On May 1st, under the leadership of its new chairman, Oregon Democrat Ron Wyden, the Senate Finance Committee held a hearing on the President's 2014 trade agenda.   Senator Wyden highlighted several themes in his opening remarks and throughout the hearing.  The two most prominent, it seemed to us, were enforcement - the need to implement and enforce the terms of existing agreements before moving on to new ones - and transparency.  Today's quote on transparency was part of Chairman Wyden's closing summary.

The chairman did not confine himself to general comments about transparency.  Instead, he pressed the hearing's only witness, U.S. Trade Representative Michael Froman, on two points.  First, he asked the USTR to assure the Committee and the American people that the text of the Trans-Pacific Partnership Agreement would be made available to the public before the President signs the agreement.  In response, Ambassador Froman said, "our goal is to release the terms of the agreement as soon as we can," and he talked about how these matters have been handled in the past.  He avoided, however, any firm commitment to the publication of the text of the agreement before the Administration takes the formal step of signing it.

Senator Wyden also asked the USTR to commit to publishing "a clear comprehensive description, in plain English of the Trans-Pacific Partnership so that people can be informed about these negotiations," and to have this on line preferably within 30 days.  Asked if he could commit to that, Ambassador Froman said, "Yes, Mr. Chairman."

Currency, Transparency, and Trade.  Over the course of this past month, each of the two key trade committees of Congress held a hearing on the President's Trade Agenda, with USTR Michael Froman as the only witness. There was the House Ways and Means Committee hearing on April 3 and the Senate Finance Committee hearing last Thursday, May 1.   The scope of these hearings was quite broad, and not every topic had to with current negotiations like TPP and T-TIP. 

Indeed, our impressions was that no topic was more prominent than exchange rates, specifically the belief on the part of many in Congress that China, Japan, and others have reaped significant trade advantages by keeping the values of their currencies artificially low.  And frequently, that concern is linked to TPP and the desire to see a currency provision in any TPP agreement. 

At the May 1 hearing, Senator Charles Schumer (D-NY) told Ambassador Froman, "I cannot and will not support a TPP agreement that does not include objective criteria to define and enforce against currency manipulation."  He asked Ambassador Froman if the issue of currency manipulation had been discussed in the TPP negotiations.  The ambassador responded with a general discussion of currency valuations, particularly in China.  Senator Schumer pressed again, "Has it been discussed in the TPP negotiations?"

"Not as of yet, No," came the reply.

We will return to the issue of "currency manipulation" in future entries, and we will discuss then the merits of attempting to reach new agreements on that topic.  The purpose of including the issue here, however, is somewhat different.  Senator Schumer's comments, like those of many other members, highlighted concerns about currency manipulation.   To our knowledge, however, this was the first time an Administration official conceded that, in fact, the issue has not been discussed in the TPP negotiations. 

Presumably, "the clear and comprehensive description of TPP" that the Administration is going to post on its web site will clear up the issue of currency in TPP.  (Your editor once worked for an Army pathologist who stressed to him that "It is important to note pertinent negatives.")

There are some other issue the new summary might clear up as well.  For example, what is the status of the free-trade agreements that already exist within the family of countries participating in TPP?  A few years ago, we were given to believe that the existing bilateral agreements in TPP were not going to be opened.  But that was before Canada, Mexico and Japan entered the picture.  Now, NAFTA notwithstanding, we routinely read about U.S. efforts to gain more market access in, for example, the Canadian dairy market.  That sounds like a good idea, but it does raise the question: Are all the bilaterals being re-opened?  What about the U.S.-Chile agreement?  And the U.S. FTA with Australia?  Presumably, once the forthcoming summary is out, the public will know just what is, and what is not, on the table in the TPP talks.

As for Senator Wyden's request that the text of any TPP agreement be made public before the agreement is signed?   He can and probably will make that request in a more formal, more compelling manner.  If it is something he intends to insist upon, then, presumably, he will include a provision to that effect in the next Trade Promotion Authority bill that comes out of the Senate Finance Committee.

In urging the Administration to provide more TPP transparency - the text before a signature - Senator Wyden mentioned that he had just completed a series of seven town hall meetings in Oregon.  He talked too about the fact that, in the internet age, people expect to be able to find on-line reliable and up-to-date information on major public policy initiatives.  He did not mention healthcare, but he might have.  Former House Speaker Nancy Pelosi's 2010 comment - "We have to pass the bill so that you can find out what's in it" - is a spectre that now haunts any major legislative undertaking.

But trade is different in this respect.  Here, the legislation one is looking for, namely a "fast track" or Trade Promotion Authority bill, would have the effect of explaining what is now somewhat obscure, namely, the American trade agenda.  In the hearings on April 3 and May 1, the members of the Ways and Means and Senate Finance Committee were, in effect, asking the U.S Trade Representative what objectives the Administration was pursuing.  If those hearings had been held against the background of TPA legislation that was already on the books, U.S. trade goals would already be a matter of law.  Members would not have needed to ask what those objectives are.  They could have concentrated solely on how much success the Administration was having in meeting them.

Logically, TPA legislation should precede the negotiations to which it applies, and there seems to be a growing sense in Washington that finishing the current TPP and T-TIP negotiations will need to wait until Congress and the Administration have agreed on a TPA bill.  With that in mind, we will end with something Senator Johnny Isakson (R-GA) said at last Thursday's hearing in the Senate Finance Committee: