June 6 (Bloomberg) -- White House official Michael Froman, seeking confirmation as U.S. trade representative, told a Senate committee he would press lawmakers to renew the president’s authority assuring speedy action on trade deals.
Such trade-promotion authority, which expired in 2007, can help assure Europe and Pacific-region negotiators that commitments made by the U.S. won’t unravel when submitted to Congress for approval. Renewing the authority, which requires up-or-down votes on trade deals, is a priority for President Barack Obama, Froman told the Senate Finance Committee.
“If confirmed, I will engage with you to renew trade promotion authority,” Froman, deputy national security for international affairs, said today at his confirmation hearing.
Senator Max Baucus, a Montana Democrat and chairman of the panel, said he’ll introduce bipartisan legislation renewing the White House authority “in the next few months.” The panel’s top Republican, Orrin Hatch of Utah, said Froman is qualified and likely to get the post, and chided the administration for what he called a lack of leadership on renewing trade-promotion authority and other matters.
“Without the president’s active leadership and public support for TPA, it is hard to see how our current efforts to renew TPA can succeed.”
Froman, 50, if confirmed would lead U.S. efforts in negotiating the two largest trade deals in American history. U.S. officials have said they intend this year to reach an agreement with 10 other Pacific-region nations. The U.S. and the 27-nation EU, which already have the world’s largest bilateral economic relationship, may begin talks on a separate trade pact as early as next month.
The Trans-Pacific Partnership accord, with Japan joining the talks in the coming months, would link a region that generates about $26 trillion in annual economic output. The U.S. and EU region produces about $28 trillion a year.
At the USTR, Froman would also oversee U.S. enforcement of trade rules. To curb what it calls unfair competition that hinders exports, the Obama administration has filed complaints against nations including China and India at the World Trade Organization, and last year it established a unit to police potential trade violations.
Obama nominated Froman, a former Harvard Law School classmate, on May 2 to replace Ron Kirk, who left in March. Obama called Froman “one of the world’s foremost experts on the global economy.”
At the hearing today, Froman pledged to seek tough enforcement of trade rules during a time of mounting trade tensions between China and India. He also said he will use both discussions and trade enforcement tools to help lead a resolution to a growing trade conflict between China and the European Union.
The 27-nation EU on June 4 imposed tariffs on Chinese solar panels that could reach as high as 67.9 percent, with China the next day initiating an anti-dumping and anti-subsidy probe of wine imports from the EU.
Froman along with Commerce secretary nominee Penny Pritzker, a Chicago businesswoman, was nominated to be part of Obama’s second-term economic team. The trade representative has the rank of ambassador and is a member of the cabinet.
Froman has said he and his wife will divest their holdings with his former employer, Citigroup Inc., if confirmed. Among the assets is a Cayman Islands-based investment fund worth at least $500,000, according to Froman’s financial disclosure documents.
Froman testified today that he paid “every penny that was due” in taxes from the investment fund.
Froman is the third cabinet-level pick this year to disclose offshore holdings, sparking criticism from Senate Republicans.
Hatch said he will consider Froman on his merits. He said Obama was being hypocritical after accusing Republican presidential nominee Mitt Romney last year of dodging taxes by stashing money overseas. He said Froman’s bonuses at Citigroup during the financial bailout add to the hypocrisy, as Obama also faulted Wall Street payouts at that time.
Senator Charles Grassley, an Iowa Republican who sits on the panel, said today he will send Froman written questions about his offshore investment and bonuses before voting. He will ask Froman to disclose whether the White House ever raised concerns about a Cayman Islands investment Obama once called “the largest tax scam in the world,” according to a statement.
“The White House and the nominee should help Congress and the public understand the president’s double standard,” Grassley said without saying how he will vote on the nomination.
Treasury Secretary Jack Lew was called to account for $56,000 in a Cayman Islands account at his confirmation hearing, although he won confirmation Feb. 27 on a 71-26 vote.
Last month, Republicans on the Commerce panel vowed tough questioning of Pritzker after she disclosed $53.6 million in consulting-fee income last year from a trust in the Bahamas, run by CIBC Trust Co. However, Pritzker -- whose family founded Hyatt Hotels Corp. and who was the finance chairman of Obama’s 2008 campaign -- faced one question on the subject at her hearing and panel Republicans predict she’ll be confirmed.
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