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What we’re covering this week –

        Washington is back in business – at least for a while.  There is a threat of a government shutdown stating October 1.  One aspect of the Congressional controversy is whether or not to reopen the US Export-Import for large loans.

 And on Monday evening there’s the first of three Presidential candidates’ debate.


 Here’s what we’re covering –

 ●         Monday – The first Presidential candidates debate is supposed to focus on the economy.

 ●        Commerce Secretary Penny Pritzker and free-trade Democrat Rep. Don Beyer (Va) talk up the benefits of the TransPacific Partnership at a Capitol Hill gathering;

 ●        Secretary of State John Kerry and US Trade Representative Michael Froman open the day-long African Growth and Opportunity leaders meeting at the State Department;

 ●        Tuesday – House Ways and Means Committee Chairman Kevin Brady talks about US trade agreements at the Peterson Institute for International Economics and

 ●        The House Ways and Means trade subcommittee holds a hearing with Customs Commissioner Gil Kerlikowske testifying on trade enforcement.

 ●        Wednesday – The US Export-Import Bank holds its regular private-sector advisory committee meeting;

 ●        The Global Business Dialogue conducts a session on China and the North American Free Trade Agreement;

 ●        The Woodrow Wilson Center sponsors a program on US-India relations, with US Ambassador to India Richard Verma and

 ●        The Council on Foreign Relations in New York webcasts a session on US trade policy, with House Ways and Means Committee ranking Democrat Sander Levin (Mich).

 ●        Friday – The US Trade Representative’s office holds a public hearing on Russia in the World Trade Organization.

 


 Volume 25, Number 147                             Monday, July 25, 2016

Trade Reports International Group

_________________________________________________________                                             

G-20 Push Doha Issues

  Group-of-20 leaders meeting yesterday in Hangzhou restated their commitment to shape a post-Nairobi work program “with development at its center” for addressing the remaining Doha Development Agenda issues on a priority basis (WTD, 7/26/16).

 In a communique following the weekend meeting, the leaders devoted seven paragraphs to deal with an expansive trade and investment agenda.  Called for was an acceleration of the multilateral negotiations in “all three pillars of agriculture (i.e. market access, domestic support and export competition), nonagricultural market access, services, development, agreement on trade-related intellectual property rights and rules.”

 Immediate priorities in the international trade and investment portion of the final communique were problems created by excess capacity in steel and other industries along with distortions caused by subsidies and other types of support from governments.  Without getting into details, the leaders emphasized that “a range of issues may be of common interest and importance to today’s economy, and thus may be legitimate issues for discussions in the WTO, including those addressed in the regional trade agreements and by the B-20 [Business 20 group].”

‘Work Together’

 The leaders said the G-20 countries “will work together with all WTO members with a sense of urgency and solidarity” to achieve “positive outcomes” at the WTO’s eleventh ministerial conference next year.  Significantly, they underscored the importance of “WTO-consistent plurilateral trade agreements with broad participation” in complementing “global liberalization initiatives.”

 G-20 Environmental Goods Agreement participants – such as the United States, China, the European Union, Japan, South Korea, Australia and Canada, among others – welcomed “the landing zone achieved in the WTO EGA negotiations” last month.

 EGA members reaffirmed their commitment to “redouble efforts to bridge remaining gaps and conclude an ambitious, future-oriented EGA that seeks to eliminate tariffs on a broad range of environment goods by the end of 2016, after finding effective ways to address the core concerns of participants.”



 Trade and Investment-related text of the G-20 final communique –


Robust International Trade and Investment


25. Our growth, to be strong, must be reinforced by inclusive, robust and sustainable trade and investment growth. We note with concern the slow growth in trade and investment globally and commit to enhance an open world economy by working towards trade and investment facilitation and liberalization. We recognize the importance of economic diversification and industrial upgrading in developing countries to benefit from more open global markets. We endorse the outcome of the G20 Trade Ministers Meeting held in Shanghai on 9-10 July, and welcome the establishment of the G20 Trade and Investment Working Group (TIWG). We commit to further strengthen G20 trade and investment cooperation.


26. We reaffirm our determination to ensure a rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system with the World Trade Organization playing the central role in today’s global trade. We reiterate our commitment to shape the post-Nairobi work with development at its center and commit to advancing negotiations on the remaining DDA issues as a matter of priority, including all three pillars of agriculture (i.e. market access, domestic support and export competition), non-agricultural market access, services, development, Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and rules. We also note that a range of issues may be of common interest and importance to today’s economy, and thus may be legitimate issues for discussions in the WTO, including those addressed in regional trade arrangements (RTAs) and by the B20. We will work together with all WTO members with a sense of urgency and solidarity and with a view to achieving positive outcomes of the MC11 and beyond and we will work together to further strengthen the WTO.


27. We commit to ratify the Trade Facilitation Agreement by the end of 2016 and call on other WTO members to do the same. We note the important role that bilateral and regional trade agreements can play in liberalizing trade and in the development of trade rules, while recognizing the need to ensure they are consistent with WTO rules. We commit to working to ensure our bilateral and regional trade agreements complement the multilateral trading system, and are open, transparent, inclusive and WTO-consistent. WTO-consistent plurilateral trade agreements with broad participation can play an important role in complementing global liberalization initiatives. G20 Environmental Goods Agreement (EGA) participants welcome the landing zone achieved in the WTO EGA negotiations, and reaffirm their aim to redouble efforts to bridge remaining gaps and conclude an ambitious, future-oriented EGA that seeks to eliminate tariffs on a broad range of environmental goods by the end of 2016, after finding effective ways to address the core concerns of participants.


28. We reiterate our opposition to protectionism on trade and investment in all its forms. We extend our commitments to standstill and rollback of protectionist measures till the end of 2018, reaffirm our determination to deliver on them and support the work of the WTO, UNCTAD and OECD in monitoring protectionism. We emphasize that the benefits of trade and open markets must be communicated to the wider public more effectively and accompanied by appropriate domestic policies to ensure that benefits are widely distributed.


29.We endorse the G20 Strategy for Global Trade Growth, under which the G20 will lead by example to lower trade costs, harness trade and investment policy coherence, boost trade in services, enhance trade finance, promote e-commerce development, and address trade and development. We welcome the World Trade Outlook Indicator released by the WTO as an important leading indicator of global trade. We endorse the G20 Guiding Principles for Global Investment Policymaking, which will help foster an open, transparent and conductive global policy environment for investment.


30. We also support policies that encourage firms of all sizes, in particular women and youth entrepreneurs, women-led firms and SMEs, to take full advantage of global value chains (GVCs), and that encourage greater participation, value addition and upward mobility in GVCs by developing countries, particularly low-income countries (LICs).We welcome the B20's interest to strengthen digital trade and other work and take note of it’s initiative on an Electronic World Trade Platform (eWTP).


31. We recognize that the structural problems, including excess capacity in some industries, exacerbated by a weak global economic recovery and depressed market demand, have caused a negative impact on trade and workers. We recognize that excess capacity in steel and other industries is a global issue which requires collective responses. We also recognize that subsidies and other types of support from government or government-sponsored institutions can cause market distortions and contribute to global excess capacity and therefore require attention. We commit to enhance communication and cooperation, and take effective steps to address the challenges so as to enhance market function and encourage adjustment. To this end, we call for increased information sharing and cooperation through the formation of a Global Forum on steel excess capacity, to be facilitated by the OECD with the active participation of G20 members and interested OECD members. We look forward to a progress report on the efforts of the Global Forum to the relevant G20 ministers in 2017.

       



US, India At It Again in DSB

 Geneva – The United States yesterday disagreed with India over its implementation of World Trade Organization dispute settlement body recommendations to remedy restrictive measures imposed  on US poultry and poultry-related products in the wake of an avian influenza scare in 2011 (WTD, 7/20/16).

 At a Dispute Settlement Body meeting, Washington insisted that India’s revised measures – which were published on July 8 – appear to retain many of the features of India’s prior measure that the DSB found to be inconsistent.

 The United States has requested $450 million worth of retaliation on Indian goods because of nonimplementation of the DSB recommendations.  Washington claimed India’s revised measure continues to impose even more severe import prohibitions.

 India has made “good faith” efforts to resolve the issues.  New Delhi suggested the best course now is to bring the issue to a compliance panel.  India urged the US to suspend the arbitration proceedings to avoid “inefficient and avoidable legal uncertainties.”

Indian Steel

 In another dispute concerning US countervailing duties on Indian hot-rolled carbon steel flat products, New Delhi reminded the United States that it has neither amended nor repealed the determination of “public body” in its domestic law despite the Appellate Body’s ruling that it is inconsistent with the agreement on subsidies and countervailing measures (WTD, 5/26/16).

 Neither has the United States provided any status report as it is required under Article 21.6 of the Dispute Settlement Undertstanding.

 Washington has maintained that the provisions of the WTO on inconsistent domestic law have never been utilized in any investigation.  But India maintained that the issue of non-utilization of a provision of a law is irrelevant in implementing an Appellate Body ruling.

 On a separate dispute concerning the continued distributions to US companies under the illegal “continued dumping and subsidy offset act of 2000" – the so-called Byrd amendment, the European Union and Japan issued a joint statement urging Washington “to stop illegal distributions.”  China and India joined in.

 Meanwhile, Colombia rejected Brussels’ call to establish a dispute settlement panel against Bogota’s discriminatory treatment of imported spirits on the grounds that its Congress is working on new legislation to address the concerns (WTD, 8/23/16).

AB Vacancies

 DSB chair Xavier Carim set September 14 as the deadline for receiving new nominations for two vacant posts on the Appellate Body (WTD, 7/22/16).  So far, there are seven candidates in the race.

 And former New Zealand trade envoy and previous chair of the Doha agriculture negotiations John Adank was appointed director of the WTO’s legal division, WTD has learned.

       



Around the Globe

             ●          China agreed to cooperate more closely with its trading partners on its politically volatile steel exports as leaders of major economies ended a summit Monday with a forceful endorsement of free trade and a crowded agenda that included the Koreas, Syria and refugees, the Associated Press news service reported (see related report in this issue).  In a joint statement, Chinese President Xi Jinping, U.S. President Barack Obama and the leaders of Britain, Japan, Russia and other Group of 20 nations pledged to boost sluggish global growth by promoting innovation.

 Beijing made trade a theme of the gathering in this lakeside city southwest of Shanghai but faces complaints that a flood of low-cost Chinese steel into global markets threatens U.S. and European jobs, propelling the rise of political movements that promise to curb trade.  The joint statement calls for formation of a steel forum under the Organization for Economic Cooperation and Development to study excess production capacity.

 In a concession to Beijing, the statement doesn’t mention China by name and says excess steel capacity is a global issue. However, U.S. and European officials say the vast Chinese state-owned industry, which accounts for half of worldwide output, is the root of the problem. Washington has hiked import duties by up to 500 percent on Chinese steel to offset what it says are improper subsidies.  Beijing promised in January to reduce steel production capacity by 100 to 150 million tons by 2020. But that is half of China’s estimated excess capacity of 300 million tons, so deeper cuts would be required to bring it in line with demand.

 The president of the European Union’s governing body, Jean-Claude Juncker, called Sunday for the G-20 to take action on steel. He said the trade bloc will look at Beijing’s response when deciding whether to grant China market economy status, which would make it harder to bring anti-dumping cases.

             ●         U.S. President Barack Obama said on Monday that U.S. trading partners in Asia did not need to be persuaded of the benefits of the Trans-Pacific Partnership, just that Washington would eventually approve the trade pact, Reuters news service reported from Hangzhou (WTD, 9/5/16).  Obama has made the 12-nation TPP the centerpiece of a diplomatic “pivot” to Asia, but the prospects for U.S. congressional approval have looked increasingly dim, with both major presidential candidates - Democrat Hillary Clinton and Republican Donald Trump - standing opposed.

 Administration officials had said that Obama would make the case for the TPP during his visit to Asia, including in a speech he has scheduled in Laos on Tuesday.  “I don’t have to sell it to Asian leaders here who were part of the negotiations because they see this as the right thing to do for their own countries,” Obama told reporters at the close of the G20 summit in the eastern Chinese city of Hangzhou.

 “And what I’ll be telling them is that the U.S. has never had a smooth, uncontroversial path to ratifying trade deals, but they eventually get done,” Obama said.  “Back home we’ll have to cut through the noise once election season is over. It’s always a little noisy there,” he said.  The White House has said it could still win congressional approval of the trade pact before Obama leaves office, and warned that failing to do so would undermine U.S. leadership in the region and allow China to increasingly set the terms of world trade.

             ●          Japanese Prime Minister Shinzo Abe vowed Monday to press the parliament into ratifying the controversial free trade deal with the United States and ten other Pacific Rim nations, Sputnik news service reported from Tokyo. The Trans-Pacific Partnership (TPP) deal, which was concluded last October, aims to lower tariffs and other trade barriers on thousands of items. Its participants make up some 40 percent of the world economy.

 “Japan needs to urgently ratify the TPP agreement in the parliament. I plan to make every effort to achieve that because its prompt ratification by the Japanese parliament will be the first step toward building this partnership,” Abe said on the sidelines of the G20 summit. Speaking at the Hangzhou economic summit, the Japanese prime minister referred to the TPP pact as key to strategic economic development and lauded the advent of a “free, open economy.” China, which hosted this year’s summit of the world’s 20 major economies devoted to building an “inclusive world economy,” is not part of the agreement.

 ●        The US and Japan have warned the UK that trade relations with the EU are more important to them than those with Britain in the context of Brexit, according to EU Observer (WTD, 9/5/16).  US president Barack Obama spoke at a press conference with British prime minister Theresa May at the start of the G20 summit in Hangzhou, China, on Sunday.

 He said “we are going to do everything we can to make sure the consequences of the decision [Brexit] don’t end up unravelling what is already a very strong and robust economic relationship” with the UK.  But he said that his main priority would be to conclude a free-trade pact, the TTIP, with Europe.

 He said it “would not make sense” for the US to start bilateral talks with the UK if that would imperil the EU deal.

 “The first task is figuring out what Brexit means with respect to Europe. And our first task is making sure we go forward on TTIP negotiations in which we have already invested a lot of time and effort,”,he said.

 Japan issued its warning in a 15-page memo on UK trade published on its foreign ministry website.  “Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to continental Europe if EU laws cease to be applicable in the UK after its withdrawal,” it said.

 It noted that about half of Japanese firms that are active in the EU, such as carmakers Nissan and Mitsubishi, or financial firm Nomura, had chosen the UK as a “gateway to Europe”, adding: “We strongly request that the UK will consider this fact seriously and respond in a responsible manner to minimise any harmful effects on these businesses.”

 May, the British PM, said alongside Obama: “As we forge a new global role for the UK, we can and will seize the opportunities that Brexit presents, and make a success of it.”  She told reporters on the flight to Hangzhou that “the reaction of the [British] economy has been better than some had predicted post the referendum”.

             ●          German Chancellor Angela Merkel’s chief of staff is insisting that Berlin wants to press ahead with concluding a sweeping European Union-U.S. trade deal, underscoring divisions in the country’s governing coalition, the Associated Press news service reported from Berlin (WTD, 9/5/16).  Economy Minister Sigmar Gabriel, who’s also vice chancellor and leads the center-left junior party in Merkel’s coalition, has said that trade negotiations with the U.S. “have de facto failed.”

 Merkel’s conservatives, however, are standing by the Trans-Atlantic Trade and Investment Partnership. Her chief of staff, Peter Altmaier, said the government had agreed three years ago that TTIP should go ahead because it’s in Germany’s interest.  He told ZDF television Wednesday: “We will do everything to achieve TTIP. The final negotiations over the final meters will be particularly difficult - they always are - but I think we can achieve it.”

 Meanwhile Belgian PM Charles Michel is the latest European politician to call for free-trade talks between the EU and the US to be suspended.  He told the L’Echo newspaper on Saturday that the TTIP pact would not lead to a balance of jobs and growth.  “For the moment, I prefer to say that it’s not right and that perhaps we will resume negotiations later,” he said.

             ●          Australian Prime Minister Malcolm Turnbull said on Monday he wants to negotiate a “very strong” free trade agreement with Britain after it leaves the European Union, Reuters news service reported (WTD, 9/5/16).  Britain’s June decision to leave the 28-country EU sent financial markets into shock in anticipation of a recession as Britain enters a years-long process of tearing itself away from its biggest trading partner and forging a new global economic role.

 Britain’s economy will suffer as a result of the decision despite signs in recent data that the impact has not been as severe as some predicted, Prime Minister Theresa May said on Sunday on her way to the G20 summit in the eastern Chinese city of Hangzhou.

 Turnbull told reporters that May told the Australians she “remains very grateful for the assistance we are providing, both legislative and in terms of other resources.  And of course, from our point of view, getting in to deal with the British early and making sure we can negotiate a very strong, very open free trade agreement once they are actually out of the European Union.”

             ●          Mexico has set its maximum sugar export quota to the United States for the 2016/17 sugar cycle at 870,688.94, according to a notice published in the Diario Oficial. The quota applies to both cane and beet sugar.




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On the Web......

 

Agriculture


European Union.  European Union latest report to the World Trade Organization on its tariff quotas.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=230957,230930,230927,230925,230953,230937,230906,230926,230928,230955&CurrentCatalogueIdIndex=4&FullTextHash=371857150 ) issued: 9/5/16.



China


Imports.  World Trade Organization latest report on China’s countervailing duty activities.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=230956,230947,230931,230938,230950,230948,230939,230954,230942,230951&CurrentCatalogueIdIndex=0&FullTextHash=371857150 ) issued: 9/5/16.


US Relations.  White House fact sheet on US-China relations.  (available at:  https://www.whitehouse.gov/the-press-office/2016/09/04/fact-sheet-us-china-economic-relations ) issued: 9/4/16.



European Union


Agriculture.  European Union latest report to the World Trade Organization on its tariff quotas.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=230957,230930,230927,230925,230953,230937,230906,230926,230928,230955&CurrentCatalogueIdIndex=4&FullTextHash=371857150 ) issued: 9/5/16.


G-20.  The European Union statement on the G-20 summit.  (available at:  http://www.euintheus.org/press-media/the-eu-at-the-g20-summit/ ) issued: 9/5/16.


TTIP.  Coalition of US and European business associations statement on the TransAtlantic Trade and Investment Partnership.  (available at: http://transatlanticbusiness.org ) issued: 9/5/16.



World Economy


G-20.  G-20 leaders’ final communique.  (available at:  http://europa.eu/rapid/press-release_STATEMENT-16-2967_en.htm ) issued: 9/5/16.


G-20.  Press conference by President Obama at the G-20 leaders’ meeting conclusion.  (available at: http://whitehouse.gov ) issued:  9/5/16.


G-20.  International Chamber of Commerce statement on the G-20 leaders’ meeting.  (available at:  http://www.iccwbo.org/ ) issued: 9/5/16.


G-20.  Statement by the World Trade Organization on the G-20 leaders’ meeting.  (available at:  https://www.wto.org/english/news_e/news16_e/dgra_05sep16_e.htm ) issued: 9/5/16.


G-20.  White House fact sheet on the G-20 summit meeting.  (available at:  https://www.whitehouse.gov/the-press-office/2016/09/05/fact-sheet-2016-g-20-summit-hangzhou-china ) issued: 9/5/16.


G-20.  OECD statement on the G-20 leaders’ meeting.  (available at:  http://www.oecd.org/newsroom/oecd-to-help-put-innovation-at-heart-of-g20-global-growth-strategy.htm ) issued: 9/5/16.


G-20.  The European Union statement on the G-20 summit.  (available at:  http://www.euintheus.org/press-media/the-eu-at-the-g20-summit/ ) issued: 9/5/16.

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WTD’S

FRIDAY

AFTERNOON

PODCAST


Straight Talk.

Click the underlined text to hear snippets from WTD’s straight talk. (mp3 files)

 •  Watch President Obama slow jam on the TransPacific Partnership.

 •  Here’s what veteran Congressman Darrel Issa (R-Calif) says about the free-trade conundrum evident in the Presidential election campaign.

 •  Here’s what Senate Majority Leader Mitch McConnell told NPR about working with the White House on Trade Promotion Authority.

  •  Campaign 2016  –  Here’s how Republican Presidential contender Donald Trump is at a loss to explain China’s positive reaction to his sharp criticisms.

 •  Here’s what New Democrat free-trader Rep. Henry Cuellar (Texas) tells WTD in an interview about trade and the upcoming elections.  

•  Here’s an introduction by Woodrow Wilson Center Director Jane Harmon -- a rare species known as “pro-trade Democrats” -- of US Trade Representative Michael Froman on the TransPacific Partnership.

•  Campaign 2016 -- Republican Presidential contender Donald Trump explains his China trade policy to a crowd on Iowa.

•  Campaign 2016 -- Here’s what Republican Presidential contender Donald Trump says about “Made in USA”.

•  Campaign 2016 -- Republican Pr-esidential contender New Jersey Governor Chris Christie says why he’s against the Obama TPP agreement.

•  Here’s why Democratic Presidential contender Hillary Clinton opposes the TransPacific Partnership.

•  A question to and answer from Republican Presidential contender Jeb Bush on the US Export-Import Bank -- and OPIC.

•  Here’s how Nucor steel company CEO John Ferriola describes the Chinese economic monolith.

•  Negotiating in Geneva -- or Can You Hear Me?  --  From chief WTO services negotiator Abdel-Hamid Mamdouh.

•  Here’s how the United States views the future of the Doha Development Round according to Deputy US Trade Representative Michael Punke.

•  Here’s a comment from Senate Foreign Relations Committee Chairman Bob Corker about why he doesn’t want to get into reauthorizing the Overseas Private Investment Corporation -- ala the Ex-Im mess.

•  Here’s a response from World Trade Organization Director General Roberto Azevedo at the Peterson Institute for International Economics on whether the Doha Development Agenda is a vampire.






2016wtdpodcast0916.mp3