Bureau of Economic and Business Affairs
May 14, 2013

The meeting was open to the public. The meeting room was at capacity with individuals from the membership, general public and media.

Committee Chairman Theodore Kassinger of O'Melveny & Myers, LLP, opened the meeting of the Advisory Committee on International Economic Policy (ACIEP) and welcomed members and other participants.

The meeting focused on Recent Developments in U.S. Trade Initiatives, including the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).

Assistant Secretary of State for Economic and Business Affairs (EB) Jose W. Fernandez led the discussion of the Economic Statecraft Initiative. Assistant Secretary Fernandez underscored the United States' continued global leadership as critical to the vitality of the U.S. economy. He noted that Secretary Kerry is very committed to the continued institutionalization of the Economic Statecraft Agenda, which was initiated by former Secretary Clinton in 2011.

In Washington and through overseas missions around the world, the State Department is enthusiastically implementing Economic Statecraft in its public diplomacy and other engagement in host countries. This engagement has continued to record high-profile successes in promoting U.S. business and U.S. exports, and in attracting job-creating foreign direct investment in the United States. This critical work directly benefits U.S. workers, U.S.-based companies, and U.S. foreign policy leadership. Fernandez noted his recent travel to Mexico to discuss deepening and elevating the U.S.-Mexico economic relationship.

Fernandez highlighted several examples of Economic Statecraft at work. The examples include the Direct Line Program, through which small and medium size businesses engage directly with U.S. ambassadors and embassy economic sections, receiving detailed, country-specific information on expanding business into these markets. As of May 2013, State had organized more than 80 Direct Line events. Fernandez noted that U.S. companies are well-positioned to assist developing countries meet their infrastructure needs, as U.S. companies are internationally recognized for innovation and expertise in advancing infrastructure development.

Fernandez mentioned the Department’s call for U.S. embassies around the world to identify U.S.-based companies engaged in exemplary corporate social responsibility activities for the Secretary of State's Annual Award for Corporate Excellence (ACE). He asked that ACIEP members assist the State Department in identifying worthy candidates for this prestigious award. Assistant Secretary Fernandez also discussed the recent factory tragedies in Bangladesh, and noted that he would travel to that country during the week of May 29, to discuss with the Bangladesh Government, private companies, and civil society, strengthening labor rights and improving working conditions.

Other Matters noted during the ACIEP member discussion:

In 2013 the Colombia, Panama and Korea free trade agreements will mark their first anniversaries since entering into force. Exports from the United States to all three countries have increased. There is a substantial commitment to facilitate President Obama's export agenda in order to create more jobs for the United States. It is important that the United States maintains it focus on Asia and the broader Pacific region and the TPP advances this effort. The Obama Administration has been consulting with Congress about Japan's joining TPP. Pursuant to a Federal Register Notice, USTR received approximately 371 public comments about Japan's joining TPP negotiations. A Federal Register Notice has also been published to call for a public hearing on Japan's participation in TPP. There will be a focus on state-owned-enterprises in relation to TPP, with TPP becoming a model for future free trade agreements. The 17th round of TPP talks were to begin during the week of 14 May in Lima, Peru. Nearly one-third of future global trade will fall under the purview of TPP.

Negotiations for TTIP will begin this summer. Participants hope TTIP negotiations will have a strong positive influence on other trade negotiations at the World Trade Organization in Geneva.

The TTIP negotiations between the European Union and the United States will have important impacts on non-TTIP trading partners, including Mexico and Turkey. The United States has made clear that it is taking into consideration the impacts of TTIP negotiations on other trading partners. While trade has grown in the North America Free Trade Agreement (NAFTA) area, some say such trade has not always translated into higher incomes or job growth in these countries. Some have also said expressed NAFTA has negatively impacted U.S. workers in certain sectors, including in the aerospace industry, as some jobs have moved to Mexico. All three NAFTA countries have experienced substantial export growth, which has made each of these countries more competitive and has had a positive impact on jobs.

The restructuring of the Mexican banking system, which NAFTA necessitated, has helped Mexico's economy to be more resilient. Mexico has also expressed interest in joining the TTIP negotiations. But, including additional countries in TTIP talks is not feasible at this time. Consumer and other citizen groups view harmonization of regulations among countries to be a good thing if it brings improvements in quality of products, but not if harmonization goes in the direction of "the lowest common denominator" in terms of quality and safety. An example was raised regarding imports of fish products from countries, which might use several chemicals in seafood production that U.S. fish producers are barred from using in the United States, due to health concerns. At the end of the discussion on TPP and TTIP, members commented that the discussion had been among the most useful and productive ACIEP meetings they had attended.

Subcommittee reports:

The Subcommittee on Sanctions held a meeting on May 8, at Georgetown University Law Center meeting, "Update on Recent Developments in Sanctions Implementation from the State Department and Securities and Exchange Commission (SEC)." At that meeting there was a discussion of the Burma investment reporting requirement and on implementation of the recent Iran Freedom and Counter-proliferation Act. The Stakeholder Advisory Board (SAB) for the U.S. NCP discussed recent SAB meetings held in February and April, and gave an overview of the SAB's draft report regarding the work of the U.S. National Contact Point in relation to procedural matters with specific instances, promotional activities, and advancing a proactive agenda.

The Investment Subcommittee plans to discuss at its next meeting, time and date to be decided, the investment provision under consideration for TTIP. The Subcommittee on Women in International Economic Policy gave a summary about a bilateral women's conference hosted by the U.S. Embassy in Bern. The co-chairs informed the ACIEP that were stepping down as the co-chairs of this subcommittee.

Following a question-and-answer period about the subcommittees, Assistant Secretary Fernandez noted that the next ACIEP meeting would be held on July 31. The Assistant Secretary and Chairman Kassinger then concluded the meeting, with the concurrence of the DFO.