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This Week In Trade

With Congress back, industry groups are flying in to push for USMCA

Posted: September 09, 2019

Both chambers of Congress return to work in Washington, DC, this week -- and they will be met by an armada of trade association representatives eager to tell them to pass the U.S.-Mexico-Canada Agreement.

Members of the National Farmers Union, the National Pork Producers Council and the Motor & Equipment Manufacturers Association will be on Capitol Hill this week to discuss U.S. trade policy writ large, but the real focus will be getting USMCA across the finish line.

“Passing legislation to implement the USMCA is one of MEMA’s top advocacy priorities,” the group says on its website. “Members of Congress need to hear from you! MEMA needs company representatives to come to Washington, DC, on Sept. 11 and participate in our 'Pass USMCA!' Legislative Fly-In event. This fly-in is the perfect opportunity for you to meet with key Members of Congress and urge them to pass USMCA.”

The NPPC lists congressional ratification of the USMCA as one of its “top priorities” for the fall session. “This would allow the U.S. pork industry to maintain zero-duty market access to two of its largest export markets,” the group contends. “Last year, Canada and Mexico took more than 40 percent of the pork that was exported from the United States. We strongly urge Congress to ratify USMCA, maintaining zero-duty access to U.S. for our two largest trading partners.”

The normally trade-skeptical National Farmers Union, meanwhile, is expecting to back UMSCA if House Democrats and U.S. Trade Representative Robert Lighthizer reach a deal on labor, environment, pharmaceutical and enforcement provisions, according to NFU President Roger Johnson. The country’s second-largest agricultural group on Sunday laid out its demand for USMCA changes.

“National Farmers Union Board of Directors’ final judgement on the passage of USMCA depends on the strengthening of labor, environment, and enforcement provisions; rectifying language related to prescription drugs; strengthening of anti-dumping protections for agricultural goods; and re-establishing Country of Origin Labeling authority,” says a resolution unanimously passed by the board.

Tech groups are also getting into the act, writing a letter urging Congress to pass the trade deal. “When NAFTA was negotiated a quarter-century ago, there was no e-commerce and, consequently, the agreement did not address digital policies,” 11 tech groups, including the Internet Association, the Information Technology Industry Council and the Semiconductor Industry Association say in the Sept. 9 letter. “USMCA’s Digital Trade Chapter -- along with provisions in the Intellectual Property, Financial Services, Customs Administration and Trade Facilitation, and other chapters -- set a new, global standard for rules that will benefit digital trade and e-commerce.”

The tech groups did add one caveat, telling Congress the administration should not be allowed to “unilaterally amend the U.S. de minimis threshold through the USMCA implementing bill,” the letter says. “The current threshold was set by Congress and continues to benefit U.S. small businesses.”

As negotiated, USMCA contains a footnote that says parties will be able to apply “reciprocal” de minims levels once the agreement is in force. Lawmakers have also expressed concern over the inclusion of the footnote.

The elephant in the room

U.S. and Chinese negotiating teams are expected to meet at the deputy level this month, but both sides remain dug in with China appearing to prepare for a prolonged fight with the U.S. and the Trump administration insisting tariffs have had little impact on the U.S. economy.

“It's fair to say it's impacted the Chinese economy,” Treasury Secretary Steven Mnuchin said on Fox News on Monday. “We have not yet seen any impact on the U.S. economy. So I think, as you know, we've navigated this very carefully. There's no question that the RMB has depreciated significantly. That's paid for the majority of the tariffs.”

Meanwhile, Deputy USTR Jeffrey Gerrish is leading the U.S. delegation to the Association of Southeast Asian Nations Economic Ministers meeting in Bangkok, Thailand, this week. Chief Agricultural Negotiator Gregg Doud is also on the trip. The meeting kicked off on Sunday and will wrap up on Wednesday.

“In Bangkok, Ambassador Gerrish and Ambassador Doud will promote fair market access in U.S. trade relations with the region,” USTR said in a statement on Friday. “On the margins of the AEM meeting, they will hold bilateral meetings with ASEAN trade ministers to address U.S. trade priorities, including the removal of barriers to U.S. exports and the reduction of U.S. trade deficits. Ambassador Gerrish will also lead the U.S. delegation at the East Asia Summit (EAS) Economic Ministers Meeting.”

Fisheries negotiations at the World Trade Organization will resume beginning on Tuesday, as members continue to push for a deal by the end of the year. Before WTO ambassadors broke for their August recess, U.S. envoy Dennis Shea said he did not believe the negotiations were on track to finish by the end 2019.

Events this week

  • The U.S. Chamber of Commerce and U.S.-India Business Council on Tuesday will hold a discussion on how U.S.-India relations are impacting the global trade environment with USIBC President Nisha Biswal. The discussion comes as the two countries are working on a partial trade agreement with the hopes of announcing one during the United Nations General Assembly later this month.
  • The Heritage Foundation will host Brazilian Foreign Affairs Minister Ernesto Araujo on Wednesday. A delegation of Brazilian officials visited the White House late last month and the U.S. last week announced Brazil would increase its ethanol tariff-rate quota. The National Economists Club welcomes Chad Bown, a senior fellow at the Peterson Institute for International Economics, for a luncheon discussion on trade policy and economics on Thursday.
  • George Washington University’s Elliott School of International Affairs will hold a forum on next steps in the U.S.-Korea economic relationship on Thursday with Wendy Cutler, the vice president and managing director of the Asia Society Policy Institute, and Yonho Kim, the associate director of the GWU Institute for Koreas Studies.
  • The Elliott School will host a panel on Thursday focusing on how rising trade tensions impact technological competition between the U.S. and China. Panelists will include Donald Morrissey, the head of U.S. congressional, state and local government affairs for Huawei; U.S.-China Business Council Vice President Jacob Parker; and Gene Ma, the head of China research at the Institute of International Finance. -- Brett Fortnam (bfortnam@iwpnews.com)

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