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This Week In Trade

China talks resume; U.S. and Japan sign trade pact; Neal leads trip to Mexico

Posted: October 07, 2019

A delegation of Chinese officials will visit Washington, DC, this week to resume trade negotiations with their U.S. counterparts one week before the U.S. is scheduled to raise tariffs on Chinese goods. Meanwhile, President Trump is scheduled to sign a limited trade deal with Japan on Monday, and a group of House Democrats is heading to Mexico today to focus on labor reforms seen as crucial to the fate of the U.S.-Mexico-Canada Agreement.

Deputy-level Chinese officials will be in Washington on Monday and Tuesday to establish an agenda for ministerial meetings on Thursday and Friday. Chinese Vice Premier Liu He will again lead the Chinese delegation and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will head the U.S. team.

“The two sides will look to build on the deputy-level talks of the past weeks,” the White House said in a statement on Monday. “Topics of discussion will include forced technology transfer, intellectual property rights, services, non-tariff barriers, agriculture, and enforcement.”

White House trade adviser Peter Navarro, in an interview with NPR’s Morning Edition on Monday, downplayed the possibility of the U.S. and China reaching a deal. “President Trump has steely resolve,” Navarro said. “It’s either a big deal or no deal. That’s been his posture from Day One.”

Navarro suggested that China was trying to wait out the Trump administration, hoping instead to negotiate with a Democratic president like former Vice President Joe Biden or Sen. Elizabeth Warren (MA).

“I’m concerned about a possible miscalculation by China,” Navarro said. “They clearly prefer anybody but Trump as president. As we get closer to this election, they see Trump as the only president in the last 30 years who has stood up to them.”

Biden is “weak” on China, according to Navarro, while Warren’s stance on China shows she “clearly doesn’t understand the importance of the tariffs.”

Navarro’s tone was much more pessimistic than the one White House National Economic Director Larry Kudlow struck on Friday, when in multiple interviews he suggested some surprisingly positive developments could stem from the negotiations this week. Kudlow said the atmosphere between the sides had improved and suggested they could make further progress on removing Chinese foreign ownership restrictions.

Navarro also downplayed the importance of a deal with China, pivoting to USMCA by saying the latter “is far more important” than a deal with Beijing. If House Speaker Nancy Pelosi (D-CA) “fails to put USMCA up for a vote this month, it will be a signal failure of our political process and an economic catastrophe,” he said.

House Minority Leader Kevin McCarthy (D-CA) on Monday linked USMCA ratification efforts to the negotiations with China, saying that passing USMCA would provide the U.S. with greater leverage in its talks with Beijing.

“Wouldn’t we be stronger in our negotiations with China when it comes to trade if we had the USMCA done before President Trump has to sit down with Xi Jinping?” McCarthy said on Fox Business News.

According to McCarthy, House Democrats’ impeachment inquiry is preventing Congress from passing UMSCA. “Because of impeachment, we don’t have USMCA,” he said.

Mexico trip; Japan deal

House Ways & Means Committee Chairman Richard Neal (D-MA) is leading a delegation of Democrats to Mexico this week to meet with Mexican labor leaders on USMCA. “The trip comes as the House Democratic Working Group on NAFTA 2.0 continues to engage in productive discussions with the U.S. Trade Representative regarding important improvements to the agreement,” the committee said in an Oct. 4 announcement. “While in Mexico, members will meet with representatives from the Mexican Government as well as local workers.”

Members of the delegation include Reps. Bill Pascrell (D-NJ), Dan Kildee (D-MI), Jimmy Panetta (D-CA), and Jimmy Gomez (D-CA).

President Trump, meanwhile, will sign the U.S.-Japan Agreement and U.S.-Japan Digital Agreement on Monday afternoon at the White House.

WTO Public Forum

The World Trade Organization will hold its annual public forum this week with a theme focused on how trade policy can adapt to the changing technological landscape. The public forum starts on Tuesday. Inside U.S. Trade’s Hannah Monicken will be in Geneva to cover the discussion.

WTO Director General Roberto Azevêdo on Tuesday will deliver opening remarks for a discussion on fisheries subsidies. The U.S. has called the WTO’s negotiations on fisheries a bellwether for how the WTO handles special and differential treatment in future negotiations. But the talks have not picked up steam of late as divisions remain over rules capping the most harmful types of fisheries subsidies. Fisheries negotiations will resume on Thursday and Friday.

Azevêdo will also launch the “WTO World Trade Report 2019: The Future of Trade in Services” on Wednesday. He will meet with the U.S.-based Coalition of Services Industries and the Global Services Coalition on Wednesday, as well as with a delegation from the House Ways & Means Committee. Representatives of the National Foreign Trade Council will meet with Azevêdo on Thursday.

Events

  • Former USTR Charlese Barshefsky on Monday will discuss trade policy challenges in a discussion with Center for Strategic and International Studies trustees William Brock, Frederick Smith and Bob Schieffer.
  • USTR on Tuesday will hold its annual hearing on whether Russia is living up to its WTO commitments. The hearing will inform a report due to Congress by the end of the year.
  • The U.S. Chamber of Commerce’s Global Innovation Policy Center will launch its “Innovation and Creativity Access Barometer” on Tuesday. The Chamber describes the barometer as “an intellectual property tool to measure how top economies offer marketplace access for the latest innovative and creative products -- from medicines to music, films and television.”
  • The Middle East Institute on Wednesday will discuss the potential for a free trade agreement between Egypt and the U.S. The panel will feature former U.S. Ambassador to Yemen Gerald Feierstein, now the senior vice president of MEI; AmCham Egypt Inc. CEO Hisham Fahmy; Basillina CEO Deborah Lehr; and MEI Egypt program Director Mirette Mabrouk.
  • On Wednesday, the East-West Center in Washington will discuss how trade conflicts are hindering Asia’s economic growth. Set to speak is senior economist in the Asian Development Bank's Economic Research and Regional Cooperation Department; and Satu Limaye, vice president of the East-West Center.
  • Irish Ambassador to the U.S. Daniel Mulhall on Wednesday will discuss Brexit and the status of U.S.-EU relations at the Johns Hopkins University Paul H. Nitze School of Advanced International Studies. Mullhall will be joined by research professor at the U.S. Army War College; director of the Carnegie Endowment for International Peace Europe Program; assistant professor at SAIS; professor at SAIS; and post-doctoral fellow at SAIS.
  • FiscalNote and CQ Roll Call on Thursday will host a discussion on whether trade will decide the next election. It will feature Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce; Clete Williams, partner at Akin Gump and a former Trump administration White House adviser; Josh Nassar, legislative director for United Automobile Workers; Tomas Baert, head of trade and agriculture at the Delegation of the European Union to the United States; and Ellyn Ferguson, senior reporter at CQ. -- Brett Fortnam (bfortnam@iwpnews.com)

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