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Speaker Firms and Organization:
Skadden Arps
Stephen P. Vaughn
Counsel
Baker & Hostetler LLP
Elliot J. Feldman
Senior Partner
Baker & McKenzie LLP
Douglas B. Sanders
Partner
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Presented By:
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Partner Firms:
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Partner Firms:
May 02, 2014
6
"With 23 offices, approximately 1,600 attorneys and more than 40 distinct areas
of practice, Skadden, Arps, Slate, Meagher & Flom LLP and affiliates serves
clients in every major international financial center, providing the specific legal
advice companies across a spectrum of industries need to compete most
effectively in a global business environment. Our clients include approximately 50
percent of the Fortune 250 industrial and service corporations, as well as
financial and governmental entities, small, entrepreneurial companies and
nonprofits. Skadden’s attorneys and staff share a commitment to providing our
clients with the highest-quality and most cost-effective legal services in an
atmosphere emphasizing teamwork, creativity, responsiveness and diversity."
One of the largest law firms in the United States, with14 offices
coast to coast, BakerHostetler helps clients around the world to
address their most complex and critical business and regulatory
issues. The firm’s 900 lawyers often work in teams across offices to
maximize a full range of skills and legal disciplines. BakerHostetler
is perhaps most well known for its role as court-appointed counsel
to the Securities Investor Protection Act (SIPA) Trustee in the
recovery of billions of dollars in principal lost in the Ponzi scheme
perpetrated by Bernard L. Madoff. BakerHostetler is recognized as
having one of the country’s top 10 tax practices and leading national
and international practices in litigation, data privacy, intellectual
property, and an industry-leading middle market business practice.
For more information, visit www.bakerlaw.com.
Partner Firms:
May 02, 2014
7
Founded in 1949, Baker & McKenzie advises many of the world’s most dynamic and
successful business organizations through more than 4,000 locally qualified lawyers and
6,000 professional staff in 75 offices in 47 countries. The Firm is known for its global
perspective, deep understanding of the local language and culture of business,
uncompromising commitment to excellence, and world-class fluency in its client service.
Brief Speaker Bios:
Stephen P. Vaughn
Stephen Vaughn works primarily on international trade litigation and policy matters, with a specific focus on injury issues in the context
of antidumping and countervailing duty litigation. He has fourteen years of experience in complex trade litigation before the U.S.
International Trade Commission, the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, as well as
dispute settlement panels under the North American Free Trade Agreement and the World Trade Organization. Mr. Vaughn also is
active in client representations regarding a number of trade policy matters, from enforcement of unfair trade laws to recent WTO
negotiations.
May 02, 2014
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Elliot J. Feldman
Elliot J. Feldman has been National Leader of BakerHostetler’s International Trade Practice for twelve years and is now Senior Partner
in the Washington, D.C. office. He represents foreign governments, international organizations, corporations, trade associations, and
individuals in international legal and trade disputes, and is recognized in Chambers and in Superlawyers as one of the world’s leading
practitioners, valued especially for strategic and innovative solutions to unusually complicated legal problems. He is principal author of
BakerHostetler’s Mergers & Acquisitions: A Practical Guide for Non-U.S. Buyers (Wolters Kluwer), published in English and Mandarin,
and author or coauthor of seven other books. He graduated with honors from the University of Chicago (B.A.), M.I.T. (Ph.d.) and
Harvard Law School. Former director of Harvard’s University Consortium for Research on North America, he contributes frequently
now to the BakerHostetler blog on China-U.S. trade and trade policy (www.chinaustradelawblog.com).
Brief Speaker Bios:
Douglas B. Sanders
Mr. Sanders leads Baker & McKenzie’s U.S. environmental litigation practice and represents both domestic and non-U.S. corporations
before federal, state and administrative courts in environmental, class action, mass tort and product liability litigation, government
enforcement, permitting and criminal proceedings. Mr. Sanders advises multi-national and domestic corporations on environmental,
health and safety statutory requirements and legal risks with respect to bringing products to market in the United States and around
the world. He counsels companies with respect to compliance with CERCLA, RCRA, TSCA, OSHA and state environmental and
product regulations and advises clients on environmental, health & safety and product regulatory risks in transactions.
May 02, 2014
9
► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/the-trans-pacific-partnership-tpp-fair-practices-live-webcast/
The Trans Pacific Partnership (TPP) is a pending international trade agreement among 12 nations bordering the Pacific. Negotiations by-and-large have been
secret. Successful completion of the TPP is a cornerstone of President Obama’s “pivot” to Asia.
In November, 2013, a draft version of the TPP Intellectual Property Rights (IPR) chapter was published by WikiLeaks, revealing controversial clauses that have
elicited protest from numerous groups about several issues ranging from intellectual property, currency, the Internet, fair trade, human rights, and public health to
the environment. Organizations such as the United States Chamber of Commerce enthusiastically support the TPP negotiations, but many groups and
organizations see the agreement as unfair and even dangerous for some U.S. businesses.
While the majority of reputable economists believe that free trade contributes to prosperity by creating jobs (maximizing comparative advantages), some believe that
current US trade policy contributes to ever increasing income inequality in the United States. Hundreds of activist groups are protesting, demonstrating, and signing
letters urging Congress to reject TPP. Their complaints include an under-mining of financial regulations, labor rights, public procurement, allowing corporate suit of
foreign governments (‘investor-state’ provisions), restricting access to generic drugs, challenging food safety regulations, restricting Internet use, delaying action on
climate change, and limiting exportation of oil, liquid natural gas, coal, and water.
A Bipartisan Congressional Trade Priorities Act introduced in January 2014, designed to grant the President ‘fast track’ negotiating authority to speed international
trade agreements through Congress was denied a hearing by the Senate Majority Leader and probably will never reach the Senate Floor. Without its passage, the
President faces formidable obstacles to ratify the TPP, provided the twelve countries agree to a text.
This webinar will bring together national and international experts to explain what has made the TPP so controversial, why it is important, and the obstacles it
faces. They will suggest how businesses can best prepare for any changes the TPP could bring about. The current agenda to be addressed of the speakers will be:
• What is the TPP?
• Role of U.S. Domestic Policy
• Role of U.S. Foreign Policy
• Summary and Conclusions
May 02, 2014
10
Featured Speakers:
May 02, 2014
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Stephen P. Vaughn
Counsel
Skadden Arps
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Introduction
Stephen Vaughn works primarily on international trade litigation and policy matters, with a specific focus on injury issues in
the context of antidumping and countervailing duty litigation. He has fourteen years of experience in complex trade litigation
before the U.S. International Trade Commission, the U.S. Court of International Trade, the U.S. Court of Appeals for the
Federal Circuit, as well as dispute settlement panels under the North American Free Trade Agreement and the World
Trade Organization. Mr. Vaughn also is active in client representations regarding a number of trade policy matters, from
enforcement of unfair trade laws to recent WTO negotiations.
May 02, 2014
12
Stephen P. Vaughn
Counsel
Skadden Arps
Introduction
Elliot J. Feldman has been National Leader of BakerHostetler’s International Trade Practice for twelve years and is now
Senior Partner in the Washington, D.C. office. He represents foreign governments, international organizations,
corporations, trade associations, and individuals in international legal and trade disputes, and is recognized in Chambers
and in Superlawyers as one of the world’s leading practitioners, valued especially for strategic and innovative solutions to
unusually complicated legal problems.
He is principal author of BakerHostetler’s Mergers & Acquisitions: A Practical Guide for Non-U.S. Buyers (Wolters
Kluwer), published in English and Mandarin, and author or coauthor of seven other books. He graduated with honors from
the University of Chicago (B.A.), M.I.T. (Ph.d.) and Harvard Law School. Former director of Harvard’s University
Consortium for Research on North America, he contributes frequently now to the BakerHostetler blog on China-U.S. trade
and trade policy (www.chinaustradelawblog.com).
May 02, 2014
13
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Introduction
Mr. Sanders leads Baker & McKenzie’s U.S. environmental litigation practice and represents both domestic and non-U.S.
corporations before federal, state and administrative courts in environmental, class action, mass tort and product liability
litigation, government enforcement, permitting and criminal proceedings. Mr. Sanders advises multi-national and domestic
corporations on environmental, health and safety statutory requirements and legal risks with respect to bringing products to
market in the United States and around the world. He counsels companies with respect to compliance with CERCLA,
RCRA, TSCA, OSHA and state environmental and product regulations and advises clients on environmental, health &
safety and product regulatory risks in transactions.
May 02, 2014
14
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Overview
• What is the TPP?
• Role of U.S. Domestic Policy
• Role of U.S. Foreign Policy
• Summary and Conclusions
May 02, 2014
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Stephen P. Vaughn
Counsel
Skadden Arps
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Douglas B. Sanders
Partner
Baker & McKenzie LLP
What is the TPP?
• A U.S. response to disappointing results from prior trade agreements
• A strategic U.S. response to developments in Asia
• An American attempt to revise global environmental issues
May 02, 2014
16
Stephen P. Vaughn
Counsel
Skadden Arps
U.S. Current Account Deficit Since 1993
May 02, 2014
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Stephen P. Vaughn
Counsel
Skadden Arps
U.S. Trade Balance In Goods with Canada and Mexico Since 1993
May 02, 2014
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Stephen P. Vaughn
Counsel
Skadden Arps
U.S. Trade In Goods with China Since 1993
May 02, 2014
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Stephen P. Vaughn
Counsel
Skadden Arps
The TPP Could Have a Major Impact on Global Trade
• The negotiating parties are responsible for roughly 40 percent of world GDP and 26 percent of world
trade
• Other countries, such as South Korea and Taiwan, have expressed interest in joining
• Would affect U.S.-China relations
May 02, 2014
20
Stephen P. Vaughn
Counsel
Skadden Arps
A Model for Future Agreements?
“The Trans-Pacific Partnership is perhaps the most ambitious trade negotiation underway in the world. It
will break new ground on important issues . . . Our goal is for high standards for the Trans-Pacific
Partnership to enter the bloodstream of the global system and improve the rules and norms.”
-- Vice President Joseph P. Biden (April 5, 2013)
May 02, 2014
21
Stephen P. Vaughn
Counsel
Skadden Arps
The TPP As A Strategic Response
May 02, 2014
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Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
“The centerpiece of the economic rebalancing is the Trans-Pacific Partnership (TPP), the
most important trade deal under negotiation today …
The TPP’s most important aims, however, are strategic. A deal would solidify U.S.
leadership in Asia.”
Tom Donilon
National Security Adviser to President Obama, 2010-13
Washington Post, April 21, 2014
U.S. Strategic Purpose
• Post-Iraq and Afghanistan
• Responding to smaller Asian partners: Genesis of the TPP
May 02, 2014
23
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
24
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
25
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
26
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
27
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
28
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
29
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
May 02, 2014
30
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
U.S. Strategic Purpose
• Containing China
• Engaging China
• China v. Vietnam: The Paradox
• Balancing And Rebalancing, Economics And Security: Japan, South Korea, China
May 02, 2014
31
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
U.S. Greening Global Trade Agreements
A VALUES-DRIVEN TRADE POLICY
REMARKS BY U.S. TRADE REPRESENTATIVE
MICHAEL FROMAN AT THE CENTER FOR
AMERICAN PROGRESS,
FEBRUARY 18, 2014
May 02, 2014
32
Douglas B. Sanders
Partner
Baker & McKenzie LLP
“But more than that, they will level the playing field by
raising labor and environmental standards, putting
disciplines on state-owned enterprises and dealing
ourselves into global supply chains, rather than being
left on the sidelines by others.”
“Values-Driven Trade Policy”
• What does that mean in the environmental context?
• Future global economy should be more sustainable than it is today (WTO environmental goods
efforts)
• U.S. taking lead to advance the agenda in the WTO, TPP and T-TIP; driving higher
environmental standards
• Insisting that environmental commitments be on “equal footing” with commercial obligations
• Commitments to effectively enforce environmental laws, including laws implementing multilateral
environmental agreements (MEAs)
May 02, 2014
33
Douglas B. Sanders
Partner
Baker & McKenzie LLP
How has the US done it before?
• NAFTA
• Major step forward in recognizing environmental issues in context of free trade agreement.
• Resulted in side agreement addressing environmental issues and establishing a permanent
body to focus on environmental issues.
• Created a forum for citizen petition process and “teeth” in state v. state dispute mechanism that
could result in trade sanctions.
May 02, 2014
34
Douglas B. Sanders
Partner
Baker & McKenzie LLP
NAFTA - Environmental Success?
• Mixed results
• Collaborative projects in some areas
• CEC has not historically worked with FTC to advance environmental agenda in conjunction with
trade policies.
• Citizen submission and factual record development –slow and limited effectiveness, but
increased transparency and may have driven improvements.
• State-to-state consultation and dispute resolution – not a factor.
May 02, 2014
35
Douglas B. Sanders
Partner
Baker & McKenzie LLP
What next? 2007 Bipartisan Trade Deal
May 02, 2014
36
Douglas B. Sanders
Partner
Baker & McKenzie LLP
• Incorporate specific list of MEAs
• Alter non-derogation obligation for
environmental laws from a “strive to” to
a “shall” obligation
• Enforce environmental obligations on
the same basis as the commercial
provisions of our agreements – same
remedies, procedures, and sanctions
How does TPP fit in?
Again, from Mr. Froman:
“TPP is a chance to reach a new, higher plane.”
• Includes countries in a region of the world that
has significant natural resources, centers of
biodiversity, and important marine ecosystems.
• Key issues in a number of MEAs.
• Keep promises in 2007 deal?
May 02, 2014
37
Douglas B. Sanders
Partner
Baker & McKenzie LLP
May 02, 2014
38
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May 02, 2014
39
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May 02, 2014
41
Role of U.S. Domestic Policy
Domestic Policy And Politics
Interaction of Domestic And Foreign Affairs
Traditional Foreign Affairs
•Traditional national security pressures
•Insecurity of Asian partners
•Renewal of Japanese nationalism
Domestic Pressures
•Cancellation of Presidential Trip: Government Shutdown
•Moving Japan to Center Stage for TPP
•Politics of trade: Interest groups (unions, environmental groups v. U.S. Chamber of Commerce, financial
institutions), partisanship
•Secrecy
May 02, 2014
42
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Domestic Policy And Politics
TPA and Priorities
•TPA
• What It Is And Why
• Why It Should Come First
• Presidential Failure
• Congressional Opposition: Democratic Leadership
• Republican Opposition
• Strategy Relating TPA to TPP
May 02, 2014
43
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Evolving Political Strategy
• Market Access In Japan
• Replacing NAFTA
• Extending American IP
• Investor-State Arbitration
May 02, 2014
44
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
TPP Negotiations Cover More than “Trade”
• Plan is to go beyond WTO and FTA’s
• TPP would cover a broad range of regulatory and legal issues
• Negotiations involve 29 different chapters
May 02, 2014
45
Stephen P. Vaughn
Counsel
Skadden Arps
Examples of Issues Presented by TPP Negotiations
• Market Access
• Labor Standards
• Environmental Obligations
• Access to Medicines
• Currency Manipulation
May 02, 2014
46
Stephen P. Vaughn
Counsel
Skadden Arps
• Food Safety
• Dispute Settlement
• State-Owned Enterprises
• Tobacco Controls
• Cross-Border Data Flows
Some Key Supporters of Trade Promotion Authority (TPA)
• Obama Administration
• Chairman of House Ways and Means Committee
• Ranking Member of Senate Finance Committee
• U.S. Chamber of Commerce
• Business Roundtable
May 02, 2014
47
Stephen P. Vaughn
Counsel
Skadden Arps
Excerpt of Letter Opposing TPA Signed by 151 House Democrats (Nov. 2013)
“In light of the broad scope of today’s trade agreements, it is even more vital that Congress have a
fulsome role in shaping these pacts’ terms. Given our concerns, we will oppose ‘Fast Track’ Trade
Promotion Authority or any other mechanism delegating Congress’ constitutional authority over
trade policy that continues to exclude us from having a meaningful role in the formative stages of trade
agreements and throughout negotiating and approval processes.”
May 02, 2014
48
Stephen P. Vaughn
Counsel
Skadden Arps
Excerpt of Letter Opposing TPA Signed by 22 House Republicans (Nov. 2013)
“Article I-8 of the Constitution gives Congress exclusive authority to set the terms of trade. Meanwhile,
the executive branch has constitutional authority to negotiate with foreign sovereigns on behalf of our
nation. The Founders established this clear check and balance to prevent the president from
unilaterally negotiating with foreign nations and imposing trade policies that Congress would deem to
be against the national interest.”
May 02, 2014
49
Stephen P. Vaughn
Counsel
Skadden Arps
Factors Complicating TPA Approval
• Divided Congress
• Changes at Senate Finance Committee
• Concerns about relationship between globalization and inequality
• 2014 elections
May 02, 2014
50
Stephen P. Vaughn
Counsel
Skadden Arps
TPP Environmental Chapter
•On January 15, 2014, Wikileaks releases “Secret TPP treaty:
Environmental Chapter for all 12 nations”
https://wikileaks.org/tpp-enviro/
May 02, 2014
51
Douglas B. Sanders
Partner
Baker & McKenzie LLP
How does TPP stack up with US commitments?
• Three key areas:
• Setting levels of protection and enforcing and improving environmental laws
• Meeting obligations in multilateral environmental agreements
• Treating environmental obligations the same as trade and commercial ones.
May 02, 2014
52
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Setting environmental levels of protection
Peru bilateral agreement –
Each Party shall strive to ensure that those
laws and policies provide for and
encourage high levels of environmental
protection and shall strive to continue to
improve its respective levels of
environmental protection.
Article 18.1
May 02, 2014
53
Douglas B. Sanders
Partner
Baker & McKenzie LLP
TPP –
Each Party shall strive to ensure that its environmental
laws and policies provide for and encourage high levels
of environmental protection and shall strive to continue
to improve its respective levels of environmental
protection.
Article SS.3.3
Enforcing environmental laws
Peru bilateral agreement –
A Party shall not fail to effectively enforce its
environmental laws, and its laws, regulations
and other measures to fulfill its obligations
under the covered agreements, through a
sustained or recurring course of action or
inaction, in a manner affecting trade or
investment between the Parties.
Article 18.3
May 02, 2014
54
Douglas B. Sanders
Partner
Baker & McKenzie LLP
TPP –
No Party shall fail to effectively enforce its
environmental laws through a sustained or recurring
course of action or inaction in a manner affecting trade
or investment between the Parties.
Article SS.4.4
Committing to MEAs
May 02, 2014
55
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Peru bilateral agreement –
A Party shall adopt, maintain, and
implement laws, regulations, and all other
measures to fulfill its obligations under the
multilateral environmental agreements listed
in Annex 18.2 (“covered agreements”).
Article 18.2.
TPP –
The Parties recognize that environmental agreements
to which they are a party play an important role globally
and domestically in protecting the environment and that
their respective implementation of these agreements is
critical to achieving the environmental objectives of
these agreements. Accordingly, each Party affirms its
commitment to implement the [MEAs] to which it is a
party.
Article SS.4.1
Consultation/Dispute Provisions
May 02, 2014
56
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Peru bilateral agreement –
Parties must consult and failing resolution
can bring the matter to the Council for
further assistance or consultation. Parties
also have the right to invoke the general
Consultation and Dispute Settlement
Provisions of the agreement, which include
trade sanctions.
Article 18.12
TPP –
Parties must consult in multi-layer process. If the
parties fail to resolve the matter at the highest level,
then an arbitral tribunal may be requested “under this
Chapter.” The tribunal has the power to hear the
dispute and issue a report to resolve the matter.
Article SS.12.
Response
• Environmentalists decry weakening of US commitments, in particular:
• MEAs
• Dispute resolution
• Conservation and Trade
• Fisheries
• More than 100 members of Congress joined in a letter condemning the negotiated draft, raising
concerns about unequal enforcement of laws, conservation, illegal trade and marine fisheries
May 02, 2014
57
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Role of U.S. Foreign Policy
May 02, 2014
58
Is the US alone on the environment?
• Report from the Chairs:
– Australia, Brunei, Canada, Chile, Japan, Mexico,
New Zealand, Peru, Singapore and Vietnam
oppose inclusion of language adopting MEAs
– Same parties (all but Malaysia) oppose US position
to make environmental chapter disputes subject to
same tribunal as other TPP obligations.
May 02, 2014
59
Douglas B. Sanders
Partner
Baker & McKenzie LLP
Again thanks to Wikileaks:
http://wikileaks.org/tpp-enviro-
chairsreport/
Relationship Between TPP and Other Trade Agreements
• U.S.-Korea FTA
• NAFTA
• WTO Doha Round
• Transatlantic Trade and Investment Partnership
May 02, 2014
60
Stephen P. Vaughn
Counsel
Skadden Arps
May 02, 2014
61
International Security Issues
• Priorities
• Alliance With Japan
• Cooperation on North Korea
• East And South China Seas
• With Or Without Japan; With Or Without South Korea; With
Or Without China
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
International Security Issues
• Priorities
• Alliance With Japan
• Cooperation on North Korea
• East And South China Seas
• With Or Without Japan; With
Or Without South Korea; With
Or Without China
May 02, 2014
62
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Tensions And Risks
• Between Economics And Security
• Between China And The Region
• Between China And The United States:
“The United States must continue to seek constructive relations with China.”
(Tom Donilon)
May 02, 2014
63
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Summary and Conclusions
May 02, 2014
64
Can a weak environmental chapter tank TPP?
May 02, 2014
65
Douglas B. Sanders
Partner
Baker & McKenzie LLP
• USTR’s response to the leaked
provisions was that there would not
be a TPP without “a robust fully
enforceable environmental
chapter.”
Domestic Opposition to TPA Could Be Overcome
• Broad bi-partisan support for TPA
• Potential for deal-making with opponents
• Presidents can always play the foreign policy card
May 02, 2014
66
Stephen P. Vaughn
Counsel
Skadden Arps
The Process
The Obama Administration Process
Press Japan On Agriculture and Automobiles
 Persuade Other Countries To Make Deal Based On Japan’s Concessions  Present Deal To
Congress Without Debate  Ask For TPA For TPP Only  Complete TTIP, Based On TPP  Ask
Congress Again For Limited TPA After Presenting Deal
The Process Historically:
Obtain TPA From Congress  Negotiate International Agreement  Submit To Congress For Up
Or Down Vote
May 02, 2014
67
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Conclusion
• Must Have TPP Done In Order To Persuade Congress To Grant TPA
• Must Have TPA In Order To Pass TPP
May 02, 2014
68
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type
your question in the box that appears and click send.
► Questions will be answered in the order they are received.
Q&A:
May 02, 2014
69
Stephen P. Vaughn
Counsel
Skadden Arps
Elliot J. Feldman
Senior Partner
Baker & Hostetler LLP
Douglas B. Sanders
Partner
Baker & McKenzie LLP
May 02, 2014
70
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  • 6. Partner Firms: May 02, 2014 6 "With 23 offices, approximately 1,600 attorneys and more than 40 distinct areas of practice, Skadden, Arps, Slate, Meagher & Flom LLP and affiliates serves clients in every major international financial center, providing the specific legal advice companies across a spectrum of industries need to compete most effectively in a global business environment. Our clients include approximately 50 percent of the Fortune 250 industrial and service corporations, as well as financial and governmental entities, small, entrepreneurial companies and nonprofits. Skadden’s attorneys and staff share a commitment to providing our clients with the highest-quality and most cost-effective legal services in an atmosphere emphasizing teamwork, creativity, responsiveness and diversity." One of the largest law firms in the United States, with14 offices coast to coast, BakerHostetler helps clients around the world to address their most complex and critical business and regulatory issues. The firm’s 900 lawyers often work in teams across offices to maximize a full range of skills and legal disciplines. BakerHostetler is perhaps most well known for its role as court-appointed counsel to the Securities Investor Protection Act (SIPA) Trustee in the recovery of billions of dollars in principal lost in the Ponzi scheme perpetrated by Bernard L. Madoff. BakerHostetler is recognized as having one of the country’s top 10 tax practices and leading national and international practices in litigation, data privacy, intellectual property, and an industry-leading middle market business practice. For more information, visit www.bakerlaw.com.
  • 7. Partner Firms: May 02, 2014 7 Founded in 1949, Baker & McKenzie advises many of the world’s most dynamic and successful business organizations through more than 4,000 locally qualified lawyers and 6,000 professional staff in 75 offices in 47 countries. The Firm is known for its global perspective, deep understanding of the local language and culture of business, uncompromising commitment to excellence, and world-class fluency in its client service.
  • 8. Brief Speaker Bios: Stephen P. Vaughn Stephen Vaughn works primarily on international trade litigation and policy matters, with a specific focus on injury issues in the context of antidumping and countervailing duty litigation. He has fourteen years of experience in complex trade litigation before the U.S. International Trade Commission, the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, as well as dispute settlement panels under the North American Free Trade Agreement and the World Trade Organization. Mr. Vaughn also is active in client representations regarding a number of trade policy matters, from enforcement of unfair trade laws to recent WTO negotiations. May 02, 2014 8 Elliot J. Feldman Elliot J. Feldman has been National Leader of BakerHostetler’s International Trade Practice for twelve years and is now Senior Partner in the Washington, D.C. office. He represents foreign governments, international organizations, corporations, trade associations, and individuals in international legal and trade disputes, and is recognized in Chambers and in Superlawyers as one of the world’s leading practitioners, valued especially for strategic and innovative solutions to unusually complicated legal problems. He is principal author of BakerHostetler’s Mergers & Acquisitions: A Practical Guide for Non-U.S. Buyers (Wolters Kluwer), published in English and Mandarin, and author or coauthor of seven other books. He graduated with honors from the University of Chicago (B.A.), M.I.T. (Ph.d.) and Harvard Law School. Former director of Harvard’s University Consortium for Research on North America, he contributes frequently now to the BakerHostetler blog on China-U.S. trade and trade policy (www.chinaustradelawblog.com).
  • 9. Brief Speaker Bios: Douglas B. Sanders Mr. Sanders leads Baker & McKenzie’s U.S. environmental litigation practice and represents both domestic and non-U.S. corporations before federal, state and administrative courts in environmental, class action, mass tort and product liability litigation, government enforcement, permitting and criminal proceedings. Mr. Sanders advises multi-national and domestic corporations on environmental, health and safety statutory requirements and legal risks with respect to bringing products to market in the United States and around the world. He counsels companies with respect to compliance with CERCLA, RCRA, TSCA, OSHA and state environmental and product regulations and advises clients on environmental, health & safety and product regulatory risks in transactions. May 02, 2014 9 ► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/the-trans-pacific-partnership-tpp-fair-practices-live-webcast/
  • 10. The Trans Pacific Partnership (TPP) is a pending international trade agreement among 12 nations bordering the Pacific. Negotiations by-and-large have been secret. Successful completion of the TPP is a cornerstone of President Obama’s “pivot” to Asia. In November, 2013, a draft version of the TPP Intellectual Property Rights (IPR) chapter was published by WikiLeaks, revealing controversial clauses that have elicited protest from numerous groups about several issues ranging from intellectual property, currency, the Internet, fair trade, human rights, and public health to the environment. Organizations such as the United States Chamber of Commerce enthusiastically support the TPP negotiations, but many groups and organizations see the agreement as unfair and even dangerous for some U.S. businesses. While the majority of reputable economists believe that free trade contributes to prosperity by creating jobs (maximizing comparative advantages), some believe that current US trade policy contributes to ever increasing income inequality in the United States. Hundreds of activist groups are protesting, demonstrating, and signing letters urging Congress to reject TPP. Their complaints include an under-mining of financial regulations, labor rights, public procurement, allowing corporate suit of foreign governments (‘investor-state’ provisions), restricting access to generic drugs, challenging food safety regulations, restricting Internet use, delaying action on climate change, and limiting exportation of oil, liquid natural gas, coal, and water. A Bipartisan Congressional Trade Priorities Act introduced in January 2014, designed to grant the President ‘fast track’ negotiating authority to speed international trade agreements through Congress was denied a hearing by the Senate Majority Leader and probably will never reach the Senate Floor. Without its passage, the President faces formidable obstacles to ratify the TPP, provided the twelve countries agree to a text. This webinar will bring together national and international experts to explain what has made the TPP so controversial, why it is important, and the obstacles it faces. They will suggest how businesses can best prepare for any changes the TPP could bring about. The current agenda to be addressed of the speakers will be: • What is the TPP? • Role of U.S. Domestic Policy • Role of U.S. Foreign Policy • Summary and Conclusions May 02, 2014 10
  • 11. Featured Speakers: May 02, 2014 11 Stephen P. Vaughn Counsel Skadden Arps Elliot J. Feldman Senior Partner Baker & Hostetler LLP Douglas B. Sanders Partner Baker & McKenzie LLP
  • 12. Introduction Stephen Vaughn works primarily on international trade litigation and policy matters, with a specific focus on injury issues in the context of antidumping and countervailing duty litigation. He has fourteen years of experience in complex trade litigation before the U.S. International Trade Commission, the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, as well as dispute settlement panels under the North American Free Trade Agreement and the World Trade Organization. Mr. Vaughn also is active in client representations regarding a number of trade policy matters, from enforcement of unfair trade laws to recent WTO negotiations. May 02, 2014 12 Stephen P. Vaughn Counsel Skadden Arps
  • 13. Introduction Elliot J. Feldman has been National Leader of BakerHostetler’s International Trade Practice for twelve years and is now Senior Partner in the Washington, D.C. office. He represents foreign governments, international organizations, corporations, trade associations, and individuals in international legal and trade disputes, and is recognized in Chambers and in Superlawyers as one of the world’s leading practitioners, valued especially for strategic and innovative solutions to unusually complicated legal problems. He is principal author of BakerHostetler’s Mergers & Acquisitions: A Practical Guide for Non-U.S. Buyers (Wolters Kluwer), published in English and Mandarin, and author or coauthor of seven other books. He graduated with honors from the University of Chicago (B.A.), M.I.T. (Ph.d.) and Harvard Law School. Former director of Harvard’s University Consortium for Research on North America, he contributes frequently now to the BakerHostetler blog on China-U.S. trade and trade policy (www.chinaustradelawblog.com). May 02, 2014 13 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 14. Introduction Mr. Sanders leads Baker & McKenzie’s U.S. environmental litigation practice and represents both domestic and non-U.S. corporations before federal, state and administrative courts in environmental, class action, mass tort and product liability litigation, government enforcement, permitting and criminal proceedings. Mr. Sanders advises multi-national and domestic corporations on environmental, health and safety statutory requirements and legal risks with respect to bringing products to market in the United States and around the world. He counsels companies with respect to compliance with CERCLA, RCRA, TSCA, OSHA and state environmental and product regulations and advises clients on environmental, health & safety and product regulatory risks in transactions. May 02, 2014 14 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 15. Overview • What is the TPP? • Role of U.S. Domestic Policy • Role of U.S. Foreign Policy • Summary and Conclusions May 02, 2014 15 Stephen P. Vaughn Counsel Skadden Arps Elliot J. Feldman Senior Partner Baker & Hostetler LLP Douglas B. Sanders Partner Baker & McKenzie LLP
  • 16. What is the TPP? • A U.S. response to disappointing results from prior trade agreements • A strategic U.S. response to developments in Asia • An American attempt to revise global environmental issues May 02, 2014 16 Stephen P. Vaughn Counsel Skadden Arps
  • 17. U.S. Current Account Deficit Since 1993 May 02, 2014 17 Stephen P. Vaughn Counsel Skadden Arps
  • 18. U.S. Trade Balance In Goods with Canada and Mexico Since 1993 May 02, 2014 18 Stephen P. Vaughn Counsel Skadden Arps
  • 19. U.S. Trade In Goods with China Since 1993 May 02, 2014 19 Stephen P. Vaughn Counsel Skadden Arps
  • 20. The TPP Could Have a Major Impact on Global Trade • The negotiating parties are responsible for roughly 40 percent of world GDP and 26 percent of world trade • Other countries, such as South Korea and Taiwan, have expressed interest in joining • Would affect U.S.-China relations May 02, 2014 20 Stephen P. Vaughn Counsel Skadden Arps
  • 21. A Model for Future Agreements? “The Trans-Pacific Partnership is perhaps the most ambitious trade negotiation underway in the world. It will break new ground on important issues . . . Our goal is for high standards for the Trans-Pacific Partnership to enter the bloodstream of the global system and improve the rules and norms.” -- Vice President Joseph P. Biden (April 5, 2013) May 02, 2014 21 Stephen P. Vaughn Counsel Skadden Arps
  • 22. The TPP As A Strategic Response May 02, 2014 22 Elliot J. Feldman Senior Partner Baker & Hostetler LLP “The centerpiece of the economic rebalancing is the Trans-Pacific Partnership (TPP), the most important trade deal under negotiation today … The TPP’s most important aims, however, are strategic. A deal would solidify U.S. leadership in Asia.” Tom Donilon National Security Adviser to President Obama, 2010-13 Washington Post, April 21, 2014
  • 23. U.S. Strategic Purpose • Post-Iraq and Afghanistan • Responding to smaller Asian partners: Genesis of the TPP May 02, 2014 23 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 24. May 02, 2014 24 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 25. May 02, 2014 25 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 26. May 02, 2014 26 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 27. May 02, 2014 27 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 28. May 02, 2014 28 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 29. May 02, 2014 29 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 30. May 02, 2014 30 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 31. U.S. Strategic Purpose • Containing China • Engaging China • China v. Vietnam: The Paradox • Balancing And Rebalancing, Economics And Security: Japan, South Korea, China May 02, 2014 31 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 32. U.S. Greening Global Trade Agreements A VALUES-DRIVEN TRADE POLICY REMARKS BY U.S. TRADE REPRESENTATIVE MICHAEL FROMAN AT THE CENTER FOR AMERICAN PROGRESS, FEBRUARY 18, 2014 May 02, 2014 32 Douglas B. Sanders Partner Baker & McKenzie LLP “But more than that, they will level the playing field by raising labor and environmental standards, putting disciplines on state-owned enterprises and dealing ourselves into global supply chains, rather than being left on the sidelines by others.”
  • 33. “Values-Driven Trade Policy” • What does that mean in the environmental context? • Future global economy should be more sustainable than it is today (WTO environmental goods efforts) • U.S. taking lead to advance the agenda in the WTO, TPP and T-TIP; driving higher environmental standards • Insisting that environmental commitments be on “equal footing” with commercial obligations • Commitments to effectively enforce environmental laws, including laws implementing multilateral environmental agreements (MEAs) May 02, 2014 33 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 34. How has the US done it before? • NAFTA • Major step forward in recognizing environmental issues in context of free trade agreement. • Resulted in side agreement addressing environmental issues and establishing a permanent body to focus on environmental issues. • Created a forum for citizen petition process and “teeth” in state v. state dispute mechanism that could result in trade sanctions. May 02, 2014 34 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 35. NAFTA - Environmental Success? • Mixed results • Collaborative projects in some areas • CEC has not historically worked with FTC to advance environmental agenda in conjunction with trade policies. • Citizen submission and factual record development –slow and limited effectiveness, but increased transparency and may have driven improvements. • State-to-state consultation and dispute resolution – not a factor. May 02, 2014 35 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 36. What next? 2007 Bipartisan Trade Deal May 02, 2014 36 Douglas B. Sanders Partner Baker & McKenzie LLP • Incorporate specific list of MEAs • Alter non-derogation obligation for environmental laws from a “strive to” to a “shall” obligation • Enforce environmental obligations on the same basis as the commercial provisions of our agreements – same remedies, procedures, and sanctions
  • 37. How does TPP fit in? Again, from Mr. Froman: “TPP is a chance to reach a new, higher plane.” • Includes countries in a region of the world that has significant natural resources, centers of biodiversity, and important marine ecosystems. • Key issues in a number of MEAs. • Keep promises in 2007 deal? May 02, 2014 37 Douglas B. Sanders Partner Baker & McKenzie LLP
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  • 41. May 02, 2014 41 Role of U.S. Domestic Policy
  • 42. Domestic Policy And Politics Interaction of Domestic And Foreign Affairs Traditional Foreign Affairs •Traditional national security pressures •Insecurity of Asian partners •Renewal of Japanese nationalism Domestic Pressures •Cancellation of Presidential Trip: Government Shutdown •Moving Japan to Center Stage for TPP •Politics of trade: Interest groups (unions, environmental groups v. U.S. Chamber of Commerce, financial institutions), partisanship •Secrecy May 02, 2014 42 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 43. Domestic Policy And Politics TPA and Priorities •TPA • What It Is And Why • Why It Should Come First • Presidential Failure • Congressional Opposition: Democratic Leadership • Republican Opposition • Strategy Relating TPA to TPP May 02, 2014 43 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 44. Evolving Political Strategy • Market Access In Japan • Replacing NAFTA • Extending American IP • Investor-State Arbitration May 02, 2014 44 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 45. TPP Negotiations Cover More than “Trade” • Plan is to go beyond WTO and FTA’s • TPP would cover a broad range of regulatory and legal issues • Negotiations involve 29 different chapters May 02, 2014 45 Stephen P. Vaughn Counsel Skadden Arps
  • 46. Examples of Issues Presented by TPP Negotiations • Market Access • Labor Standards • Environmental Obligations • Access to Medicines • Currency Manipulation May 02, 2014 46 Stephen P. Vaughn Counsel Skadden Arps • Food Safety • Dispute Settlement • State-Owned Enterprises • Tobacco Controls • Cross-Border Data Flows
  • 47. Some Key Supporters of Trade Promotion Authority (TPA) • Obama Administration • Chairman of House Ways and Means Committee • Ranking Member of Senate Finance Committee • U.S. Chamber of Commerce • Business Roundtable May 02, 2014 47 Stephen P. Vaughn Counsel Skadden Arps
  • 48. Excerpt of Letter Opposing TPA Signed by 151 House Democrats (Nov. 2013) “In light of the broad scope of today’s trade agreements, it is even more vital that Congress have a fulsome role in shaping these pacts’ terms. Given our concerns, we will oppose ‘Fast Track’ Trade Promotion Authority or any other mechanism delegating Congress’ constitutional authority over trade policy that continues to exclude us from having a meaningful role in the formative stages of trade agreements and throughout negotiating and approval processes.” May 02, 2014 48 Stephen P. Vaughn Counsel Skadden Arps
  • 49. Excerpt of Letter Opposing TPA Signed by 22 House Republicans (Nov. 2013) “Article I-8 of the Constitution gives Congress exclusive authority to set the terms of trade. Meanwhile, the executive branch has constitutional authority to negotiate with foreign sovereigns on behalf of our nation. The Founders established this clear check and balance to prevent the president from unilaterally negotiating with foreign nations and imposing trade policies that Congress would deem to be against the national interest.” May 02, 2014 49 Stephen P. Vaughn Counsel Skadden Arps
  • 50. Factors Complicating TPA Approval • Divided Congress • Changes at Senate Finance Committee • Concerns about relationship between globalization and inequality • 2014 elections May 02, 2014 50 Stephen P. Vaughn Counsel Skadden Arps
  • 51. TPP Environmental Chapter •On January 15, 2014, Wikileaks releases “Secret TPP treaty: Environmental Chapter for all 12 nations” https://wikileaks.org/tpp-enviro/ May 02, 2014 51 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 52. How does TPP stack up with US commitments? • Three key areas: • Setting levels of protection and enforcing and improving environmental laws • Meeting obligations in multilateral environmental agreements • Treating environmental obligations the same as trade and commercial ones. May 02, 2014 52 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 53. Setting environmental levels of protection Peru bilateral agreement – Each Party shall strive to ensure that those laws and policies provide for and encourage high levels of environmental protection and shall strive to continue to improve its respective levels of environmental protection. Article 18.1 May 02, 2014 53 Douglas B. Sanders Partner Baker & McKenzie LLP TPP – Each Party shall strive to ensure that its environmental laws and policies provide for and encourage high levels of environmental protection and shall strive to continue to improve its respective levels of environmental protection. Article SS.3.3
  • 54. Enforcing environmental laws Peru bilateral agreement – A Party shall not fail to effectively enforce its environmental laws, and its laws, regulations and other measures to fulfill its obligations under the covered agreements, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties. Article 18.3 May 02, 2014 54 Douglas B. Sanders Partner Baker & McKenzie LLP TPP – No Party shall fail to effectively enforce its environmental laws through a sustained or recurring course of action or inaction in a manner affecting trade or investment between the Parties. Article SS.4.4
  • 55. Committing to MEAs May 02, 2014 55 Douglas B. Sanders Partner Baker & McKenzie LLP Peru bilateral agreement – A Party shall adopt, maintain, and implement laws, regulations, and all other measures to fulfill its obligations under the multilateral environmental agreements listed in Annex 18.2 (“covered agreements”). Article 18.2. TPP – The Parties recognize that environmental agreements to which they are a party play an important role globally and domestically in protecting the environment and that their respective implementation of these agreements is critical to achieving the environmental objectives of these agreements. Accordingly, each Party affirms its commitment to implement the [MEAs] to which it is a party. Article SS.4.1
  • 56. Consultation/Dispute Provisions May 02, 2014 56 Douglas B. Sanders Partner Baker & McKenzie LLP Peru bilateral agreement – Parties must consult and failing resolution can bring the matter to the Council for further assistance or consultation. Parties also have the right to invoke the general Consultation and Dispute Settlement Provisions of the agreement, which include trade sanctions. Article 18.12 TPP – Parties must consult in multi-layer process. If the parties fail to resolve the matter at the highest level, then an arbitral tribunal may be requested “under this Chapter.” The tribunal has the power to hear the dispute and issue a report to resolve the matter. Article SS.12.
  • 57. Response • Environmentalists decry weakening of US commitments, in particular: • MEAs • Dispute resolution • Conservation and Trade • Fisheries • More than 100 members of Congress joined in a letter condemning the negotiated draft, raising concerns about unequal enforcement of laws, conservation, illegal trade and marine fisheries May 02, 2014 57 Douglas B. Sanders Partner Baker & McKenzie LLP
  • 58. Role of U.S. Foreign Policy May 02, 2014 58
  • 59. Is the US alone on the environment? • Report from the Chairs: – Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam oppose inclusion of language adopting MEAs – Same parties (all but Malaysia) oppose US position to make environmental chapter disputes subject to same tribunal as other TPP obligations. May 02, 2014 59 Douglas B. Sanders Partner Baker & McKenzie LLP Again thanks to Wikileaks: http://wikileaks.org/tpp-enviro- chairsreport/
  • 60. Relationship Between TPP and Other Trade Agreements • U.S.-Korea FTA • NAFTA • WTO Doha Round • Transatlantic Trade and Investment Partnership May 02, 2014 60 Stephen P. Vaughn Counsel Skadden Arps
  • 61. May 02, 2014 61 International Security Issues • Priorities • Alliance With Japan • Cooperation on North Korea • East And South China Seas • With Or Without Japan; With Or Without South Korea; With Or Without China Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 62. International Security Issues • Priorities • Alliance With Japan • Cooperation on North Korea • East And South China Seas • With Or Without Japan; With Or Without South Korea; With Or Without China May 02, 2014 62 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 63. Tensions And Risks • Between Economics And Security • Between China And The Region • Between China And The United States: “The United States must continue to seek constructive relations with China.” (Tom Donilon) May 02, 2014 63 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 65. Can a weak environmental chapter tank TPP? May 02, 2014 65 Douglas B. Sanders Partner Baker & McKenzie LLP • USTR’s response to the leaked provisions was that there would not be a TPP without “a robust fully enforceable environmental chapter.”
  • 66. Domestic Opposition to TPA Could Be Overcome • Broad bi-partisan support for TPA • Potential for deal-making with opponents • Presidents can always play the foreign policy card May 02, 2014 66 Stephen P. Vaughn Counsel Skadden Arps
  • 67. The Process The Obama Administration Process Press Japan On Agriculture and Automobiles  Persuade Other Countries To Make Deal Based On Japan’s Concessions  Present Deal To Congress Without Debate  Ask For TPA For TPP Only  Complete TTIP, Based On TPP  Ask Congress Again For Limited TPA After Presenting Deal The Process Historically: Obtain TPA From Congress  Negotiate International Agreement  Submit To Congress For Up Or Down Vote May 02, 2014 67 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 68. Conclusion • Must Have TPP Done In Order To Persuade Congress To Grant TPA • Must Have TPA In Order To Pass TPP May 02, 2014 68 Elliot J. Feldman Senior Partner Baker & Hostetler LLP
  • 69. ► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type your question in the box that appears and click send. ► Questions will be answered in the order they are received. Q&A: May 02, 2014 69 Stephen P. Vaughn Counsel Skadden Arps Elliot J. Feldman Senior Partner Baker & Hostetler LLP Douglas B. Sanders Partner Baker & McKenzie LLP
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