Mara Lee

The U.S. trade representative will negotiate with the European Union to seek to "secure comprehensive market access for U.S. agricultural goods in the EU by reducing or eliminating tariffs," and eliminate "non-tariff barriers that discriminate against U.S. agricultural goods," the Office of the U.S. Trade Representative said.

Sen. Ted Cruz, R-Texas, and Sen. Chris Coons, D-Del., have introduced a bill that would require the administration to review whether Cambodia should remain on the list of countries eligible for the General System of Preferences. Cambodia exported $400 million worth of products in 2017 that are covered by GSP, according to the Office of the U.S. Trade Representative. Only eight GSP countries had higher GSP exports that year. In all, more than $21 billion in imports received GSP duty benefits during 2017. Cruz said that Cambodia does not meet basic labor rights standards, has had the integrity of its elections undermined by its prime minister, and tilted toward China. "The [just introduced] Cambodian Trade Act aims to hold [Cambodia's Prime Minister Hun Sen] and his government accountable for this behavior, and reinforces steps our European partners are taking," he said in a statement. Coons added that "Countries that undermine democracy, ignore labor standards, disregard human rights, and fail to protect intellectual property should not enjoy special trade privileges."

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, reiterated that he will evaluate the president's authority to impose tariffs under Section 232, saying, "I do not believe that we should alienate our allies with tariffs disguised as national security protections." Grassley released a statement Jan. 9 on his priorities for the new Congress. He also said, "I’m not fond of the Section 301 tariffs on products from China, but I agree with the reasons they’ve been applied. I’ll continue to engage with the Administration on the ongoing trade dispute with China in hopes that negotiations will result in a change in China’s discriminatory policies and practices and an easing of tariffs and tensions. The World Trade Organization is also on his to-do list. "I have great interest in reforming and strengthening the WTO, which is a clearinghouse for our rules-based international trading system. I plan to work closely with the administration and our allies to strengthen the ability of the WTO to more effectively meet the demands of our global economy."

U.S. Trade Representative Robert Lighthizer issued a joint communique after a Jan. 9 trilateral meeting in Washington with EU Trade Commissioner Cecilia Malmstrom and Japan's Minister of Economy, Trade and Industry, Hiroshige Seko, to address non-market policies through the World Trade Organization (see 1901090023). They talked about finalizing text for the WTO on industrial subsidies by spring, and identified additional criteria that indicate market-oriented conditions. They are working on new rules on forced technology transfers, and coordinating on investment review and export controls. In Geneva in November 2018, they submitted a joint transparency and notification proposal to the Council for Trade in Goods and agreed during the meeting in Washington to work together to convince other countries to accept that notification proposal. They also are renewing their call for advanced WTO member countries that claim developing country status to stop using that status as an excuse to not undertake full commitments on trade within the organization.

Cecilia Malmstrom, the European Union's trade commissioner, told an audience at the Atlantic Council Jan. 10 that if U.S. tariffs on imported autos were to be implemented, the EU would not accept a quota system as Canada and Mexico have done. Malmstrom has been in Washington meeting with U.S. Trade Representative Robert Lighthizer this week on both World Trade Organization reform and the bilateral trade relationship.

U.S. Chamber of Commerce CEO Thomas Donohue said the same things on trade he's been saying for months -- the tariffs on Chinese goods are paid by businesses, not China; the steel and aluminum tariffs in the NAFTA region have to go; the new NAFTA should be approved -- during his annual State of American Business address. "Now that we’ve struck a deal with Canada and Mexico, the administration must make good on its repeated promise to remove the steel and aluminum tariffs that were imposed in the heat of negotiations," Donohue said in his speech Jan. 10. "This would be an encouraging sign for all of our partners, including those we’re pursuing new market-opening agreements with -- Japan, the EU, and the UK."

Farmers will be able to apply for trade assistance payments past the original deadline of Jan. 15, because they have not been able to apply since the partial federal government shutdown began Dec. 22, 2018. Farmers who already certified their production are receiving checks. Agriculture Secretary Sonny Perdue announced Jan. 8 that the deadline will be extended by the number of business days the government was closed, once the shutdown ends.

Sen. Chuck Grassley, R-Iowa, the new Senate Finance Committee chairman, said that while there's room for Democrats to get some of their priorities in the new NAFTA, he thinks President Donald Trump should play hardball if Democrats insist on reopening negotiations. "I want to sit down and talk to those Democrats and see what they have in mind, because surely they can't have in mind renegotiating. But there's things we can do, like side letters on what our feeling is about it," he said. "If they're reaching the point where you gotta go back to the negotiating table, I would encourage the president to pull out of NAFTA, and hope that they're smart enough not to let that happen."

Mid-level trade talks in Beijing discussed "ways to achieve fairness, reciprocity, and balance in trade relations between our two countries," according to a summary of the three days of talks released Jan. 9 by the U.S. Trade Representative. They also focused on China's pledge to buy more agricultural products, energy, and other goods and services, in order to address the persistent trade deficit. The summary said they discussed how there could be effective verification and enforcement of any deal. The US-China Business Council reacted to the round by saying "progress should include a mechanism for the removal of tariffs and measurable, commercially meaningful outcomes."

Revenues were flat in the first quarter of fiscal year 2019, as a major decline in corporate income taxes was offset by a sharp jump in tariff revenue, the Congressional Budget Office reports. Customs duties increased by $8 billion, or 83 percent, compared with the same October-December quarter in 2017. CBO said the increase was "largely because of new tariffs imposed by the Administration during the past year." CBP said in November that it has assessed more than $10 billion under the recent Trump administration Section 201, 232 and 301 trade remedies (see 1811260010).