Sen. Kay Hagan, D-N.C., met with U.S. trade representative nominee Michael Froman on Tuesday to press the state’s concerns about textiles, tobacco and advanced medicines in Pacific Rim trade talks.
Froman will face the Senate Finance Committee on Thursday. If the full Senate confirms President’s Barack Obama choice to lead the trade office, he will head the U.S. team negotiating in the Trans-Pacific Partnership, a trade and investment agreement with a dozen other nations.
“I wanted to make sure he understood issues important to North Carolina,” Hagan said.
She said that the trade agreement could expand markets for the state’s products if it’s done right. Her main concerns about the proposed deal center on tobacco, yarn used for textiles, and biological medicines, such as vaccines and some forms of chemotherapy.
She opposes an Obama administration’s draft proposal that would allow for countries to regulate tobacco products. The United States has raised the idea, but hasn’t formally put a plan on the table yet.
Under current trade rules, all products are treated by the same standards. But the draft proposal would create an exception for tobacco and prevent the World Trade Organization from striking down a nation’s regulations as long as they did not discriminate against a product because of its place of origin, were based on scientific findings and were promulgated through a process that allowed for public comment.
“I’m concerned that proposal would hurt our market,” Hagan said. “I think that provision is unnecessary, and I think they need to take it off the table.”
Tobacco is a legal product, she said, and the provision, if included, would set a precedent for creating exceptions for other products.
About 225,000 jobs in North Carolina are related to tobacco production, according to state figures. North Carolina produces more than half the tobacco grown in the United States. It exports the majority of its crop.
The U.S. trade representative’s office said on its website that the proposal would “create a safe harbor” for Food and Drug Administration tobacco regulation under U.S. law.
Ellen Shaffer, a co-director of the Center for Policy Analysis on Trade and Health, a health advocacy group, said the administration’s draft would be a good step because “it recognizes the exceptional nature of tobacco as a lethal substance.” But she said it didn’t go far enough to prevent tobacco companies from using trade agreements to challenge U.S. tobacco regulations.
Health groups have long called for removing tobacco from the trade pacts entirely. North Carolina tobacco growers have said that approach would eliminate an important part of their export markets.
On textiles, Hagan said she pressed Froman for a strong provision that would require that the yarn for all textile profits that benefit from the agreement be made in countries that are part of the Trans-Pacific Partnership. Along with the U.S., they are: Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Japan will join this summer.
Hagan, Sen. Richard Burr, R-N.C., and other senators wrote in 2011 to the trade representative at the time, Ron Kirk, that they did not want to see Vietnam get its yarn from China.
“We have lost so many thousands of jobs over the last decade, 27,000 in just five years from 2005 to 2010,” Hagan said.
If the yarn provision isn’t strong enough in the trade agreement, “countries like Vietnam, which would source its yarn from China and other countries, would pose a great threat to textile jobs in North Carolina,” she said.
In the area of high-tech medicines, Hagan supports demands by drug companies in the Research Triangle that they get 12 years before competitors can get the data they need to copy biological medicines, because the new medicines are so expensive to develop. Some countries in the trade agreement area want a shorter time in which to make lower-cost generic versions.