Senate Finance Committee: Hearing on Free Trade Agreement Implementation

Yesterday the Finance Committee held a hearing on how past free trade agreements (FTA) have been implemented to identify how to better enforce future trade agreements. Industry representatives and an environmental advocate gave their testimony, answered questions, and submitted statements on their experiences with past FTAs, how the Trans-Pacific Partnership (TPP) compares, and their recommendations to achieve better enforcement. All the witnesses agreed that the TPP establishes high standard rules and creates new market opportunity, and that the U.S. has an opportunity to better ensure compliance through the implementation and certification process. Here are some highlights:

Glenn Prickett, Chief External Affairs Officer at the Nature Conservancy identified how environmental commitments in FTAs can successfully be implemented:

“We believe clear environmental obligations spelled out in the agreements, coupled with follow-on funding, technical assistance and capacity building to implement those obligations, are the main ingredients for success…”

When asked how we have incorporated the lessons from past FTAs in our current trade agreements, particularly the TPP, Mr. Prickett said that trade and environment policy has improved since NAFTA. One key accomplishment is naming particular multilateral environmental agreements and specific environmental commitments that are enforceable in modern trade agreements. Moreover, Mr. Prickett stressed that trade agreements not only gives the U.S. more leverage to police international environmental commitments, it gives environmental NGOs a higher profile and platform to cooperate with foreign governments on enforcement. He finds that:

“...the recently concluded Trans-Pacific Partnership contains important new obligations for Parties to address illegal and unsustainable fisheries practices, and to combat illegal wildlife trade. The Nature Conservancy is very optimistic about the power of these provisions to tackle what are often systemic problems that are depleting ecosystems globally. We are also cognizant that effective compliance will involve significant capacity building and technical support among the partners.”

Jim Mulhern, President and CEO of the National Milk Producers Federation testified saying:    

“Our FTAs have created important new market access opportunities for us and we have worked very hard through our market development efforts to ensure that we are taking full advantage of them.”

When the same question was posed to him, of how we have incorporated lessons from past FTAs into new trade agreements, Mulhern said:

“What comes to mind in TPP, it is the language in the agreement on geographic indications, GIs, which has been a problem for our industry in particular and several other food producing industries. Up to this point when the EU in particular is negotiating FTAs with third countries there is not a transparency, there is no ability for us to engage in that process. The language in the TPP that will commit TPP partners to have an open transparent process to at least have an opportunity to weigh on what is a legitimate GI in a third market will be very important for the dairy industry going forward so that we are not blocked out with our cheese product exports into those third countries.”

Mr. Mulhern pointed to the successful implementation of NAFTA and KORUS with Mexico and South Korea as examples of how to craft better FTAs and address some of the ongoing concerns with other trading partners:

“Based on past experience, we believe that it is clear that the greatest window of opportunity for influencing how countries will implement their obligations to the U.S. is during the period prior to Congressional approval of an agreement. Action during this window not only ensures that Congress has a clear understanding of how the agreement is intended to work in practice, but it utilizes the strongest point of leverage the U.S. possesses: whether or not we will decide to put in place a strengthening of our trade ties with the FTA partner.”                 

You can watch the full forum or read their statements here.