New USTR Discusses Trade Agenda, How U.S. and EU Can Address Divergent Regulatory Regimes

At a forum this morning hosted by the U.S. Chamber of Commerce, the new U.S. Trade Representative, Michael Froman, discussed the next steps in the U.S. trade agenda. The Chamber’s president, Tom Donohue, opened a wide-ranging dialogue with Froman and then took written questions from the audience.

Froman focused on progress on the two main trade agreements that the U.S. is negotiating — the Trans-Pacific Partnership Agreement (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). (See CEI’s official comments on TTIP here. ) Froman said that with the recent inclusion of Japan in TPP, the negotiations can help resolve some of the thorny issues relating to market access for autos and agriculture. He noted that early negotiations on TTIP have gone well, with the regulatory issues probably the most difficult.

When asked about Trade Promotion Authority (TPA), which allows the administration to “fast-track” trade agreements and have them voted on without amendments, Froman said that TPA is a critical tool and requires close consultation with congressional committees, as it is an “issue of congressional prerogative.”

Froman discussed the continued importance of the World Trade Organization as a rules-based, consensus-based organization critical in dispute settlement. He said that trade liberalization has been a stumbling block but progress has been made on negotiations on services, trade facilitation, and information technology. A “small package” at the next Ministerial Meeting in Bali and making further progress on that can set the tone for more ambitious negotiations.

In the Q&A segment, perhaps the most interesting question relating to TTIP was on the difficulty of reconciling the EU’s approach to regulation by using the “precautionary principle” and the U.S. approach, which is more science-based. Froman was asked how those two approaches could result in “regulatory convergence.” He noted that the EU and the U.S. both have complex regulatory structures, with the EU more dependent on government bodies making decisions, while the U.S. also looks to private standards-setting bodies and the scientific community.

He said that “horizontal changes” could be made, that is, a more open process for regulatory decision-making could lead to a more common approach. Froman noted that in the U.S. the government publishes  proposed regulations, opens those up for comments from the public, considers those comments, and makes decisions based on science.

Donohue responded that some agencies don’t follow that process — and “we sue them.”  He advised Froman to ensure that what the U.S. “is setting up as an example really is true.”

(See CEI’s comments to the USTR on the Precautionary Principle here on pages 9-10.)