February 28, 2013 / 4:10 PM / in 5 years

Budget cuts could impair trade agenda: USTR

WASHINGTON (Reuters) - Automatic budgets cut that begin taking effect on Friday could impair the U.S. government’s ability to negotiate new agreements and enforce existing trade pacts, a top U.S. trade official said on Thursday.

Tim Reif, general counsel with the U.S. Trade Representative’s office, noted at a trade conference at the Georgetown University Law Center that the agency was conducting or preparing to launch three major trade negotiations.

“The sequester cuts will add a significant hurdle to these and other efforts to support American jobs by opening markets, including through reduced staffing, reduced ability to engage with our trading partners,” Reif said.

“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.

It was the latest warning from President Barack Obama’s administration of the negative impact of the automatic spending cuts set to begin on March 1 because the White House and Congress have not agreed on another plan to reduce the budget deficit.

The United States is already involved in negotiations with 10 countries in the Asia-Pacific region on a free trade pact, and there are indications that Japan could join soon.

Reif said the United States’ welcomed the world’s third largest economy’s interest in joining the negotiations, which he said would be an important development if it occurs.

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.

The United States is also pursuing an initiative aimed at updating the 1996 Information Technology Agreement by eliminating tariffs on an expanded list of technology goods.

Reporting by Doug Palmer; Editing by Andrea Ricci

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