TLJ News from July 21-25, 2013

Obama Nominates San Francisco City Attorney for Northern District of California

7/25. President Obama nominated Vince Chhabria to be a Judge of the U.S. District Court for the Northern District of California. See, White House news office release and release.

He is the Deputy City Attorney for Government Litigation and Co-Chief of Appellate Litigation in the San Francisco City Attorney's Office.

The Northern District of California hears a large number of patent and other technology related cases. However, Chhabria's work for the city of San Francisco does not involve technology related areas of law. In contrast, he has defended numerous of San Francisco's social experiments that are sure to rattle Senate conservatives.

Before he went to work for the city, he worked for the law firm of Covington & Burling. Before that, he clerked for Supreme Court Justice Stephen Breyer. Before that, he worked briefly for the law firm of Keker & Van Nest in 2001. And before that, there was a 9th Circuit clerkship, a District Court clerkship, and law school.

He is only 39 years old.

Federal Election Commission (FEC) records disclose that he contributed to the election campaigns of former Rep. Lynn Woolsey (D-CA), who until her retirement at the end of the 112th Congress was one of the most liberal members of the Congress.

People and Appointments

7/25. President Obama nominated Robert Michael Simon to be an Associate Director of the Executive Office of the President's (EOP) Office of Science and Technology Policy (OSTP). See, White House news office release.

Sarah Raskin7/31. President Obama nominated Sarah Raskin (at left) to be Deputy Secretary of the Treasury. See, White House news office release. She is currently a member of the Board of Governors of the Federal Reserve System.

EC Proposes Regulation of Fees for Card, Internet and Mobile Payments

7/24. Joaquín Almunia, VP of the European Commission Responsible for Competition Policy, gave a speech in Brussels regarding regulation of interchange fees for cards, internet and mobile payments.

Almunia said that "Regulation of Interchange Fees is strongly needed" because "these interchange fees which are collectively set by banks restrict competition and negatively affect retail prices".

He noted that the EC "has accepted commitments by the main card schemes Visa and MasterCard to charge low multilateral interchange fees for cross-border (and some domestic) transactions." (Parentheses in original.)

However, he continued that "These ad hoc commitments achieved through our antitrust enforcement cover only certain types of card payments and deal only with specific market players. Interchange fees on most domestic transactions still vary widely across Member States, fragmenting the internal market."

Hence, "Ex ante regulation is therefore required in order to cap multilateral interchange fees for everybody and everywhere in the EU."

The EC also released a proposal [102 pages in PDF] for a directive of the European Parliament and of the Council on payment services in the internal market, and a proposal [33 pages in PDF] for a directive on interchange fees for card based payment transactions.

He explained that "The regulation will impose caps for interchange fees applied with respect to the widespread cards which merchants in practice cannot refuse, that is to say, the consumer debit and credit cards."

The caps will be 0.2% of the value of the transaction for debit cards and 0.3% for credit cards.

Joaquín AlmuniaAlmunia (at right) also stated that "there are vested interests which have been fighting the idea of limiting interchange fees, trying to scare consumers that the impact of the regulation would be higher cardholder fees and no decrease in retail prices. However, there is every reason to believe that consumers will benefit from the disappearance of a hidden cost on their bills, since retailers compete on transparent retail prices."

He also argued that "The limitation of interchange fees will also encourage innovation. Under the current system of high interchange fees banks have no incentives to support new schemes and issue the cards of such new schemes. Breaking up this cosy system between banks and card schemes will allow new providers to enter the market. Such innovative new players, for example in mobile payments, are necessary to put Europe at the forefront of global developments in payments, bringing new services to citizens and benefiting the entire economy."

Voir aussi, le Commissaire Michel Barnier's remarques introductives, seulement en Français.

VP Biden Addresses Trade in India

7/24. Vice President Biden gave a speech in Mumbai, India in which he discussed multilateral trade negotiations, and US India trade.

He said that "The United States is negotiating major new trade agreements across both the Atlantic and the Pacific". There are both the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the US and EU, and the Trans Pacific Partnership (TPP) negotiations between nations all around the Pacific.

He also addressed bilateral talks between the US and India. He stated that "It seems to me there are certain basic principles in the way forward that are clear: a trade and investment partnership that is open and fair; that grows both our economies". He continued that "There's no reason, if our countries make the right choices, that we can't grow together and more rapidly."

He said that "Expanding trade between India and the United States can and should be a central part of this story.  But that requires us to be candid with each other about the obstacles that exist when it comes to a business environment: protection of intellectual property; requirements that companies buy local content; limits on foreign direct investment; inconsistent tax treatment; barriers to market access."

"These are tough problems", said the Vice President. "But we all know they have to be negotiated and worked through in order to meet the potential of this relationship."

He also addressed visas. "Indians receive more skilled-worker visas to the United States than any other country in the world. And the legislation our Congress is considering increases the number of temporary visas and Green Cards availability for highly skilled Indians to come work in the United States."

He also said that India has an essential role to play at the World Trade Organization (WTO) meeting in Bali in December. He added that "Success in Bali can help reinvigorate world trade" and the WTO can "show that it remains a vital forum to resolve these issues."

Finally, he said that "America and India have already built strong trilateral dialogue with Japan. It is past time we launch one with China."

Senate Confirms Russel for East Asia State Department Position

7/22. The Senate approved the nomination of Daniel Russel on July 9 to be Assistant Secretary of State for East Asian and Pacific Affairs, a position with responsibilities with respect to Japan, the People's Republic of China (PRC), Taiwan, Korea, Thailand, Vietnam, and other east Asian nations, as well as Australia and New Zealand. See, Congressional Record, July 9, 2013, at Page S5581.

Daniel RusselRussel (at right) is a career Foreign Service and Senior Foreign Service officer, who has held numerous positions in and related to Japan, Korea, and Asia. He replaces Kurt Campbell.

He gave a speech, and answered questions from reporters, on July 22, in Washington DC. He avoided discussion of most technology related issues.

He said that "cyberspace" is one of the "broad transnational global challenges", but did not elaborate. He did not mention cyber based theft of trade secrets.

Nor did he discuss copyright, patent, or trademark. Nor did he discuss the stalled negotiations at the World Trade Organization (WTO) to expand the Information Technology Agreement (ITA).

Nor did he discuss internet freedom, electronic commerce, telecommunications, or PRC exports of rare earth materials.

He did say that the U.S. is committed to the Trans-Pacific Partnership (TPP) agreement talks. He said that it is a "high-standards, high-quality trade agreement".

He also spoke in broad terms about U.S. diplomacy in east Asia.

He argued that "our relationships in Northeast Asia are very strong, arguably stronger than they have ever been. I don’t think they’ve ever been in better shape than they are now, and I'm determined, and see opportunities, to continue to advance and improve all of those relationships."

He added that "there is no let up, no backtracking, no diminution of that commitment" of President Obama to "rebalance our interests" in Asia.

He noted that "in Northeast Asia, of course, we have two major allies -- Japan and Korea", and "we also have a hugely consequential relationship with China. With China we're working hard to build a cooperative partnership." Also, "we also have very robust unofficial relations with Taiwan, which is an important democracy and a major economy in the region."

"We are in an extraordinary period of growth and prosperity in the Asia Pacific region, and promoting that growth, facilitating it, sustaining it, and harnessing it, frankly, is central to America’s economic and strategic interest. That’s why we are so determined and so committed to deepening our economic engagement in the Asia Pacific and to promoting economic integration in the region", for example, through TPP negotiations.

People's Republic of China. Russel spoke only in vague language about the PRC. For example, he said that "We are exploring the areas in which cooperation between the U.S. and China, two major economies, can make a positive and practical impact both on the wellbeing and the lives of the citizens of both of our countries, but also in the region and in the global economy and in the global context. We are also working hard to develop a candid dialogue on areas of disagreement, and there are areas of disagreement, and to make sure that we understand the motivations and the objectives of the other side."

Japan. Russel said that "the support in the United States for the U.S.-Japan relationship and the U.S.-Japan alliance is bipartisan, the support in Japan for the U.S.-Japan relationship and alliance is bipartisan, and the United States has worked effectively with LDP governments and DPJ governments."

He said that the recent upper house elections in Japan "should also remind us is that Japan is a thriving and a mature democracy." He added that "We have full faith in the democratic process and in the people of Japan".

Also, "It's important that the Japanese delegation is either in or on its way to Malaysia and is expected to begin the process of joining the TPP."

Finally, "a thriving Japanese economy isn't only good for the people of Japan; it’s good for the region, and certainly it’s good for the United States", and "it's hugely important that the relations between Japan and its neighbors improve, that problems be dealt with in a peaceful and a thoughtful way".

Taiwan. Russel said that "U.S. policy on Taiwan is ... consistent and it is unchanged."

"The U.S. One-China policy has been sustained through eight administrations. It is based on the three communiques and the Taiwan Relations Act, and that will continue to inform our approach."

He also said that "we respect and admire the progress that has been made in cross-strait relations under President Ma Ying-jeou's tenure. We think that the dialogue that he has fostered provides benefits to people on both sides of the strait as well as to the region and others in terms of promoting stability and promoting prosperity. Now, we continue to believe that progress in cross-strait relations can go only as fast and be only as broad as the people of Taiwan and the people on the mainland will accept. But it is certainly a net positive in terms of the region."

Russel also referenced Congressional passage of HR 1151 [LOC | WW]. See, story titled "House and Senate Pass Taiwan Observer Status Bill" in TLJ Daily E-Mail Alert No. 2,584, July 11, 2013. President Obama signed it on July 12. It is now Public Law No. 113-17.

He explained that "the key point here is that the United States has and continues to support Taiwan's active participation and membership in international organizations where statehood is not a requirement. And we also welcome or encourage Taiwan's meaningful participation as appropriate in organizations where membership itself is not an option. So we will and continue to support Taiwan's participation in ICAO."

(The International Civil Aviation Organization (ICAO) Assembly will be held in September 2013 in Montreal, Canada.)

Russel did not comment on President Ma Ying-jeou's visit to the U.S. earlier this month, or the recently concluded Taiwan New Zealand trade agreement.

Vietnam. Russel said that "the relationship between the United States and Vietnam has tremendous opportunity".

He said that "Vietnam is close to the heart of our rebalancing. Vietnam is an important emerging nation, coming into its own in Southeast Asia. Vietnam is a major player in ASEAN at a time where America’s engagement in the institutions, in helping to foster the rule-building and the consensual progress of ASEAN, is gaining great momentum."

He also said that "Vietnam is an important negotiating partner in the TPP, Trans-Pacific Partnership. Vietnam is, in the scope of the 11 countries, soon to be 12 countries involved in the negotiations, arguably the country that holds down the developing end of the scale. But for that very reason, Vietnam is also, according to the World Bank, the country that stands to gain the most from membership in a high-standards, high-quality trade agreement like the TPP."