TPP fight kicks off

With help from Adam Behsudi

AND SO IT BEGINS: After the prologue of business endorsements last week, what could be the last big battle over the finalized Trans-Pacific Partnership kicks off this week. On Tuesday, President Barack Obama will make his pitch for the Asia-Pacific pact in his final State of the Union address to the nation, which will be followed by three days of testimony at the U.S. International Trade Commission covering the gamut of opinions on the deal.


But today, TPP opponents will be first up to the plate with an afternoon rally by members of Congress led by Rep. Rosa DeLauro (D-Conn.) and groups including the AFL-CIO, National Farmers Union, Communications Workers of America and American Federation of Teachers. “[B]efore the president speaks, leaders in Congress and the coalition will show a unified front against a bad trade agreement and the dangerous effects that it can have on the country,” the press advisory said.

Also today, House Ways and Means ranking member Sander Levin (D-Mich.) will hold the next in his series of forums on TPP, this one on autos, with co-host Sen. Sherrod Brown (D-Ohio). Last week, Brown pointed to a spike in sales for U.S. auto manufacturers and record high car purchases by U.S. consumers in 2015 as reasons to be worried about the trade deal. “Today’s news that auto sales are at a record high is proof that the auto recovery worked and auto workers in Ohio and across the country are key to growing our economy … but TPP and its weak auto provisions stand to roll back recovery and cost Ohio jobs, so we must continue fighting for a better deal for American auto jobs,” he said.

As for the ITC hearing, the views expressed by dozens of organizations this week will inform an important report estimating the deal’s impact on the overall U.S. economy and specific sectors, which is expected in mid-May and will accompany the TPP implementing legislation when it is sent to Congress.

IT’S MONDAY, JAN. 11! Welcome to Morning Trade, where we understand that The Revenant, based off the book by U.S. ambassador to the WTO Michael Punke, cleaned up at the Golden Globes last night, winning for Best Picture, Best Director and Best Actor. Were there any funny jokes we missed? Let me know at [email protected] or @vtg2 .

OBAMA TO MAKE HONEYED PLEA FOR TPP: As part of his push for TPP in the State of the Union, the president has invited Ronna Rice, CEO of Greeley, Colo.-based Lucky Clover Honey, to represent small businesses that will benefit from the pact.

“The company has expanded across the U.S. and around the world, most recently in Japan, South Korea and China, allowing the company to grow domestically and hire more employees,” the White House said in a press release. The company’s exports are worth roughly $500,000 a year with 15 jobs supported by those exports, the release says. Click here to read Reuters’ interview with Rice: http://reut.rs/1nbWfr2 .

ITIF CALLS OUT PROTECTIONISM: The Information Technology and Innovation Foundation released a report today on the “worst mercantilist policies” of 2015, defined as protectionist policies aimed at “replacing imports with domestic production or unfairly promoting exports.” China, along with India and Russia, is singled out in the report. For example, ITIF points to requirements that force companies to store their data in China and Beijing’s push for “secure and controllable” equipment in certain sectors, like banking, which the think tank argues is a way of keeping U.S. companies out of the Chinese market.

“Foreign technology companies are the clear target of these rules, given their competitive advantage in IP-based advanced technologies,” the report says. “China even made a preemptive push for compliance by trying to get U.S. tech firms to sign an explicit ‘pledge’ that they would abide by the contentious new national security law. These equipment and access requirements add to the already considerable risk many foreign tech firms face in having their IP passed onto Chinese competitors.” Click here to read the full report: http://bit.ly/1IXK6jq .

PORK PRODUCERS WARY ABOUT JAPANESE SUBSIDY PLAN: U.S. pork producers claim to be one of the biggest supporters of the TPP, but the Japanese government’s plans to provide major domestic support to farmers to soften the blow of the trade deal could dampen the U.S. industry’s enthusiasm for the agreement.

Japanese lawmakers from the ruling Liberal Democratic Party were presented draft “counter measures” on farm support just last week, which will move as part of a budget package this spring. For pork farmers, the support plan would cover up to 90 percent of losses accrued between production costs and sales price. That would represent a 10 percent increase from the current support plan. Some lawmakers were preparing letters requesting changes to the draft, although it’s unclear what those specific requests are, according to a Japanese Diet source.

“We’re a little miffed this is happening since the National Pork Producers Council almost alone pushed and got Japan into TPP,” NPPC spokesman Dave Warner said in an interview last month. “We did an awful lot to convince the administration and lawmakers on Capitol Hill about the importance of getting Japan into TPP.”

U.S. pork producers have raised concerns with the Office of the U.S. Trade Representative, said Warner, whose group has since declined to comment on the issue. Whether the NPPC reverses its support or goes neutral on the deal will be up to the board of directors. “It’s more about violating the spirit and point of the TPP, which is about creating free trade,” Warner said.

VETTER: AG WON’T LOSE ITS LOVE FOR TPP: The agriculture industry’s support for TPP remains strong despite recent reports about the Japanese government’s actions and other issues, USTR’s chief agricultural negotiator, Darci Vetter, told reporters Sunday at the American Farm Bureau Federation’s annual conference in Orlando. Vetter identified new sanitary and phytosanitary standards, noted that the TPP was the first time that Japan has included rice in a free trade deal and highlighted measures that would “prevent the overly broad protection of cheese names” as examples of why the deal is important for U.S. ag producers.

Vetter also addressed complaints about tobacco being carved out of investor-state dispute protections in the TPP, saying there is “a lot of misunderstanding” about the issue. She noted how TPP would assure tobacco faces zero tariffs in all partner countries. Watch the news conference here: http://bit.ly/1ZeF1FA .

BEEF EXPORTS TO JAPAN SLIP: Beef exports to Japan, the leading market for U.S. producers, slipped 21 percent in volume and 31 percent in value in November, although shipments to other key Asian markets like South Korea, Hong Kong and Taiwan have increased, according to the U.S. Meat Export Federation.

“November offered some encouraging signs for U.S. meat exports, though the results were certainly not at the levels we would like to see,” the group’s president and CEO, Philip Seng, said in a statement accompanying his group's report for that month, which was released Friday. “Exports to most Asian markets are showing upward momentum, but clearly the need to defend and expand our market share in Japan has never been greater.”

At the Farm Bureau conference, Vetter responded to questions about Congress delaying a vote on the TPP by reiterating warnings that other nations are moving ahead with separate trade deals with countries in the Asia-Pacific pact. For example, a separate agreement struck between Australia and Japan while TPP was being negotiating made Japan’s tariffs on Australian beef 10 percent lower than its tariffs on U.S. beef, she noted. “Day one when TPP goes in force, we will instantly be on an equal footing with Australia,” she said. Click here to read the export group’s report: http://bit.ly/22UcSIv .

TECHNET ENDORSES TPP: From our colleagues at Morning Tech: One of the tech industry’s biggest trade groups is throwing its weight behind TPP this morning. TechNet’s endorsement follows several high-profile thumbs ups from other business groups last week, including the U.S. Chamber of Commerce and Business Roundtable, as the Obama administration tries to present a diverse set of support for the trade pact. “Our nation’s ability to continue to lead in this sector is dependent on access to the fastest growing markets in the world and the uninhibited flow of data across borders,” TechNet CEO Linda Moore said in a statement about the deal, which includes tech goodies like a prohibition against data localization requirements. “This agreement supports U.S. technology leadership around the globe, and will drive economic growth and job creation here at home.” TechNet members include a range of firms from Oracle and Comcast to Google and Airbnb.

U.S. SEARCHING FOR FOREIGN IP VIOLATORS: USTR announced Friday that it is starting its annual “Special 301” review process, which identifies countries accused of failing to provide adequate intellectual property protections. Written comments and notices to testify at a March 1 public hearing are due Feb. 5, although foreign governments have until midnight on Feb. 19, according to a pre-published Federal Register notice. The report is expected to be released around April 30.

USTR said last year that it was continuing to keep an eye on India and Ukraine but did not name any nation a "priority foreign country." The agency moved Ukraine to the "priority watch list," a lesser but still serious designation. USTR previously named Ukraine a priority foreign country, which triggered a special investigation into its intellectual property protections, though the U.S. government ultimately decided not to take action given the complex geopolitical situation resulting from Russia’s efforts to annex Crimea. Click here to read the notice: http://bit.ly/1RElXQp .

You’re Invited — Morning Money with Rep. Kevin Brady: POLITICO’s Ben White discusses the upcoming State of the Union Address, the U.S. economy and what it means for your hometown with House Ways and Means Committee Chairman Kevin Brady (R-Texas) AIA District Architecture Center — 421 7th St. NW; Monday, January 11 — 5 p.m. RSVP: http://politi.co/1OS26ry .

INTERNATIONAL OVERNIGHT

Turkey is pursuing free trade agreements with multiple countries to find more reliable markets than Russia, Turkish newspaper Daily Sabah reports: http://bit.ly/1P1fHwZ .

German Chancellor Angela Merkel said no standards in the European Union will be lowered under the Transatlantic Trade and Investment Partnership, Bloomberg reports: http://bloom.bg/1OWs2sB .

Protesters picketed outside a TPP briefing by Malaysian Trade Minister Mustapa Mohamed, according to Malaysiakini: http://bit.ly/1IXVSui .

Russian Trade Minister Denis Manturov said Russia and Indonesia are discussing establishing a free trade zone, Sputnik reports: http://bit.ly/1mPiKlc .

THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: [email protected] and @ABehsudi ; [email protected] and @vtg2 ; [email protected] and @tradereporter ; [email protected] and @mjkorade ; and [email protected] and @JsonHuffman . You can also follow @POLITICOPro and @Morning_Trade .

Follow us on Twitter Pradnya Joshi @pjoshidc



John Yearwood @john_yearwood



Megan Cassella @mmcassella



Doug Palmer @tradereporter



Sabrina Rodriguez @sabrod123