The U.S. Economic Diplomacy agenda

The agenda of US economic diplomacy can be found in the objectives set out by Congress for the Fast Track, even if negotiations are secret.
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Foto: Backbone campaign   Flickr fast track usa   backbone campaign
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After the Great Depression, since 1934, the US Congress has delegated some of its trade policy powers on the Executive. Since 1974 the delegation was complete through what is known in political jargon as Fast Track and is officially called Trade Promotion Authority (TPA). The procedure is that the Congress first sets the trade policy objectives and promises to reject or approve the negotiated text unchanged.


Since NAFTA, all trade agreements proposed by the United States implicitly involve the adoption of neo-liberal policies and overflow commercial content with obligations in other non-commercial areas, with clauses on finance, investment, intellectual property, labour, environment, international cooperation and even regarding industrial policies (preferential rules of origin). Because the agreements cover such a wide range, the agenda of economic diplomacy of the United States can be found in the objectives set out by Congress for the Fast Track, even if negotiations are secret.


Objectives in 2015's TPA


In April 2015 the US Congress approved the Fast Track or TPA, with 113 pages of conditions and reservations, defending US protectionism and fighting that of foreigners. In textiles, anti-dumping and agriculture, the law explicitly limits any opening of the US market. If there is any oversight, Section 8, on sovereignty, specifies that any trade agreement is not binding if it contradicts present or future U.S. norms. This means that the trade agreements oblige all the other partners, but not the U.S., the unique and indispensable country, as its leaders claim.


Section 12 of the TPA identifies the objectives. It omits the WTO Doha Round so it follows that the U.S. is no longer interested in Doha, because the U.S. failed to change its main mandate: the elimination of agricultural subsidies. The Round remains stalled because the U.S. refuses to dismantle agricultural subsidies that favour U.S. exports and destroy agriculture in other countries.


The priorities expressed in the TPA 2015 are as follows:


a) Extend the coverage of the World Trade Organization and multilateral and plurilateral agreements to products, sectors, and conditions of trade not adequately covered. That is, reduce the areas for independent policies.


b) Expand country participation in and enhancement of the Information Technology Agreement, the Government Procurement Agreement, and other plurilateral trade agreements of the World Trade Organization  These agreements include only countries that have wanted or have been forced to sign them and do not have multilateral recognition.


c) Expand competitive market opportunities for United States exports and to obtain fairer and more open conditions of trade, including through utilization of global value chains, through the negotiation of new WTO multilateral and plurilateral trade agreements. The key word here is value chains, a concept that gives much more value to intellectual property and capital investment in the final value of a product, labour, materials and any other local production input. The idea of value chain is clearly shown in a case mentioned by Katu Arkonada, in his excellent analysis « EE.UU. la hegemonía no termina de morir, la fase de dominación ya ha comenzado » (USA: hegemony is not yet dead, the domination phase has begun, "Although since 2007, China is the main producer of software and hardware, 84% of profits in this area are still in the hands of American capitalists."


d) Ensure that regional trade agreements to which the United States is not a party fully achieve the high standards of, and comply with, WTO disciplines, including Article XXIV of GATT 1994, Article V and V bis of the General Agreement on Trade in Services, and the Enabling Clause, including through meaningful WTO review of such regional trade agreements. It proclaims a brazen interference in the affairs agreed upon by third countries and seeks to sabotage those international economic relations in which the U. S. is not a partner: read Mercosur, Euro-Asian Common Market with Russia as the centre, or the Regional Comprehensive Economic Partnership (RCEP) in Asia, which excludes the United States, but brings together the six largest economies in Asia: China, India, Japan, Korea South Australia and New Zealand, along with Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. A large counterweight to the U.S. TPP.


e)  Enhance compliance by WTO members with their obligations as WTO members through active participation in the bodies of the World Trade Organization by the United States and all other WTO members, including in the trade policy review mechanism and the committee system of the WTO.

It should be noted here that almost all committees are chaired by representatives of countries that already gave up their political space to the United States via the so-called FTAs. Not a single committee is presided by a country that doesn't bend to U.S. initiatives. This should encourage a better coordinated policy between BRICS, ALBA, Mercosur and independent African or Asian countries.


f) Encourage greater cooperation between the WTO and other international organizations. The allusion here is mainly to the IMF, World Bank and its regional banks, whose loans are tied to well-known neo-liberal economic recipes.


The multilateral part of the agenda is to circumvent resistance at the WTO with a "successful negotiation of new trade rules in the TPP agreement... that then serve as a model for future negotiations in the WTO" which is clear in the text as a general strategy. For specific technical issues we will highlight the most important points.


On Sanitary and Phytosanitary rules it says to encourage the adoption of international standards and require a science-based justification be provided for a sanitary or phytosanitary measure if the measure is more restrictive than the applicable international standard.


The issue here is the export of agricultural products and the U.S. is the largest exporter, thanks to all sort of subsidies. It happens that WTO rules are already the standard in sanitary and phytosanitary matters. What is sought here is to enforce the U. S. rules as the standard and in particular to force the acceptance of products from genetically modified organisms (GMOs) as in the U.S.; even though there is already scientific evidence of their being harmful to health, but it is something the U.S. or Monsanto refuse to admit.


In subsidies the goal is to dismantle subsidies, but those of other countries. The US should reduce or eliminate subsidies that decrease market opportunities for United States exports or unfairly distort agriculture markets to the detriment of the United States. Such an objective is steeped in cynicism. United States distorts international prices and invades markets thanks to the US$ 139.5 billion (2012) with which it subsidises its agriculture and its agricultural exports, but at the WTO the U.S. dares to complain when others subsidise their farmers. At the WTO the United States complains that India, whose population of poor farmers is the largest in the world, spends US $ 58 billion (2010) in aid to its farmers. A reckless claim, because every American farmer receives US$ 57,901, which could allow each a comfortable life, while each Indian farmer receives only US$ 99.


On Geographical Indications, a topic on which the U. S. cannot compete with Europe, the text speaks of eliminating and preventing the decreased market access to products from the United States. In essence it asks for generic terms to be protected against the specific geographical indications.


In government procurement it encourages to seek best practices and market opening, because in every country the best client is always governments, which often prefer domestic producers; as the U.S. does under the Buy American slogan. It is an old goal proposed and rejected in Singapore's ministerial of 1996.


In trade in services the text says ... A) ... to expand competitive market opportunities for United States services and to obtain fairer and more open conditions of trade, including through utilization of global value chains, ...  B) recognize that the expansion of trade in services generates benefits for all sectors of the economy and the objective mentioned in paragraph A) must be pursued with all means, including through plurilateral agreements....


There is resistance to enlarge with new commitments the areas granted at the General Agreement on Trade in Services, so the U.S. policy is to expand services commitments through bilateral or regional trade agreements, to include them as plurilateral agreements within the WTO, and then pretend they are a new source of international standards.


In Foreign Investment the goal is to eliminate and prevent measures that require United States producers and service providers to locate facilities, intellectual property, or other assets in a country as a market access or investment condition, including indigenous innovation measures. In short, the goal is to exclude all the reasons by which a country may desire foreign investment.


In Intellectual Property Rights there is a reverse gear in policy. Before the U.S. wanted to prolong patent monopolies. Now it wants protection level not to be set be too high if it would impede ‘legitimate digital trade’.  The U.S. insists on providing protection to new technologies and methods of transmitting and distributing products digitally. This issue, a priority for the United States, is vulnerable, because at WTO there is a waiver that suspends legislation on the subject, but which has to be renewed every year. Incidentally, the TPA does not mention paragraph 6 of the Doha Declaration, which gives priority to public health over intellectual property rights.


On Digital trade in goods and services, its aim is to prevent governments from restricting the trans-border flow of data or require local processing and local data banks.


State owned enterprises will be a target for limiting trading privileges, discrimination and subsidies that favour them.


In labour and environment standards the text dictates which standards must be adopted by U.S, trading partners.




Throughout the document, there is insistence on open markets to US products. A rather perplexing attitude because America is not competitive on international trade, it has a chronic trade deficit and  subsidizes most of its exports. The enigma becomes clear if we remember that Sismondi said 200 years ago[1], that those who have more money push out their competitors in open markets.  The companies from a country that produces money from nowhere will always have more money. That privilege is the basis of the international trade policy of the United States.

Geneva 05/09/2015



[1]    Jean Charles Sismondi, New Principles of Political Economy, Paris, 1827.
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