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 Volume 23, Number 238                         Monday, December 1, 2014

Trade Reports International Group


US Appeals WTO COOL Ruling

 Geneva – The United States on Friday said it would appeal to the World Trade Organization Appellate Body an October dispute panel decision saying the US country-of-origin labeling regulations are inconsistent to WTO rules (WTD, 11/3/14).

 The panel found that the US regulations revised in 2013 imposed undue burdens on imports of processed meat and cattle for slaughter from Canada and Mexico.  The regulations, it said, gave an unfair advantage to domestic meat producers over Canadian and Mexico producers.

 A specially convened Dispute Settlement Body meeting on COOL was cancelled just after the US announcement.

 It was the second negative ruling against the US program.

 Canada complained in a statement that the delay due to the appeal will simply continue the US protectionist action to the detriment of its producers.

 The Appellate Body has three months to come to a final judgement.

 Last month, Agriculture Secretary Tom Vilsack commented that he saw no way administratively to change the law to meet the WTO conditions.  Only Congress could do that, short of abandoning the whole effort.

 A three-member WTO compliance panel ruled that the revised COOL regulation accords less favorable treatment to Canadian and Mexican livestock exporters.

 In a statement, the National Farmers Union – a strong advocate of COOL – said the US appeal was the right way to go.


The US Paper on E-Commerce

 Geneva – The United States will underscore the need for “robust” trade rules at the World Trade Organization to ensure that existing commitments on computer and related services are clear in terms of coverage, particularly for cloud computing (WTD, 10/1/14).

 The United States intends to put forth a paper on the topic during this week’s resumed negotiations on a Trade in Services Agreement, WTD has learned.

 “Cloud computing is a critical component for any e-commerce and it is essential that trade commitments reflect a high degree of openness for this services,” the US paper suggests.  As some countries consider cloud computing as a telecommunication service in their domestic regulatory scheme, members need to clarify their policies on the coverage of these services to avoid negative consequences, the proposal circulated to members last week and obtained by WTD points out.

 The paper flags priorities for electronic commerce to “ensure that trade rules support innovative advances in computer applications and platforms, such as mobile applications and the provisions of cloud computing services, including electronically delivered software hosted by such services.”

 Cloud computing is one issue suggested by negotiations head Joakim Reiter as a priority, along with better rules in general and the need to balance economic policy interests with competing policy objectives, such as privacy and consumer protection.

 The United States is suggesting that members need to ensure the freedom of cross-border data flow.  “Governments should not prevent services suppliers of other countries or customers of those suppliers from electronically transferring information internally or across borders, accessing publicly available information or accessing their own information stored in other countries.

 Governments also “should not require ICT service suppliers to use local infrastructure or establish a local presence as a condition of supplying services,” the US position states.  Governments should not give priority or to national suppliers of ICT services in the use of local infrastructure or give preferential treatment to national suppliers of ICT services in the use of local infrastructure, national spectrum or orbital services.

 Washington adopted in its proposal an Australia suggestion that online personal data should be protected.  Further, the US stance echoes Australia’s position that governments must share information on their experiences in protecting the data of electronic commerce users.

 Washington also wants members to reconsider the utility of localization requirements, including measures that require consumers’ personal data to be processed and stored within their borders.  “These measures have the potential to impede economic activity and do not necessarily provide the data security that they ostensibly seek to achieve,” the United States points out.

 On privacy and the protection of personal data, the United States says there is little evidence for the need to restrict data from being exported to a particular country’s territory if the destination country does not share a formal privacy or data security regime with the source country.  Effectively, countries must take “great care” not to adopt measures to prevent data exports or mandate local storage as they could constitute an unjustified barrier to trade, according to the US paper.


Around the Globe

             ●          German Vice Chancellor Sigmar Gabriel said he expected his Social Democrat party (SPD) would back Europe’s free trade agreement with Canada (CETA), which has faced opposition from party left-wingers due to its investment protection clause, the Globe and Mail newspaper reported (WTD, 11/12/14).  The deal, which could increase bilateral trade by a fifth to $34-billion and is widely seen as a template for a larger trade pact between the EU and the United States, was wrapped up in August after five years of tricky negotiations.

 However, critics say the investor protection clause, allowing companies to bring claims against a state if it breached the treaty, would give multinationals too much power and could lead to governments being pressured into ignoring laws on labor, the environment, data protection or food standards.  It is unclear whether all 28 EU states will have to ratify CETA. The EU Commission believes it is not necessary, but member states want a say, which means the dispute may have to be settled by the European Court.

 “Europe has ensured that the investment protection is better and fairer than in many other deals. We can still improve it,” Gabriel told weekly news magazine Spiegel in an interview.  “But it appears that no one in Europe would support the removal of the investment clause altogether,” he added.  Gabriel had initially said Berlin would reject the deal because of the investor protection provision – a deeply unpopular clause with the left-wing of the SPD, junior partners in Chancellor Angela Merkel’s right-left coalition.  European Trade Commissioner Cecilia Malmstrom said in November small changes could be made to the clause.  “We will continue to try to push through improvements,” Gabriel said, adding he would allow the SPD to vote on the deal and he was confident they would back it.

             ●          Russian President Vladimir Putin’s visit to Turkey on Monday will have trade and energy issues at its heart, but is not expected to bridge deep differences over Syria and Crimea, Reuters news service reported.  The two issues have tested a relationship usually kept on track by mutual economic advantage: Russia is Turkey’s main energy supplier, and Ankara is Moscow’s second biggest trade partner after Germany.

 Turkish President Tayyip Erdogan has strongly criticized Russia’s backing for Syrian President Bashar al-Assad. And Turkey has strong links with the Muslim Tatar population of Crimea, which Russia annexed from Ukraine in March.  With Erdogan and Putin set to chair the fifth annual meeting of a council to improve trade and relations, several deals are expected to be signed, officials on both sides said.  State monopoly Rosatom, which is building Turkey’s first nuclear plant, expected to be worth $20 billion, will continue pushing for “investor status,” which would cut tax on profit to 2 percent from 20, Putin’s top foreign policy aide Yuri Ushakov told journalists on Friday.  Turkey’s imminent ascension to the presidency of the G20 makes bilateral ties particularly important, Ushakov said, adding that Syria would be discussed in “great detail.”

             ●          Farmer organisations, trade unions and civil society groups have asked the government to immediately halt its negotiations for joining the Regional Comprehensive Economic Partnership (RCEP) mega trade deal, saying it would “jeopardize” the government’s efforts to revive manufacturing, hit agriculture and access to affordable medicines, the Indo-Asian news service reported from New Delhi (WTD, 11/12/14).  Yudhvir Singh, convenor, Indian Coordination Committee of Farmers’ Movements, said that farmers’ movements in India are opposed to the RCEP as it “has the potential to irreparably damage Indian dairy and agriculture sector in total,” said a statement from the Forum Against FTAs.

 Singh said deeper tariff cuts on agriculture products will intensify the agriculture crisis in India.  Amitava Guha, from Centre of Indian Trade Unions (CITU), said many of the RCEP countries have advanced manufacturing capability. Elimination of import duties on industrial products would intensify the cut-throat competition to reduce the cost of production and harm workers’ welfare.  Gopakumar of Third World Network (TWN) said that governments like Japan and Australia are pushing for ‘TRIPS Plus’ provisions in RCEP negotiations. Such a strict intellectual property regime will restrict generic manufacturing of medicines at affordable prices, adversely affect public health objectives and increase cost of treatments for cancer, HIV/AIDS and many other life threatening diseases, said the statement. In the letter to Commerce and Industry Minister Nirmala Sitharaman, civil society groups demanded the government to immediately halt India’s engagement in all FTAs including RCEP negotiations and to make public all RCEP documents.

             ●         Taiwan’s premier Jiang Yi-huah resigned Saturday after his ruling Nationalist Party, the Kuomintang, or KMT, got only 40 percent of the vote, while the Democratic Progressive Party, or DPP, received 47 percent of the vote, CNN reported. The loss was seen as a response to a trade agreement the premier signed with mainland China in Shanghai last year: The deal prompted demonstrators dubbed the Sunflower Movement by the media to occupy Parliament and protest in the streets.

 Critics of the trade agreement worry that an alliance between the longtime adversaries would give China too much influence over Taiwan and threaten small businesses. China and Taiwan – officially the People’s Republic of China and the Republic of China, respectively – separated in 1949 following a civil war, but China still claims Taiwan as its territory. “This is no time to be sad ... but we will implement reform measures as soon as possible,” said Taiwan President Ma Ying-jeou, who is also KMT chairman. Both Jiang, who occupied an appointed position, and KMT Secretary-General Tseng Yung-chuan stepped down after the election loss, and the government said there would be a cabinet reshuffle probably by next week.

             ●          The World Bank said today that it will provide $1.2 billion to support infrastructure development and improve the competitiveness of the East African Community (EAC) states.  In addition, through IFC and MIGA, the World Bank Group will provide additional resources for regional infrastructure through market-driven private sector financing and guarantees.

 The financing will contribute to the EAC states’ planned investments in the next three to seven years. This support is additional to large ongoing individual country programs, the bank said.  “We are partnering with the EAC governments, other development partners and the private sector to invest in regional infrastructure and to help deepen policy integration and reduce barriers to trade in the EAC,” said Philippe Dongier, World Bank Country Director for Burundi, Tanzania and Uganda, during the EAC Heads of State retreat in Nairobi. “We are preparing investments to revive the region’s inland waterways on Lakes Victoria and Tanganyika, and to enhance the capacity and efficiency of the two main EAC ports on the Indian ocean: Dar-es-Salaam in Tanzania, and Mombasa in Kenya. We will also invest in specific transport links to better connect landlocked countries (Burundi, Rwanda, Uganda and South Sudan) to the Northern and Central corridors, this way improving these countries’ access to the ports of Mombasa and Dar-es-Salaam.”

   —  —

On the Web......



Canada.  Canadian statement on the US appeal of the US country-of-origin labeling program ruling in the World Trade Organization.  (available at:  http://www.international.gc.ca/media/comm/news-communiques/2014/11/28b.aspx?lang=eng )  issued:  11/28/14.

COOL.  World Trade Organization announcement of US appeal of the WTO ruling on the country-of-origin labeling program.  (available at:  http://www.wto.org/english/news_e/news14_e/ds384_386apl_28nov14_e.htm )  issued:  11/28/14.

COOL.  National Farmers Union statement on the country-of-origin labeling program.  (available at:  http://www.nfudc.org )  issued:  11/28/14.


Agriculture.  Canadian statement on the US appeal of the US country-of-origin labeling program ruling in the World Trade Organization.  (available at:  http://www.international.gc.ca/media/comm/news-communiques/2014/11/28b.aspx?lang=eng )  issued:  11/28/14.


TFA.  World Trade Organization General Council decision on the Trade Facilitation Agreement.  (available at: https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128896,128922,128918,128899,128901,128900,128886,128887,128889,128888&CurrentCatalogueIdIndex=4&FullTextSearch=  )  issued:  11/28/14.

Developing Countries

Food Security.  World Trade Organization General Council decision on food stockholding facilities for developing countries.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128896,128922,128918,128899,128901,128900,128886,128887,128889,128888&CurrentCatalogueIdIndex=3&FullTextSearch= )  issued:  11/28/14.

ROO.  World Trade Organization report on preferential rules of origin.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128914,128898,128892,128919,128920,128921,128923,128924,128903,128902&CurrentCatalogueIdIndex=0&FullTextSearch=/ )  issued:  11/28/14.

European Union

Economy.  European Union survey of the economy.  (available at:  http://europa.eu/rapid/press-release_IP-14-2235_en.htm )  issued:  11/28/14.

Export Controls

EAR.  Commerce Department final rule on legal authorities for the Export Administration Regulations.  (available at:  http://www.gpo.gov/fdsys/pkg/FR-2014-12-01/html/2014-28235.htm )  issued:  12/1/14.


ROO.  World Trade Organization report on preferential rules of origin.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128914,128898,128892,128919,128920,128921,128923,128924,128903,128902&CurrentCatalogueIdIndex=0&FullTextSearch=/ )  issued:  11/28/14.


TISA.  US proposal on services trade.  issued:  11/28/14.

World Trade Organization

COOL.  World Trade Organization announcement of US appeal of the WTO ruling on the country-of-origin labeling program.  (available at:  http://www.wto.org/english/news_e/news14_e/ds384_386apl_28nov14_e.htm )  issued:  11/28/14.

COOL.  National Farmers Union statement on the country-of-origin labeling program.  (available at:  http://www.nfudc.org )  issued:  11/28/14.

Food Security.  World Trade Organization General Council decision on food stockholding facilities for developing countries.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128896,128922,128918,128899,128901,128900,128886,128887,128889,128888&CurrentCatalogueIdIndex=3&FullTextSearch= )  issued:  11/28/14.

Post Bali.  World Trade Organization General Council decision on the post-Bali work program.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128896,128922,128918,128899,128901,128900,128886,128887,128889,128888&CurrentCatalogueIdIndex=5&FullTextSearch= )  issued:  11/28/14.

TFA.  World Trade Organization General Council decision on the Trade Facilitation Agreement.  (available at: https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128896,128922,128918,128899,128901,128900,128886,128887,128889,128888&CurrentCatalogueIdIndex=4&FullTextSearch=  )  issued:  11/28/14.

What we’re covering this week –

     What We’re Covering This Week

 US and Chinese officials convene this week in Chicago for the annual meeting of the Joint Commission on Commerce and Trade.  In Geneva, the World Trade Organization conducts a trade policy review of the United States and holds a Dispute Settlement Body meeting.

 Here are some the events we’ll be following this week:

             ●          Monday, World Trade Organization Director General Roberto Azevedo continues consultations with members in Geneva on implementing the Bali outcomes.

             ●          Tuesday, the US-China Joint Commission on Commerce and Trade begins in Chicago.  Meetings continue through Thursday.

             ●          Also Tuesday, the WTO begins a three-day trade policy review of the United States.

             ●          Wednesday, the Commerce Department releases its report on the US current account balance for the third quarter.

             ●          Thursday, the US Chamber of Commerce Global Intellectual Property Center holds its annual roundtable of US intellectual property attaches from around the world.

             ●          Also Thursday, US and Chinese officials hold a concluding press conference on the JCCT meeting.

             ●          Friday, the Peterson Institute sponsors a discussion with European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici on investment and growth in the European Union.

             ●          Also Friday, the WTO Dispute Settlement Body meets.

Our  Blog

Updated:  12/9/14


Friday Afternoon


Straight talk.   

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

•  House Speaker John Boehner on December 4 comments on President Obama’s call for Trade Promotion Authority.

•  Canadian Ambassador to the United States Gary Doer comments on Trade Promotion Authority and the TransPacific Partnership on October 9 at the Financial Services Roundtable.

•  House Ways and Means Committee Chairman Dave Camp speaks to WTD about prospects for Trade Promotion Authority legislation on September 18.

•  Visiting South African President Jacob Zuma was asked at the National Press Club on August 4 what impact has President Obama’s color had on US relations with Africa.

•  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.