President Barack Obama departed on Sunday for what will be his 10th trip to Asia, with scheduled stops in Vietnam and Japan.  The U.S. International Trade Commission (ITC) released its much-anticipated report reviewing the Trans-Pacific Partnership’s (TPP) implications to the U.S. economy last Wednesday.  The Administration immediately pointed to the report and called for Congress to ratify the TPP deal, while others, such as unions, touted the report as validating their claims the TPP deal is not good for the United States.  President Obama signed the Miscellaneous Tariff Bill (MTB) reform process measure (H.R. 4923) into law on Friday; released a new Executive Order on atrocities last Wednesday.  The White House also announced last week that President Obama will host Prime Minister Narendra Modi of India on 7 June.

Congress was in session last week and will be in session this week, before recessing for the Memorial Day holiday (30 May).  The House of Representatives debated the Fiscal Year (FY) 2017 National Defense Authorization Act (NDAA) last week, passing the measure late on Wednesday.  The Senate Armed Services Committee’s FY 2017 NDAA markup measure was released on Thursday, ahead of this week’s expected floor debate.  Congress also debated and acted on Zika-related legislative proposals.

President’s Asia Trip

President Obama’s latest trip to the Asia-Pacific continues to demonstrate the Administration’s focus on the region.  The Asia rebalance has been a central objective of the President’s broader foreign policy and economic policy, rooted in the belief that this largest-emerging market in the world is critical to U.S. future prosperity and is also host to some critical U.S. national security interests.

His stop in Vietnam is intended to highlight the U.S. partnership with the country.  President Obama will give a speech to the Vietnamese people on Tuesday, describing the advancing U.S. Vietnamese bilateral relations, as well as addressing areas of difference.

In Japan later in the week to attend the G-7 Summit, the President will emphasize the important U.S.-Japan alliance, which is considered a cornerstone of the U.S. approach to stability and security in Asia.  The G-7 Summit is expected to also discuss the excess steel capacity issue.

U.S. Trade Representative Michael Froman will travel with President Obama to Vietnam.  At a press briefing on the President’s trip last week, Ambassador Froman said that he expects the President will discuss the TPP ratification process and outstanding Transatlantic Trade and Investment Partnership (TTIP) concerns at the G-7 Summit in Japan.

National Defense Authorization Act – House Passes Measure; Senate Floor Debate Ahead

The House approved its FY 2017 NDAA (H.R. 4909) late last Wednesday.  The Senate is expected to consider its version of the NDAA (S. 2943) this week, under a process spearheaded by Senate Armed Services Committee Chairman John McCain (R-Arizona).  As the measures advanced by both chambers have differences, we can expect they will negotiate over the coming months to reconcile these differences.  The White House has issued a veto threat on H.R. 4909.

  • On Tuesday, 24 May, the Senate Appropriations Subcommittee on Defense is scheduled to markup its FY 2017 Defense appropriations measure.
  • On Thursday, 26 May, the Senate Appropriations Committee is scheduled to markup the FY 2017 Defense spending bill.

FY 2016 State Department Authorization Measure – House Committee Markup Ahead

The Department of State Authorization for Fiscal Year (FY) 2016 (S. 1635) was passed, as amended, by the Senate on 28 April.  The measure is scheduled to be marked-up by the Foreign Affairs Committee (HFAC) on Thursday, May 26.  Any changes to the Senate-passed version will eventually have to be reconciled between the two chambers.

Global Magnitsky Act Advances

The House Foreign Affairs Committee approved the Senate-passed Global Magnitsky Human Rights Accountability Act (“Global Magnitsky Act,” S. 284) last Wednesday with a manager’s amendment.  Notably, the amended House measure adds a sunset provision, ensuring congressional review of the sanctions three years after enactment, as well as a requirement that any sanctions recommendations made to the President have the support from both the Chairman and Ranking Member of six congressional committees.

The Global Magnitsky Act, if enacted, would expand upon the Sergei Magnitsky Human Rights Accountability Act of 2012, which became law and is more narrowly targeted to those Russians determined to be complicit in gross human rights violations.  The Global Magnitsky Act goes further and would broaden this authority globally, as well as authorize the imposition of sanctions on government officials, or senior associates of such officials, for corruption-related activities as well.

Senate Foreign Relations Committee Ranking Member Benjamin Cardin (D-Maryland) and Senate Armed Services Committee Chairman John McCain (R-Arizona) are the original co-sponsors of S. 284. Last week there were some attempts to attach S. 284 as an amendment to broader bills moving in the Senate, such as the Military Construction-Veterans Affairs/transportation spending measure, which failed; the Senate NDAA, which is on the Senate floor this week for debate.

Cyber Attacks on the SWIFT System

Senator Tom Carper (D-Delaware) sent letters last Thursday to Federal Reserve Bank of New York President William Dudley and Society for Worldwide Interbank Financial Telecommunication (SWIFT) Managing Director Patrick Antonacci asking what steps are being taken to better protect banks around the world against cybersecurity threats in light of multiple recent attacks on the SWIFT system.  Senator Carper requested that both entities answer questions and brief staff on how the Federal Reserve and SWIFT are addressing these recent attacks as well as safeguarding against other potential threats by June 17.

  • On Wednesday, 25 May, the Senate Foreign Relations Subcommittee on International Cyber Security is scheduled to hold a hearing titled, “International Cybersecurity Strategy: Deterring Foreign Threats and Building Global Cyber Norms.”

Zika Funding – U.S. Prepares; Both Chambers Acted

The Senate approved a $1.1 bipartisan deal early last week to partially fund the Obama Administration’s request for emergency funding to fight Zika.  The House took a different direction, with House Appropriations Committee Chairman Hal Rogers (R-Kentucky) introducing a $622 million bill at the beginning of the week and approving it, despite opposition from the Democrats in that chamber.

President Obama spoke of the Zika situation on Friday, detailing some of the Administration’s efforts to prevent the spread of Zika to the homeland and also calling on Congress to fully fund the Administration’s request of $1.9 billion.  He said the Administration has a plan that includes developing a vaccine, improving diagnostic tests, and developing new tools for vector control.  The President said there have been a little over 500 travel-related cases of Zika in the continental United States.  Over 800 mosquito-caused cases have been diagnosed in the U.S. territory of Puerto Rico.

TPP – ITC Report Released

Late last Wednesday afternoon, the ITC released its report on the effects of the proposed TPP on the U.S. economy.  The nearly 800-page report examines specific industry sectors in the United States and seeks to ascertain which would benefit or suffer from the deal.  U.S. Trade Representative Michael Froman immediately issued a statement welcoming the report and saying:

“The ITC report provides another strong argument for why TPP should be passed this year. It is part of a growing body of evidence that shows that TPP will benefit our economy at home and allow the U.S. to help set the rules of the road for trade in the Asia Pacific.”

Others have noted the ITC report reflects the United States will only marginally benefit from the deal, particularly in comparison to other TPP member states.  AFL-CIO President Richard Trumka said of the ITC report in a statement:

“One of many shockers is just how meager the purported benefits of the TPP are.  A mere 0.15 percent of GDP growth over 15 years is laughably small.”

Ambassador Froman sought to counter anti-TPP critics by observing the ITC report focused heavily on tariffs and did not reflect the economic benefits of other major parts of the agreement, such as rules on state-owned enterprises, labor and the environment.

The report notes that the U.S. agricultural sector is expected to benefit from the agreement, highlighting that overall agricultural exports would rise by $7.2 billion, while imports would increase by $2.7 billion.  The report reflects that U.S. rice exports would be worse off under TPP, dropping 0.3 percent.  The TPP deal is also reported as increasing the trade deficit in chemicals, a category that includes pharmaceuticals.

White House Spokesman Josh Earnest said last week that the Administration is working with Democratic and Republican supporters of the TPP to “develop a legislative strategy for moving forward.”  There is, however, a general belief in Washington that if the 114th Congress is unable to advance the TPP deal before it concludes later this year, there will be little momentum in the next Congress or new Administration.

Meanwhile, Ministers from the TPP countries met early this week on the margins of the Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade Meeting to review progress on their respective internal processes to approve the TPP agreement.  The other TPP countries are on track to ratify the agreement before the end of the year.  At the end of the meeting, the TPP country Ministers released a joint statement, available here.

New Executive Order – Atrocities Defined

On 18 May, President Obama issued an Executive Order (EO) that details a definition for “mass atrocities” and “atrocities” (which is not defined under international law) and essentially establishes a comprehensive U.S. policy for preventing and responding to atrocities.  It defines “mass atrocities” or “atrocities” as “large scale and deliberate attacks on civilians, and includes acts falling within the definition ‘genocide’ as defined in international law and under U.S. domestic statute.”  The EO further delineates the Atrocities Prevention Board (established in 2012) and its responsibilities.

Congressional Hearings This Week

  • On Monday, 23 May, the Senate Foreign Relations Committee is scheduled to hold a closed hearing titled, “The Open Skies Treaty: Managing Russia’s Request to Upgrade Sensors.”
  • On Tuesday, 24 May, the Senate Foreign Relations Committee is scheduled to hold a hearing titled, “U.S. -India Relations: Balancing Progress and Managing Expectations.”
  • On Tuesday, 24 May, the Senate Banking Committee is scheduled to hold a hearing titled, “Understanding the Role of Sanctions Under the Iran Deal.”
  • On Tuesday, 24 May, the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade is scheduled to hold a hearing titled, “The U.S.-Saudi Arabia Counterterrorism Relationship.”
  • On Wednesday, 25 May, the House Foreign Affairs Committee is scheduled to hold another Iran Nuclear Deal oversight hearing titled, “Implementation and its Consequences.”
  • On Wednesday, 25 May, the House Foreign Affairs Subcommittee on the Middle East and North Africa is scheduled to hold a hearing titled, “Tunisia’s Struggle for Stability, Security, and Democracy.”
  • On Wednesday, 25 May, the Senate Banking Committee is scheduled to hold a hearing titled, “Understanding the Role of Sanctions Under the Iran Deal: Administration Perspectives.”
  • On Wednesday, 25 May, the Senate Foreign Relations Committee is scheduled to hold a closed hearing titled, “Trafficking in Persons: Preparing the 2016 Annual Report.”
  • On Thursday, 26 May, the House Armed Services Committee is scheduled to hold a hearing titled, “Navy Force Structure and Readiness: Perspectives from the Fleet.”
  • On Thursday, 26 May, the House Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights is scheduled to hold a hearing titled, “The ISIS Genocide Declaration: What Next?”

Looking Ahead

Washington is expected to focus on the following upcoming events:

  • 21-25 May: President Obama travels to Vietnam
  • 26-27 May: G-7 Summit in Ise-Shima, Japan
  • 7 June: President Obama hosts Indian Prime Minister Narendra Modi
  • 29 June: North American Leaders Summit in Ottawa, Canada
  • 8-9 July: NATO Summit in Warsaw, Poland