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This Week In Trade

EU member states mull mandate for U.S. trade talks; Azevêdo in town

Posted: April 08, 2019

European ambassadors in Brussels this week will again consider a mandate for trade talks with the U.S. as they seek unanimity among the EU’s 28 member states. World Trade Organization Director General Roberto Azevêdo, meanwhile, will be in Washington, DC, to take part in the annual World Bank/International Monetary Fund spring meetings.

France has called for the revocation of the European Commission’s mandate to negotiate the Transatlantic Trade and Investment Partnership as a condition for supporting a mandate on a limited trade deal covering industrial goods. Other member states believe revoking a mandate would set a bad precedent and send the wrong signal to other countries with which the EU negotiates.

Member state ambassadors will convene on Thursday to try to hammer out compromise language that makes clear the potential new negotiations are separate from the TTIP talks, which stalled in September 2016. Member states have already addressed another French concern, agreeing on language on the timing of an environmental impact assessment of a limited trade deal.

The Brexit countdown is once again in the final days, with the United Kingdom set to leave the European Union on Friday. The British Parliament and Prime Minister Theresa May have repeatedly ruled out a no-deal Brexit, but, with five days to go, it is one of two most likely options for the UK. May has floated another, longer extension, which much be approved by EU leaders who will meet this week.

If the UK leaves the EU without a deal, it could immediately begin negotiating a trade agreement with the U.S. But U.S. businesses, along with British and European groups, have said a no-deal Brexit would spell unprecedented disruptions for global trade.

While EU leaders are expected to approve another extension, all eyes will be on the conditions attached to it. The UK will almost certainly have to participate in European Parliament elections and European leaders will demand a plan from May. The prime minister last week finally reached out to her opposition, Labour Party leader Jeremy Corbyn, to find a way forward. The talks -- initially characterized as constructive before stalling out later in the week -- could be key in securing an extension from the EU.

In Washington, Azevêdo will take part in several public events that could provide him with chances to discuss a dispute settlement’s panel landmark ruling last week that has the potential to anger the Trump administration. According the ruling, in a case between Russia and Ukraine, dispute settlement panels can decide whether a country’s trade restrictions meet the requirements of WTO’s national security exception, contained in Article XXI of the General Agreement on Tariffs and Trade. Russia, and the U.S. via a third-party submission, argued that a member’s invocation of Article XXI is not justiciable.

The U.S. has justified its tariffs on steel and aluminum imports as key to protecting its national security interests. Several WTO members are challenging the U.S. tariffs via dispute settlement, and the U.S. has invoked Article XXI as part of its defense.

On Wednesday, Azevêdo will take part in a panel discussion with IMF Managing Director Christine Legarde and World Bank Interim President Kristalina Georgieva on how trade can be used to reduce poverty. The DG will also give a keynote speech at the Peterson Institute for International Economics as well as participate in a roundtable discussion at the U.S. Chamber of Commerce on Thursday.

In the midst of Brexit chaos and the potential for a new round of U.S.-EU trade talks, the U.S. Chamber of Commerce will hold its second annual Transatlantic Business Works Summit on Monday afternoon. U.S. and European officials will be in attendance, along with business leaders from both sides of the pond. Under Secretary of Commerce for International Trade Gilbert Kaplan and Clete Willems, deputy director of the National Economic Council, will represent the Trump administration at the summit. European officials slated to attend include Spanish Ambassador to the U.S. Santiago Cabanas Ansorena, German Ambassador to the U.S. Emily Haber and Danish Ambassador to the U.S. Lone Dencker Wisborg.

Other events of note:

  • The Center for Strategic and International Studies on Wednesday will hold a forum on U.S.-China innovation. U.S.-China Business Council President Craig Allen will deliver the opening remarks.
  • The Association of Marshall Scholars and Carnegie Endowment for International Peace on Thursday will host former U.S. Trade Representatives Michael Forman and Carla Hills, White House officials from the Clinton and George W. Bush administrations and Bank of England Governor Mark Carney for a trade panel on the U.S.-UK strategic and economic dialogue.
  • Also on Thursday, Singapore Deputy Prime Minister Tharman Shanmugaratnam will be joined by Ngozi Okonjo-Iweala, senior adviser at Lazard; Ceyla Pazarbasioglu, vice president of equitable growth, finance and institutions at the World Bank; and Danny Leipziger, professor of international business and international affairs at the George Washington University, for a discussion on the future of globalization. The discussion will be hosted by GW’s Elliott School of International Affairs.
  • European Commission Vice President for Euro and Social Dialogue, Financial Stability, Financial Services and Capital Markets Union Valdis Dombrovskis will discuss the EU and Brexit at the Atlantic Council on Friday.
  • German Finance Minister Olaf Scholz will take part in a discussion on the trans-Atlantic partnership on Friday at the Peterson Institute.

Finally, the American International Automobile Dealers Association is sending hundreds of dealers to Capitol Hill on Tuesday and Wednesday to lobby against auto tariffs as part of its “Auto Tariff Fly-In.” President Trump is expected to make a decision on whether to impose Section 232 tariffs on autos and auto parts by mid-May. -- Brett Fortnam (bfortnam@iwpnews.com) with Hannah Monicken (hmonicken@iwpnews.com)