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June01, 2015

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18 THE JOURNAL OF COMMERCE TOP 100 IMPORTERS AND EXPORTERS 2015 JUNE 1.2015 By Alan M. Field TWO DECADES AFTE R the enactment of NAFTA, the debate over free trade has again risen to the top of the U.S. politi- cal agenda. This time, the controversy rages around the looming Trans-Pacifi c Partnership, a 12-nation trade bloc that would unite the U.S. and 11 other Pacifi c Rim countries in a wide-ranging pact that would establish new rules for international trade, intel- lectual property and foreign investment. Total trade between the U.S. and the other TPP mem- ber states exceeds $1.7 tril- lion in goods and $260 billion in services, making the TPP potentially the largest, most comprehensive trade pact in history. Like the North American Free Trade Agreement, which brought together the U.S., Canada and Mexico, the TPP has become a divisive political issue, not only among the general public, but also within the Democratic and Republican parties. What impact would the TPP have on the U.S. economy, and on the competitiveness of U.S. multinationals? What impact would it have on U.S. job growth? On U.S.-China trade and political relations? All of these issues have become highly contentious in recent weeks, as the U.S. Congress considers whether to extend the "fast track" authority to President Obama that it granted to his presi- dential predecessors Clinton and Bush when their adminis- trations enacted NAFTA and numerous bilateral U.S. trade agreements. Unlike conventional free trade agreements, the TPP would go well beyond making additional cuts in tariff and duties to include the imple- mentation of standards for the protection of labor rights, intellectual property, foreign investment and other fast-growing issues involving trade in services. Despite political rhetoric, the TPP is a very different kind of agreement than NAFTA, said Mauro Guillen, director of Wharton's Lauder Institute of Manage- ment and International Studies. Tariffs, he noted, aren't the main thing in the TPP, in part because the U.S. already has bilateral A 'Rohrschach Test' for TPP As with NAFTA, debate over the Trans-Pacifi c Partnership comes down to fundamental discord about free trade rely more on complaints about OSRA viola- tions to take action. Although understandable as a statement of how the agency is proceed- ing, this does nothing to address the mess. First, now that the labor situation appears to be resolved, businesses are going about getting their cargo and trying to fi ll orders. They aren't focusing on making complaints, nor are they likely to do so in the future. Once things get back to normal (however that's defi ned), even should the FMC decide to take action, the parties who shelled out the tens of thousands of dollars assessed aren't going to get those funds back. If the FMC does anything, it will likely proceed with enforcement efforts that, at their core, collect fi nes from violators. That money doesn't result in refunds to aggrieved shippers or consignees. The report acknowledges the FMC could proceed on a public petition or its own initiative. It could explore the establish- ment of a public-private advisory committee whose recommendations would be nonbind- ing. The FMC also could seek reports about certain filed agreements or even explore whether vessel operators' charges were "unreasonable revenue sources." Although each carries unique outcomes, the one recommendation the FMC has con- sistently made is having the shipping public fi le complaints. Although a few will do so, the basic question is: Why bother? What good does a complaint do if it doesn't get money back into the pockets of those aggrieved? Any question about why the filing of complaints won't solve the underlying issues can be found in this statement at the end of the report: "In the absence of documented facts that provide a basis for the commission to take action, issues regarding applica- tion of demurrage and detention charges will continue to be reviewed as part of the broader examination of port congestion." There's only one way to read that conclu- sion: the FMC blinked. Instead of getting in front of the port congestion problem by pub- licizing to the shipping public the contents of carrier tariffs, the FMC missed a golden opportunity to show its relevance to BCOs. Despite statements from FMC commis- sioners about wanting to take action, anything the agency does now is too little, too late. JOC Susan Kohn Ross is an international trade attorney with Mitchell Silberberg & Knupp in Los Angeles. Contact her at By Alan M. Field

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