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This Week In Trade

As House hangs in the balance, USMCA's passage could be in question

Posted: November 05, 2018

As voters head to the polls on Tuesday to decide who controls the House, the future of the U.S.-Mexico-Canada Agreement -- and President Trump’s broader trade agenda -- could hang in the balance.

If the House goes from red to blue, Democrats likely will want to make their mark on the USMCA -- and changes to the deal could jeopardize Republican support. USMCA also could fall out of the congressional spotlight if the Democrats win the House, as lawmakers could choose to prioritize other issues -- such as immigration and health care -- over trade.

Democrats could also opt to challenge the Trump administration on its trade policy by investigating specific policies or by attempting to take back authority over trade via legislation. Republican lawmakers have proposed bills that would give Congress more authority over trade, but the Republican leadership has not been moved to try to pass it.

The makeup of the committees with jurisdiction over trade is also set to change, though how much remains in question. The re-election bids of Senate Finance Committee members Dean Heller (R-NV) and Bill Nelson (D-FL) are considered “toss ups” by Real Clear Politics. Democratic Finance Committee members Robert Menendez (NJ) and Sherrod Brown (OH) are expected to win their races, while Robert Casey’s (PA) seat is considered “safe.”

A number of Republicans on the House Ways & Means Committee find themselves in tight races. The races of Reps. Mike Kelly (PA), Peter Roskam (IL), Carlos Curbelo (FL) and Mike Bishop (MI) are all rated as toss ups.

The makeup of the trade committees is guaranteed to change, regardless of Tuesday’s results, as Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Ways & Means trade subcommittee chairman Dave Reichert (R-WA) are retiring.

President Trump will be in full campaign mode on Monday, traveling to Cleveland, OH, Fort Wayne, IN, and Cape Girardeau, MO, for rallies. Trade is almost always part of the president's pitch, as it was at a rally in Tennessee on Sunday. The president used the speech to tout the merits of the USMCA as well as taking “the toughest-ever action to crack down on China's abusive trade practices.”

Meanwhile, European trade ministers will meet on Friday to discuss trans-Atlantic trade relations as well as the reform of the World Trade Organization. The U.S.-EU Executive Working Group met in Washington, DC, last month, and its report -- which will outline the next steps for the trans-Atlantic trade relationship -- is expected to be issued later this month.

Last month the Office of the U.S. Trade Representative notified Congress of its intent to launch negotiations with the EU, but the U.S. and EU appear to be far apart on the prospective scope of those talks, France’s ambassador to the U.S. said last week.

On WTO reform, the EU ministers will discuss a proposal on transparency that the EU, U.S., Japan, Costa Rica and Argentina issued last week. The proposal includes rules that would hit WTO members delinquent in their notifications with penalties. According to a briefing note previewing Friday’s meeting, the EU is also working on a draft proposal on how to reform the WTO’s Appellate Body. The EU issued a concept paper that included proposed reforms for the Appellate Body, but U.S. Ambassador to the WTO Dennis Shea scoffed at the EU’s suggested changes.

Back in Washington, New Zealand’s ambassador to the WTO, Tim Groser, will give a farewell address on Monday at an event sponsored by the Washington International Trade Association. Groser is leaving his diplomatic post this month. He served as New Zealand’s trade minister during the Trans-Pacific Partnership negotiations.

Germany’s ambassador to the U.S., Emily Haber, will take part in the Hudson Institute’s “Ambassador Series” on Wednesday. Haber will discuss the evolving U.S.-German relationship with Hudson President and CEO Kenneth Weinstein and Hudson fellow Walter Mead.

The Taiwanese-American Chamber of Commerce will hold a launch event on Wednesday, which will include a panel discussion on the future of U.S.-Taiwanese trade.

On Thursday, WITA will take up the future of the WTO with a panel set to include National Economic Council Deputy Director Clete Willems. Willems will be joined by Stephen Claeys, attorney at Wiley Rein LLP; Grant Aldonas, executive director of the Georgetown University Law Center's Institute of International Economic Law; Ronald Lorentzen, senior international trade adviser at Kelley Drye & Warren LLP; Terence Stewart, managing partner at Stewart & Stewart; and Dorothy Dwoskin, principal at d2Strategies LLC.

White House trade adviser Peter Navarro on Friday will discuss “economic security as national security” at the Center for Strategic and International Studies with CSIS senior fellow Andrew Philip Hunter. The Trump administration has used the “economic security as national security” rationale to justify its Section 232 investigations into imports of steel, aluminum, autos, and auto parts.

CSIS will also offer a preview of the East Asia Summit and Asia-Pacific Economic Cooperation Summit. Trade policy is expected to be a key part of the APEC meeting later this month in Papua New Guinea, which Vice President Mike Pence will attend. Taking part in CSIS’ preview will be Victor Cha, senior adviser and Korea chair at CSIS; William Reinsch, senior adviser and international business chair at CSIS; Matthew Goodman, senior vice president and senior Asian economics adviser at CSIS; Amy Searight, senior adviser and director of the CSIS Southeast Asia Program; Christopher Johnson, senior adviser and China studies chair at CSIS; and Richard Rossow, senior adviser and U.S.-India policy studies chair at CSIS.

WTO Director General Roberto Azevêdo will meet with Chinese Premier Li Keqiang in Shanghai on Monday and Japanese Prime Minister Shinzo Abe in Tokyo on Tuesday. Back in Geneva, the WTO’s Rules committee will hold a negotiating session on fisheries that will extend from Tuesday until Friday. The Council for Trade-Related Aspects of Intellectual Property Rights will meet on Thursday and Friday. -- Brett Fortnam (bfortnam@iwpnews.com)