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This Week In Trade

World leaders gather in Davos while U.S. remains sidelined by shutdown

Posted: January 22, 2019

As the World Economic Forum kicked off in Davos, Switzerland this week, U.S. officials remained at home due to the month-long government shutdown.

A group of trade ministers will meet on the sidelines of Davos on Wednesday and Thursday to discuss World Trade Organization affairs. The Thursday meeting is the annual “mini-ministerial” hosted by the Swiss government. The Wednesday meeting will be the second “reform ministerial” chaired by Canadian Trade Minister Jim Carr. The last reform ministerial was last October in Montreal.

U.S. Trade Representative Robert Lighthizer had been slated to make the trip, but the entire delegation was kept home by President Trump, who cited the shutdown in his decision. Geneva-based U.S. Ambassador to the WTO Dennis Shea is not attending the WTO meetings in Davos, the Office of the U.S. Trade Representative.

Ministers could formally launch plurilateral negotiations on e-commerce this week, although some industry sources have been skeptical that potential participants, including the U.S., could agree on the scope of a deal. The Global Services Coalition last week urged trade minister to redouble their efforts to launch negotiations and reach a deal by the next WTO ministerial in mid-2020.

German Chancellor Angela Merkel, Japanese Prime Minister Shinzō Abe and Chinese Vice President Wang Oishan will address the World Economic Forum on Wednesday. Secretary of State Michael Pompeo addressed the forum via satellite link on Tuesday. At the forum last year, Trump offered temporary hope the U.S. would re-engage on the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.

EU Trade Commissioner Cecilia Malmström will participate in several panels, including one on Thursday -- alongside WTO Director General Roberto Azevêdo -- on whether global trade is at a tipping point. Also on Thursday, she will discuss the future of Europe with Irish Taoiseach Leo Varadkar, WEF Founder Klaus Schwab, Dutch Prime Minister Mark Rutte, Spanish Prime Minister Pedro Sánchez and Polish Prime Minister Mateusz Morawiecki. A full agenda can be found on the WEF website.

British Prime Minister Theresa May presented her “Plan B” to Parliament on Monday, less than a week after the historic defeat of her withdrawal deal. Plan B, it turns out, looks a lot like Plan A, with May telling members of Parliament that she planned to go back to the European Union in hopes of winning additional concessions to assuage lawmakers. Since her deal was defeated, May has been meeting with the leaders of other parties in a bid to incorporate their input into a deal that can pass Parliament.

The European Parliament’s International Trade Committee will meet on Wednesday to debate two mandates the Commission needs to negotiate deals with the U.S. on industrial goods and conformity assessments. The Commission sent the mandates to the Council of the EU last week and needs unanimous consent from its member states before moving forward with negotiations. Parliament must approve a negotiated deal. The Commission’s proposed mandates make any deal with the U.S. contingent on the Trump administration's lifting of its Section 232 steel and aluminum tariffs on the EU, as well as refraining from imposing future Section 232 or 301 tariffs on Brussels.

The Commission on Wednesday will present to the INTA Committee the trade-related outcomes of the G20 summit held last November. The presentation will include work related to the Global Forum on Steel Overcapacity, according to an INTA agenda.

The U.S. International Trade Commission was supposed to submit its report on the economic effects of a potential U.S.-Japan free trade agreement on Thursday, but the government shutdown will delay its completion.

The House Ways & Means Committee will hold a hearing on the economic impacts of the government shutdown on the Treasury Department on Thursday. The witnesses have not yet been announced.

Economic and trade analysts from the Center for Strategic and International Studies will participate in the “Asia Forecast 2019” conference on Wednesday. The U.S.’ trade and economic relationships with China, India and South Korea will be discussed.

Also on Wednesday, the Asia Society Washington Center will discuss the U.S.-Korea economic agenda with the Korean ambassador to the U.S., Cho Woon-je, along with Wendy Cutler, vice president of the Asia Society Policy Institute; former South Korean Ambassador for International Economic Affairs Hyemin Lee; former Rep. Charles Boustany (R-LA), partner at Capitol Counsel LLC; and David Gossack, vice president for Asia at the U.S. Chamber of Commerce will also participate. -- Brett Fortnam (bfortnam@iwpnews.com)