US Trade Act Proposed

Excerpt from North American Free Trade & Investment Report
published by WorldTrade Executive, Inc.

By Kenneth G. Weigel, Thomas E. Crocker and Eric Shimp
(Alston & Bird LLP)

The Trade Reform, Accountability, Development and Employment Act (TRADE Act) would seek to fundamentally change core tenets of U.S. trade agreements, mandate the renegotiation of several existing agreements, strengthen the role of Congress in trade policy, restrict fast track votes, and dilute the power of the federal government over the states in the area of trade and investment.
Fostered by core Democratic constituencies including ten major unions and NGOs, including Public Citizen and Friends of the Earth, the TRADE Act was launched on June 4. Democratic Representative Mike Michaud (ME) and Senator Sherrod Brown (OH) offered joint legislation aimed at a wholesale reform of the way the nation conducts trade policy. This bill will shape the debate over trade policy in Congress, on the campaign trail, and during the first year of the new presidential administration in 2009.

Key Provisions
The sprawling scope of the TRADE Act would compel key changes in U.S. trade policy, including:
• New objectives: Lays out new negotiating objectives, focusing specifically on trade and environment matters, and reducing the scope of provisions on investment and services disciplines.
• Trade agreement review: Mandates that GAO perform regular reviews of all existing trade agreements, examining data on job creation, wage levels, exports and imports, outsourcing and labor and environment issues. Criteria are clearly slanted to portray agreements as detrimental to the economy.
• Renegotiation: Compels the government to renegotiate all existing U.S. trade agreements, including NAFTA, to a) comply with new objectives and b) address faults found in review process.
• State opt outs: Would grant states the ability to reject all nontariff-related provisions of negotiated agreements (e.g., services, investment, government procurement, IPR). This particular provision is likely to cause significant problems for foreign trading partners who look to market access within the 50 states as a major benefit of FTAs with the United States.
• Services: Would move the U.S. to a positive list approach, thereby reducing potential market access gains for U.S. services providers in foreign markets.

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EC Recommends Limiting Auditors’ Liability

Excerpt from EuroWatch
published by WorldTrade Executive, Inc.

by Andrea Hamilton
McDermott Will & Emery

The European Commission has issued a Recommendation to limit auditors’ civil liability with the objective of promoting the market entry of auditing firms that would otherwise be deterred by the threat of unlimited liability.

By encouraging new market entries, the Commission hopes that its Recommendation will protect European capital markets by ensuring that sufficient auditing capacity exists to perform statutory audits of EU-listed companies. This Recommendation is based on a mandate contained in the 2006 Directive on Statutory Audit, and reportedly also on an increasing trend of litigation and issues concerning insurance coverage in the auditing sector.

Member States are free to decide on the appropriate method for limiting liability and set caps for liability if they wish.

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Working Time Directive Agreement Reached

From EuroWatch.
published by WorldTrade Executive, Inc.
By Daniel Kelly
McDermott Will & Emery

The Employment and Social Affairs Council, following a meeting in Luxembourg on 10 June 2008, has adopted a Common Position on both the Working Time Directive and the Temporary Agency Workers Directive.

The agreement on the Working Time Directive only became possible after Spain and other countries overcame objections to an opt-out that allows an increase in the weekly cap to 60 working hours. A distinction was also drawn between “active” and “inactive” on-call time, allowing greater flexibility for doctors struggling to keep average weekly working hours below the agreed limit. Agreement on the Temporary Agency Workers Directive was reached after, Member States were given the option of derogating from the requirement of equal treatment as of day one for temporary agency workers in terms of pay, maternity leave and annual leave.

The Council Common Positions will now be sent to the European Parliament for a second opinion. If they are passed, they will return to the Council of Ministers for a second round of approvals, at which stage they will become EU Law.

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