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This Week In Trade

Hearings set for Japan, EU deals as China talks progress; Lighthizer girds for USMCA debate

Posted: December 10, 2018

U.S. industry representatives get their say about a potential trade deal with Japan on Monday as the U.S. International Trade Commission holds a daylong hearing on negotiating objectives.

The hearing will feature panels focused on autos, pharmaceutical and biotechnology issues, agriculture and other sectors, as well as a group of business and labor representatives. Many groups weighed in on the negotiating objectives in comments that were due by Nov. 26. The Chamber of Commerce and the U.S.-Japan Business Council, in a Nov. 21 joint submission to USTR, urged the governments to “prioritize a comprehensive agreement rather than narrowly focus on the reduction of tariffs on certain goods and services.”

Additionally, the groups -- along with many others -- said the talks should lead to the “expeditious” eradication of Section 232 tariffs on steel and aluminum, adding that the U.S. should “make clear” that it will not impose similar tariffs on imports of autos and auto parts from Japan.

The ITC last week heard from industry officials and other stakeholders in a separate hearing on the potential economic impacts of a U.S.-Japan deal. The Office of the U.S. Trade Representative, in a Sept. 26 statement announcing the talks, said the U.S. would seek market access outcomes “designed to increase production and jobs in the United States in the motor vehicle industries.”

On Friday, the Office of the U.S. Trade Representative's Trade Policy Staff Committee will hold a hearing at the Commerce Department on another potential trade deal, this one with the European Union. Comments are due today. The ITC will take up the EU deal next week.

British Prime Minister Theresa May on Monday delayed a vote in Parliament on her negotiated withdrawal deal with the European Union. The vote, originally scheduled for Tuesday, was largely expected to fail, despite no clear path forward for that scenario. What the UK decides -- and what other minor concessions May can wrest from EU officials -- will determine whether the UK and the U.S. can negotiate a future trade deal. Adding fuel to fire of the pro-EU side, the European Court of Justice, the EU’s top judicial body, ruled on Monday that the United Kingdom can unilaterally revoke its withdrawal from the EU, upholding a judgment last week from the court's advocate general.

As the U.S. continues its preparations for talks with Japan and the EU, discussions with China will proceed -- with U.S. Trade Representative Robert Lighthizer saying on Sunday that as far as he's concerned, they'll end in late March, deal or not. Lighthizer made a rare television appearance in which he was pressed on whether the 90-day deadline agreed to by President Trump and Chinese President Xi Jinping on Dec. 1 was fixed.

“As far as I’m concerned it’s a hard deadline,” Lighthizer said. “When I talk to the president of the United States, he’s not talking about going beyond March. He’s talking about getting a deal. If there is a deal to be gotten, we want to get it in the next 90 days.”

Trump has suggested an extension is possible.

Lighthizer also deflected a question about whether he might become White House chief of staff, saying he had not been approached about the position and insisting, “I’m entirely focused on what I’m trying to do and it’s difficult enough.”

One of Lighthizer's most difficult tasks will be to shepherd the new U.S.-Mexico-Canada Agreement through Congress. The president has said he will initiate a U.S. withdrawal from NAFTA to force lawmakers' hand, but Lighthizer, on Sunday, declined to comment on the timing.

“We'll see,” he said. “That's a decision that's up to the president of the United States.”

Inside U.S. Trade reported on Friday that the withdrawal process could begin as soon as this week.

Asked about when he expected the deal to be put to a vote in Congress, Lighthizer said “Certainly within the next few months.”

Lighthizer recently spoke with a key voice in Congress, New Democrat Coalition Chair Jim Himes (CT), who said in a statement that the two “had a constructive conversation Friday in which he expressed his interest in engaging closely with members of Congress and I agreed that such engagement would be essential to consideration of the revised NAFTA agreement, but also the ongoing challenges caused by tariffs and the President’s threat to withdraw from NAFTA.”

Himes echoed calls from other prominent Democrats in stressing “the importance to the Ambassador of consulting with all Members of Congress, particularly our Members on the Ways and Means Committee.” he said, adding: “I expressed my opposition to President Trump starting a process to withdraw from NAFTA as a negotiating tactic. NAFTA can and should be improved, but threatening unilateral withdrawal will create economic chaos and not build the trust necessary for bipartisan progress.”

NAFTA 2.0, “Fix it or Nix It,” is the subject of a webinar set for Thursday that will be focused on “the impact that NAFTA has had and how Trump's NAFTA could continue to harm working people and the environment in all three countries,” according to the organizer, The Institute for Policy Studies. Arthur Stamoulis, executive director of the Citizens Trade Campaign; Anthony Torres, associate campaign representative with the Sierra Club; Ted Lewis, executive council and human rights director at Global Exchange; Catherine Houston, political, rapid response and women of steel coordinator for United Steelworkers District 12; and Manuel Perez-Rocha, associate fellow at IPS, will take part.

Over in Geneva, the World Trade Organization's last General Council of the year will convene on Wednesday and Thursday, with the Appellate Body controversy expected to be a focal point of the meeting. The U.S. has been blocking appointments to the Appellate Body since mid-2017, and the panel is down to three members. If WTO members do not agree on new appointments by December 2019, the AB will be unable to hear appeals or enforce dispute settlement panel hearings.

A slew of other trade-related events are on tap for the week, with the Washington International Trade Association set to hear from the “U.S. Sherpa,” National Economic Council Deputy Director Clete Williams, on Wednesday. The subject: The recently concluded G20 leaders summit.

On Tuesday, the Inter-American Dialogue will hold an event at the National Press Club titled “What Does the New U.S. Congress Mean for Latin America and Energy?” Among those slated to appear: Katherine Tai, chief trade counsel for the House Ways & Means Committee’s democratic staff; Neil Brown, director of the KKR Global Institute; Daniel Kastholm, managing director of Fitch Ratings; Mark Nelson, regional vice president of Sempra Energy; Jeremy Martin, vice president for energy and sustainability at the Institute of the Americas; Nelson Cunningham, president and co-founder of McLarty Associates; and Lisa Viscidi, director of the IAD Energy, Climate Change and Extractive Industries Program.

Tuesday will also bring a news conference on the “real” economic effects of Section 232 Aluminum and Steel Tariffs. The American Primary Aluminum Association, the Economic Policy Institute, the Alliance for American Manufacturing and the Coalition for a Prosperous America are behind the Press Club event, which will feature former Sen. Evan Bayh, (D-IN); Jesse Gary, executive vice president and general counsel at Century Aluminum; Robert Scott, senior economist at EPI; Scott Paul, president of AAM; and Jeff Ferry, research director of CPA.

Kevin McAleenan, U.S. Customs and Border Protection commissioner, will be sole witness on Tuesday at a Senate Judiciary Committee hearing on his agency.

Japan will be discussed by the Inter-American Dialogue and the Japan Association of Latin America and the Caribbean during the fourth annual “Japan-Latin America Forum” on Tuesday. The theme: “Japan's Latest Moves in Latin American and Caribbean (LAC): Reshaping the Partnership.” Among those appearing will be Takahiro Nakamae, director general of the Japanese Ministry of Foreign Affair's Latin American and Caribbean Affairs Bureau; and Toshiyuki Yasui, executive director of the Inter-American Development Bank.

Commerce's International Trade Administration on Wednesday will host a discussion on energy, information and communication technology and infrastructure in the Indo-Pacific region. “As part of the commitment to a free and open Indo-Pacific, the Global Markets unit [of ITA] seeks individual comments from industry on government programs to inform the catalyzation of U.S. private sector participation in commercial opportunities in the Indo-Pacific region in energy, ICT and infrastructure,” the agency said in a notice, calling the roundtable an opportunity to “facilitate a discussion with industry representatives and U.S. government staff.”

Also on Wednesday, George Washington University's Elliott School of International Affairs holds a conference on “U.S.-Taiwan Relations: Enhancing the Terms of Engagement in Media, Business and Trade.” -- Dan Dupont (ddupont@iwpnews.com)