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This Week In Trade

U.S.-China trade spat spoils APEC ministerial as Xi-Trump meeting approaches

Posted: November 19, 2018

Asia-Pacific Economic Cooperation leaders gathered in Papua New Guinea were unable to agree on a joint ministerial statement last week as talks between the U.S. and China bogged down over how it should address trade policy, according to reports.

The New York Times reported that the U.S. sought to include language condemning Chinese forced technology transfers, while China wanted to condemn U.S. unilateral actions such as its tariffs on $250 billion worth of Chinese goods. Bloomberg says Papua New Guinea Prime Minister Peter O’Neill confirmed that talks broke down over language on reforms to the World Trade Organization.

Vice President Mike Pence represented the U.S. at the meeting; U.S. Trade Representative Robert Lighthizer did not attend. Pence rebuked China’s trade practices in a speech on Saturday, promising that U.S. tariffs would continue until Beijing changed its approach.

“We’ve taken decisive action to address our trade imbalance with China,” Pence said. “We’ve put tariffs on $250 billion in Chinese goods and we could more than double that number. But we hope for better. The United States though will not change course until China changes its ways.”

Chinese President Xi Jinping repeatedly slammed the U.S. in thinly veiled remarks at the APEC summit. “Resorting to old practices such as protectionism and unilateralism will not resolve problems,” Xi said at the APEC CEO summit on Saturday. “On the contrary, they can only add uncertainties to the global economy. Only openness and cooperation can bring more opportunities and create more space for development. This is a well-proven historical fact. One who chooses to close his door will only cut himself off from the rest of the world and lose his direction.”

Xi also criticized WTO reform efforts, which have been largely spurred by U.S. unilateral actions. The U.S. has charged that some countries -- namely China -- need to take on additional obligations rather than hide behind the label of a “developing country."

“The principle of ‘special and differential treatment,’ which is a cornerstone of the WTO, is not to be challenged,” Xi said. “Otherwise the very foundation of the multilateral trading system will be shaken.”

The APEC episode comes less than two weeks before Xi and President Trump are slated to meet at the G20 in Buenos Aires, Argentina. Trade is expected to be the focal point of the meeting.

The European Parliament’s International Trade Committee will meet on Monday and Tuesday this week to discuss U.S.-EU trade relations, the future of the WTO and the implementation of a global registry of geographical indications. On Tuesday, INTA members will discuss the EU’s accession to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications within the World Intellectual Property Organization. The U.S. fought against the Geneva Act’s passage in 2015, but ultimately failed in blocking it. The new GI register would allow parties to protect cheese names the U.S. considers common or generic, such as “asiago” or “feta.” Once those names received protection, U.S. agriculture groups would be barred from exporting such products to any member of the group.

The INTA Committee will debate the text of a resolution on the future of the WTO on Tuesday. A draft resolution endorses reforms to the WTO and expresses concern about the crisis of the WTO’s Appellate Body, while reiterating the EU’s commitment to the multilateral trading system.

On Tuesday, DG Trade Director Ignacio Garcia Bercero will brief INTA on EU Trade Commissioner Cecilia Malmström’s meeting with Lighthizer and the state of play between the U.S. and EU. Malmström and Lighthizer discussed the progress of the U.S.-EU Executive Working Group, which has thus far focused on voluntary regulatory cooperation. The group is tasked with implementing a July joint statement issued by Trump and European Commission President Jean-Claude Juncker. That statement included language on a potential deal to eliminate industrial tariffs, but those talks are imperiled by the U.S. and EU’s disagreement over whether agriculture should be included in the scope of the negotiations.

Back in Washington, DC, former Mexican Ambassador to the U.S. Geronimo Gutierrez and former U.S. Ambassador to Mexico Earl Anthony Wayne will discuss a possible reset of U.S.-Mexico relations. The Tuesday Brookings Institution discussion also will feature Mireya Solis, director of the Brookings Center for East Asia Policy Studies; Vanda Felbab-Brown, senior fellow at Brookings; and Bruce Jones, senior fellow at Brookings.

The Center for Strategic and International Studies will hold a conference call on Tuesday to preview the G20 summit. Participants will include Heather Conley, director of the CSIS Europe Program; Lisa Collins, Korea chair at CSIS; and Jon Alterman, director of the CSIS Middle East Program.

Section 232 tariffs on steel and aluminum and the retaliatory duties they've inspired are expected to dominate the WTO Dispute Settlement Body meeting on Wednesday. Several countries -- Mexico, Norway and Russia, among others -- will make their second request for a panel, which cannot be denied by the U.S. The U.S., meanwhile, will make its second panel requests of countries with retaliatory tariffs, including Canada, Mexico, the European Union and China. The U.S. has argued that its national security designation cannot be questioned, while other countries have maintained the U.S. tariffs are incompatible with WTO rules. -- Brett Fortnam (bfortnam@iwpnews.com)

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