UK to Seek Membership in Trans-Pacific Partnership

Britain will shortly formally apply to join a trans-Pacific trading bloc of 11 countries, with negotiations set to start later this year, according to this report from Reuters.

Statement by Canadian Minister of International Trade on successful conclusion of Comprehensive and Progressive Agreement for Trans-Pacific Partnership

The Honourable François-Philippe Champagne, Minister of International Trade, today issued the following statement:

“Strengthening Canada’s economic relationship with countries in the large and economically fast-growing Asia-Pacific region to support prosperity and create jobs for our middle class is a priority for Canada.

“Today, I am pleased to announce that Canada and the 10 other remaining members of the Trans-Pacific Partnership concluded discussions in Tokyo, Japan, on a new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We are happy to confirm the achievement of a significant outcome on culture as well as an improved arrangement on autos with Japan, along with the suspension of many intellectual property provisions of concern to Canadian stakeholders.

“Canada has always said that we would only agree to a deal that is in Canada’s best interests. To that end, Canada has been working very hard on the new CPTPP, from spearheading the first meetings of officials in May 2017 to proposing several suspensions and changes to secure better terms for Canadians throughout this burgeoning region.

“Over the past year, we have also worked collaboratively with our partners to make the necessary changes so that the agreement builds real prosperity and creates opportunities. We said from the beginning that we didn’t want just any deal; we wanted a good deal for Canada and for Canadians. Canada went to great lengths to ensure to reach a progressive agreement that will benefit Canada and Canadians for decades to come. These involved a whole-of-government approach and direct engagement at the highest levels. The agreement reached in Tokyo today is the right deal. Our government stood up for Canadian interests, and this agreement meets our objectives of creating and sustaining growth, prosperity and well-paying middle-class jobs today and for generations to come.

“Canada has shown that it can and will work hard to set the terms of trade so the middle class can compete and win on the world stage.

“Canada successfully concluded an agreement with hard-fought gains for Canadians, thanks in large part to a dedicated and hard-working negotiating team and Canada’s special envoy Ian McKay.”

Withdrawal of the United States From the Trans-Pacific Partnership Negotiations and Agreement

Memorandum for the United States Trade Representative, Monday, January 23, 2017

It is the policy of my Administration to represent the American people and their financial well-being in all negotiations, particularly the American worker, and to create fair and economically beneficial trade deals that serve their interests. Additionally, in order to ensure these outcomes, it is the intention of my Administration to deal directly with individual countries on a one-on-one (or bilateral) basis in negotiating future trade deals. Trade with other nations is, and always will be, of paramount importance to my Administration and to me, as President of the United States.

Based on these principles, and by the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby direct you to withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP), to permanently withdraw the United States from TPP negotiations, and to begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.

You are directed to provide written notification to the Parties and to the Depository of the TPP, as appropriate, that the United States withdraws as a signatory of the TPP and withdraws from the TPP negotiating process.

ITC Issues Report on Likely Impact of TPP

On May 18, 2016, the U.S. International Trade Commission ("USITC") released the report Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors.. With regard for textiles, apparel, and footwear, the report concluded:

Textiles and Apparel

The Commission’s model results estimate that U.S. imports of apparel would be 1.4 percent higher ($1.9 billion) as a result of TPP, compared with the 2032 baseline. These results reflect a 35.2 percent ($7.3 billion) increase in U.S. imports from new FTA partners compared with baseline estimates, which is partially offset by lower imports from non-TPP countries, including China. Vietnam in particular is expected to be the largest beneficiary in terms of increased U.S. apparel imports. Vietnam is already a competitive, major supplier of apparel to the U.S. market, ranking second after China. Nevertheless, initial growth in U.S. imports from Vietnam under TPP preferences would likely be moderated by Vietnam’s limited ability to meet the TPP's yarn forward rules of origin, coupled with long duty phaseouts for certain key products. For textiles, the Commission’s model results estimate that U.S. imports under TPP would be 1.6 percent higher ($869 million) compared with the 2032 baseline. U.S. imports of textiles and apparel from TPP countries totaled $19.9 billion in 2015, accounting for 17 percent of total U.S. textile and apparel imports from the world ($118.5 billion).

The Commission’s model results estimate that U.S. exports of textiles under TPP would be 1.3 percent higher ($257 million) than baseline economic growth, and U.S. exports of apparel would be 0.3 percent higher ($10 million) compared with the 2032 baseline. Certain textile subsectors would likely benefit more than others under TPP. According to industry sources, there may be some opportunities to increase U.S. exports of certain textiles on a limited scale to new FTA partner countries, including technical textiles and cotton and specialty yarns. U.S. exports of textiles and apparel to TPP countries totaled $7.9 billion in 2015, accounting for 54 percent of total U.S. textile and apparel exports to the world ($14.7 billion).

The largest changes in textiles and apparel trade from TPP would likely occur in U.S. imports of apparel. The Commission’s model projects that U.S. demand for both imported and domestically produced apparel would increase over the 2032 baseline. The modeling results estimate that TPP would result in a 1.4 percent ($1.9 billion) increase in U.S. imports of apparel over the 2032 baseline (i.e., expected level of imports in 2032 without TPP), and a 0.3 percent ($10 million) increase in U.S. exports. Imports of apparel would be expected to grow most significantly from Vietnam, the second-largest supplier to the United States, while those from China, the largest U.S. apparel supplier, would be expected to decline. The Commission’s model results indicate that U.S. output and employment in the apparel sector also would increase slightly (by 1.0 percent and 0.9 percent, respectively), over the 2032 projected baseline. High-end, niche products, replenishment or quick turnaround products, and other items that generally do not compete with imports are among the types of products being produced domestically. Examples of such products include those that require customized, often smaller orders, such as sports team uniforms, test market products or reorders, and fastfashion items.

The Commission’s model results for textiles (non-apparel) estimate that TPP would result in U.S exports that are 1.3 percent ($257 million) higher than the baseline estimate, and imports that are 1.6 percent ($869 million) higher, compared with the 2032 baseline. The model estimates that output and employment in the textiles sector would be slightly lower compared with the 2032 baseline (by 0.4 percent each).

Footwear

TPP would likely result in an increase in U.S. footwear trade. U.S. imports of footwear from all countries would be $1.1 billion higher (2.7 percent) than 2032 baseline growth estimates. U.S. imports of footwear from the TPP countries would be $1.6 billion higher (23.4 percent) than the baseline; most of this increase would be accounted for by imports of footwear from Vietnam. The growth in U.S. footwear imports from TPP countries is expected to occur at the expense of China and other non-TPP footwear suppliers to the U.S. market. U.S. imports from China would fall by $400 million (1.3 percent) under TPP, compared with the non-TPP baseline. TPP’s impact on U.S. footwear exports is expected to be small in absolute terms, with total U.S. footwear exports expected to be $138 million higher (12.2 percent). Most of these exports would be of footwear parts to Vietnam, to be used to assemble footwear for the U.S. market.

Is TPP Toast?

"The Trans-Pacific Partnership Agreement is a dead deal, says Steve Warner at the BeaverLake6 Report.

Op-Ed: Time to put the TPP out of its Misery?

Mike Flanagan, CEO Clothesource, writes:

"After the Super Tuesday Primary results, more and more U.S. Congress members who supported fast-tracking the TPP last year are now finding reasons to oppose the deal. With no significant presidential candidate supporting it, isn’t it time to abandon the pretense there’s any chance the deal’s ever going to go ahead?"

in an Op-Ed in Sourcing Journal. If you are not a subscriber to Sourcing Journal, you can sign up for a free limited account which allows you to read five free articles per month.

Legally Verified Text of the Trans-Pacific Partnership Has Been Released to the Public

The legally verified text of the Trans-Pacific Partnership (TPP) was released on 26 January 2016 and can be accessed by chapter below. (This supersedes the version of the TPP text that was initially released by TPP Parties on 5 November 2015.) The Agreement will be translated into French and Spanish language versions, and released on this website.

Two Free TPP Webinars Tomorrow

The U.S. Department of Commerce Office of Textiles and Apparel is offing two free webinars on the Trans-Pacific Partnership free trade agreement--

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Rules of Origin, Tuesday, January 26, 2016 at 1:30 pm EST (Note the PDF says January 19th, but the webinar has been rescheduled to January 26th.

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Market Access Commitments, Tuesday, January 26, 2016 at 2:30 pm EST

There is no cost to participate, but advance registration is required.

For more information, please contact Maria D’Andrea at (202) 482-1550 or Richard Stetson at (202) 482-2582.

Request for Public Comments on Review of Employment Impact of the Trans-Pacific Partnership

SUMMARY: The Office of the United States Trade Representative ("USTR") and the Department of Labor ("DOL"), through the Trade Policy Staff Committee ("TPSC"), are initiating an employment impact review of the Trans-Pacific Partnership ("TPP") Agreement. USTR is seeking public comments on the impact of the TPP Agreement on U.S. employment, including labor markets.

DATES: Written comments are due by Wednesday, January 13, 2016.

Two Free TPP Webinars

The U.S. Department of Commerce Office of Textiles and Apparel is offing two free webinars on the Trans-Pacific Partnership free trade agreement--

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Rules of Origin, Tuesday, January 19, 2016 at 2:30 pm EST

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Market Access Commitments, Tuesday, January 26, 2016 at 2:30 pm EST

There is no cost to participate, but advance registration is required.

For more information, please contact Maria D’Andrea at (202) 482-1550 or Richard Stetson at (202) 482-2582.

Opportunities for U.S. Textiles and Apparel in TPP

The U.S. Department of Commerce has published a report on export opportunities for the U.S. textile and apparel sectors in the Trans-Pacific Partnership free trade agreement.

The Report Cites Key Market Access Benefits--

• Japan will eliminate import taxes on 99.2% of U.S. textiles and apparel products exports immediately
• Vietnam will eliminate import taxes on 98.4% of U.S. textiles and apparel exports immediately and 100% within 4 years
• Malaysia will eliminate import taxes on 79.2% of U.S. textiles and apparel exports immediately
• New Zealand will eliminate import taxes on 50.0% of U.S. textiles and apparel exports immediately and 100% within 7 years

Read the full report at http://www.trade.gov/fta/tpp/industries/textile.asp

It Was All So Different Before Nothing Changed

Well I was confused.  The Intellectual Property protections of the Trans-Pacific Partnership had been published and these radical new agreements were going to: 1) disrupt commerce and end innovation throughout the world; and 2) strip nations of their sovereignty and deprive millions of people of access to their basic necessities.  Apparently, it depends on whether you listen to Fox News or MSNBC. 

And so, in one of the worst personal decisions I had made since I traded a Land Rover for a dog and a cat, I decided to actually read Chapter 18 of the TPP to see what was going on. 

The short version:  not much.   

The longer version is provided below. 

Administrative Process  

The parties agree to:  1) respond to requests for IP protection with written decisions that include legal justifications and reasoning for these decisions; 2) provide the applicant with the opportunity to respond to a decision; 3) provide a written response to the applicant’s response that includes legal justifications and reasoning for the decisions provided in the written response; 4) provide an opportunity to appeal decisions described in point 3); and, 5) provide a written decision regarding the appeal that includes legal justifications and reasoning for the decisions provided in the appeal decision. 

Trade Secrets 

The parties will put in place legal remedies to protect against the loss of trade secrets through fraudulent action, unauthorized access, or misappropriation.

Trademarks and Geographic Indications 

The parties will recognize Geographic Indications and treat them like trademarks.

Internet Service Providers

Each party will establish laws that require internet service providers to cooperate with right holders to remove protected materials from the internet.  Each party will also establish laws that provide internet service providers with safe harbor protections if they unknowingly or inadvertently distribute protected materials.

Patents 

The standards for determining the patent eligibility of an invention will follow reasonably closely to USPTO practices with the exceptions that:  1) diagnostic, surgical, and therapeutic methods do not have to be patentable; 2) plants do not have to be patentable; and, 3) biological processes do not have to be patentable. 

The parties agree to make publically available information about patents and patent applications the maps fairly closely the practices of the USPTO.  This is a fairly consistent practice across most countries.

Protection of Proprietary Data by Regulatory Agencies

When seeking marketing approval for an Agricultural Chemical, Pharmaceutical or Biologic product, each party will not permit the use of undisclosed or proprietary data that was used for the marketing approval of a previously submitted Agricultural Chemical, Pharmaceutical or Biologic product that is the same or a similar product unless the same right holder owns both products.  Each party also agrees not to use such undisclosed or proprietary data received from other countries or other entities whether or not the other country or other entity is a part of the TPP agreement. 

For Agricultural Chemicals, this protection will expire ten years after the marketing approval of the Agricultural Chemical product. 

For Pharmaceuticals, this protection will expire five years after the marketing approval of the Pharmaceutical product.  Clinical trial data for pharmaceuticals is protected for three years. 

For Biologics, this protection will expire eight years after the marketing approval of the Biologic.  There is a provision within the biologics to reduce this protection to five years if the reducing party compensates the right holder in a manner that creates a comparable market outcome.  I think the intent is clearly that a party can force a right holder of Biologic products to accept a buy out for the last three years.  This is a pretty fuzzy section of the chapter and, unfortunately, the devil will be in the implementation details. 

The definition of a pharmaceutical product is a product that does not contain a chemical entity that has been previously approved.  I am assuming that the definition of an agricultural chemical product is similar.  The definition of a biologic product is a protein made using biotechnology methods that is intended for use in humans.  If these definitions are not met by a product seeking marketing approval, the above protections will not apply.

The above protections will be provided by a party to Agricultural Chemical products, Pharmaceutical products or Biologic products whether or not the products have patent protections from the party. 

The Australia and Chile “Exemption” Claim

There has been some noise made that Australia and Chile are claiming that the five year biologic rule means they do not have to change their laws.  This sounds worse than it actually is because Australia and Chile have already changed their laws.  Australia and Chile already have trade agreements with the US that are considered to be generally consistent with Chapter 18.  In addition, the US has already reached agreements with both Chile and Australia that work out which sections of Chapter 18 will replace the existing agreements. 

Patent Term Extension

The parties agreed to patent term adjustment if the approval process for a patent application takes longer than five years.  The parties also agreed to extend the patent term for Pharmaceutical products that faced unreasonable or unnecessary delays in the market approval process.  This extension does not appear to apply to Agricultural Chemical products or Biologic products which is a little surprising to me.  The language of this section is a little vague. 

Copyrights

The actual copyright section was fairly straight forward.  It is the enforcement section where things got interesting in this area. 

In general, the normal copyright protections apply.  In addition, the parties agree to legally protect the use of Technology Protection Measures and Rights Management Information techniques and technologies.  There will be civil and criminal legal remedies for people and entities who knowingly bypass these techniques and technologies.  The parties also agreed to make it illegal to make or sell equipment to get around Technology Protection Measures, Rights Management Information, or satellite decryption technologies involving programmed content. 

Libraries, museums, archives, educational institutions, and non-commercial broadcasting entities can be exempted from criminal penalties. 

Enforcement

Each party agrees to put in place the laws and enforcement mechanisms to enforce the agreements in this chapter.  This includes judicial procedures that provide the judicial system with the authority to order injunctive relief, restitution, and damage payments.  In addition, the judicial system will be given the authority to order payment of bonds or to suspend the release of counterfeit, misleadingly labeled, or pirated goods based on prima facie evidence of an intellectual property rights violation.  The chapter goes into a lot of detail about what this means and what appropriate relief measures should be.  The chapter also goes into a lot of detail regarding what constitutes criminal activity and the appropriate criminal remedies.   

Final Observations

In interpreting all of this, I am going to avoid addressing the argument that the US could have cut a better deal because I can’t speak to that point. 

What I would point out is that in many respects, this section of the TPP is pretty consistent with, if somewhat less generous than, existing United States laws and procedures in most of the major intellectual property protection areas.  In trademarks we got protection of geographic indicators.  While the copyright section is updated to accommodate new technologies and the internet, the basic copy right protections are essentially the same as they have been since the 1950s.  From what I can see, no changes in US law will be required to accommodate the patent protections and industrial design protections called for in the TPP.  I was surprised to see that trade secrets were even addressed because, by definition, trade secrets are secret and will not generally be registered with a government. 

Even the differences between US law and the TPP were predictable.  For example, within the patent community opinions are divided regarding the appropriateness of patenting medical methods and biological processes and practices vary by country.  The result that the agreement does not require patents for these sorts of innovations should not have been unexpected. 

In reading the popular press, one seemingly controversial point that I hear coming from the mainstream media is the idea that the administrative process described in the TPP will infringe on the national sovereignty of the parties.  This seems misguided to me.  The administrative processes described in Chapter 18 seem reasonable and are consistent with the standard procedures of many, if not most, countries.  Unless you hold the opinion that disagreeing with the administrative decisions of a government is an infringement of national sovereignty, I don’t really see an issue here. 

I would point out is that the proprietary data protections and the patent term extensions that were agreed to are unusual.  These types of protections are rare especially beyond the first world countries.  In my mind, these are not valueless concessions for the protection of Agricultural Chemical products, Pharmaceutical products or Biologic products.  Even if these protections are flawed, if I were betting I would think these industries would rather have these weaker protections than to not have the protections at all.

At David’s request, I have published an article by article summary of the intellectual property agreements that were made in Chapter 18 of the Trans-Pacific Partnership.  This summary has been put up on the Agathon Associates website. 

And yes – I still have the dog and the cat J

Jim Carson is a principal of RB Consulting, Inc and a registered patent agent.  He has over 30 years of experience across multiple industries including the biotechnology, textile, computer, telecommunications, and energy sectors.  RB Consulting, Inc specializes in providing management, prototyping, and IP services to small and start-up businesses.  He can be reached via email at jim@rbconsulting.us or by phone at (803) 792-2183.

Analysis of Intellectual Property Chapter of TPP

Jim Carson, of RB Consulting, Inc., has prepared for Agathon Associates a detailed summary of Chapter 18 of TPP, Intellectual Property. Subscribers to Agathon Associates' Trade Advisor Service may see it at http://agathonassociates.com/textile-pri/tpp/ip.htm. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

More Details of Trans-Pacific Partnership

Agathon Associates has added to its analysis of the Trans-Pacific Partnership ("TPP") new pages relating to --

• Cotton on the Short Supply List,

• Rules of Origin and Tariff Phase Out Schedule for Cotton, and

• Strech Knits on the Short Supply List.

This information is available to clients of Agathon Associates, subscribers to Agathon Associates' Trade Advisor Service, and students in David Trumbull's TMD 433 course at the University of Rhode Island. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Customized reports are available upon request

What Will TPP Mean for Technical and Industrial Textiles?

For an overview of what TPP will mean for technical and industrial textiles (along with details on rules of origin and U. S. tariff phase out) see my column which appears today in Steve Warner's BeaverLake6 Report.

TPP Rules of Origin and Tariff Phase Outs, in One Page and Easy to Read

Agathon Asociates has posted two new reports on the Trans-Pacific Partnership ("TPP").

ROO and Market Access Report Series 600 shows, for man-made fiber yarn, woven fabrics, apparel, home textiles, and other textile products--

• The current rate of duty.
• The rules of origin ("ROO") to qualify for TPP and
• The U.S. tariff phase out schedule ("Market Access").
• Sorted by 3-digit multifiber arrangement category and 10-digit Harmonized Tariff Schedule of the U.S. classification.

ROO and Market Access Report Series 400 shows, for wool fiber yarn, woven fabrics, apparel, home textiles, and other textile products--

• The current rate of duty.
• The rules of origin ("ROO") to qualify for TPP and
• The U.S. tariff phase out schedule ("Market Access").
• Sorted by 3-digit multifiber arrangement category and 10-digit Harmonized Tariff Schedule of the U.S. classification.

This information is available to clients of Agathon Associates, subscribers to Agathon Associates' Trade Advisor Service, and students in David Trumbull's TMD 433 course at the University of Rhode Island. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Customized reports are available upon request.

USITC Launches Study of Likely Impact of TPP

The U.S. International Trade Commission (USITC) has instituted an investigation to assess the likely impact of the Trans-Pacific Partnership Agreement that the President has announced he intends to enter into with Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The investigation, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors, was requested by the U.S. Trade Representative in a letter received on November 5, 2015.

The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 requires the USITC to prepare a report that assesses the likely impact of the Agreement on the U.S. economy as a whole and on specific industry sectors and the interests of U.S. consumers. The USITC’s report, which will be public, is due to the President and the Congress no more than 105 days after the President signs the Agreement, which he can do 90 days after he notifies Congress of his intent to do so. The President notified Congress on November 5, 2015, of his intent to enter into the Agreement.

The USITC will hold a public hearing in connection with the investigation beginning at 9:30 a.m. on January 13, 2016. Requests to appear at the hearing should be filed no later than 5:15 p.m. on December 22, 2015, with the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. For further information, call 202-205-2000.

The USITC also welcomes written submissions for the record. Written submissions should be addressed to the Secretary of the Commission at the above address and should be submitted at the earliest practical date but no later than 5:15 p.m. on February 15, 2016. All written submissions, except for confidential business information, will be available for public inspection.

Further information on the scope of the investigation and the procedures for written submissions is available in the USITC’s notice of investigation, dated November 17, 2015, which can be obtained from the USITC web site (www.usitc.gov) or by contacting the Office of the Secretary at the above address or 202-205-2000.

The TPP, What Does It Mean for Your Textile or Apparel Business?

On Thursday, November 5th, the Office of the United States Trade Representative ("USTR") published the text of the Trans-Pacific Partner Ship ("TPP") free trade agreement. This text is still subject to review and correction but only of a technical nature (I spotted a couple of typos). The final text can be expected to not deviate in any substantial way.

I have annotated the parts most relevant to textile and apparel interests and posted them on the Agathon Associates website at http://agathonassociates.com/textile-pri/tpp/index.htm

Among the documents on the Agathon Associates site are --

1. Full text of Chapter 4 - Textiles and Apparel:

• as a PDF published by USTR,
• as an individual HTML webpage for each Article, with links in the Articles to related concepts, and
• accompanied by a table of contents for easy of locating relevant Articles.

2. Market Access (U.S. Tariff Phase Out Schedule:

• as an extremely difficult to read PDF published by USTR,
• as an easy to navigate spreadsheet with all tariff lines likely to be of interest to the textile and apparel industries, and
• as a formatted report showing the U.S. tariff phase out schedule for Vietnam, arranged by Multifiber Arrangement ("MFA") category and tariff classification number, and with the USTR codes for the phase out stages decoded.

NOTE, Agathon Associates has the entire U.S. Tariff Phase Out Schedule in an Access database and can quickly produce customized reports for clients.

3. Short Supply List:

• the PDF published by USTR,
• the entire textile and apparel short supply list conveniently formatted as an HTML webpage,
• for wool products on the short supply list, a webpage of just the wool products, along with an easy to read summary of all the short supply provisions relating to wool, and
• for knit products on the short supply list, a webpage of just the knit provisions in short supply.

4. Annex A - Textile and Apparel Specific Rules of Origin:

• the PDF published by USTR,
• the rules of origin rendered in HTML as an easy to read webpage complete with explanations of meanings of the tariff classification numbers so it is no longer necessary to read the rules in conjunction with the bulky and cumbersome Harmonized Tariff Schedule of the United States ("HTSUS"),
• Plain English explanation of every rule and every deviation from the rules, and
• Comments relating to differences between TPP and other recent U.S. trade agreements.

5. Earned Import Credit Program:

• as PDF published by USTR and
• formatted for the internet.

This information is available to clients of Agathon Associates, subscribers to Agathon Associates' Trade Advisor Service, and students in David Trumbull's TMD 433 course at the University of Rhode Island. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Fast Track Calendar Means No Vote on TPP before February

Agathon Associates Calendar for Passing an Agreement under Trade Promotion Authority ("TPA").

Agreement is reached among the negotiating partner nations.
(In the case of the Trans-Pacific Partnership ("TPP') that happened in the early hours of Monday, October 5, 2015. TPP has not yet been signed.)

The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 sets out certain deadlines--

• §106(a)(1)(A) President must notify Congress at least 90 days before entering (signing) an FTA.
  (Note that the President may "enter into trade agreements" but the agreements do not become effective in U.S. law until voted affirmatively in both houses of Congress.)

• §106(a)(1)(B) President must publish text of FTA at least 60 days before entering (signing) FTA.

• §106(a)(1)(C) President must submit description of changes to law to implement the FTA within 60 days of signing.

• §106(a)(1)(D) at least 30 days before submitting implementing bill to Congress the President must submit statement of administrative action proposed and final legal text of agreement.

• §106(a)(1)(E) President submits implementing bill.

• §106(a)(1)(F) Implementing bill passes. >§106(a)(1)(G) at least 30 days before agreement enters into force President submits notice to Congress that the partner(s) has/have taken necessary measures to comply.

That calendar places early to mid February as the soonest Congress can vote on the TPP. 2016 is an election year, and with trade being controversial, Congress could delay and take TPP up in a lame duck session after the November elections.

Agathon Associates Analysis of TPA in General.

Under TPA procedures, a free trade agreement ("FTA") is approved as a Congressional-Executive Agreements, rather than a treaty. This is due to the separation of powers under the U.S. Constitution --

• "[The President] shall have power, by and with the advice and consent of the Senate, to make treaties, provided two-thirds of the Senators present concur." – Article 2, Sec. 2

• "Congress shall have power to lay and collect duties..." – U.S. Constitution, Article 1, Sec. 8

• "All bills for raising revenue shall originate in the House of Representatives..." – Article 1, Sec. 7

Therefore, an FTA is not, in the US, a "treaty." Treaties are negotiated by the President and approved by two-thirds of the Senate with no vote in the House. An FTA adjusts duties, which affects revenue and is therefore (Art. 1, Sec. 7) a "money bill," which must originate in the House.

TPA in general--

• Under TPA procedures the negotiation is entirely in the hands of the Executive (however Congress may include negotiations objectives in the TPA bill), but the President must negotiate an agreement that can get a majority vote in each of the houses of Congress, where his party may not have a majority.

• TPA is important as a signal to our negotiating partners that Congress has confidence in the President to negotiate an agreement that can be passed by Congress.

• TPA is also important as the bill provides a vehicle for Congress to instruct the President, via the negotiation objectives set forth in the TPA bill, as to what he needs to do to get those majorities in the House and Senate.

• However, it is not the case, as some have said, that you must have TPA to do an FTA.

  • If you have the votes to pass the FTA you have the votes in the House to bring the FTA up for a vote under a "closed rule," meaning no amendments are allowed. It is commonly stated that Senate does not have the "closed rule," however, that is clearly mistaken, as TPA is, effectively, a closed rule, and if the Senate can operate under a closed rule in the case of TPA it can find a way to use a closed rule without TPA. (Which brings us to one of Trumbull's maxims, "At any given time the rules are what the majority says the rules are.")

  • The Jordan FTA was implemented in 2001, though not under TPA. It was passed by a voice vote in the House followed by a voice vote in the Senate.

Clients of Agathon Associates, subscribers to Agathon Associates' Trade Advisor Service, and students in TMD 433 at the University of Rhode Island can learn more about TPA at http://agathonassociates.com/textile-pri/tpa/index.htm. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

AAFA Advocates for Specific TTP Provisions Relating to Hosiery, Gimped Yarn, and Nylon Yarn

On February 13, 2015, the American Apparel and Footwear Association ("AAFA") wrote to the United States Trade Representative to urge inclusion of a knit to shape ("KTS") rule of origin ("ROO") provision in the Trans Pacific Partnership ("TPP") trade agreement for legwear. The same day AAFA also sent a letter that stresses the importance of including specialized provisions relating to gimped and Israeli nylon filament yarn that had been included in previous U.S. free trade agreements.

MORE INFORMATION.

Agathon Associates' report on Nylon Yarn Exemption.

Agathon Associates' report on Gimped Yarn.

Clients of Agathon Associates may access these reports with their username and password. If you need your username and password sent to you, email David Trumbull at david@agathonassociates.com.