* USTR could have less money to enforce trade agreements
* Japan's addition to TPP talks would have "tremendous"
* Annual report on Friday may not call for trade promotion
By Doug Palmer
WASHINGTON, Feb 28 A top U.S. trade official
warned that automatic budgets cuts that start taking effect on
Friday could hamper ongoing U.S. trade talks in the Asia-Pacific
region and another proposed set of negotiations with the
"The sequester cuts will add a significant hurdle to these
and other efforts to support American jobs by opening markets,
including through reduced staffing (and) reduced ability to
engage with our trading partners," said Tim Reif, general
counsel with the U.S. Trade Representative's office.
"Additionally, USTR may no longer have the funding to
initiate new legal disputes, which would result in reduced
enforcement of trade agreements, so the sequester is an
important issue for us," Reif said at a trade conference at the
Georgetown University Law Center.
It was the latest warning from President Barack Obama's
administration of the negative impact of the automatic spending
cuts, or "sequester," set to begin on March 1 because the White
House and Congress have not agreed on any alternative plan to
reduce the federal budget deficit.
The cuts come as United States engages in negotiations with
10 countries in the Asia-Pacific region on a free trade pact.
Expectations also are rising that Japan will join the talks
following Japanese Prime Minister Shinzo Abe's meeting with
Obama last week at the White House.
"Including the world's third-largest economy in a
comprehensive high-standard agreement would be a tremendous
economic and strategic benefit for both our economies," Reif
said, adding the United States "welcomed" Tokyo's renewed signs
of interest in the negotiations.
U.S. trade officials are also preparing to launch trade
negotiations with the 27-nation European Union and on another
set of talks to forge an international agreement to tear down
barriers to trade and investment in service sectors ranging from
banking to insurance to telecommunications.
Another U.S.-led trade initiative is aimed at updating the
World Trade Organization's 1996 Information Technology Agreement
by eliminating tariffs on an expanded list of technology goods.
A coalition of 20 U.S. business groups urged Obama in a
letter on Thursday to make a big push for that pact, which they
said could be concluded by the end of July.
"Strong, sustained, high-level U.S. political leadership ...
will be necessary to get the work across the finish line and
achieve a significant trade win for the United States and the
global economy this year," the groups said.
The U.S. Trade Representative's office on Friday is due to
release its annual report on the "president's trade agenda,"
laying out its priorities for the year.
The report usually contains few surprises but some lawmakers
and business groups have been hoping the 2013 edition will call
for "trade promotion authority" (TPA), a piece of legislation
considered essential for U.S. trade negotiations.
Reif's comments at the law school on Thursday suggested the
report would stop short of that.
"We obviously recognize the importance of trade promotion
authority" and have had discussions with key congressional
committee about the bill, Reif said.
"We will expand that dialogue to include a more directed
conversation about TPA at the appropriate time."
TPA, which expired in 2007, allows the White House to
negotiate agreements that can be submitted be Congress for a
straight up-or-down vote without any amendment. It is intended
to give other countries confidence that any deal they strike
with the United States won't be picked apart by U.S. lawmakers.
Congress has not voted on a TPA bill since 2002, when it
caused a bitter fight. Republicans, who generally favor free
trade, passed the bill over the objections of Democrats, many of
whom blame past trade agreements for U.S. job losses.