Lane says many countries involved in the TPP talks have eliminated tariffs on heavy equipment. He says that, for Caterpillar, one of the biggest benefits of those negotiations “is it gives us a chance to modernize NAFTA.”
He says that, for example, NAFTA “has a very arcane rule of origin,” which is a yardstick for determining whether a product, including components that may be produced in other countries, can be classified for trade-regulation purposes as “made in the U.S.”
More broadly, Lane says, for U.S. trade officials, the “key to everything” that lies ahead is having Congress provide the president with trade promotion authority (TPA). That mechanism, formerly called “fast track” authority, gives the administration the ability to negotiate trade deals and have Congress review them quickly.
TPA expired in 2007. Froman said in testimony prepared for his June 6 confirmation hearing before the Senate Finance Committee that he would “engage” with Congress to renew TPA. He added, “TPA is a critical tool. I look forward to working with you to craft a bill that achieves our shared goals.”
Architectural and engineering firms are monitoring negotiations the Obama administration proposed in January with the EU and 18 other countries. U.S. firms in services industries hope the negotiations will expand their overseas markets. A USTR official says that the negotiations are under way and progressing positively.
Senate Finance Chairman Max Baucus (D-Mont.) called Froman “the right man for the job at just the right time.” Industry officials also are happy to see Froman as USTR. Yaksich says AEM is “pleased that he has experience with past free-trade agreements and, therefore, understands the benefits of [those] agreements that take place.”
Lane notes that Caterpillar worked with Froman on U.S. free-trade agreements—all of which went into force in 2012—with Panama, Colombia and South Korea as well as last year’s measure establishing permanent normal trade relations with Russia.
Lane says, “What we quickly learned is, if Mike Froman is involved in the effort, the White House is serious and is making the issue a priority.”
Story updated on June 25
