Trade Watch 2015 lists some key issues to watch out for in the trade arena this year:
US-Cuba Relations: President Obama has announced a slight easing in its trade policy towards Cuba. The embargo remains in place (that can only be lifted or changed by US Congress). However, effective January 16, 2015, new regulations are in place to implement the announced changes. Look out for how the US Office of Foreign Assets Control (OFAC) in the US Treasury Department and the Bureau of Industry & Security (BIS) in the Department of Commerce interpret their rules on this policy change.
Trade-Related Actions by the New US Congress: The Republican Party has assumed control of both houses of the US Congress. While we can expect the party to butt heads with President Obama over many issues, we may see some cooperation over the President’s trade agenda. Senate Majority Leader, Senator Mitch McConnell (R-KY) has indicated that he intends to work with President Obama on trade. A logical place to begin this cooperation is with passage of legislation renewing the President’s Trade Promotion Authority (TPA). The first item on the Republican Party platform on trade is the call to renew TPA, which has been expired since 2007. TPA defines US trade negotiation objectives which the President needs to follow and in return the US Congress accepts or rejects the negotiated agreement in its entirety. This gives US trade partners some assurance that the agreement they negotiate will not be subjected to further requirements in order to gain Congressional approval. We expect President Obama to formally request TPA renewal and how Congress responds.
New Trade Agreements under Negotiation: Several trade agreements are being negotiated whose progress will bear watching in 2015:
- US-EU Transatlantic Trade & Investment Partnership (TTIP) Agreement – Negotiations began in 2013 with a focus on harmonizing/reducing the regulations and rules that govern trade between these transatlantic trade partners. Meanwhile, the EU has made public its trade negotiating position and proposals presented to US negotiators.
- TransPacific Partnership (TPP) Agreement – Free trade agreement being negotiated among 12 Pacific Rim countries, including the United States.
- Trade in Services Agreement (TISA) – Negotiations by 23 WTO members, with others being encouraged to join, to expand on areas covered by and rules of the existing WTO General Agreement on Trade in Services (GATS); the TISA is a response to the lack of progress on services negotiations as part of the WTO Doha Round.
- Environmental Goods Agreement (EGA) – WTO plurilateral negotiations (only 14 WTO members to date) were launched in 2014 to reduce tariffs on environmentally-friendly good.
- Expanded WTO International Technology Agreement (ITA) – Negotiations begun in 2012 to expand the number of high-tech products covered under this existing WTO plurilateral agreement (not all WTO members are parties) that eliminates tariffs on high-tech products. A long-standing agreement between U.S. and China was resolved in November (2014), which promises to allow the parties to quickly conclude negotiations of the expanded ITA.
Ratification & Implementation of the WTO Agreement on Trade Facilitation (TFA) — The TFA created new rules to streamline customs and ports procedures around the world and contains commitments of technical and financial support for developing countries to help them implement the new rules. The TFA enters into force when two-thirds of WTO members have ratified the agreement.