaken confidence in the new government of Narendra Modi, who came to power earlier this year with a pro-business agenda but now appears set to derail what several officials called the most significant global trade pact in two decades.

Australian Trade Minister Andrew Robb said assurances had been given to all of the signatories to the treaty that their concerns would be met and expressed optimism that it would be resolved before the deadline.  “There was strong resolution around the table that India’s issues to do with food security would and should and will be addressed as decided previously and I think there will be discussions about how to satisfy the Indians and they won’t be left behind,” Robb told reporters.  The row over subsidies has raised fears that the so-called “trade facilitation agreement”, the first ever global trade agreement under the World Trade Organization, will be derailed.

“We are focused on implementing the full Bali package that will deliver for every country involved,” said Michael Froman, the U.S. Trade Representative.  “Reinvigorating the multilateral system is too important to put at risk with any backsliding on commitments.”

           ●         Russia is planning to complain to the World Trade Organization, or WTO, about sanctions imposed  by the U.S. over Russia’s perceived failure to help de-escalate the ongoing crisis in Ukraine, media reports said according to the Moscow Times (WTD, 7/17/14).  The U.S. on Wednesday let rip with its third and harshest round of sanctions against Russia, targeting two of Russia’s biggest banks, two energy companies and eight defense companies.

“Needless to say, we will raise this issue at the WTO General Council and, most likely, will use its dispute resolution procedures,” Russian Economic Development Minister Alexei Ulyukayev was quoted as saying Saturday by ITAR-Tass.  “Until now we have refrained from taking such steps in hopes that our American partners would take a more balanced position. Unfortunately, our American colleagues failed to demonstrate this, and we have been left with no other choice,” Ulyukayev said after a meeting of the Group of 20 trade ministers in Sydney.

Prime Minister Dmitry Medvedev also said Friday that Russia would take its complaints over U.S. sanctions to the WTO, reiterating the position he staked out last month in regard to the two previous rounds of U.S. sanctions. Medvedev said at that time that Washington stood guilty of failing to fulfill its trade obligations and of violating the organization’s rules.  Ulyukayev said he felt it was too early to say how serious the impact of the sanctions could be for Russia’s flagging economy.

The Moscow Times also reported that the EU Council has formally decided to expand the list of criteria for placing Russian companies on the European Union’s blacklist, the council said in an announcement in its official journal.  EU leaders on Wednesday agreed to impose sanctions on Russian companies that are seen as participants in the destabilization of Ukraine, and at the same time asked the EU’s bank, the European Investment Bank, to suspend new lending for Russian companies and to seek the suspension of new lending to Russia by the European Bank for Reconstruction and Development, or EBRD.

Russia is traditionally one of the EBRD’s biggest beneficiaries:  The development bank gave Moscow 1.8 billion euros ($2.43 billion) in loans in 2013 and has pledged another 1 billion euros ($1.35 billion) for this year.  The 28-nation EU is expected to put together a first list of companies and people to be hit with asset freezes by the end of July.  The measures are an attempt to ratchet up the pressure on Moscow, which the bloc accuses of failing to use its influence to de-escalate the conflict in eastern Ukraine.

The EU’s decision on Friday to widen the criteria, which came after a Malaysia Airlines flight was shot down in eastern Ukraine last week, killing all 298 people on board, could indicate a willingness to target some of Russia’s biggest companies.  Previously, the EU could only impose sanctions on companies if a person associated with that company had been blacklisted for threatening Ukraine’s sovereignty, whereas now the bloc can target companies without that restriction.

            ●          Japanese and U.S. trade negotiators have failed to make major progress in bridging gaps on auto trade as talks continue on sealing a Pacific Rim free trade initiative, a Japanese official said, according to a Kyodo news service report (WTD, 7/18/14).  “As we entered a crucial stage, we had many difficult moments,” Takeo Mori, Japanese ambassador in charge of economic diplomacy, told reporters in Washington on Friday after talks with Wendy Cutler, the deputy acting U.S. trade representative.

Mori and Cutler began their latest round of talks on auto trade Wednesday as a separate channel from bilateral negotiations on farm products related to the 12-nation Trans-Pacific Partnership deal. The U.S. has historically had a difficult time getting access to Japan’s auto market, a source of trade friction highlighted by the stark difference in market share.  Mori, deputy director general of the Economic Affairs Bureau of the Foreign Ministry, said he and Cutler thrashed out the legal language of an envisioned agreement. The Office of the U.S. Trade Representative said in statement Friday that Cutler and Mori “continued to make steady progress and narrow the remaining differences.”

In the TPP-related auto talks the U.S. has urged Japan to open its market further, saying nontariff barriers, such as regulatory standards, prevent American carmakers from expanding sales in Japan. Tokyo usually attributes U.S. sales woes to a lack of models that appeal to its finicky consumers.

            ●          Chinese machinery manufacturer Sany Group may take further action against the US government over a controversial wind farm purchase, the China Daily newspaper reported (WTD, 7/17/14).   US federal appeals court sided with the Chinese firm and ruled on Tuesday that the US government had violated the rights of Ralls Corp. owned by two executives of Sany Group, when it rejected the company’s bid to purchase four wind farms in the US state of Oregon.

US President Barack Obama issued a presidential order in September 2012 to prevent Ralls from buying the wind farms, citing national security risks. The installations are near to a naval weapons systems training facility. Obama’s presidential order followed a recommendation from the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee headed by the US Treasury Secretary, which reviews attempts to bring US businesses under foreign ownership. Ralls immediately sued Obama for blocking the deal, claiming that the order exceeded the president’s constitutional rights and failed to provide detailed evidence.

Three possibilities following the ruling exist, Xiang Wenbo, a board member of Sany, said Saturday at a press conference in Beijing.  If CFIUS and Obama decide not to appeal, then Sany will win the case.  If CFIUS and Obama appeal, Sany will also continue their pursuit.  In the third instance, it cannot be ruled out that lawyers from both sides will strike a deal and end the logjam. Sany may continue with the Oregon wind farms purchase, or transfer their ownership to others, or purchase wind farms in different locations, said Xiang, adding that “a final decision is yet to be made.”

            ●          Visions of chlorine-drenched chickens and the prospect of genetically modified “Frankenfood” invading dinner tables across the European Union are proving serious impediments to the signing of a sweeping free trade agreement between the United States and the 28-country bloc, the Associated Press news service reported (see related report this issue).  Optimism that negotiations, which marked their first-year anniversary this week, would lead to a deal to create a trading bloc of 800 million people representing around half the world’s economic output have faltered amid growing public opposition.

Suspicions toward the U.S. following a spying scandal and electoral considerations on both sides of the Atlantic have also not helped to foster progress.  “There was much hype a year ago,” economist Andre Sapir of Brussels-based think-tank Bruegel said. “That was totally unrealistic .... It will take a long time, if it can be achieved at all.”  Analysts say a deal is unlikely within Obama’s second term, which ends in early 2017.

A senior EU official conceded that the timeline is slipping with the European Commission — the bloc’s executive branch — now hoping to conclude a deal during Obama’s current term.

             ●          Ukraine, already facing recession, may see its economy shrinking by as much as 2 percentage points more should Russia halt trade as a conflict widens between the two ex-Soviet partners, Premier Arseniy Yatsenyuk said (WTD, 7/17/14)  The trade relationship between Ukraine and Russia is “getting worse,” Yatsenyuk said in an interview on Bloomberg Television. “We do not have any kind of real relationship. we have the war. It will severely hamper Ukrainian gross domestic product.”

Ukraine’s economy has been battered by deadly anti-government street protests, Russia’s annexation of the Crimean peninsula and a pro-Russian insurgency in the nation’s eastern industrial heartland. Gross domestic product may shrink 6.5 percent this year, the government and the IMF predict now, compared with the 5 percent contraction they forecast in May.  Russia limited trade ties with Ukraine a year ago for planning to sign a trade agreement with the European Union in November. Ukraine’s then-President Viktor Yanukovych snubbed the deal because of concern over halted trade, sparking a popular street protest that led to his ouster. Yanukovych’s successor, Petro Poroshenko, signed the deal last month.

Ukraine will lose $5 billion per year if Russia stops trade, Yatsenyuk said.

            ●          South Korea has asked its major trade partners including China and the United States for cooperation in its upcoming negotiations to set tariff rates on its rice imports, the trade ministry said Sunday according to a Yonhap news agency report from Seoul (WTD, 7/1/14).  South Korea on Friday announced that it will open its rice market to tariffed imports, ending a 20-year waiver that had capped the import of the grain to a set minimum. It now has to negotiate the tariff rates with the World Trade Organization (WTO) before the market opening from Jan. 1 next year.

In a bid to discuss cooperation in future talks, South Korea’s Trade Minister Yoon Sang-jick held a series of bilateral meetings with his counterparts from the U.S., China, India, Canada, Australia and France on the sidelines of a meeting of trade ministers from the Group of 20 nations held on Saturday in Sydney, the ministry said.  During the meetings, Yoon explained his government’s policy on the tariffication of the rice market and asked his counterparts to support South Korea in the negotiations with the WTO, the ministry said.

            ●          China’s President Xi Jinping departed Argentina Sunday for Venezuela, the next-to-last stop of a Latin American tour aimed at bolstering trade with the region, Xinhua news agency reported.  The Chinese leader’s charm offensive seeks to secure new bilateral trade deals – particularly for coveted raw materials.

Xi hopes to further develop his country’s strategic relationship with Venezuela, just as Caracas’ ties with the United States – the region’s traditional political and economic powerhouse –  are arguably at their lowest point ever.  The countries, which have not had ambassadors in each other’s capitals since 2010, had poor relations during the leadership of late president Hugo Chavez and ties have remained strained under his successor, Nicolas Maduro.

            ●          Developing Asia remains on track toward steady growth in 2014 despite slower-than-expected growth in the United States (US) in the first quarter, says a new Asian Development Bank (ADB) report.  The Asian Development Outlook (ADO) Supplement, released today, maintains ADB’s April forecast of 6.2% growth in 2014 and 6.4% in 2015 for the region’s 45 developing economies.

The major industrial economies are anticipated to expand by 1.5% this year, a downward revision from the 1.9% forecast in April’s ADO 2014. Softer US growth has been somewhat offset by Japan’s robust first quarter performance while the euro area has generally met expectations.  In East Asia, quarterly growth in the PRC met ADB expectations with steady consumer demand, targeted government measures to stabilize investment, and a pickup in external demand in the second quarter of 2014. Both retail sales and industrial production have been picking up pace. Overall, the PRC is on track to meet ADO 2014 forecasts of 7.5% growth in 2014 and 7.4% in 2015.

The outlook for Southeast Asia has softened as growth prospects falter in Indonesia, Thailand, and Viet Nam.  Growth in Central Asia is gradually moderating, with many economies affected by the deteriorating outlook of the Russian Federation. Revised projections reflect weaker-than-expected performances in Kazakhstan, Kyrgyz Republic, and Uzbekistan so far in 2014. Aggregate growth projections for the region are revised down to 6.3% in 2014 and further to 6.1% in 2015, from 6.5% forecast for both years in ADO 2014.                                    —   —

On the Web......

Asia


ASEAN.  Association of Southeast Asian Nations statement on antitrust.  (available at:  http://www.asean.org/news/asean-secretariat-news/item/asean-discusses-approach-to-effective-competition-enforcement?category_id=27 )  issued:  7/18/14.


ASEAN.  Association of Southeast Asian Nations statement on food trade.  (available at:  http://www.asean.org/news/asean-secretariat-news/item/harmonising-food-control-requirements-in-asean-to-remove-trade-barriers?category_id=27 )  issued:  7/18/14.


Economy.  Asian Development Bank projections on economic growth in Asia.  (available at:  http://www.adb.org/news/adb-maintains-developing-asia-growth-forecast?utm_source=daily&utm_medium=email&utm_campaign=alerts )  issued:  7/18/14.



Business Practices


ASEAN.  Association of Southeast Asian Nations statement on antitrust.  (available at:  http://www.asean.org/news/asean-secretariat-news/item/asean-discusses-approach-to-effective-competition-enforcement?category_id=27 )  issued:  7/18/14.


NSA Spying.  Open Technology Institute report on the business costs of the NSA’s surveillance program.  (available at:  http://www.oti.newamerica.org )  issued:  

7/14.



Canada


Korea (South).  Canadian government statement on relations with South Korea.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/07/18a.aspx )  issued:  7/18/14.


Trade Policy.  Remarks by Canadian Minister of International Trade Fast at the G-20 trade ministerial on global trade issues.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/07/19a.aspx )  issued:  7/19/14.



Brazil


China.  Chinese government statement on trade with Brazil.  (available at:  http://english.mofcom.gov.cn/article/newsrelease/significantnews/201407/ 20140700666407.shtml )  issued:  7/18/14.



China


Brazil.  Chinese government statement on trade with Brazil.  (available at:  http://english.mofcom.gov.cn/article/newsrelease/significantnews/201407/ 20140700666407.shtml )  issued:  7/18/14.


Foreign Investment.  Chinese government statement no foreign investment.  (available at:  http://english.mofcom.gov.cn/article/newsrelease/significantnews/201407/ 20140700666386.shtml )  issued:  7/18/14.



European Union


Fiji.  European Union statement on free trade agreement with Fiji.  (available at:  http://trade.ec.europa.eu/doclib/press/index.cfm?id=1130 )  issued:  7/18/14.


IPR.  European Union statement no US-European Union discussions on intellectual property rights.  (available at:  http://trade.ec.europa.eu/doclib/press/index.cfm?id=1131 )  issued:  7/18/14.


Trade Balance.  European Union statement on the first quarter balance of payments.  (available at:  http://europa.eu/rapid/press-release_STAT-14-114_en.htm )  issued:  7/18/14.


TTIP.  Concluding press conference in Brussels of the TransAtlantic Trade and Investment Partnership negotiations round.  (available at:  http://ec.europa.eu/avservices/video/player.cfm?ref=I091332 )  issued:  7/18/14.


TTIP.  US Trade Representative Froman’s remarks on the TransAtlantic Trade and Investment Partnership.  (available at:  http://www.ustr.gov/about-us/press-office/press-releases/2014/July/Statement-by-USTR-Froman-at-Close-of-Sixth-Round-TTIP-Negotiations )  issued:  7/18/14.


TTIP.  Statement by chief European Union negotiator Bercero on the TransAtlantic Trade and Investment Framework negotiations.  (available at:  http://trade.ec.europa.eu/doclib/press/index.cfm?id=1132 )  issued:  7/18/14.



Export Policy


Pritzker.  Remarks by Commerce Secretary Pritzker on rural exports.  (available at:  http://www.commerce.gov/blog/2014/07/18/us-secretary-commerce-penny-pritzker-talks-about-efforts-boost-exports-rural-delta-0 )  issued:  7/18/14.



Export-Import Bank


Corruption.  Letter from the House Financial Services Committee to Export-Import Bank President Hochberg on alleged corruption in the agency.  issued:  7/16/14.


Reauthorization.  Letter to House Finance Services Committee Chairman Henserling from Jenny’s Pickles on reauthorization of the US Export-Import Bank.  issued:  7/16/14.



Fiji


European Union.  European Union statement on free trade agreement with Fiji.  (available at:  http://trade.ec.europa.eu/doclib/press/index.cfm?id=1130 )  issued:  7/18/14.



Food and Beverages


ASEAN.  Association of Southeast Asian Nations statement on food trade.  (available at:  http://www.asean.org/news/asean-secretariat-news/item/harmonising-food-control-requirements-in-asean-to-remove-trade-barriers?category_id=27 )  issued:  7/18/14.



Foreign Investment


China.  Chinese government statement no foreign investment.  (available at:  http://english.mofcom.gov.cn/article/newsrelease/significantnews/201407/ 20140700666386.shtml )  issued:  7/18/14.



Intellectual Property Rights


European Union.  European Union statement no US-European Union discussions on intellectual property rights.  (available at:  http://trade.ec.europa.eu/doclib/press/index.cfm?id=1131 )  issued:  7/18/14.



Korea (South)


Canada.  Canadian government statement on relations with South Korea.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/07/18a.aspx )  issued:  7/18/14.




Trade Policy


Canada.  Remarks by Canadian Minister of International Trade Fast at the G-20 trade ministerial on global trade issues.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/07/19a.aspx )  issued:  7/19/14.



World Trade


G-20.  Australian government summary of the G-20 trade ministerial meeting.  (available at:  https://www.g20.org/sites/default/files/g20_resources/library/20140720-Chair-Summary-TMM-Syd.pdf )  issued:  7/20/14.


What we’re covering this week –

  There’s a lot of action this week in Geneva.  The World Trade Organization meets on the Trade Facilitation Agreement and holds agriculture negotiations.  In addition, the Dispute Settlement Body and General Council meet.

            ●          Tuesday, WTO Director General Roberto Azevedo launches the Trade Facilitation Agreement Facility.

            ●          Also Tuesday, the WTO Dispute Settlement Body meets.

            ●          On Wednesday, the Atlantic Council sponsors a program on the Pacific and the Americas with speakers including Acting Deputy US Trade Representative Wendy Cutler and Rep. Charles Boustany.

            ●          The White House holds a two-day rural opportunity investment conference with speakers including Agriculture Secretary Tom Vilsack and US Trade Representative Michael Froman.

            ●          Also Wednesday, the State Department Advisory Committee on International Economic Policy holds an open meeting on US-Russia relations.

            ●          In Geneva, the WTO holds agriculture negotiations.

            ●          Thursday, the House Foreign Affairs subcommittee on Asia and the Pacific holds a hearing on US-India relations.  US Foreign and Commercial Service Director Arun Kumar is among the witnesses.

            ●          The Heritage Foundation sponsors a program on energy exports and free trade with Rep. Cory Gardner.

            ●          The WTO General Council meets in Geneva.


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WTD’s

Friday Afternoon

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Straight talk.   

Click the highlighted text to hear snippets from WTD’s straight talk.

•  Comments by Senate Finance Committee Chairman Ron Wyden to the press on trade and transparency on July 16.

•  Australia News Network interviews World Trade Organization Director General Roberto Azevedo during his visit to the G-20 meetings in Sydney on July 17.

•  New House Majority Leader Kevin McCarthy on June 22 tells Fox News Sunday why the US Export-Import Bank should end.

•  Here’s why Congressional ignorance can be very dangerous when it comes to willy-nilly support for free trade agreements, according to consumer advocate Ralph Nader.

•  Here’s what’s at stake with Trade Promotion Authority and why Louisiana Republican Rep. Charles Boustany can’t sleep at night.

•  Here’s what Wisconsin Republican Rep. Tom Petri said on the House floor April 10 about TTIP and Bratwurst.

•  Here’s a brief interview with the Heritage Foundation’s Foundry report with House Financial Services Chair Rep. Jeb Hensarling (R-Texas) on the dangers of renewing the US Export-Import Bank given April 17.

•  Here’s a brief snippet from remarks April 8 by Senate Finance Committee ranking Republican Orrin Hatch saying he is befuddled over why the President says he supports Trade Promotion Authority but doesn’t do anything about.

•  Here’s Aspen Institute scholar and former Reagan Administration Assistant Secretary of Commerce speaking about with WTD on the many iterations of a US-European Union free trade agreement after a recent Hudson Institute event.

•  Here’s what veteran House Democrat Richard Neal (Mass) – one of four cochairs of the new House TTIP Caucus – told WTD during a reception celebrating the caucus creation on April 3.

•  Here’s what World Trade Organization chief spokesperson Keith Rockwell said in Washington on how and why the WTO is back.

•  Here’s what Council of Economic Advisors Chair Jason Furman told the Joint Economic Committee last week about why there is so little mention of trade in the Economic Report of the President.

•  This is why the European Union is wrong when it says it will never allow imports of US hormone-treated beef, Agriculture Secretary Vilsack tells WTD.