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This Week In Trade

Steel tariff negotiations to run up against USMCA signing deadline

Posted: October 29, 2018

The United States and Mexico could begin talks on Section 232 steel and aluminum tariffs as soon as this week, leaving negotiators with roughly one month to resolve the issue before the target date for the signing of the U.S.-Mexico-Canada Agreement.

The earliest the U.S. can sign the agreement is Nov. 29, just before Andrés Manuel López Obrador takes over as Mexico's president on Dec. 1. AMLO’s chief trade negotiator, Jesús Seade, has said the U.S. needs to lift the tariffs before the deal is signed. Earlier this month, Seade told Inside U.S. Trade that Mexico was seeking “an all-out elimination” of the tariffs.

Mexican officials, however, have not ruled out the possibility of agreeing to quotas, according to sources with knowledge of Mexico’s position. The U.S. has agreed to quotas with South Korea, Argentina and Brazil following its imposition of steel and aluminum tariffs earlier this year. Canada’s ambassador to the U.S., David MacNaughton, last week said he expected the U.S. steel and aluminum tariffs to be lifted “sooner rather than later,” according to media reports.

U.S. Trade Representative Robert Lighthizer said earlier this month that there is no deadline for addressing the Section 232 tariffs with Canada and Mexico, but noted it was a “high priority” for the three North American countries.

Any negotiations over the steel and aluminum tariffs will be happening as the U.S. continues to complete its domestic processes under Trade Promotion Authorities. Interested parties have until the end of Monday, Oct. 29, to submit a request to appear at the U.S. International Trade Commission’s hearing on the economic implications of the USMCA. The ITC hearing will be held on Nov. 15. Pre-hearing briefs are due on Tuesday.

Also on Tuesday, the ITC will hold its final hearing on the first antidumping and countervailing case the Commerce Department has self-initiated on behalf of the domestic industry in roughly 30 years. Commerce launched the case on imports of common alloy aluminum sheet from China last November. In January, the ITC issued a preliminary determination that found Chinese imports injured or threatened to injure the U.S. industry. Commerce is scheduled to announce its final determination this week, according to a June 2018 fact sheet. The ITC is scheduled to make its final injury determination 45 days after Commerce issues its final determination, if affirmative.

Comments on USTR’s annual National Trade Estimate on Foreign Trade Barriers report, meanwhile, are due on Tuesday. The report is typically issued at the end of March.

The Woodrow Wilson Center’s Asia Program, in conjunction with the Korea Economic Institute of America, on Tuesday will host a discussion on rules for the digital economy. Participants are set to include Masayuki Matsui, an economic counselor in Japan's U.S. embassy; Lee Do-kyu, information and communication technology counselor in the Korean embassy; Victoria Espinel, president of BSA | The Software Alliance; and Shihoko Goto, senior associate for Northeast Asia at the Wilson Center.

Deputy Assistant Secretary of State for East Asian and Pacific Affairs Walter Douglas will give a keynote address at an Association of Southeast Asian Nations stakeholder forum hosted by the Henry L. Stimson Center on Tuesday. Other participants include Deputy Assistant Secretary of State for International Finance and Development Roland De Marcellus; Philippines Ambassador to the United States Jose Manuel del Gallegos Romualdez; Boosara Kanchanalai, deputy chief of mission at the Royal Thai Embassy; Paul Shmotolokha, vice president of Alpha Technologies; and Brian Eyler, director of the Stimson Center's Southeast Asia Program.

On Wednesday, the Farm Foundation will present its economic analysis of the USMCA at an event at the National Press Club. Dominique van der Mensbrugghe, the director of the Center for Global Trade Analysis at Purdue University, and Joe Glauber, a senior fellow at the International Food Policy Research Institute, will discuss the findings.

The Austrian Embassy will host a program on the state of Transatlantic relations on Wednesday. EU Ambassador to the U.S. David O’Sullivan will participate along with Othmar Karas, the head of delegation of the Austrian People’s Party and former vice president of the European Parliament, and former Rep. Robert Walker (R-PA), who once served as chief deputy whip.

The Washington International Trade Association will take a deep dive into USMCA’s investment rules at a panel on Thursday featuring Edward Brzytwa, international trade director at the American Chemistry Council; Marney Cheek, partner at Covington and Burling LLP; Simon Lester, associate director of the Cato Institute Center for Trade Policy Studies; Aaron Padilla, senior international policy adviser at the American Petroleum Institute; and Ted Posner, international arbitration and trade partner at Weil, Gotshal and Manges LLP.

On Friday, administration officials will discuss the intersection of global trade and national security law at the American Bar Association’s National Security Conference. Tom Feddo, the deputy assistant secretary for investment security at the Treasury Department, and Sanchitha Jayaram, the chief of the foreign investment review staff at the national security division of the Justice Department, will be on a panel with former Deputy Assistant Treasury Secretary for Investment Security Aimen Mir, Covington & Burling partner David Fagan, and Steptoe & Johnson partner Stewart Baker. -- Brett Fortnam (bfortnam@iwpnews.com)