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Washington Tariff & Trade Letter: ITC Deflects Call to Delay Assessment of TPP

April 06, 2015

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CPA's effort to delay an expected ITC economic assessment of the TPP was covered in WTTL:

An effort by TPP opponents to delay an expected International Trade Commission (ITC) economic impact assessment of the deal was brushed aside by the commission’s public affairs officer, who merely explained the legal process under which the ITC conducts investigations.  “In keeping with its longstanding practice, the commission does not speculate on possible investigations, discuss investigations that are ongoing, or respond to commentary on reports after publication,” said an email from ITC Public Affairs Officer Peg O’Laughlin to the Coalition for a Prosperous America (CPA).

[Reposted from the Washington Trade & Tariff Letter  |  April 6, 2015]

In February, 14 CPA members wrote to the ITC asking it to refrain from undertaking a TPP study until the agreement is reached and its text is available. They noted that U.S. Trade Representative (USTR) Michael Froman has asked the ITC to conduct an analysis of the TPP before it is completed. “We fail to see how an accurate, credible report can be completed without access to the final text and without improving on the analytical techniques used in past USITC reports,” wrote the coalition members, who include nongovernment organizations, unions and companies.

“There has been a persistent pattern of large gaps between estimated and actual outcomes in similar past USITC reports,” they wrote.  The letter cited the ITC’s report on U.S.Korea Free Trade Agreement as an example. That report said imports from Korea would increase by $6-7 billion and that the annual U.S. trade balance would improve by about $4-5 billion. “Neither of these projections have proved to be remotely accurate, suggesting that the guidance  provided to policy makers and the public may have been inaccurate in important ways,” they argued. One problem with these ITC studies is their focus on tariffs and nontariff measures (NTM) barriers.  Tariffs and NTM are not important, noting that six TPP countries already have FTAs with the U.S.

“Until and unless the commission devises a way to assess the likely economic effects of negotiated provisions unrelated to tariffs and traditional NTMs, no assessment can be meaningful,” CPA members wrote. They said a proper study should look at currency practices, changes in border adjustable consumption taxes, industrial subsidies, operation of state-owned enterprises, indigenous innovation policies, and many other mercantilist tactics.

In her email reply, O’Laughlin said the ITC conducts investigations at the request of the president, the USTR or congressional committees. “When such investigations are instituted, the Commission publishes a notice in the Federal Register and invites interested parties to provide information and their views, which are made part of the official record,” she said.   The ITC has already conducted two confidential investigations into the potential impact of TPP after the president notified Congress on the addition of Mexico, Canada and Japan to the talks.  Those were submitted to the USTR.


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