What we’re covering this week –
The Senate this week continues working through nominations for President Trump’s cabinet, while House Ways and Means Committee Chairman Kevin Brady makes several appearances to discuss the committee’s agenda for the year, particularly on tax reform.
● Monday, the Senate Foreign Relations Committee meets to vote on the nomination of Rex Tillerson to be Secretary of State.
● The Institute of International Economic Law sponsors a program on renegotiating NAFTA with Kenneth Smith Ramos, head of the trade and NAFTA office at the Mexican Embassy.
● Tuesday, the Senate Committee on Small Business holds a hearing on the nomination of Linda McMahon to be administrator of the Small Business Administration.
● The US Chamber of Commerce hosts House Ways and Means Committee Chairman Kevin Brady for a speech on the committee’s 2017 agenda.
● The Delegation of the European Union to the United States sponsors a two-
● Wednesday, the Financial Services Roundtable sponsors a discussion on tax reform with Ways and Means Chairman Brady.
● The German Marshall Fund sponsors a program with European Parliament member and Brexit negotiator Guy Verhofstadt.
● Thursday, the Carnegie Endowment sponsors a program on Japan in 2017. Rep. Joaquin Castro is among the speakers.
Volume 25, Number 211 Thursday, October 20, 2016
Trade Reports International Group
Mr. Lighthizer Makes the Rounds
Mr. Lighthizer will be an important player in the new Administration since the President-
Finance has not yet scheduled a hearing on Mr. Lighthizer, but Sen. Hatch said in a statement following his meeting that he plans to move quickly.
It is unclear just how much power Mr. Lighthizer will have in the decision-
How It Will Work
Commerce Secretary designee Wilbur Ross “will be the Administration’s policy leader when it comes to renegotiating and negotiating better trade deals for the American workers,” Trump spokesman Sean Spicer told reporters yesterday.
Mr. Ross will be “teaming up” with Mr. Lighthizer and with Peter Navarro, director of the newly created National Trade Council, “who will be in the White House as the point person on trade issues,” Mr. Spicer said.
The Senate Commerce Committee will hold its hearing on Mr. Ross’ nomination Thursday.
Outgoing US Trade Representative Michael Froman demurred when asked yesterday for his opinion about the President-
Speaking at the Washington International Trade Association, Mr. Froman criticized the President-
Mr. Froman’s Advice to Mr. Trump
US Trade Representative Michael Froman thinks that President-
In one of his final speeches before leaving office, Mr. Froman said that the President-
“There simply is no way to reconcile a get-
By walking away from TPP, the United States will cede its economic leadership in the Asia-
Mr. Froman’s advice to the incoming Administration is to read TPP, decide what changes it wants and then figure out if the 11 other countries involved are willing to make those changes. But he added that the new Administration needs to be given “time and space” to determine its trade policy. It took several years for the Obama White House to decide how it wanted to proceed on trade, he noted.
The USTR said he believes Congress would have passed TPP this year if Congressional leaders had allowed it to come to a vote. Mr. Froman said he personally met with 100 House Republicans – and almost every one was willing to vote for the TPP. The support was there, but House Republican leaders never actively whipped for votes, he said.
TTIP Was Within Reach
Conclusion of the Administration’s other major trade initiative – the TransAtlantic Trade and Investment Partnership – was within reach last year, but Europe balked, Mr. Froman suggested. Last summer, Washington presented Brussels with a proposal for a final agreement. But by early fall, it had become clear that the political will did not exist on the European side to tackle the most politically sensitive issues – like agriculture, services and digital trade.
If the incoming Administration decides it wants to continue these negotiations, it will find that Europe is going to need some time before it is ready to conclude a deal, Mr. Froman stated. Upcoming elections in several key European countries along with Britain’s withdraw from the EU will create political difficulties in the near term.
Nevertheless significant progress was made – and when Europe is ready to restart the negotiations, much of the work is already done, the USTR said.
Trade also has become a political football in the United States, Mr. Froman acknowledged. Critics have done a far better job of getting their message out than supporters, he said. “But the critics of trade are on to something. We do not do a particularly good job as a government or as a country in helping individuals and communities adversely affected by change – whether that change comes from technology, migration or globalization.”
Given the political environment, Mr. Froman said one lesson to be learned from the TPP failure is that it is no longer possible for supporters of free trade to wait until just before Congress is ready to vote to build support for a trade agreement. The groundwork needs to be laid far in advance. “And if the ground is allowed to be poisoned by half-
Argentina Defends GSP Readmission
In front of an inter-
Argentina lost GSP in 2012 mostly due to inadequate intellectual property rights protection.
Over the past two years US-
Argentina is the fifth largest Latin American trader with the United States. US imports from the country were $6 billion in 2015. US exports to the country for the period amounted to $22.4 billion – leaving a $5.4 billion US surplus.
But several US officials on the panel said not all concerns about IPR protection have been erased.
Argentina remains on the “Priority Watch List” under the Special 301 program – one of only 13, one US trade official pointed out. Issues brought up were special requirements that foreign biotechnology and agricultural chemical companies have their products re-
There also is uncertainty over the protection of patents pending in the nation. In addition the government pointed to the large backlog in patent applications.
Mr. Rojas said legislation is now in Congress that would resolve much of the issue. He also said the matter is under discussion with the United States in the TIFA. Buenos Aires also is cooperating on common patent protection procedures with its Mercosur partners – Brazil, Paraguay, Uruguay – along with Mexico and Peru.
US officials also suggested that Buenos Aires has not fully lived up to last year’s World Trade Organization dispute settlement decision on a variety import-
Argentina is in full compliance with that decision, Mr. Rojas said. But it also is a topic of discussion within the TIFA.
Also the country is planning to eliminate – fully by 2019 – its export refund program, according to Mr. Rojas. Refunds currently amount to 5-
Even if Argentina regains GSP status, it might now last long, another US official suggested. The country now is just $15 below the $12,475 average Gross National Income per capita level for higher-
Final, Final Satellite Export Regs
The Commerce and State department yesterday published latest revisions to a May 2014 rule on exports of space technology (WTD, 12/8/16).
The latest final rule pertains to changes in aperture size for spacecraft. The rule make changes in Export Administration Regulations that would impose more restrictive requirements compared to other Commodity Control List items.
Yesterday’s rule also addresses some changes in moving the James Webb Space Telescope from State’s Munitions List to Commerce’s CCL.
Below is an up-
I – firearms ●
II – artillery projectors ●
III – ammunition ●
IV – launch vehicles, guided missiles, rockets, bombs, mines ● ● ● ●
V – explosives, propellants ● ● ● ●
VI – vessels of war and special naval equipment ● ● ● ●
VII – tanks, military vehicles ● ● ● ●
VIII – aircraft, associated equipment ● ● ● ●
IX – military training equipment ● ● ● ●
X – protective personnel equipment ● ● ● ●
XI – military and special electronics ● ● ● ●
XII – fire controls, optical and guidance, range finder, equipment ● ● ● ●
XIII – auxiliary military equipment ● ● ● ●
XIV – toxicological agents ● ● ● ●
XV – space systems, equipment ● ● ● ●
XVI – nuclear weapons design equipment ● ● ● ●
XVIII – directed energy ● ● ● ●
XIX – gas turbine engines ● ● ● ●
XX – submersible vessels, equipment ● ● ● ●
Washers and Ammonium Sulfate
The International Trade Commission yesterday determined that a US industry is materially injured by imports of large residential washers from China that the Commerce Department has determined are sold in the United States at less than fair value (WTD, 12/12/16).
All six Commissioners voted in the affirmative.
Commerce earlier set antidumping duties at 32.12 percent for LG and 52.51 percent for Samsung. Whirlpool Corporation, which filed the petition, praised the final determination saying that both producers have been unfairly dumping their products on the US market and moved their production to China after the ITC imposed an earlier antidumping decision on washers from Mexico and South Korea.
Separately, Commerce made its final affirmative determination yesterday in the countervailing duty investigation of imports of ammonium sulfate from China (WTD, 11/3/16). Commerce found the companies received countervailable subsidies at a rate of 206.72 percent, based on “adverse facts available”.
In 2015, imports of ammonium sulfate from China were valued at $62 million.
The ITC is scheduled to make its final injury determination on February 23.
Around the Globe
● Alibaba Executive Chairman Jack Ma met U.S. President-
Alibaba has previously campaigned to bring more small U.S. businesses onto the company’s sites, but this is the first time Ma has discussed specific targets. Trump and Ma emerged from their meeting at Trump Tower in New York together. The president-
Ma said the two mainly discussed supporting small businesses, especially in the Midwest, such as farmers and small clothing makers, who could tap the Chinese market directly through Alibaba, whose Tmall online shopping platform offers virtual store fronts and payment portals to merchants. The company has in recent years been aggressively courting foreign brands to set up Tmall stores to sell to China’s vast and growing middle class by offering to smoothen out Chinese sales, payment and shipping processes.
Trump often targeted China in the election campaign, blaming Beijing for U.S. job losses and vowing to impose 45 percent tariffs on Chinese imports. He also promised to call China a currency manipulator on his first day in office. Alibaba has deep ties with the Chinese government, working closely on some of the country’s core technology development goals including cloud infrastructure and big data.
The U.S Trade Representative last month returned the Chinese e-
● Carmakers used the Detroit Auto Show to talk up their U.S. production, in a likely reaction to President-
“It’s clearly a new and big movement across the board,” he said. “Every press conference, every discussion we have today, it seems like some executive from any of the automakers is at pains to talk about what they make in the U.S., how much they make in the U.S.” Rosevear noted that a VW conference highlighted that its SUVs were being made in Tennessee, while Toyota went so far as to display a Camry model with “Made in U.S.A.” painted on the side. “It’s being talked up obviously at the Detroit-
Automakers new focus on flag-
In a tweet last week, Trump also criticized Japanese automaker Toyota Motor for plans to build a new plant in Mexico. In response to Trump’s tweet, Toyota said in a statement to Reuters that the new Mexican plant will not cut its U.S. employment. Also this month, Trump issued a separate ultimatum to General Motors: Make its Chevy Cruze cars in the U.S. or expect to pay a big border tax. GM responded by saying it built the Cruze hatchback in Mexico for global markets with a very small amount sold in the U.S. Of the 190,000 Cruze cars sold in the U.S., 185,500 were built in Lordstown, Ohio, the company said.
● Britain will be in the “front seat” to negotiate a new trade deal with the incoming administration of Donald Trump, a top Republican in the United States Senate said, the BBC reported (WTD, 1/9/16). Senate Foreign Relations Committee Chairman Bob Corker said after meeting British Foreign Secretary Boris Johnson that a trade deal between the two countries would be a priority as Britain prepares to leave the European Union.
Ahead of the Brexit vote, President Barack Obama exhorted Britons to stay in the EU and warned that if they left they would be at “the back of the queue” for a U.S. trade deal. Corker said Johnson knows “full well” that “there is no way the United Kingdom is going to take a back seat. They will take a front seat and I think it will be our priority to make sure that we deal with them on a trade agreement initially but in all respects in a way that demonstrates the long-
Trump, while a candidate for the U.S. presidency, hailed Brexit as a “great thing” when visiting Scotland the day after the vote though Britain cannot sign a trade deal until it leaves the EU which under current plans will likely be in 2019. After visits to see aides in Trump Tower in New York and meet members of Congress in Washington, Johnson said: “Clearly, the Trump administration-
● Canadian Prime Minister Justin Trudeau has given his cabinet not just a shuffle but a big second-
Trudeau said in a statement she will have responsibility for the Canada-
Immigration Minister John McCallum, a former bank economist, leaves a 16-
● According to data from the US Department of Agriculture, in 2016 Mexico managed to position itself as the main supplier of agricultural products for the US, surpassing Canada and the European Union, Fresh Plaza reported. According to information from the federal agency, Mexico closed 2016 with a 19.9% share of the US agricultural market, while Canada had 19% and the European Union had 18%.
Mexican agricultural products in the United States began gaining importance after the North American Free Trade Agreement (NAFTA) was implemented. Jorge Armando Narvaez, undersecretary of Agriculture, Livestock, Rural Development, Fisheries and Food (Sagarpa), recently participated in the Mexico Food Show 2016 event and said that, over time, NAFTA had been instrumental in the development of the agricultural sectors of Mexico, the United States, and Canada. Currently, Mexico ranks as the twelfth biggest producer of food in the world; its main export products include avocados and tomatoes, among others, Sagarpa stated.
***** WTD is intended for readers within the office that subscribes. PLEASE do not redistribute. *****
Take a look at our newly designed homepage at:
We are sure you will see something you like.
Our Blog, Podcast, Facebook, Twitter
Straight Talk, Calendar, Primary Source
On the Web......
Imports. Chinese statement on trade remedies. (available at: http://www.mofcom.gov.cn/article/ae/ai/201701/20170102498548.shtml ) issued: 1/10/17.
US Relations. US-
USTDA. Annual report of the US Trade and Development Agency. (available at: https://www.ustda.gov/about/ustda-
Semiconductors. Article by Commerce Deputy Secretary Andrews on the US semiconductor industry. (available at: https://www.commerce.gov/news/blog/2017/01/supporting-
Economy. OECD report on the economy of Mexico. (available at: http://www.oecd.org/newsroom/mexico-
Economy. World Bank report on Poland’s economy. (available at: http://www.worldbank.org/en/news/press-
Froman Speech. Remarks by US Trade Representative Froman to the Washington International Trade Association. (available at: https://ustr.gov/about-
US Trade Representative
Lighthizer. Statement by Senate Finance Committee Chairman Hatch on meeting with new US Trade Representative Robert Lighthizer. (available at: http://finance.senate.gov ) issued: 1/10/17.
Economy. World Bank report on the global economy. (available at: http://www.worldbank.org/en/news/press-
Click the underlined text to hear snippets from WTD’s straight talk. (mp3 files)