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This Week In Trade

Lighthizer to meet with Freeland, then head to China

Posted: March 25, 2019

U.S. Trade Representative Robert Lighthizer will head to China this week to continue talks with senior Chinese officials, but before that he'll discuss U.S.-Mexico-Canada Agreement issues -- including Section 232 tariffs on steel and aluminum -- with his Canadian counterpart, Foreign Affairs Minister Chrystia Freeland.

The Monday meeting with Freeland was disclosed by the Canadians, who said she would also meet with members of Congress during her visit to Washington, DC. Top Mexican economic and labor officials were in town earlier this month, with USMCA and Section 232 prime topics, as Inside U.S. Trade reported.  Canada and Mexico -- and many U.S. lawmakers -- have tied the ratification of the deal to the removal or replacement of the tariffs, which continue to vex the business community as well. National Foreign Trade Council President Rufus Yerxa reiterated last week that the tariffs were the biggest issue facing his member companies, and that quotas, reportedly under consideration by the president, could be worse.

Also contributing to the continuing uncertainty over the fate of USMCA is Mexican labor reform, called for in the deal but so far not approved by Mexico's legislature. In Mexico, too, the business community is restless over the fate of the deal -- and not necessarily on board with all of the reforms, as Inside U.S. Trade reported last week.

The issue is likely to be discussed in depth on Tuesday when the House Ways & Means trade subcommittee holds a hearing titled “Trade and Labor: Creating and Enforcing Rules to Benefit American Workers.” Witnesses will include Celeste Drake, trade and globalization policy specialist at the AFL-CIO; Shane Larson, director of legislation, politics and international affairs for the Communications Workers of America; Steve Catanese, president of SEIU Local 668; Susan Monteverde, vice president of government relations for the American Association of Port Authorities; Thea Lee, president of the Economic Policy Institute; Holly Hart

legislative director and assistant to the president of United Steelworkers of America; and Josh Nassar, the legislative director of United Auto Workers.

Also on Capitol Hill this week: The Congressional Steel Caucus on Wednesday will hold its annual hearing featuring a host of industry witnesses as well as Leo Gerard, president of United Steelworkers.

Sen. Pat Toomey (R-PA), a leading critic of the president's use of Section 232 tariffs on steel and aluminum as well as his threats of auto tariffs, will headline a slate of speakers at a Thursday discussion of the “congressional trade agenda” hosted by the Washington International Trade Association. WITA says the Toomey-backed “Bicameral Congressional Trade Authority Act,” crafted to limit the president's authority to adjust imports under Section 232, will be on the agenda. Also slated to speak are former Rep. Charles Boustany (R-LA); Robert DeFrancesco, a partner at Wiley Rein LLP; Stacy Ettinger, a partner at K&L Gates LLP; Vanessa Sciarra, National Foreign Trade Council vice president for legal affairs and trade and investment policy; and Paul DeLaney, the Business Roundtable's vice president for international engagement.

The president met with Business Roundtable leaders and CEOs last week to discuss USMCA and China trade talks. Business Roundtable President and CEO Joshua Bolten said the group's trade panel would meet with Lighthizer ahead of his trip to Beijing -- adding that BRT's members were “cautiously optimistic” that Washington and Beijing would reach a deal that addresses at least some of the structural issues U.S. business groups have raised with the administration.

Also headed to China for talks on Thursday and Friday are Treasury Secretary Steven Mnuchin and Deputy USTR Jeffrey Gerrish. A Chinese delegation led by Vice Premier Liu He will then head to Washington for talks beginning on April 3, the White House announced.

The epic U.S. dispute with the European Union over aircraft subsidies continues at the World Trade Organization this week, when, on Thursday, the Appellate Body will issue its final ruling on U.S. subsidization of Boeing. The ruling will determine whether the remaining contested U.S. policies comply with WTO rules.

The WTO Dispute Settlement Body, meanwhile, will meet on Tuesday, when Venezuela is set to escalate a dispute with the U.S. over sanctions. The U.S. is also likely to once again block nominations to the Appellate Body.

Trump raised eyebrows last week with comments on the WTO, claiming -- falsely -- that the U.S. “never won cases” before he took over. “But we’re doing better even with WTO,” he said on Fox Business. “We’re winning cases all of a sudden because we never won cases. Now we’re starting to win cases because they know my attitude. If they don’t treat us fairly, we get out. And there’s a big difference there."

Trump spoke about trade and other issues on Friday with German Chancellor Angela Merkel, the White House said, providing no specifics.

On Thursday and Friday, the Export-Import Bank holds its annual conference in Washington, DC. Slated to speak are White House advisers Larry Kudlow and Peter Navarro. Also on the agenda is a panel of House members who will discuss a “path” to Ex-Im's reauthorization -- not considered a sure thing, as some lawmakers continue to object to the bank.

The Senate Banking Committee recently approved all four of President Trump’s nominees to the bank's board, but none has received a full Senate vote. Toomey has said he will prevent a quorum on the bank’s board, though he will support the confirmation of Kimberly Reed as president in the hopes that she will carry out what he and some other Republicans say are needed reforms.

Also worth watching: The United Kingdom was set to leave the EU on Friday, but the country’s cliff-edge date has been pushed back to April 12 after EU leaders agreed to a short extension last week. British Prime Minister Theresa May is expected to bring her twice-defeated deal to Parliament one last time this week. If it is approved, the UK will have until May 22 to pass needed implementing legislation. If it is voted down a third time, Parliament will likely hold a series of indicative votes to determine a way forward with all options back on the table.

Other events of note this week:

  • On Tuesday, the Henry L. Stimson Center holds a discussion titled “U.S.-China Competition 'Short of War,' 1991-2018.” Speakers include Michael Chase, senior political scientist at the RAND Corporation; and Yun Sun, director of the Stimson Center's China Program.
  • The Representative of German Industry and Trade and the American Institute for Contemporary German Studies on Tuesday will hold a discussion on “the automotive industry’s role in trade, job creation, and investment.” Slated to speak are Manny Manriquez, general director of the Japan Automobile Manufacturers Association; Bernhard Mattes, president of the German Association of the Automotive Industry;, Bryan Riley, director of the National Taxpayer’s Union “Free Trade Initiative”; Sherman Robinson, nonresident senior fellow at the Peterson Institute for International Economics; andPeter Rashish, director of the geoeconomics program at AICGS
  • On Wednesday, the National Lieutenant Governors Association holds a “Federal State Relations Meeting” featuring a discussion on “the economy and trade.”
  • The East-West Center in Washington will hold a seminar on “U.S.-Japan Trade Talks and Expanding Private Sector Opportunities in U.S.-Japan-Southeast Asia Economic Relations.” Participants include Darren de la Torre Mangado, visiting fellow at the East-West Center; Kyoko Suzuki, visiting fellow at the East-West Center; and Ellen Frost, senior adviser at the East-West Center.
  • On Thursday, the George Washington University Elliott School of International Affairs holds a discussion on titled “Beyond Brexit,” featuring Irish Ambassador to the United States Dan Mulhall.
  • On Thursday, the National Economists Club holds a discussion on the “State of the Indian Economy: Growth Amid Challenges.”
  • Friday, the Atlantic Council will discuss “visions” for a “free and open Indo-Pacific” with Walter Douglas, deputy assistant secretary of State for East Asian and Pacific affairs; Satoshi Suzuki, director general of the Japanese Foreign Affairs Ministry's Foreign Policy Bureau; Meredith Miller, senior vice president of the Albright Stonebridge Group and former senior vice president of the National Bureau of Asian Research; and Matthew Kroenig, deputy director of the Atlantic Council Scowcroft Center for Strategy and Security. -- Dan Dupont (ddupont@iwpnews.com)