core sector communique

U.S. Trade Official on U.S. Trade Policy in Asia-Pacific

Office of the United States Trade Representative

Remarks by Ambassador Demetrios J. Marantis

On the Obama Administration's Asia-Pacific Trade Policy

The Washington Council on International Trade

Seattle, Washington

July 19, 2012

As Prepared for Delivery

"Thanks, Tim, for that kind introduction. Thank you also to the Washington Council on International Trade, and especially to Eric Schinfeld, for organizing this event and for inviting me here today.

"Seattle's deep ties and extensive trade with the Asia-Pacific make it the perfect location from which to reflect on where the Obama Administration started on trade with this region, and the challenges that lie ahead.

"When President Obama took office in early 2009, the Administration faced two seemingly incompatible imperatives - to be responsive to Americans' growing concerns about trade, and to do what was economically necessary to support growth and recovery. But the Obama Administration tackled that task head-on. We've gone to great lengths to bring U.S. trade policy into greater balance, taking into account the concerns and aspirations not just of our business leaders and employers, but also of American families and workers. And our trade policy is better for it. Listening to concerns on all sides, we have crafted and pursued solutions that deliver real results. And that is how we have attained many milestones over the last three years, particularly with respect to trade with the Asia-Pacific.

"At the start of this Administration, three stalled trade agreements with Korea, Colombia, and Panama needed improvements in order to pass Congress. With Korea in particular, Ambassador Kirk and our team spent long days and nights in Seoul, San Francisco, and Maryland, seeking the best deal possible for U.S. workers and exporters, particularly in the automotive sector. And we spent longer days and longer nights on Capitol Hill ensuring that the improved agreements passed Congress. Our efforts paid off on one incredible day last October, when Congress enacted all three trade agreements with strong bipartisan support, along with strengthened Trade Adjustment Assistance, and the renewal of important trade preference programs. Since then, the Korea and Colombia trade agreements have entered into force. So far, implementation of the Korea agreement has proceeded smoothly, providing benefits to both our countries.

"With Korea's $1.2 trillion economy, and a bilateral trade relationship totaling over $100 billion last year, the U.S.-Korea trade agreement is our most commercially significant trade pact in 18 years. According to U.S. International Trade Commission estimates, the full elimination of tariffs on goods exports alone will increase annual U.S. exports to Korea by up to $11 billion. The agreement also further opens Korea's $580 billion services market to U.S. exports and investment, addresses regulatory and other non-tariff barriers, and strengthens protection of intellectual property rights. All of these measures will help U.S. businesses sell more goods and services in Korea. And that will support jobs here at home. We're already seeing positive results from implementation of this agreement in Washington State, where, for example, this year's exports of cherries to Korea have approximately doubled from the same period last year.

"Another milestone is the work we have accomplished through the Asia-Pacific Economic Cooperation forum, or APEC. Last year, as host of APEC, the United States successfully advanced a bold agenda. And thanks to the work of many in this town - including the National Committee for APEC - we achieved practical, concrete, and meaningful results in three priority areas. APEC economies agreed first, to reduce tariffs on environmental goods to five percent or less by 2015; second, to adopt market driven and non-discriminatory innovation policies; and third, to implement by 2013 a set of good regulatory practices designed to reduce unnecessary burdens on businesses and save them time and money. This year, under the able leadership of Russia as APEC host, we will implement and build on these outcomes.

"I could give you more examples of our recent successes, from our efforts to expand trade with the Association of Southeast Asian Nations to our deepening relationships with partners such as the Philippines and Sri Lanka.

"But I know that you are most interested in learning more about developments with China and the Trans-Pacific Partnership, so I will turn to those topics now.

"Since China joined the World Trade Organization (WTO) ten years ago, our bilateral trade relationship has brought us both benefits and challenges. When President Obama took office in 2009, commentators bemoaned U.S. responses to China's growing economic might and discriminatory trade policies. The Obama Administration has risen to meet the enormous challenges posed by China through bilateral engagement, vigorous enforcement at the WTO, and, close coordination with other trading partners.

"Working together, the United States and China have made progress on a range of issues under the auspices of the U.S.-China Joint Commission on Commerce and Trade, the U.S.-China Strategic and Economic Dialogue, and in other bilateral engagements, including frequent interaction between Presidents Obama and Hu. Through these fora, the United States has negotiated concrete solutions to pressing trade issues.

"For example, we successfully pressed China to agree to improve intellectual property rights enforcement and to increase its use of legitimate software. We won China's commitment to sever the links between its innovation policies and government procurement preferences at all levels of government. And we have worked to ensure that China neither uses technology transfer as a pre-condition for market access nor mandates specific technological standards in sectors like telecommunications.

"Where we could not resolve problems through dialogue, we have made effective use of WTO dispute settlement. In fact, over the last three years, we have brought cases at twice the rate of the previous Administration, addressing export restraints, prohibited subsidies, restrictions on foreign service suppliers, and abuse of trade remedies. In each of the cases, we have either received a favorable ruling from the WTO or settled the case on favorable terms. Just this week we learned that the United States prevailed in a WTO dispute addressing China's pervasive discrimination against U.S. suppliers of electronic payment services. And this month, the President announced a new case targeting China's duties on more than $3 billion in exports of American-produced automobiles.

"Significant challenges remain with China, and we must stay vigilant. We are hopeful, though, that through candid dialogue, and by continuing to hold China accountable when it diverges from the norms of open and fair trade, China will see the value of moving much more assertively toward reform.

"Turning to the Trans-Pacific Partnership, the progress we have made represents one of the most significant accomplishments in our trade agenda. I want to emphasize this point, because some of you may remember that President Obama's 2009 announcement that the United States would join the Trans-Pacific Partnership negotiations was greeted with scorn from some quarters, with some observers calling it an "obscure agreement" and asking whether it was "worth the fuss." I am happy to report that the dynamism of these talks three years on has proved these sentiments wrong.

"The expanding TPP is an historic endeavor that embodies the Obama Administration's vision for the American economy, the future of trade, and the United States' central role in the Asia-Pacific. This agreement will unlock significant new opportunities to increase exports that support higher-paying jobs here at home. The Asia-Pacific includes some of the world's most dynamic economies, representing more than forty percent of global trade. This region is already a key destination for U.S. manufactured goods, agricultural products, and services -- last year accounting for over sixty percent of total U.S. goods exports and nearly three-quarters of our total agricultural exports.

"The recent addition of Canada and Mexico to the TPP will mean even greater opportunities for American export growth, will allow for U.S. companies to leverage their existing North American supply chains by exporting goods to the other TPP countries, and will help fulfill President Obama's pledge to improve NAFTA.

"The TPP agreement also features innovative proposals on key trade issues. For the first time ever, we are seeking disciplines to ensure that state-owned enterprises compete on a level playing field with their private sector counterparts. For the first time ever, we have proposed groundbreaking provisions to ensure companies and consumers have access to information by both prohibiting arbitrary restrictions on data flows and emphasizing the important balance between copyright protection and fair use of copyrighted material.

"For the first time ever, we are working to ensure that our trade agreements work better for small- and medium-sized enterprises -- major job-creators in our economy -- by tackling trade and investment barriers that hit SMEs hardest, such as lack of transparency and complex regulatory frameworks. For the first time ever, we are seeking provisions to make the regulatory systems of the TPP countries operate more seamlessly, and to break down "behind the border" barriers that increasingly hinder U.S. exports.

"For the first time ever, we are including provisions in a free trade agreement to address the common problem of "indigenous innovation" measures that disadvantage U.S. technology by forcing U.S. investors to favor another country's domestic technology. And for the first time ever, we have put forth new and innovative proposals on the environment that seek to address illegal trade in fisheries, wildlife, and logging.

"Negotiators are working to complete a high-standard, 21st century TPP agreement as quickly as possible. This month, negotiating teams concluded the thirteenth round of negotiations in San Diego. They made important progress across many of the agreement's chapters. In September, TPP Ministers will meet in Vladivostok to assess progress. And TPP negotiators will conduct the next round of TPP talks that month as well.

"Ultimately, our goal is to not just secure a high-standard agreement with our current TPP Partners, but to fulfill the vision of TPP as a platform for regional integration in the Asia-Pacific. We are making good progress here as well. Just last month, at the G-20 Summit in Los Cabos, the nine TPP countries became eleven, as Mexico and Canada entered the fold pending completion of each country's domestic procedures. Just last week, Ambassador Kirk kicked off our domestic 90-day consultation process with Congress on the addition of our two North American partners. And we are continuing our work with Japan on the interest it has expressed in joining the TPP.

"I could go on and on about all that we are doing in the Asia-Pacific region; however, we are working on much, much more. As Ambassador Kirk likes to say, "we're going wherever the customers are" to help U.S. businesses of every size compete and win in world markets.

"To that end, we're working with the EU to enhance our trading relationship through our High-Level Working Group on Jobs and Growth; we're working with Congress to extend Permanent Normal Trade Relations status to Russia as it joins the WTO; we're working with our partners in Africa -- home to some of the fastest-growing economies in the world -- on trade and investment initiatives that recognize Africa's future as a global economic power; and we're working with like-minded partners at the WTO to conclude an agreement on trade facilitation, expand the WTO's Information Technology Agreement, and explore a potential new International Services Agreement.

"We're also pursuing aggressive trade enforcement agenda as part of our broader, more balanced approach to trade. We've ramped up enforcement efforts not just with China but across the board. We've secured numerous and significant victories, including successfully challenging $18 billion of EU subsidies to Airbus in one of the largest cases in the history of the WTO, and successfully defending the United States against the EU's claims with respect to Boeing. In March, we started proceedings to ensure that the EU complies with the WTO's ruling. Thanks to these actions, thousands of U.S. aerospace jobs, including here in Washington State, are more secure. And more Americans will have a chance at future well-paying aerospace jobs when U.S. aircraft manufacturers are able to compete on a more level playing field.

"Whether it is about Washington State's aerospace workers having a more level playing field because of trade enforcement; or Washington State's cherry producers having significant new export opportunities because of a trade agreement; or Washington State's software producers benefiting from greater intellectual property protection because of a trade dialogue; or Washington State's online providers having greater access to global electronic commerce because of better trade-related innovation policies; I am proud of the work President Obama, Ambassador Kirk, and all of us have done to make trade work better for Washington State and for America's families, workers, growers, and innovators. I am proud of the access we have been able to secure for products Made in America, Grown in America, and Designed in America to the ninety-five percent of consumers who live outside of the United States. I am proud of the amazing few years we have had and, working together with you, look forw

ard to addressing the challenges that face us in the Asia-Pacific region and elsewhere, tomorrow, and beyond."

(Distributed by the Bureau of International Information Programs, U.S. Department of State.)