Levin Presses USTR For More Consultation On TPP, Flags Ag, Investment Problems

Inside U.S. Trade

House Ways and Means Committee Ranking Member Sander Levin (D-MI) last week urged the administration to engage in more consultations with the committee before tabling proposals in the Trans Pacific Partnership (TPP) negotiations, particularly in the area of agriculture and investment.

U.S. negotiators are beginning to table proposals for TPP in this week’s negotiating round in Chile.

“As we have discussed, I hope very much that before those proposals are tabled, that there will be further consultations with this committee regarding the specifics, including those relating to investment,” Levin said in a Feb. 9 hearing on the administration’s trade policy.

Asked after the hearing if he is concerned about provisions that allow individual investors to sue sovereign governments in investment disputes, he said there is a range of investment issues that need to be addressed before USTR tables a proposal.

In response, Kirk said the administration will have more consultations, but noted that it has held “the most extensive consultations” with the Ways and Means and Finance committees as well as stakeholders.

On agriculture, Levin said the participation of Vietnam and Malaysia in the TPP negotiations raise important agricultural issues, along with worker rights questions.

In a related development, a group of U.S. and international economists urged the administration in a Jan. 31 letter to drop provisions in trade agreements it negotiates that limit a country’s ability to control short-term capital flows. They also asked that the administration do away with a related provision that allows investors to sue a country for violating these provisions.

They said recent research, including by the International Monetary Fund, has found that limits on the inflow of short-term capital into developing nations can stem the development of dangerous asset bubbles and currency appreciations and generally grant nations more autonomy in monetary policy-making which they need to effectively navigate fiscal crises.

In response, a group of business associations urged the administration in a Feb. 7 letter to adhere to the current policy of including capital control rules in bilateral trade and investment agreements.

Failure to do so, “would undermine the very policies the president is actively promoting: expanding U.S. exports; supporting and generating good-paying American jobs; and advancing broader national economic, foreign policy and national security objectives, such as the rule of law, anti-corruption disciplines, poverty reduction and political stability,” the business groups said.

According to their letter, the existing provisions permit governments to take necessary action, including capital controls, to ensure the safety and soundness of their financial systems, even in times of a financial crisis.


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