NEGOTIATIONS FOR A

Trans-Pacific
Partnership
Agreement
WILLIAM KRIST
Edited with an Introduction by KENT HUGHES
Program on America
and the Global Economy
WWW.WI LSONCENTER.ORG/PAGE
NEGOTIATIONS FOR A
Trans-Pacific
Partnership
Agreement
WILLIAM KRIST
Edited with an Introduction by KENT HUGHES
Available from :
Program on America and the Global Economy
Woodrow Wilson International Center for Scholars
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BOARD OF TRUSTEES
Joseph B. Gildenhorn, Chairman of the Board
Sander R. Gerber, Vice Chairman
Jane Harman, Director, President and CEO
Public members: James H. Billington, Librarian of Congress; Hillary R. Clinton,
Secretary, U.S. Department of State; G. Wayne Clough, Secretary, Smithsonian
Institution; Arne Duncan, Secretary, U.S. Department of Education; David Ferriero,
Archivist of the United States; Fred P. Hochberg, Chairman and President, Export-
Import Bank; James Leach, Chairman, National Endowment for the Humanities;
Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services
Private Citizen Members: Timothy Broas, John T. Casteen III, Charles Cobb, Jr.,
Thelma Duggin, Carlos M. Gutierrez, Susan Hutchison, Barry S. Jackson
Wilson National Cabinet: Eddie & Sylvia Brown, Melva Bucksbaum & Raymond
Learsy, Ambassadors Sue & Chuck Cobb, Lester Crown, Thelma Duggin, Judi Flom,
Sander R. Gerber, Ambassador Joseph B. Gildenhorn & Alma Gildenhorn, Harman
Family Foundation, Susan Hutchison, Frank F. Islam, Willem Kooyker, Linda B. &
Tobia G. Mercuro, Dr. Alexander V. Mirtchev, Wayne Rogers, Leo Zickler
Introduction
KENT HUGHES
Te Trans-Pacifc Partnership (TPP) trade negotiation is the major trade
initiative of the Obama Administration. With the addition of Canada and
Mexico, there are now eleven countries from Asia and the Pacifc Basin that
are seeking to create trade agreements that take on some practices that have
not been addressed by existing trade agreements.
Te TPP is focused on harvesting the gains that can come from greater
international economic integration. Added competition can force compa-
nies and countries to allocate their time and resources more efciently. Even
more powerful, added competition can accelerate the adoption of existing
technologies and stimulate the search for new products, new manufactur-
ing techniques, and new ways of doing business.
Te TPP is also an attempt to extend the rules-based system of inter-
national trade to respond to a series of new challenges. Te international
economic system that was created in the wake of World War II was based
on the assumption of limited government involvement in the economy and
relatively free competition among privately owned businesses.
By the 1970s, however, the existing industrial powers faced the challenge
of what many call the East Asian Miracle. Te East Asian approach was built
on quite a diferent set of assumptions. Japan led the way with active involve-
ment with private industry, restricting imports and subsidizing exports, often
maintaining an undervalued currency, severely limiting foreign direct invest-
ment, and borrowing technology, often through reverse engineering.
Te Japanese example was followed by the so called Asian Tigers (Hong
Kong, Korea, Singapore, and Taiwan) and, more recently, by Te Peoples
Republic of China (PRC). China has been very adept at using fnancial
1
incentives to attract technology-oriented foreign companies and has often
required the sharing of technology as a condition of entering its domestic
market. State-owned enterprises (SOEs) and state-infuenced enterprises
play a major role in the Chinese economy.
Te TPP is designed to engage some of the new problems. Negotiators
are working on defning trade rules governing the role of state-owned enter-
prises, there are serious eforts to tighten rules protecting intellectual prop-
erty; and negotiators are working on how to govern the fow of information
in the digital age.
Tere are major challenges that are not part of the negotiations. Te
question of adjusting currency values to gain a trade advantage is not being
addressed. Nor is the potential destabilizing impact of large trade and cur-
rent account imbalances. Some nations have been very efective in ofering
major fnancial incentives, grants of land, or lengthy tax holidays as a way
of attracting foreign direct investment. As of yet, there are no discussions
about whether to develop international rules governing investment incen-
tives or exactly what form such regulations might take.
Because of the importance of the TPP negotiations, the Wilson Center
and its Program on America and the Global Economy are very pleased
to publish a paper, Negotiations for a Trans-Pacifc Partnership Agreement,
prepared by Wilson Center Senior Scholar William Krist. Te Krist
paper puts the TPP negotiations in a historic context, assesses the cur-
rent state of the negotiations, examines a number of key issues involved
in the negotiations, and explores the implication of new members join-
ing the negotiations. Krist writes with authority on trade matters. His
background includes many years of trade-related work at the Department
of Commerce, some frst-hand experience on Capitol Hill, many years
of service at the Ofce of the U.S. Trade Representative, and extensive
private sector experience as the senior vice president, international at the
American Electronics Association.
As part of the Wilson Centers focus on the TPP, the PAGE program
hosted a major conference on trade negotiation on August 8th, 2012. A
video, transcript, and summary of the conference prepared by PAGE pro-
gram assistant, Elizabeth White, can be found at http://www.wilsoncenter.
org/event/the-trans-pacifc-partnership-and-the-future-international-trade.
Negotiations for a Trans-Pacic Partnership Agreement
2
Ambassador Demetrios Marantis, Deputy USTR, provided the keynote
remarks for the conference. He made clear the importance of the TPP and
Asian trade in general. He noted that the Asia-Pacifc region is critical to
Americas economic competitiveness as well as creating and supporting the
good-paying jobs that result from international trade. Marantis stated that
negotiators were intent on creating a high standard comprehensive agree-
ment that would cover both goods and services. When asked about the pos-
sibility of China joining the negotiations, Marantis responded that the ne-
gotiations were open to all Asian-Pacifc countries that were ready to meet
the high standards pursued by TPP members.
Marantis opening keynote was followed by two panels. Te frst panel
focused on the interests of new TPP members Canada and Mexico, the
possibility of Japan joining the negotiations, and the prospects of even-
tual Chinese involvement. Laura Dawson, president of Dawson Strategies
gave a Canadian perspective. Luz Maria de la Mora Sanchez, a professor
at CIDE, spoke to Mexican interests. Edward Lincoln, a professorial lec-
turer at George Washington University evaluated the likelihood of Japans
joining the talks. Jef Schott, a senior fellow at the Peterson Institute for
International Economics assessed the impact of China on the talks, and the
long-term prospects for China joining the negotiations.
A second panel explored key U.S. interests in the TPP. Linda Menghetti,
vice president of the Emergency Committee for American Trade, summa-
rized the broad business interests in the negotiations. Celeste Drake, a trade
policy specialist at the AFL-CIO, added the perspective of organized labor.
Jim Gruef, a former trade negotiator with the Foreign Agricultural Service,
focused on how diferent aspects of the agricultural economy viewed the
negotiations. Stephanie Burgos, senior policy advisor at Oxfam America,
highlighted some of the key concerns of the non-governmental community.
Globalization is a major reality of the 21st Century. Currents of trade,
fnance, technology, and business cycles are bringing countries and econo-
mies closer together. Te TPP is a major attempt to update the rules govern-
ing international trade to meet new challenges.
Krists paper and the TPP conference are two attempts of the Center
to explore key aspects of the TPP negotiations. We expect to return to the
broad questions of a changing global economy in the near future.
William Krist
3
NEGOTIATIONS FOR A TRANS-PACIFIC
PARTNERSHIP AGREEMENT
Te Trans-Pacifc Partnership negotiations between 11 countries would expand
our free trade agreements to include four new countriesBrunei, Malaysia,
New Zealand and Vietnamand ofer the opportunity to strengthen some of
our current agreements, particularly the North American Free Trade Agreement.
However, the real potential beneft of the TPP negotiations is that an agreement
could provide a template for future agreements with other more commercially
important countries, including Japan, China and Russia, and perhaps even for
future multilateral trade negotiations.
If the TPP negotiations are to fulfll this promise, however, it is critical that
the rules be right. Tis means that they must deal with the major gaps in the
World Trade Organization rules, such as the lack of efective rules governing
state-owned enterprises. Additionally, the negotiations need to lay the ground
for addressing currency manipulation, an issue that is not currently on the TPP
negotiating table.
It also means that the rules must be such that other countries are not hesitant to
join the TPP in the future. U.S. proposals on investor-state dispute settlement,
controls on capital fows and access to medicines have been the most controversial
and need to be carefully crafted to respect the needs of our trade partners.
Given the stalemate in the Doha Development Round, the TPP negotiations are
the best hope for developing a rules-based 21st century international trade system.
4
Negotiations for
a Trans-Pacific
Partnership Agreement
WILLIAM KRIST
New Zealand, Singapore, Brunei Darussalam and Chile originally formed
a trade bloc known as the Pacifc Four (P4) on November 8, 2006, which
aimed to eliminate all tarifs between the parties to the agreement by 2015.
Tis comprehensive agreement covered trade in goods and services, intel-
lectual property protection, competition policy, government procurement,
customs valuation, technical barriers to trade, sanitary and phytosanitary
measures, temporary movement of business persons, trade remedies and
dispute settlement. Regarding goods trade, duties were completely elimi-
nated on trade between New Zealand, Singapore and Chile, and 99 percent
eliminated on trade with Brunei. Te services provisions followed the nega-
tive list approach, similar to the U.S. agreements with Singapore and Chile.
Tese four original participants saw this agreement as a potential step-
ping stone to the wider liberalization process of the Asia Pacifc Economic
Cooperation (APEC) forum, a group of 21 Pacifc Rim countries
1
that in-
cludes the United States and countries such as China, Indonesia and Russia.
APECs objective is to promote free trade and economic cooperation in the
region, and a possible Free Trade Area of the Asia-Pacifc (FTAAP) has been
a specifc goal since 2006.
In 2008 the United States, Australia, Peru and Vietnam announced that
they would join negotiations for an expanded Trans-Pacifc Partnership
5
Agreement, and in 2010 Malaysia joined the negotiations. In November
2011, leaders of these nine nations announced that they had achieved the
broad outlines of an ambitious agreement, which could be a model for fu-
ture free trade agreements. In addition to the areas covered in the original
P4 agreement, the scope of the Trans-Pacifc Partnership Agreement would
include labor, environment, compatibility of regulatory systems, and new
emerging issues such as digital technologies.
Canada and Mexico were approved by the nine countries to participate in
the negotiations and the U.S. Trade Representative (USTR) submitted letters
to Congress that both will be included in the negotiations. Under U.S. proce-
dures, such a notifcation is to be done 90 days prior to commencing negotia-
tions, and both Canada and Mexico will likely begin active participation in
the TPP negotiations in December 2012.
2

Japan has also indicated an interest in exploring the possibility of joining
the negotiations,
3
but there is no consensus on this among Japanese policy-
makers and Japan has not formally applied for participation. Tere is some
strong opposition to Japans participation within the United States; for ex-
ample, the U.S. auto industry opposes Japans participation in the negotia-
tions at this time,
4
arguing that Japans market access barriers cannot be
remedied in a free trade agreement. If Japan did decide to participate, the
United States and other TPP countries would undoubtedly require some
signifcant measures before they would approve Japans entry.
Until recently, the negotiators had been pressing to conclude the TPP ne-
gotiations by the end of 2012, and in fact, they have made substantial prog-
ress. However, it is now clear that given the complexity of the negotiations and
the addition of Canada and Mexico, the negotiations will extend at least until
well into 2013 and probably 2014. Tis longer time frame is probably very
positive since it will give the negotiators more time to craft the agreement.
Te elevenand potentially twelvecountries participating in the
TPP negotiations are highly diverse, both commercially and in terms of
their economic structures. Australia, Brunei, Canada, Japan, New Zealand,
Singapore and the United States are all wealthy nations; Chile, Mexico and
Peru are upper middle income countries; and Malaysia and Vietnam are
lower middle income countries. Several participants have very strong agri-
cultural sectors including Australia, the United States and New Zealand.
Negotiations for a Trans-Pacic Partnership Agreement
6
Vietnam has extensive state-owned enterprises. Some are very open mar-
ketsSingapore is arguably the most open market in the worldand oth-
ers have relatively protected markets, including Japan and Vietnam.
IMPORTANCE OF THE TRANS-PACIFIC
PARTNERSHIP NEGOTIATIONS
Tese negotiations for a free trade agreement among the eleven participating
countries represent the major U.S. trade negotiation at this time. Given the
range of countries participating, these negotiations are signifcantly more impor-
tant than any of our free trade agreement negotiations since NAFTA.
5
Eforts
to conclude a multilateral trade round under the World Trade Organizations
auspicesthe Doha Development Roundhave now dragged on for eleven
years and appear to be completely stalemated. And trade discussions with the
European Union for trade liberalization are in an early stage.
Te combined gross domestic product of the original four TPP countries
was only $686 billion in 2011, as can be seen in Table 1. Te fve additional
countries joining the negotiations for the Trans-Pacifc Partnership agreement
had a combined gross domestic product of $17,157 billion, which would cre-
ate a nine nation bloc with a total 2011 GDP of $17,843 billion. However, the
United States accounted for $15,094 billion, or some 85 percent of this total.
Our NAFTA partnersCanada and Mexicohave a combined 2011
GDP of $2,892 billion. In the unlikely event that Japan were to join the ne-
gotiations in the near future, the twelve countries would have a combined
GDP of $26,604 billion, and the United States would account for some 57
percent of the total.
Te United States already has free trade agreements with four of the eight
other countries involved in the TPP negotiations, specifcally Australia,
Chile, Peru and Singapore, and we have the North American Free Trade
Agreement (NAFTA) with Canada and Mexico. In essence, we are nego-
tiating free trade agreements with four additional nationsBrunei, New
Zealand, Malaysia and Vietnamwhich have a combined 2011 gross do-
mestic product of $579 billion. If Japan joined the negotiations, the fve
new markets would have a combined GDP of $6,448 billion.
William Krist
7
TABLE 1: Economic and Trade Importance of TPP Countries
(2011) (Millions of U.S. Dollars)
Original 4
Countries
GDP U.S. Exports U.S. Imports
U.S. Trade
Balance
Brunei 15,553 184.3 23.4 160.9
Chile 248,411 15,873.4 9,068.8 6,804.6
New
Zealand
161,851 3,571.1 3,159.8 411.3
Singapore 259,849 31,393.0 19,110.7 12,282.3
TOTAL 685,664 51,021.8 31,362.7 19,659.1
The Next 5
Countries
GDP U.S. Exports U.S. Imports
U.S. Trade
Balance
Australia 1,488,221 27,515.7 10,239.9 17,275.8
Malaysia 278,680 14,217.9 25,771.8 -11,553.9
Peru 173,502 8,319.2 6,235.8 2,083.4
United
States
15,094,025 na na na
Vietnam 122,722 4,340.7 17,485.2 -13,144.5
TOTAL 17,157,150 54,393.5 59,732.7 -5,339.2
Our NAFTA
Partners
GDP U.S. Exports U.S. Imports
U.S. Trade
Balance
Canada 1,736,869 280,891.1 316,510.2 -35,619.1
Mexico 1,154,784 197,543.7 263,105.8 -65,562.1
TOTAL 2,891,653 478,434.8 579,616.0 -101,181.2
Potential of
Japan
GDP U.S. Exports U.S. Imports
U.S. Trade
Balance
Japan 5,869,471 66,168.3 128,811.3 -62,643.0
8
In addition to opening these new markets to U.S. exporters, however,
a successful TPP negotiation could provide a mechanism for strengthen-
ing the NAFTA agreement, which was negotiated in 1994. Our free trade
agreement model has evolved substantially since that time, and these nego-
tiations are an opportunity to deepen trade liberalization and strengthen
the rules achieved in the original NAFTA agreement without reopening
what is still a politically divisive issue. For example, Canada limits imports
and domestic production of poultry and dairy products in order to drive
up prices for Canadian farmers and U.S. pork producers complain about
Canadian subsidies. With regard to strengthening the rules, for example,
treatment of labor and environmental issues has evolved from having sepa-
rate dispute settlement provisions to being treated as commercial disputes.
Te agreements with Chile, Singapore and Australia were all negotiated
in the early 2000s and trade liberalization and the rules in these agreements
could also be expanded to some extent.
Te real potential of the TPP negotiations is not access to these four
and perhaps fvenew markets and improved access in the NAFTA
and our other free trade agreements, although this is important.
Instead the main importance of the TPP negotiations is that a successful
negotiation could provide a template for future agreements with other
APEC countries, including Japan and China, and possibly for future
multilateral WTO negotiations.
If these negotiations are to provide such a template, however, it is critical
that the rules and coverage of a TPP agreement further our broad national
interests, including expanding our trade, promoting employment at home,
advancing our foreign policy interests, facilitating economic development
of our trade partners, and supporting strong environmental stewardship.
Tis is particularly important because many countries in this region are
negotiating agreements among themselves that exclude the United States;
for example, Korea, China and Japan will be negotiating a trilateral deal be-
tween themselves. A successful TPP agreement could provide an attractive
alternative to these agreements and ensure that the United States is a player
in the trade arena in this critical region.
William Krist
9
Current multilateral rules under the World Trade Organization have
some very serious gaps that some countries have exploited to gain a com-
mercial advantage at their trade partners expense. Major gaps include the
lack of efective rules governing currency manipulation, behavior of state-
owned enterprises (SOEs), and anti-competitive behavior. Given the diver-
sity of the countries participating in the TPP negotiations, it is critical that
efective rules governing possible neo-mercantilist behavior be developed.
However, if the Trans-Pacifc Partnership Agreement is to be a basis for
an agreement with other APEC countries in the future or a basis for fu-
ture multilateral negotiations, the rules have to be such that other countries
have an interest in joining. Tis requires a complex balancing of our critical
commercial objectives and the interests of our trade partners.
It is particularly important to structure the TPP rules with an eye to-
ward the future participation of China, which has proven very adept at
taking advantage of gaps in the international trading rules to gain a com-
mercial advantage. While the TPP rules need to address these gaps, it is also
important that the Chinese government not see these negotiations as an
attempt to isolate China from trade within the region.
To encourage future participation by China and avoid potential misun-
derstandings that could damage U.S.-Chinese relations, U.S. negotiators
should make a special efort to have an on-going dialogue with China
on issues being addressed in the TPP and respect their input even though
China is not a formal participant.
THE NEGOTIATORS DILEMMA
Under the U.S. Constitution, Congress has the power to impose and col-
lect import duties and regulate commerce with foreign nations, while
the President is responsible for the conduct of our foreign relations. Tis
means that while the President can negotiate trade agreements, ultimately
all agreements have to be approved by Congress. To get such approval,
a trade agreement has to have broad popular support among important
Negotiations for a Trans-Pacic Partnership Agreement
10
constituents, which historically has required the business community to
lobby in support of the agreement and for organized labor, environmental
groups and others to not be strongly opposed to the agreement.
Since the 1934 Reciprocal Trade Agreements Act, Congress has often
delegated specifed authority to negotiate trade agreements to the President.
In recent years, this authority has been known as fast track authority
or trade promotion authority. Under these provisions, Congress commits
itself to vote on approval of a trade agreement within a short specifed time
period under a procedure that does not permit amendment. Tis is impor-
tant because our trade partners are often reluctant to negotiate with the
United States unless they are reasonably sure that Congress will approve
the agreement.
Te most recent such authority expired in 2002, and accordingly the
Trans-Pacifc Partnership negotiations are being conducted without fast
track authority. To date, this has not been a signifcant problem since our
trade partners no doubt assume that such authority will be forthcoming.
In the lame duck session of Congress expected after the 2012 elections, or
in the new Congress that begins in 2013, the President needs to be given
fast track authority to better encourage a successful negotiation.
Within the Administration, the White House Ofce of the U.S. Trade
Representative (USTR) has primary responsibility for trade negotiations. To
help ensure the broad popular support necessary for Congressional approval,
USTR has a number of advisory committees and chairs an interagency com-
mittee process that includes all agencies that have a role in trade policy.
Given the need for Congressional approval and the nature of the advi-
sory process, it is sometimes possible for a specifc sector to have enormous
infuence on the negotiations. For example, the U.S. agricultural sector suc-
cessfully blocked U.S. concessions on agricultural subsidies and access in
the WTO Doha Development Round, and this was a factor in the failure
of those negotiations.
Te advisory committees meet frequently and have access to U.S. and
other country proposals; however, proposals submitted by the United States
and the other TPP countries are not available to the general public. Tis
William Krist
11
lack of transparency is criticized by some in the private sector and Congress.
For example, in a June 25, 2012 letter to the U.S. Trade Representative,
Senator Wyden and three other Senators wrote, We are concerned that this
process has excluded both Members of Congress and key stakeholders. As a
result, groups essential to the success and legitimacy of any agreements are
not being provided the opportunity to provide meaningful input on nego-
tiations that have broad policy ramifcations.
6
In response, trade negotiators argued that releasing actual proposals to
the public would hinder the negotiations. In a fact sheet, USTR states In
order to reach agreements that each participating government can fully em-
brace, negotiators need to communicate with each other with a high degree
of candor, creativity, and mutual trust. To create the conditions necessary
to successfully reach agreements in complex trade and investment nego-
tiations, governments routinely keep their proposals and communications
with each other confdential.
7

However, the devil is often in the details and many in the private sec-
tor and Congress believe they have been unpleasantly surprised by some
elements of previous trade agreements. Te TPP negotiations cover more
issues than previously addressed in trade negotiations and agreements in
areas such as intellectual property protection, regulatory coherence and ser-
vices can have far-reaching efects on our domestic economy. Te negotia-
tors dilemma is to ensure that the general public is aware of the implica-
tions of various proposals before they are agreed to and that the agreements
are in the broad U.S. national interest and the legitimate interests of our
trade partners. (Lack of access to the negotiating documents, of course, also
limits the analysis in this paper.)
It is critical for the public to have as good an understanding of what
is being negotiated as possible before agreements are reached, so that
interested stakeholders not part of the advisory process can provide input
and be aware of what is forthcoming. Consistent with the need for pri-
vacy so that the negotiations can take place in a candid atmosphere, the
negotiators need to make an extraordinary efort to keep the interested
public informed.
Negotiations for a Trans-Pacic Partnership Agreement
12
NEW AREAS
In addition to the areas addressed in recent U.S. free trade agreements,
U.S. negotiators are proposing disciplines in some new areas that could
have a signifcant impact. One of these areas is cross-border data fows,
which has become an important issue in the Internet age where data is
sent around the world with the click of a mouse and stored on data servers
that may be located anywhere. Te United States has proposed that TPP
countries commit to not blocking cross-border transfer of data over the
Internet and not require that servers be located in the country in order to
conduct business in that country. While our TPP partners seem receptive
to this, Australia and New Zealand need to ensure that the fnal agree-
ment does not confict with their privacy laws.
A second area is regulatory coherence. Te U.S. proposal appears to
require TPP countries to establish central coordinating bodies for regu-
latory processes, such as the U.S. Ofce of Information and Regulatory
Afairs, which considers the costs and benefts of proposed rules, and to
allow sufciently long comment periods to allow interested stakeholders
to provide input.
Another area where U.S. proposals are more far reaching than in our
other free trade agreements is in the area of environmental protection. In
addition to the provisions in our other agreements that the parties enforce
their own environmental laws and the requirements of seven multilateral
environmental agreements to which they are signatories, the U.S. proposal
would create new binding commitments in the area of conservation, such as
an obligation to maintain domestic laws or regulations that prohibit trade
in wildlife or plants that were obtained illegally, for protection of endan-
gered species and marine fsheries, or to prevent trade in illegal logging.
Te United States would make these obligations fully enforceable under the
normal dispute settlement provisions, but reportedly some other countries,
including New Zealand, Chile and Singapore, would prefer nonbinding
environmental cooperation.
William Krist
13
MARKET ACCESS
A number of associations representing a broad spectrum of the U.S.
economy, such as the National Association of Manufacturers, the U.S.
Chamber of Commerce, the Emergency Committee for American Trade,
the American Farm Bureau Federation, the Business Roundtable and the
Coalition of Service Industries want a comprehensive agreement that
covers every commercial sector and sub-sector of the U.S. economy.
8

Tese organizations argue that if the United States excludes any specifc
sectors from the negotiations, our TPP partners will exclude sectors of
interest to American exporters.
Several U.S. sectors, however, are pressing for limiting trade liberaliza-
tion, including the sugar, beef, dairy, textile, footwear and automobile sec-
tors. In some of our free trade agreements with TPP countries, these sectors
have successfully demanded that market access be limited or that they be
excluded from trade liberalization.
Te key issue in this tug-of-war is whether the fnal TPP agreement
should preserve the rules and carve-outs in the existing free trade agree-
ments that the participants have among themselves or whether they
should be reopened for negotiation. How this issue, which is known as the
Architecture of the TPP, is resolved will have a signifcant impact on the
extent to which trade actually expands as a result of the agreement.
Preserving the rules and carve-outs in the existing free trade agreements
is politically easier, since it would not stir up opposition from the industries
where market access is limited in a specifc agreement by opening up nego-
tiations for greater liberalization. For example, sugar was exempted from
trade liberalization in our agreements with Australia and Canada, but not
in our other FTAs, and the industry is opposed to opening the U.S. market
to Australia and Canada in the TPP. To date, USTR has supported this ap-
proach and has opposed re-opening the market access schedules in any of
our current FTAs with TPP countries. If the negotiations really were to be
concluded by the end of 2012, it is probable that this could only be done by
retaining the market access provisions in each of our current FTAs.
However, the United States is pressing our TPP partners for full access
to their markets. We want duty free access across the board to all these mar-
Negotiations for a Trans-Pacic Partnership Agreement
14
kets, and some currently have relatively high tarifs; for example, Malaysia
has average applied tarifs of 10.9 percent on agricultural goods and 7.6 per-
cent on non-agricultural goods, and Vietnams average applied rates on ag-
ricultural goods are 17 percent and 8.7 percent on non-agricultural goods.
Additionally, we want Brunei, Chile and Vietnam to eliminate all trade
barriers to information technology products and to join the WTO agree-
ment on information technology. In the services area, Malaysia has limits
on foreign participation in many sectors, and Vietnam has never negotiated
a trade agreement to open its services market. If we press for carve-outs, the
other TPP countries will do likewise.
Economic theory also indicates that the more ambitious approach is de-
sirable. Import barriers produce distortions in the domestic economy, and
lead to overproduction and inefcient deployment of capital and labor.
Common rules are also important economically. For example, diferent free
trade agreements among the TPP participants have diferent rules of origin;
this might mean that a U.S. exporter could qualify for the TPP zero duty
rate in selling to Canada but not to New Zealand. Common rules of origin
would promote economic efciency.
Te more ambitious market access approach should be adopted, since it
is now clear that the negotiations will almost certainly extend into 2013
and perhaps 2014. A common tarif schedule and rules of origin would
result in a greater level of trade expansion and potential economic ben-
efts. It would also provide a better template for future expansion of the
agreement to other APEC members.
However, trade liberalization can cause unemployment and economic
difculty in sensitive industries, and strong opposition to an agreement by a
number of adversely impacted industries can result in rejection of the agree-
ment by Congress. Some considerations regarding the sensitive U.S. sectors
are the following:
SUGAR: Te United States sharply limits access to our sugar market
through a tarif rate quota, which causes prices on the U.S. market to be
sharply higher than prices globally. Sugar was exempted from our FTAs
William Krist
15
with Australia and Canada and both countries would like improved ac-
cess under the TPP. Users of sugar, such as manufacturers of soda and
baked goods, would also like to see greater market access to our sugar mar-
ket, since this would enable them to compete better in global markets.
9

However, the sugar industry strongly opposes market liberalization.
Te United States is the sixth largest producer of sugar, producing 7,521
metric tons in 2011/12, according to the U.S. Foreign Agricultural Service
(FAS).
10
Of our TPP partners, Australia is the ninth largest producer at 3,900
metric tons, while Canada only produces 135 metric tons. Te sugar industry
employs some 40,000 workers (including both feld and factory workers), ac-
cording to an August 2011 report for the American Sugar Alliance.
11
DAIRY: Te United States is the largest producer of cows milk, producing
87.5 million tons in 2010; New Zealand is the eighth largest at 17 mil-
lion tons, while Canada produced 8.2 million tons.
12
New Zealand has a
relatively open market and is globally competitive (accounting for some 35
percent of world exports), while both the United States and Canada have
protected dairy markets. Te dairy sector, which includes milk, cheese, but-
ter and other dairy products, was excluded from the NAFTA agreement.
U.S. producers want improved access to the Canadian market, while im-
proved access to U.S. and Canadian markets is one of New Zealands high-
est priorities in the TPP negotiations. Te U.S. dairy industry wants dairy
products to be excluded from any agreement with New Zealand,
13
on the
basis that some 90 percent of New Zealands dairy industry is controlled by
one company, Fonterra, and that this distorts world trade.
BEEF: Te United States is the largest producer of beef, producing 12 mil-
lion metric tons of beef and veal in 2011, most of which is consumed do-
mestically. Australia was the number one exporter in 2011 at 1.4 million
metric tons, New Zealand was number fve at 0.5 million and Canada was
number six at 0.4 million.
14
Te U.S. tarif on beef that exceeds a countrys quota is generally 26.4
percent, while the rate under the quota is much lower. For example, New
Zealand can export up to 213,402 tons to the United States at a duty of
4.4 cents per kilogram. Te U.S. Cattlemans Association is opposed to
Negotiations for a Trans-Pacic Partnership Agreement
16
removing this tarif rate quota. Te Cattlemans Association also wants a
more predictable safeguard mechanism when imports disrupt the domes-
tic market.
15
Te U.S. dairy and beef industries, along with a number of other
agricultural sectors, are pressing for better discipline on the use of san-
itary and phytosanitary (SPS) measures.
16
If these are incorporated in
a TPP agreement, opposition by these two industries may be reduced
to some extent.
TEXTILES, APPAREL AND FOOTWEAR: One of Vietnams top goals
is better access to the U.S. textile, apparel and footwear markets; this is
controversial within our textile and apparel industries and New Balance,
the largest domestic footwear producer, opposes increased footwear access
for Vietnam. It may be possible to deal with much of the concern of the
domestic industry through the rules of origin.
AUTOS: Negotiations in the auto sector in particular will be very difcult
if Japan joins the TPP. An Economic Strategy Institute paper notes that
Japanese barriers to auto imports include government targeting of support
for the domestic industry, currency manipulation and a dealership struc-
ture that is controlled by the Japanese auto producers.
17
Because of its closed
market to auto imports, the American Automobile Policy Council opposes
Japans entry into the TPP.
Tese fve sensitive sectors should be included in the TPP negotiations,
although U.S. negotiators have to be sensitive to the economic and labor
impacts of trade liberalization. Various approaches can be taken to mini-
mize adverse impacts, including longer time periods for these products
in reducing trade barriers for exports from our TPP partners, carefully
designed rules of origin, and economic assistance to impacted sectors.
William Krist
17
LEVELING THE PLAYING FIELD
As a result of seven rounds of multilateral trade negotiations under the
General Agreement on Tarifs and Trade since World War II, tarifs and
non-tarif barriers have been enormously reduced, particularly on non-
agricultural goods traded between developed countries. Te multilateral
rules developed in these negotiations, now incorporated in the World Trade
Organization, prohibit or restrict most trade barriers that countries have
employed to gain a trade advantage.
However, this process has been a little like whack-a-mole where imagi-
native governments have found loopholes in the rules to distort trade.
While reasonably efective rules are now in place for most practices, several
gaps still exist and some countries take advantage of these to gain a com-
mercial advantage. Te major gaps from the U.S. perspective are the lack
of any efective discipline on currency manipulation, weak rules governing
the behavior of state-owned enterprises, and weak rules requiring enforce-
ment by governments of their obligations to respect the international rules
governing intellectual property.
Te TPP negotiations provide a good opportunity to develop efective
rules in these areas. If China joins the TPP sometime in the future, it will be
particularly important for the current negotiations to provide a solid frame
of reference for dealing with these issues, since the Chinese currency is sig-
nifcantly undervalued, Chinas enforcement of intellectual property rules is
spotty, and China has a large number of state-owned enterprises. To a lesser
extent, however, these are also important issues for trade with Vietnam.
CURRENCY MANIPULATION: GATT/WTO rules (Article XV) rec-
ognize that currency manipulation can be a serious trade distortion. (An
undervalued currency has a double-barreled impactit efectively acts
as a subsidy for a countrys exports and simultaneously as a barrier to
imports.) In the event of claims of currency manipulation, however, the
WTO rules state that the WTO is to refer the matter to the International
Monetary Fund (IMF) and accept the determination of the Fund.
Unfortunately, however, the IMF has never taken any action with regard
to complaints of currency manipulation.
Negotiations for a Trans-Pacic Partnership Agreement
18
In the last decade, China has been the prime ofender with regard to cur-
rency manipulation and at times has undervalued the yuan by as much as 40
percent. Tis has encouraged some other countries to undervalue their own
currencies in order to stay competitive. For example, Maine Congressman
Mike Michaud argues that Vietnams currency is at least 8.5 percent under-
valued.
18
In the 1980s, Japan was also a major ofender, and discipline in this
area will also be critical if Japan joins the negotiations. (Unlike China today
and Japan in the 1980s, Vietnam has a trade defcit, not a large trade surplus.)
Te issue of currency manipulation is not on the TPP negotiating table
at this time and USTR appears to be reluctant to address this issue, arguing
that this is an issue where the Treasury Department has the lead. It is cor-
rect that this issue transcends the TPP negotiations, and the United States
needs to address it forcefully in the WTO, the IMF, and bilaterally with
China. Nonetheless, the TPP negotiations need to address this issue both
to protect against potential trade distortion by the parties to the agreement
and in order to establish a basis for addressing the issue if the agreement is
expanded to other countries in the future.
Te TPP agreement needs to make signifcant progress in dealing with the
problem of currency manipulation by recognizing this as a potentially seri-
ous trade distortion that is subject to the TPP dispute settlement mechanism.
STATE-OWNED ENTERPRISES (SOEs) can distort trade in a number
of ways, including through preferential purchasing arrangements, subsidies
provided by the government, diferential tax treatment, regulatory favoritism
and other mechanisms. Unfortunately, World Trade Organization rules re-
garding SOEs are weak. U.S. industry wants rules in a TPP agreement to en-
sure that SOEs do not nullify or impair market access in the partys home
market, the markets of other TPP countries, or in third-country markets.
Tese rules are important. First of, Vietnam has some 1,000 SOEs at
this time, although their announced intention is to cut this number in half
by 2015, and other countries participating in the TPP negotiations also have
state-owned enterprises. (For example the U.S. mortgage giants Freddie
Mac and Fannie Mae are SOEs). Secondly, improved rules are needed if the
TPP is expanded in the future to include Japan, where the future treatment
William Krist
19
of Japan Post is an important issue, or to other APEC countries, such as
China and Russia, which have a large number of SOEs.
U.S. negotiators have to develop rules that limit the potential for trade
distortions by other countrys SOEs, and at the same time are consistent
with how we intend to treat Freddie Mac and Fannie Mae and our other
SOEs. Reportedly, the U.S. proposal focuses on transparency, standards
setting and includes a harm test. According to press reports, the U.S. pro-
posal would apply to companies in which the government owned 20 per-
cent or more of the enterprise.
Improved rules on state-owned enterprises are critical to a successful nego-
tiation to ensure a more level feld of competition.
EXPANDING THE TPP
As previously noted, the main potential beneft of the Trans-Pacifc
Partnership negotiations is that they may produce an agreement that will
be a template for a broader agreement with more countries than just the 11
currently participating. In the short term, Japan and perhaps even South
Korea, may want to join. In the longer term, the remaining countries in
the Asia Pacifc Economic Cooperation forum, including countries such as
China and Russia will seek membership; and perhaps at some point a TPP
agreement could infuence future WTO negotiations.
A major reason why other countries may want to join the TPP, of course,
is to gain improved access to the U.S. market. However, the rules in the
TPP also have to be attractive. Tis means that U.S. negotiators must be
sensitive to the needs of our trade partners.
In this regard, several areas have been fagged as being particularly prob-
lematic, including provisions on investor-state dispute settlement, use of po-
tential controls on speculative capital and access to medicines. Tese areas
are complex, but they need to be addressed in a way that does not discour-
age other countries from future participation in the TPP.
Negotiations for a Trans-Pacic Partnership Agreement
20
INVESTOR-STATE PROVISIONS: Since the NAFTA agreement, the
United States has insisted on provisions in our free trade agreements which allow
private foreign investors in one country to bring claims against the government
of another party to the agreement to an international panel of arbitrators. Tese
provisions are in addition to the regular dispute settlement mechanism in free
trade agreements and to the traditional practice of bringing disputes regarding
expropriation of investments to a countrys domestic court system.
U.S. industry has argued that these provisions are necessary since many
countries do not have a strong legal system that would allow an investor to
bring a successful case to the domestic courts. U.S. industry is demanding
inclusion of these provisions in the TPP, and has stated that this is an issue
that transcends every part of the negotiations.
19
However, these provisions have often been strongly opposed by our
trade partners. For example, Australia refused to agree to such a provi-
sion in the U.S.-Australian free trade agreement and is strongly resisting
inclusion of such a provision in the TPP agreement. Additionally, a group
of internationally recognized lawyers submitted an open letter to the TPP
negotiators opposing inclusion of investor-state provisions; the letter ar-
gues that these provisions threaten to undermine the justice systems in
various countries and fundamentally shift the balance of power between
investors, states and other afected parties in a manner that undermines
fair resolution of legal disputes.
20

One of the main criticisms of these provisions is that they can have a
chilling efect on the ability of governments to protect the environment or
achieve other legitimate public welfare objectives. One problem is lack of
consistency as to the minimum standard of treatment that a government
must provide foreign investors. For example, when the United States is a de-
fendant in an investor-state dispute, we argue in favor of a narrow defnition
of obligations under minimum standard of treatment but when our frms
bring cases against foreign governments they argue for a broad defnition.
Moreover arbitration panels are not required to rely on the rulings of
previous tribunals in their analysis and there is no appeal mechanism.
Investor-state dispute settlement provisions are appropriate in free trade
agreements, particularly with developing countries, but the provisions
William Krist
21
have to be clarifed in the TPP agreement. More broadly, the United
States should seek to improve the basic system to ensure arbitration panels
do consider precedent and that there is an appeals mechanism, similar to
the WTO dispute settlement mechanism.
CAPITAL CONTROLS: Concerns have been raised that the draft TPP
agreement would not allow member countries to impose capital controls on
speculative capital in the event of a fnancial crisis. However, U.S. negotia-
tors deny that this is the case, and argue that under the prudential clause
contained in U.S. free trade agreements, countries may impose capital con-
trols to ensure the stability of their fnancial systems. Critics charge that the
footnote that specifes this only applies to measures taken by individual f-
nancial institutions, and not to macroeconomic steps taken by governments
to control speculative currency fows.
One hundred and two economists, including Kevin Gallagher, Jagdish
Bagwati and Dani Rodrik, wrote the negotiators on February 28, 2012 to
urge that the TPPA permit governments to deploy capital controls with-
out being subject to investor lawsuits.
21
Tese economists note that the
International Monetary Fund has changed its position from opposing such
controls to supporting their use in emergencies. Additionally, in a May 23,
2012 letter to Treasury Secretary Timothy Geithner, Reps. Barney Frank (D-
MA) and Sander Leven (D-MI) requested a written confrmation afrming
that U.S. free trade agreements give signatories the fexibility to impose long-
term capital controls in the event of a fnancial crisis without violating their
obligations under the deal or opening them up to investor-state claims.
22

Te TPP agreement should be crystal clear that member countries may
impose capital controls in the event of a fnancial crisis. Tis is not only
in the interest of our trade partners, but it is in our own interest to keep
fnancial crises contained.
ACCESS TO MEDICINES: Protection of intellectual property is critical
to promoting innovation and nowhere is it more important than in de-
velopment of new pharmaceutical products, where companies undertake
long and expensive research to develop important drugs, which can then
Negotiations for a Trans-Pacic Partnership Agreement
22
be produced very cheaply. However, there is an important balance between
enough protection to encourage innovation and too much protection that
delays introduction of cheaper generic products.
Te United States is reportedly proposing an access window which
would give pharmaceutical companies a period of time to apply for mar-
keting approval in a TPP country after it has applied in the United States
to ensure its product enjoys the highest level of patent protection. Key to
this proposal is the length of the windowa short period such as the six
months advocated by groups concerned about access to medicines would
speed up introduction of generics, while a long window, such as the six
years and even 12 years advocated by the pharmaceutical companies, would
provide greater profts to the company holding the patent.
Another concern is that U.S. proposals would require that each coun-
try allow patentability for diagnostic and surgical methods. Tis would go
beyond the WTO Agreement on Trade Related Intellectual Property that
allows members to exclude this area from patentability.
In an October 19, 2011 letter to USTR, Congressmen Waxman,
Conyers, Levin and McDermott emphasized the need to ensure that FTA
obligations do not put patients in poor countries in a position in which they
could have to wait longer than patients in the United States to obtain af-
fordable lifesaving generic medicines.
U.S. negotiators have to be very careful to take into account the health
concerns raised by our trade partners.
CONCLUSION
A Trans-Pacifc Partnership agreement could be of signifcant beneft to the
United States. First, a successful agreement would largely eliminate trade
barriers with four new countriesBrunei, Malaysia, New Zealand and
Vietnamand it would deepen the agreements we already have with Canada
and Mexico, as well as with Australia, Chile, Peru and Singapore. And if
Japan joins the negotiations, potential new market access could be signifcant.
William Krist
23
Of far greater importance than expanded market access, however, is the
opportunity to develop some new trade rules that go beyond the current
rules contained in the World Trade Organization. Better international dis-
cipline is needed on the role of state-owned enterprises, currency manipula-
tion, investment distortions and the fow of information in the digital age.
Te Trans-Pacifc Partnership negotiations represent the best opportunity
at this time for developing trade rules for the 21st centuryrules that will
restrict the ability of countries to distort the trade system to their own ad-
vantage at the expense of their trade partners.
A Trans-Pacifc Partnership agreement has always been seen as a basis
for a broader trade agreement among the 21 nations in the Asia Pacifc
Economic Cooperation forum, which includes major trading nations such
as China and Russia, as well as the 11 countries currently participating in
the negotiations. If a TPP agreement is to be a magnet for other countries
to join, however, we need to be sensitive to the needs of our trade partners.
In this regard, it is important that faws in the system of investor-state dis-
pute settlement provisions be corrected, that no provisions of the agreement
limit the ability of countries to restrict the fow of speculative capital in the
event of a fnancial crisis, and that the agreement not limit access to medi-
cines for our developing country partners.
NOTES
1. Te 21 members of APEC are Australia, Brunei Darussalam, Canada, Chile,
China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand,
Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taipei, Tailand,
the United States and Vietnam.
2. Te 2002 trade bill which gave the President so-called Fast Track negotiating
authority required a 90 day notifcation to Congress before commencing
trade negotiations. While this negotiating authority expired in 2007, the
Administration is still adhering to this procedure in order to facilitate
Congressional approval of an eventual agreement. Te letter to Congress
regarding Canada is available at http://www.ustr.gov/webfm_send/3496, and the
letter regarding Mexico is available at http://www.ustr.gov/webfm_send/3495.
3. Prime Minister Noda announced on November 11, 1011 that Japan is interested in
exploring the possibility of joining the TPP negotiations. However, since then Noda
has focused on budget issues, and may have to face new elections in the near future.
Negotiations for a Trans-Pacic Partnership Agreement
24
4. A copy of the American Automotive Policy Councils statement is
available at http://www.sddt.com/Commentary/article.cfm?Commentary_
ID=267&SourceCode=20120706tza&_t=Te+TransPacifc+Partnership+expandi
ng+trade+creating+jobs.
5. Our free trade agreements since NAFTA include Jordan (implemented in
2001); Chile (2004); Singapore (2004); Australia (2005); Morocco (2006);
the Central American Free Trade Agreement with Dominican Republic, El
Salvador, Honduras, Nicaragua, Guatemala, and Costa Rica (20062009);
Bahrain (2006); Oman (2009); Peru (2009); Colombia (2012); Korea (2012);
and Panama (2012).
6. A copy of this letter is available at http://www.wyden.senate.gov/library.
7. A copy of this fact sheet is available at http://www.ustr.gov/about-us/press-ofce/
fact-sheets/2012/june/transparency-and-the-tpp.
8. A copy of an October 19, 2011 letter to the President signed by 45 organizations
is available at http://www.ecattrade.com/#!__letters-2010-2011 (accessed June
20, 2012).
9. An April 30, 2012 letter to USTR signed by the Sweetener Users Association,
American Bakers Association, Grocery Manufacturers, Chamber of Commerce,
National Foreign Trade Council, National Association of Manufacturers and
the Emergency Committee for American Trade, among other organizations,
stated: We believe that for purposes of the TPP, all products and subject areas
should be on the negotiating table regardless of any less-than-comprehensive Free
Trade Agreements that may already exist among two or more of the parties.
In particular sugar should not be excluded from the TPP as it was in the U.S.-
Australia FTA.
10. Te FAS report is available at http://www.fas.usda.gov/psdonline/circulars/Sugar.pdf.
11. Te report is available at http://www.smbsc.com/pdf/LMCJobs2011.pdf.
12. Tis data is from the following site: http://www.dairyco.org.uk/
market-information/supply-production/milk-production/world-milk-production/
13. January 25, 2010 comments submitted to the U.S. Trade Representative by
the National Milk Producers Federation supporting a total exclusion of all
dairy products from any agreement with New Zealand are available at http://
www.nmpf.org/fles/fle/NMPF%20TPP%20FTA%20Comments_012509.pdf
(accessed June 20, 2012).
14. Tis data is from the Foreign Agricultural Service web site: http://www.fas.usda.
gov/psdonline/circulars/livestock_poultry.pdf.
15. A copy of the 2010 Cattlemens Association comments to the U.S. International
Trade Commission are available at: http://www.uscattlemen.org/Comments_
Letters/2010Comments_Letters/3-23HearingComments.pdf.
16. In a May 2012 paper, 19 agricultural trade associations, including those
representing the beef and dairy industries, urged the negotiators to include
efective disciplines on the application of SPS measures. A copy of this paper is
available at http://www.meatami.com/ht/a/GetDocumentAction/i/78494.
William Krist
25
17. A copy of the Economic Strategy Institute paper on the Trans-Pacifc Partnership
and Japan is available at http://www.econstrat.org/images/ESI_Research_
Reports_PDF/tpp%20and%20japan.pdf.
18. A copy of Congressman Michauds July 26, 2012 letter to President Obama
is available at http://michaud.house.gov/press-release/michaud-urges-obama-
include-manufacturing-provisions-tpp, accessed August 14, 2012.
19. ECAT, along with 30 other business associations urged the President ot include
the investor-state mechanism. See ECAT press release dated February 27, 2012,
available at http://www.ecattrade.com/#!__letters-2012, accessed June 20, 2012.
20. Source: An Open Letter from Lawyers to the Negotiators of the Trans-Pacifc
Partnership Urging the Rejection of Investor-State Dispute Settlement, dated
May 8, 2012.
21. Letter available at http://www.ase.tufts.edu/gdae/policy_research/TPPAletter.html.
22. As quoted in the June 1, 2012 issue of Inside U.S. Trade.
Negotiations for a Trans-Pacic Partnership Agreement
26
WILLIAM KRIST is a Senior Policy Scholar at the Woodrow Wilson
International Center for Scholars, where he is currently working on a book on U.S.
trade policy. His publications at the Center include Trade Policy and the Farm Bill,
Making Doha a Development Round: What do the Developing Countries Want?,
and World Trade Organization and Multilateral Environmental AgreementsTime
for a Good Neighbor Policy. In addition to his research at the Woodrow Wilson
Center, he also undertakes periodic consulting projects on various aspects of trade
policy and economic development.
Prior to the Wilson Center, he was senior vice president at the American
Electronics Association, which was the largest high tech association at that time.
While at AEA, he was responsible for the offce in Japan and opening offces in the
EU and China. Major issues included the U.S.-Japan semiconductor dispute, U.S.
export control policy, and the Uruguay Round trade negotiations.
Other previous experience includes 5 years as a senior offcial in the Offce
of the U.S. Trade Representative and work on Capitol Hill on both the House
side (Congressman Sam Gibbons, D-Fl) and the Senate side (Senator William
Roth, R-Del). He received an MA degree in International Economics from George
Washington University and a BA degree from Swarthmore College.
KENT H. HUGHES is currently the Director of the Program on
America and the Global Economy (PAGE) at the Woodrow Wilson International
Center for Scholars. As part of the PAGE agenda, he published a book, Building
the Next American Century: The Past and Future of American Economic
Competitiveness (Wilson Center Press 2005), which emphasizes the importance of
innovation and education to Americas future.
Prior to joining the Center, Dr. Hughes served as Associate Deputy Secretary
at the U.S. Department of Commerce, president of the private sector Council on
Competitiveness, and in a number of senior positions with the U.S. Congress. Prior
to his congressional service, Dr. Hughes served as a staff attorney for the Urban
Law Institute. He was also an International Legal Center Fellow and Latin American
Teaching Fellow in Brazil where he worked on a reform of Brazilian legal education.
Dr. Hughes holds a Ph.D. in Economics from Washington University, a LL.B.
from Harvard Law School and a B.A. in Political and Economic Institutions from
Yale University. He is a member of the D.C. Bar, American Bar Association and the
American Economic Association.
27
The Program on
America and the
Global Economy
The Program on America and the Global Economy (PAGE) focuses on the growing
forces of globalization and tracks the emergence of innovations and innovation
systems as they develop in the United States and elsewhere around the world.
Combining its work on globalization and innovation, PAGE also explores the long-
run future of the American economy.
PAGEs interest in the long-run future of the United States has led PAGE to
conduct research and conferences on subjects that range from strengthening the
U.S. innovation system to renewing Americas manufacturing base to fostering a
dramatic improvement in Americas education system.
With Americas economic future deeply tied to developments around the world,
PAGE has also focused on the development of an American foreign economic
policy for the 21st century. PAGE is examining the policies that contribute to a
competitive economy and the international economic policies that will create
competitive opportunities for the United States.
28
PROGRAM ON AMERICA
AND THE GLOBAL ECONOMY
Woodrow Wilson International Center for Scholars
One Woodrow Wilson Plaza
1300 Pennsylvania Avenue NW
Washington, DC 20004-3027
WWW.WILSONCENTER.ORG/PAGE