Two recent items of note on this topic:
1. From the NY Times, the effect of a smaller budget for USTR:
The Office of the United States Trade Representative has been waging a lonely battle for its budget, which shrank 7 percent to $47 million this year because of sequestration spending caps. Officials in the office, pointing to the 2014 budget proposal in the Republican-controlled House, fear that they could end up with even less money next year.
This matters, officials say, because trade negotiators fly hundreds of thousands of miles just doing their jobs. Since the trade representative’s office spends the bulk of its budget — $46 million — on fixed costs like salaries, benefits and office supplies, a cut of $5 million or $8 million could effectively ground much of its 250-person work force.
“We are in a situation where we’ve having to choose: Can we send people to a negotiation? Can we bring this enforcement case or another?” the newly appointed trade representative, Michael Froman, said in a recent panel discussion with the president of the U.S. Chamber of Commerce, Thomas J. Donohue.
2. From the WSJ, the effect of cutting off those payments to Brazilian cotton farmers:
Secretary of Agriculture Tom Vilsack said the U.S. will have to stop monthly payments to Brazil related to a cotton dispute at the World Trade Organization because of the automatic spending cuts known as the sequester, a move that risks retaliation from Brazil.
The U.S. pays about $150 million a year to the Brazilian cotton industry to avoid being punished under a WTO ruling over cotton. Brazil and the WTO say some U.S. cotton subsidies are unfair under the rules of the global trade group.
Mr. Vilsack said Wednesday in a telephone interview from Brazil that unless Congress adjusts the sequester cuts or passes a farm bill canceling cotton subsidies barred by the WTO, Washington will pay only half of its approximately $12 million monthly cotton payment in September and nothing after that. The payments in the next fiscal year, which begins in October, were already at risk because they didn't appear in the administration's budget.
"I have neither the authority nor the money to make any payment in October or thereafter," he said.
A Republican congressional aide said the Obama administration does in fact have the authority to continue making the cotton payments it negotiated with Brazil, which weren't authorized by Congress.
"Brazil is studying a course of action," said a spokesman for the foreign ministry. "All possibilities are open, including bilateral negotiations with the U.S. government and multilateral talks via the World Trade Organization."
