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This Week In Trade

Abe to meet with Trump, with trade on the agenda; key reports due this week

Posted: April 22, 2019

Japanese Prime Minister Shinzo Abe will meet with President Trump in Washington, DC, just over a week after U.S. Trade Representative Robert Lighthizer and Japanese Economy Minister Toshimitsu Motegi held a first round of bilateral trade talks.

The Trump-Abe meeting will be one of several for the two leaders in the upcoming months as Trump is scheduled to travel to Japan for a state visit at the end of next month and could make another trip across the Atlantic when Japan hosts the G20 leaders summit in June.

Trade policy could be a major topic of those meetings, as the U.S. agriculture sector is clamoring for a quick trade deal with Tokyo because it is getting pushed out of the Japanese market due to increased competition from other countries that gained market access via the Trans-Pacific Partnership. Japanese officials have said they want a “trade agreement in goods” with the U.S. and will give the U.S. no more agricultural access than it would have received as a member of TPP.

Several trade-related reports are also expected to be either publicly released or submitted to USTR this week. The U.S. International Trade Commission is slated on Tuesday to give USTR a report on the probable economic effects of providing duty-free treatment to EU imports in sectors where the U.S. has competitive domestic products. The report will also include an analysis of the probable economic effects of eliminating certain agricultural tariffs on EU products.

The European Commission last week received a mandate from its member states to launch trade talks with the U.S., but those talks must not include agricultural market access, according to the mandate. U.S. officials, meanwhile, have insisted that agriculture be included in the scope of any potential deal. The fundamental difference over the scope of the potential talks has led some analysts to doubt the negotiations will ever get out of the starting blocks.

The ITC’s report may not see the light of day, as USTR has asked that some of it be classified. “The USTR indicated that those sections of the Commission’s report that relate to the advice and assessment of probable economic effects will be classified,” a Nov. 20, 2018, ITC press release says. “The USTR also indicated that he considers the Commission’s report to be an interagency memorandum that will contain pre-decisional advice and be subject to the deliberative process privilege.”

The Treasury Department is due any day to release its biannual report on the currency practices of major trading partners. The reports typically are issued in mid-April and mid-October. The Trump administration has yet to name any U.S. trading partners a “currency manipulator” despite Trump's pledge, as a candidate for president, to label China as such. China, along with Japan, South Korea, Germany, India and Switzerland, were on the October 2018 report’s monitoring list.

USTR also is expected to release its annual Special 301 report examining the intellectual practices of U.S. trading partners “on or about” Friday, according to a December 2018 Federal Register notice. Last year’s report included tougher language on China’s IP practices -- a key topic of the ongoing trade talks between Washington and Beijing -- while also taking a harsher stance on compulsory licensing for pharmaceuticals.

In Geneva, meanwhile, the World Trade Organization’s Dispute Settlement Body is expected to adopt two major findings at a meeting on Friday: A panel’s first-ever ruling on the use of the WTO’s national security exception and a U.S. win over China that faulted Beijing for providing too much domestic support to its farmers. The panel ruling in the national security case involved Russian traffic restrictions on Ukrainian goods transiting through Russia, but is seen as a potential indicator of how future panels could rule on U.S. steel and aluminum tariffs. The panel found that it had the jurisdiction to rule on national security measures -- which the U.S. argued against in a third-party filing -- but said Russia’s measures fell under the national security exception. Ukraine and Russia each said they would not appeal the ruling.

The panel report on Chinese agricultural domestic support was the first of two significant U.S. wins over Beijing’s agricultural policies. Last week, a WTO panel found Beijing was not properly administering certain tariff-rate quotas, which led to some of those TRQs not being filled.

Notable events this week

  • The Economic Club of Washington on Tuesday will host AFL-CIO President Richard Trumka for an interview with Chubb Chairman and CEO Evan Greenberg at the Mandarin Oriental hotel.
  • The Global Business Dialogue on Tuesday will host a panel on U.S.-EU-China relations featuring Derek Scissors, a China analyst at the American Enterprise Institute; Jean-Francois Boittin, a former French trade official and analyst at a DC-based French think tanks; and Naomi Wilson, the Information Technology Industry Council’s senior policy director for Asia.
  • White House National Economic Council Director Larry Kudlow will speak at a National Press Club luncheon on Tuesday. -- Brett Fortnam (bfortnam@iwpnews.com)