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This Week In Trade

Malmström to meet with USTR; trade expectations low for APEC

Posted: November 12, 2018

European Union Trade Commissioner Cecilia Malmström will visit Washington, DC, this week to meet with U.S. Trade Representative Robert Lighthizer and discuss progress made to date by the U.S.-EU Executive Working Group. Meanwhile, the newly minted U.S.-Mexico-Canada Agreement will take center stage later in the week when the International Trade Commission convenes to assess its likely economic impacts.

Looking abroad, Vice President Pence is leading a U.S. delegation to the Asia-Pacific Economic Cooperation ministerial in Papua New Guinea, though how much trade meaningful trade movement might occur there remains unclear.

Malmström’s visit comes days after she met with European trade ministers in Brussels to brief them on the status of trans-Atlantic talks. The EU trade commission said the Executive Working Group would release a report by the end of the year. That report is expected to outline the next steps the U.S. and EU should take to implement a joint statement issued by President Trump and EU Commission President Jean-Claude Juncker in July.

EU member states are hoping to be able to give the Commission a negotiating mandate by early next year, but the political path is expected to be difficult. EU member states must unanimously agree to enter into trade negotiations with the U.S. before the two sides can begin talks on a potential free trade deal. USTR last month notified Congress of its intent to enter into negotiations with the EU. The 90-day U.S. congressional consultation period prescribed in Trade Promotion Authority that precedes formal talks will conclude in January.

The Executive Working Group has thus far focused on advancing discussions on regulatory cooperation, an area in which neither side needs a mandate to negotiate outcomes.

Trade will be a key topic at the APEC ministerial meeting, but expectations are low for progress in that sphere. Bill Reinsch, a former Commerce Department official who now serves as a senior adviser at the Center for Strategic and International Studies, said at a panel discussion last week that “Expectations are low, and they probably won’t be fulfilled anyway.” Officials likely will discuss cross-border privacy rules and could publish a services trade restrictiveness index, he said.

The Office of the U.S. Trade Representative could not be reached by press time about which U.S. trade officials would be attending the ministerial.

Reinsch also expects leaders to include “the standard rhetoric” in public statements about the hope for a Free Trade Agreement for the Asia-Pacific even though there has been little to no progress made in achieving that goal. “This has been a goal for 20 years at least. I ... think we’re not much closer to it now than we were in the beginning. I think it is useful that they continue to restate it and they continue to maintain a commitment to it, even though the steps toward actually achieving it remain fairly far away,” he said.

Discussions likely will be focused on the negotiation of the Regional Comprehensive Economic Partnership and the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. CPTPP is set to go into effect at the end of the year.

The U.S.-China Economic and Security Review Commission is set to release its annual report to Congress on Wednesday. The report will cover several topics, including the root of U.S.-China trade tensions, as well as 26 recommendations for lawmakers. The Commission, created by Congress in 2000, is required to submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the U.S. and China.

On Monday, Reps. Mark Pocan (D-WI), Raul Grijalva (D-AZ) and Pramila Jayapal (D-WA) will hold a media availability at the AFL-CIO International Headquarters to discuss the priorities for the Congressional Progressive Caucus for the next House session.

American University’s Washington College of Law will host a program on the renegotiated North American Free Trade Agreement on Monday. WCL law professor Padideh Ala’i will moderate a panel with independent trade counsel Gary Horlick, Hughes Hubbard & Reed partner Matthew Nicely and Porges Trade Law founder Amy Porges.

The Heritage Foundation on Tuesday will hold a discussion on Taiwan’s place in U.S. trade policy, featuring Chern-Chyi Chen, deputy representative for economic affairs at the Taipei Economic and Cultural Representative Office in the United States; Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council; Riley Walters, policy analyst for Asia economy and technology at Heritage; and Walter Lohman, director of the Heritage Asian Studies Center.

The Global Business Dialogue, the Canada-United States Law Institute, the Case Western Reserve School of Law, and Steptoe & Johnson on Wednesday will jointly host a discussion on the future of U.S.-Canada relations. The event is set to be headlined by Deputy Canadian Ambassador to the United States Kirsten Hillman; Terrence Stewart, managing partner at Stewart & Stewart; Lawrence Herman, counsel at Herman & Associates; Richard Cunningham, senior partner at Steptoe & Johnson; and Christopher Sands, director of the Johns Hopkins School of Advanced International Studies' Center for Canadian Studies.

Comments on South Korea's World Trade Organization challenge of U.S. safeguard restrictions on imports of large residential washers are due on Thursday. USTR's request for comments followed the Sept. 26 establishment of a WTO Dispute Settlement Body panel, which was requested by Seoul in August after DSB consultations failed to produce an outcome. Those consultations were held June 26, according to a Federal Register notice published last month.

Stakeholders must submit comments on the modifications to the rules of origin chapter of the U.S.-Korea Free Trade Agreement by Friday, according to a Federal Register notice issued last month. The comments are part of the consultations being conducted by Washington and Seoul under the auspices of KORUS and should address whether certain items can be supplied by the U.S. industry “in commercial quantities in a timely manner.” They will be used to inform the committee's consultations on the potential revision of the rules of origin for textile products that are not commercially available in either country.

CSIS will hold two panels on Wednesday to address the ramifications of last week’s midterm discussions for foreign and trade policy. Sen. Chris Murphy (D-CT), the ranking member of the Senate Foreign Relations Europe and regional security cooperation subcommittee, will discuss the election’s impact on the trans-Atlantic agenda. Murphy will be joined by CSIS Europe program director Heather Conley; Bill Reinsch; and Louis Lauter, CSIS’ vice president for congressional and government affairs. Conley and Reinsch will then take part in a separate program on the foreign policy issues facing the next Congress.

The ITC will hear from industry groups covering a range of sectors on Thursday and Friday about the potential economic impacts of the USCMA. Many of the groups filed comments by Oct. 30, with some calling for the ITC to scrutinize how the new auto rule-of-origin provisions will impact certain sectors. Labor groups and the U.S. Chamber of Commerce outlined areas of the new pact they feel should be carefully reviewed by the commission, including labor language, investment protections and more.

Former Secretary of State for Exiting the European Union David Davis will deliver remarks at the Heritage Foundation on Thursday. Davis will be joined by UK Member of Parliament Owen Paterson; Shanker Singham, head of trade in the Center for Economic and Business Research; and Nile Gardiner, director of the Heritage Center for Freedom.

The Washington International Trade Association will host Davis, Paterson, and Singham for a Brexit panel on Friday. The discussion will be moderated by Mayer Brown partner Timothy Keeler.

WITA will also host EU Ambassador David O’Sullivan; Representative of German Industry and Trade President and CEO Daniel Andrich; and Tiffany Atwell, the director of international government and industry affairs at DuPont, for a discussion on the U.S.-EU trade dynamic on Thursday.

CSIS will host several panels on Friday on the evolving relationship between the U.S. and Japan. Former Japanese Prime Minister Yasuo Fukuda, former U.S. Senate Majority Leader Tom Daschle (D) and CSIS President and CEO John Hamre will discuss ongoing U.S.-Japanese dialogues. One of CSIS’ panels will focus on the economic relationship between the U.S. and Japan; it will include Wendy Cutler, Asia Society Policy Institute senior vice president; Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce; Shigeru Hayakawa, vice chairman of Toyota Motor Corporation and vice chair, Keidanren; and Kazumasa Kusaka, former vice minister, ministry of economy, trade and industry and chairman and CEO of the Japan Economic Foundation.

The George Washington University will look at the U.S.-China trade dispute through the lens of Asia’s economy by hosting a discussion on Friday with Sourabh Gupta, resident senior fellow at the Institute of China-America Studies; Prashanth Parameswaran, senior editor at The Diplomat; and Masahiko Uchino, second secretary in the Embassy of Japan. -- Brett Fortnam (bfortnam@iwpnews.com) with Isabelle Hoagland (ihoagland@iwpnews.com)