What Little Transparency The US Trade Rep Used To Have Is Going Away

from the that's-not-transparency dept

When Michael Froman was first nominated as the US Trade Rep, we hoped he would commit to being more transparent than his predecessors. While that seemed unlikely given his history as a political crony revolving in and out of government and business, the issue was raised directly during his Senate approval process. Unfortunately, like his predecessors, Froman appears to confuse transparency with listening. The two are not the same. Transparency is about sharing what you're doing. Listening is about hearing what others have to say. You can listen while being totally opaque -- and it appears that this is the USTR's strategy.

IP Watch notes that the USTR released its list of weekly press events... in which every one of them is closed to the press. This could just be a coincidence, having to do with the type of meetings the USTR is having, but it's still indicative of the way the USTR operates. But a much bigger concern is that Jamie Love, from KEI, reveals that the USTR has now changed its policy on sharing texts of WTO TRIPS council interventions with outside organizations, such as civil society and public interest groups. That is basically spitting on transparency, with the new USTR basically making it clear that it doesn't want the actual feedback from the groups most closely following these stories from the public interest side of things.

Filed Under: michael froman, transparency, ustr

Surprise: Obama's New US Trade Rep Overturns ITC, Stops Ban On Apple Products

from the well-that's-interesting dept

For years, we've been watching how patent holders get two cracks at the proverbial (and, in this case, literal) Apple when it comes to patents. They can sue in court for patent infringement and -- in an entirely separate process -- they can go to the International Trade Commission, and argue their case as well. The regular courts and ITC judges use different criteria for judging the outcome, and also have different remedies (though with some overlap). The ITC can't award monetary damages, but can issue an injunction, barring the importation of infringing products. Over the past few years, the ITC side of things has troubled a growing number of people, and even President Obama targeted some of the problems with the ITC patent review process in his big announcement on fixing the patent system.

Still, in a somewhat surprising move, Obama's recently appointed US Trade Rep., Michael Froman, has stepped in to directly overturn an ITC injunction issued against Apple products -- including iPhones and iPads, after the ITC sided with Samsung, saying that those devices violated Samsung's patents. The decision by Froman is final -- Samsung can't appeal, and it means that those iPhones and iPads won't get blocked at customs, as would likely have happened otherwise. You can read Froman's letter about this, in which he delves into some detail about the administration's worries about "patent hold up" -- mainly on standards-essential patents (SEPs) that have so-called FRAND (fair, reasonable and non-discriminatory) licensing commitments. As the letter notes:

After extensive consultations with the agencies of the Trade Policy Staff Committee and the Trade Policy Review Group, as well as other interested agencies and persons, I have decided to disapprove the USITC's determination to issue an exclusion order and cease and desist order in this investigation. This decision is based on my review of the various policy considerations discussed above as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.

I would like to underscore that in any future cases involving SEPS that are subject to voluntary FRAND commitments, the Commission should be certain to (1) to examine thoroughly and carefully on its own initiative the public interest issues presented both at the outset of its proceeding and when determining whether a particular remedy is in the public interest and (2) seek proactively to have the parties develop a comprehensive factual record related to these issues in the proceedings before the Administrative Law Judge and during the formal remedy phase of the investigation before the Commission, including information on the standards- essential nature of the patent at issue if contested by the patent holder and the presence or absence of patent hold-up or reverse hold-up. In addition, the Commission should make explicit findings on these issues to the maximum extent possible. I will look for these elements in any future decisions involving FRAND-encumbered SEPs that are presented for policy review. The Commission is well-positioned to consider these issues in its public interest determinations.

He also notes that Samsung can continue its fight in the courts.

This is still something of a surprising move -- more or less having the administration step in and flat out overrule a patent infringement ruling for "public policy reasons." Hopefully, this signals a bit of a change in understanding under the new USTR, such that there's a real recognition that overaggressive intellectual property laws and enforcement can have a seriously negative impact. Of course, the more cynical among you might note that this is also the US government stepping in to protect the US company (Apple) against a foreign company (Samsung). An even more cynical group might further note that the Obama administration also probably didn't want to deal with the headache of headlines about how the federal government had suddenly banned a bunch of iPhones and iPads... But, for the sake of being optimistic, let's hope that this really is a sign of a more thoughtful USTR, which isn't quite as wedded to intellectual property maximalism, as its predecessors have been.

Filed Under: itc, michael froman, patent holdup, patents, seps, standards essential patents, ustr
Companies: apple, samsung

Senator Warren: If TPP Transparency Would Lead To Public Opposition, Then TPP Is Wrong

from the nicely-stated dept

It would appear that new Senator Elizabeth Warren is on the side of transparency when it comes the Trans Pacific Partnership (TPP) agreement. Sometimes it feels like Senator Wyden is the only one who cares about this issue, so it would be nice to have someone else step in as well. Following USTR nominee Michael Froman's Senate hearings, Warren has sent a letter to the White House asking for its negotiating position on the TPP. The key point, which should be repeated over and over again is the following:

I have heard the argument that transparency would undermine the Administration's policy to complete the trade agreement because public opposition would be significant. If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the United States. I believe in transparency and democracy and I think the U.S. Trade Representative (USTR) should too.

This is actually in direct response to claims from the former USTR, Ron Kirk, who pointed to a failed trade agreement -- the Free Trade Area of the Americas -- which was handled in a much more open fashion as support for why the TPP must remain secret. But the reasoning there, as Senator Warren correctly notes, is ridiculous. If the trade agreement failed because the public opposed it, that should be seen as a good thing, because the government was stopped from going against the will of the people.

Warren's overall letter is great. Here's another snippet and the full text is embedded below.

President Obama made transparency and inclusion a centerpiece of his election, and in many areas, he has opened the doors of government to ensure that the product of governing can withstand public scrutiny and is not the product of back-room deal making.

While I have no doubt that the President's commitment to openness is genuine, I am concerned about the Administration's record of transparency regarding the Trans-Pacific Partnership. Specifically, I am troubled by the Administration's unwillingness to provide to the public the composite bracketed text relating to the negotiations. As you know, the composite bracketed text includes not only proposed language from the United States but also proposed language from other countries. These different proposals are brought together in one text, and negotiations focus on ironing out the various proposals and getting to agreement on common language. The lack of transparency in this area is troubling because, as you know, the bracketed text serves as the focal point for actual negotiations. I appreciate the willingness of the USTR to make various documents available for review by members of Congress, but I do not believe that is a substitute for more robust public transparency.

Filed Under: democracy, elizabeth warren, michael froman, public opposition, secrecy, tpp, transparency, ustr

USTR Nominee Confuses Transparency With Listening

from the other-direction,-mr.-froman dept

We've already explained why were were worried that new USTR nominee Michael Froman would be as bad, if not worse, than his predecessor, Ron Kirk. And, in his Senate approve hearings he provided little to change that opinion:

Sen. Ron Wyden (D-Ore.) raised the extraordinary secrecy shrouding the Obama administration's trade negotiations to date.  Wyden has blasted USTR's incredible decision to keep the negotiating text of the sweeping TPP pact, affecting everything from food safety to Internet freedom, hidden from the U.S. public and even from members of Congress.  Not even the Bush administration attempted that degree of secrecy.  Wyden asked, "If confirmed, will you make sure that the public...gets a clear and updated description of what trade negotiators are seeking to obtain in the negotiations so that we can make this process more transparent in the future?" Wyden further asked that negotiating texts be placed online.  Froman responded by saying he agrees with the principle of transparency.  But instead of committing to a meaningful fulfillment of that principle by releasing the TPP text online (as done under Bush), he reiterated USTR's general desire to seek input from "stakeholders."  It is of course difficult for stakeholders to provide meaningful input if they cannot see the thing in which they have a stake.   

Of course, as we've explained many times, transparency has nothing to do with seeking input from stakeholders, but the opposite: providing information to the public. Listening is important to understand what's going on, but that's not transparency.

It's pretty simple: information flowing into the USTR is not transparency. Information flowing to select interests is not transparency. Releasing information to the public is transparency. How does the USTR continually get away with pretending otherwise?

Separately, as the article linked above notes, Froman refused to comment on whether he supported investor-state dispute resolution mechanisms that are showing up in trade agreements and which, as we've been highlighting, are so dangerous. He'd only say it's a matter worthy of discussion. But then refused to discuss it. Which says a lot. He also claimed he was going to continue to seek fast track authority, which they renamed Trade Promotion Authority -- which basically forces Congress to sign away its right to oversee what's in TPP. These are all very worrisome statements, because it means we're getting more of the same: a USTR that wants to make an end-run around the public and Congress, but which is driven by the interests of some of the largest companies.

Filed Under: michael froman, tafta, tpp, transparency, ustr

USTR Nominee Froman Called 'One Of The Most Egregious Examples Of The Way The Revolving Door Works Between Gov't And Business'

from the that-doesn't-bode-well dept

After posting a bit about Michael Froman, the new nominee for USTR, I was already skeptical that he'd be any improvement over the predecessor, Ron Kirk. After all, Froman was deeply involved in three of the worst free trade agreements that the US has negotiated over the past few years, which more or less set the model for the ambitious and dangerously misguided ACTA and TPP agreements. However, some others have pointed out that it may be even worse, highlighting a Felix Salmon blog post from 2009, in which he calls Michael Froman out as being an "egregious example" of the revolving door problem we've highlighted between regulators and the businesses they regulate.

[Michael Froman's] one of the most egregious examples — up there with Bob Rubin, literally — we’ve yet seen of the way the revolving door works between business and government generally, and between Citigroup and Treasury in particular.

That's troubling, to say the least. Salmon points to a Matt Taibbi piece for Rolling Stone that highlights some very questionable activity on the part of Froman, including keeping his job at Citibank while helping to select the economic team for Obama's first term... the very folks who would be in charge of regulating Citibank.

Leading the search for the president’s new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obama’s biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters — chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).

Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm....

That piece also talks about Froman's role in getting Timothy Geithner his job at Treasury, right after Geithner helped craft the bailout of Citibank that basically put all the risk on the Fed and didn't require any Citi concessions or exec changes, despite their own culpability in making a ton of bad investments.

Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup — Michael Froman — before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.

Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the government’s bailout generosity would not die with George W. Bush and Hank Paulson.

I was hopeful that perhaps we'd get a USTR who was in favor of openness and transparency, but it looks like Froman may be the quintessential example of a backroom dealer, who already has a reputation for pushing through bad trade agreements.

Filed Under: conflict of interest, michael froman, revolving door, soft corruption, ustr

New USTR Nominated; Will He Commit To Transparency?

from the don't-bet-on-it dept

President Obama has nominated Michael Froman to be the new USTR, to take over for Ron Kirk who stepped down recently. Most of the stories on Froman note that he's well known in this space and has been a key player in a number of trade agreements -- including with South Korea, Colombia and Panama. That should worry us all, because those three awful trade agreements more or less set the tone for ACTA and TPP with their incredible levels of secrecy, combined with ridiculous and extreme intellectual property provisions.

People have noted that South Korea's free trade agreement was "the model" for ACTA, which included exceptionally ridiculous copyright rules. In fact, most recently, South Korea is starting to push back and reconsider those rules that were pushed on it by the US. The agreement in Panama led to that country passing what some referred to as the worst copyright law in history. And, as for Colombia, you may remember that it rushed through its own dreadful version of SOPA in a mad dash to get into "compliance" with that free trade agreement a week before Obama was set to visit.

So all three of those "historic" trade agreements included really nasty copyright provisions. Is this really the guy we want leading the USTR?

The folks over at the EFF are asking Froman to agree to end the policy of secrecy with negotiations on free trade agreements. If Froman gets the job, he'll be in charge of both the TPP and TAFTA. He should first agree that intellectual property has no place in free trade agreements, drop those sections from the two agreements while also agreeing that the USTR will be transparent in what it's asking for on our behalf. That means actually telling the public what it is proposing, rather than keeping it a secret.

The EFF has also set up a petition demanding that the new USTR end backroom negotiations and promise to stop legacy corporate interests from sneaking in ways to regulate the internet through these secret trade negotiations.

Earlier this year, we noted that it was trade agreements like the one with South Korea that now effectively prevent Congress from allowing you to unlock your phone. Froman has significant responsibility for that whole mess. If he wants to show that he's not just pushing an agenda to protect a few companies who don't want to adapt to a changing marketplace, he should admit that those agreements were a mistake, and promise that future trade agreements will be open and transparent, and won't include intellectual property provisions.

Filed Under: michael froman, ron kirk, transparency, ustr