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This Week In Trade

WTO reform takes center stage in Ottawa; EU officials head to DC

Posted: October 22, 2018

A group of trade ministers will gather in Ottawa this week to discuss potential World Trade Organization reforms, but the United States and China -- locked in an escalating trade skirmish that has fueled a sense of urgency at the WTO -- will not be in attendance.

The Oct. 24-25 meeting will be attended by ministers from Australia, Brazil, Canada, Chile, the EU, Japan, Kenya, South Korea, Mexico, New Zealand, Norway, Singapore and Switzerland. According to an advisory issued by the Canadian government, “ministers will seek to identify concrete and tangible ways the operation and functioning of the WTO could be enhanced and improved over the short, medium and long term.”

Canada and the EU have issued papers outlining potential avenues for WTO reform work, which are likely to be discussed at the gathering. U.S. Ambassador to the WTO Dennis Shea last week warned WTO members against allowing continued discussions to get in the way of substantive outcomes. Earlier this month, Shea said WTO “middle-road” countries needed to “pick a lane” on reform.

Topics of discussion include transparency and notifications, the Dispute Settlement Body and the Appellate Body, and the development of new obligations on either a plurilateral or multilateral front.

U.S. trade officials, meanwhile, will be meeting with their European counterparts this week. The U.S.-EU Executive Working Group session in Washington, DC, will follow a reportedly contentious exchange between EU Trade Commissioner Cecilia Malmström and Commerce Secretary Wilbur Ross last week in Brussels. Ross, according to reports, complained about the pace of the trans-Atlantic talks.

According to Commission sources, U.S. and EU officials this week will discuss regulatory cooperation as well as issues that could be included in future trade negotiations. “These discussions are a preliminary and indispensable step for the Commission to request a negotiating mandate from EU Member States before engaging in formal negotiations,” a Commission source said via email.

The U.S. last week notified Congress of its intent to negotiate a free trade agreement with the EU. The EU must secure a mandate from its member states before formal FTA talks can begin.

New Zealand Trade Minister David Parker will stop in Washington, DC, on his way to Ottawa to meet with U.S. Trade Representative Robert Lighthizer, according to a press release from the New Zealand government. Parker will discuss ideas for WTO reform with Lighthizer and push for New Zealand steel and aluminum exporters to receive an exemption from U.S. Section 232 tariffs, the release said.

The U.S. Section 232 tariffs remain a focus for Mexico and Canada as the two countries hope to secure exemptions before the U.S. congressional midterm elections. Canada and Mexico are reportedly refusing to take part in an unofficial ceremonial signing of the U.S.-Mexico-Canada Agreement because the tariffs remain in effect. The U.S. cannot officially sign the USMCA until Nov. 29, as laid out in the 2015 Trade Promotion Authority law.

Canacero, a major Mexican steel group, will hold a press conference on Monday that will be attended by current Mexican Economy Secretary Ildefonso Guajardo and incoming Mexican President Andrés Manuel López Obrador. Guajardo and Canacero President Máximo Vedoya will deliver remarks, as will Mexican steel CEOs.

U.S. steel executives will hold a “State of Steel” press conference on Thursday. Steel Manufacturers Association President Philip Bell and SMA vice chairmen Mark Millett and Dave Sumoksi will participate. Millett is the president and CEO of Steel Dynamics and Sumoski is the executive vice president of Nucor.

Canada’s safeguard measures on certain steel products will go into effect on Thursday. The measures will not apply to steel from the U.S., Chile and Israel. Mexico did not receive a full exemption from the measures.

British Prime Minister Theresa May will once again defend her government's handling of Brexit negotiations to Parliament on Monday after a summit with European leaders last week didn't appear to move the dial nearly enough for a deal to emerge. According to her prepared remarks, May insisted 95 percent of the deal is done, and cite significant progress in recent weeks.

The sticking point continues to be the Irish border -- specifically, how long the United Kingdom will remain in a customs union with the European Union after the March 2019 Brexit deadline. May could be willing to drop a UK demand for a time-limited arrangement to avoid the EU's demand for a Northern Ireland-only customs union failsafe and reach a deal, according to reports [https://www.bloomberg.com/news/articles/2018-10-19/u-k-is-said-to-drop-b..., but this could imperil Parliamentary support for the overall deal.

European Parliament’s Constitutional Affairs Committee will hold a debate on Brexit on Monday. The debate will be led by Guy Verhofstadt, Parliament’s coordinator for the Brexit talks, and Danuta Maria, a member of Parliament’s Brexit Steering Group.

On Tuesday, British Ambassador to the U.S. Kim Darroch will discuss Brexit at an event hosted by the Brookings Institution. Darroch will be joined by former UK Secretary of State for Scotland Douglas Alexander; former Irish Minister for European Affairs Lucinda Creighton; columnist Edward Luce; and senior Brookings fellows Amanda Sloat and Thomas Wright.

American University’s Washington College of Law will hold its annual trade symposium on Wednesday. Brazilian Ambassador to the U.S. Sérgio Amaral will deliver opening remarks. Representatives from the embassies of Brazil, Mexico and Germany will discuss the global outlook for trade policy. The repercussions of U.S. Section 232 tariffs will be addressed by Terence Stewart, the managing partner at Stewart and Stewart; Matthew Nicely, a partner at Hughes Hubbard & Reed; and Pablo Bentes, the managing director of trade and investment at Steptoe and Johnson.

Potential Section 232 tariffs on auto and auto part imports will be the focus of a Tuesday discussion at the Heritage Foundation. Sen. Rob Portman (R-OH) will give remarks and participate in a question-and-answer session. Portman is the lead sponsor of a bill that would roll back the president’s authority to impose Section 232 tariffs. His remarks will be followed by a panel featuring Ann Wilson, the senior vice president of government affairs at the Motor Equipment Manufacturers Association; and John Bozzella, the president and CEO of the Association of Global Automakers.

The Alliance for American Manufacturing and the Economic Policy Institute will hold a conference call on Tuesday about a new report that says the U.S. trade deficit with China cost 3.4 million U.S. jobs between 2001 and 2017. AAM President Scott Paul and EPI senior economist Rob Scott will participate.

On Friday, George Washington University’s Elliott School of International Affairs will hold its 11th annual conference on U.S.-China relations and economic development. The World Bank’s Caroline Freund will deliver a keynote address on U.S.-China trade tensions. Following the address, Tsinghua University’s Jiandong Ju and the Peterson Institute’s Mary Lovely’s will discuss “The myths of the U.S.-China trade war.”

In Geneva, the WTO’s Committee on Subsidies and Countervailing Measures will hold a special meeting and a regular meeting on Tuesday. The working group for trade and transfer of technology will meet on Friday. -- Brett Fortnam (bfortnam@iwpnews.com)