No business or labor group came out against the U.S.-Mexico-Canada Agreement, in comments filed to the International Trade Commission, even as some groups expressed concerns about aspects of the deal to replace NAFTA. Comments are due before the ITC holds a hearing on Nov. 15.
Mara Lee
Mara Lee, Senior Editor, is a reporter for International Trade Today and its sister publications Export Compliance Daily and Trade Law Daily. She joined the Warren Communications News staff in early 2018, after covering health policy, Midwestern Congressional delegations, and the Connecticut economy, insurance and manufacturing sectors for the Hartford Courant, the nation’s oldest continuously published newspaper (established 1674). Before arriving in Washington D.C. to cover Congress in 2005, she worked in Ohio, where she witnessed fervent presidential campaigning every four years.
Australia has become the sixth country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, so the trade pact will go into effect Dec. 30, 2018. A second round of tariff cuts will follow Jan. 1 for countries party to the agreement that follow a calendar tariff year; Japan's second round will happen April 1. Peru, Malaysia, Vietnam, Chile and Brunei have yet to ratify the trade agreement; Canada, New Zealand, Mexico, Japan, Singapore and now Australia have done so. The U.S. exited the TPP, the agreement's original name, three days after President Donald Trump took office in January 2017 (see 1810290044).
The higher quotas for poultry and dairy under the new NAFTA should create $450 million in benefits by the time they phase in 19 years from now, according to a new study by Purdue University economists. That gain is massively overshadowed by the size of $1.8 billion in lost sales now to Mexico and Canada because Mexico placed tariffs on pork, poultry, cheese and apples and both countries levied duties on some retail food products. When you combine the gains in the new NAFTA with the losses from retaliatory tariffs, the net loss is $779 million, according to the study. The biggest bite has been from tariffs on pork and poultry in Mexico -- those exports have fallen by 7 percent.
The U.S. blocked requests from China, Canada, Mexico, Norway, Russia, Turkey and the European Union to examine the legality of steel and aluminum tariffs at the World Trade Organization on Oct. 29. Panel requests can only be blocked one time, so at the next meeting, the panels will be formed. The U.S. was also seeking panels on retaliatory tariffs from China, Canada, Mexico and the EU, and those were blocked.
If investments stall because of tariffs between the U.S. and China, the World Bank projects that the rate of growth will fall over all over the world. If the impacts are largely concentrated between the two global giants, China will be hurt worse than the U.S., and other countries will benefit, said Caroline Freund, the director of trade at the World Bank. Freund, a Chinese trade economist and a domestic China expert, spoke about the trade war Oct. 26 at a George Washington University conference on U.S.-China relations.
South Africa's government welcomed product exclusions from tariffs on 161 aluminum and 36 steel products it exports to the U.S., but continues to push for a countrywide exemption. A government press release said aluminum foil, aluminum plates, sheets and strip were spared from tariffs. Steel hot rolled bars, hot rolled sheets, cold rolled sheets, steel plates and steel coils also received exclusions. Trade Minister Rob Davies met with U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross in July, the government said. "The exemption of some of the aluminum and steel lines confirms that South Africa remains a source of strategic primary and secondary products used in further value added manufacturing in the US, does not threaten US national security and contributes to jobs in both countries," the release said.
The European Union, Japan, Canada, Brazil, Mexico, South Korea and seven other pro-trade countries agreed that "the current situation at the WTO is no longer sustainable," but they didn't put forth any specific solutions at the end of a summit in Ottawa Oct. 25. In a joint communique, the countries said they're concerned about a lack of compliance by WTO members on notifying other countries on subsidies or other requested disclosures, and they wrote, "we recognize the need to address market distortions caused by subsidies and other instruments."
The Office of the U.S. Trade Representative is seeking public input on its negotiating objectives for talks with Japan, it said in a notice. People can submit written comments, or ask to testify at a public hearing on Dec. 10 at the International Trade Commission. The deadline for comments and to request an appearance at the hearing is Nov. 26. The USTR is seeking information about barriers to trade in goods and services between the U.S. and Japan; treatment of specific goods, described by their HTS numbers, under any proposed agreement; and "ways to address export priorities and import sensitivities in the context of the proposed agreement." The agency is also are interested in hearing about technical barriers to trade, customs and trade facilitation issues exporters would like to see addressed during negotiations, and an estimate of the economic benefits and costs to U.S. producers and consumers of the removal of U.S. tariffs and the removal or reduction of non-tariff barriers on articles traded with Japan.
Trade promotion authority puts obligations on the administration to consult, and follow congressional objectives, but the provisions that constrain Congress have no teeth, former trade staffers from both sides of the aisle agreed. Stephen Claeys, a partner at Wiley Rein and former Republican House Ways and Means Trade Subcommittee counsel, said the rules about how long Congress can delay a vote on a trade agreement, and the fact that they have to vote on it with no amendments, are wholly voluntary. "There is no TPA jail. There's no TPA judge," he said during a panel discussion hosted by The Federalist Society.
On Twitter, President Donald Trump bragged that "Billions of dollars... coming into United States coffers because of Tariffs." A few hours later, in an interview with The Wall Street Journal, he argued with the premise that tariffs are the greatest risk to the economy, declaring, "We don't have any tariffs." He then asked: "Other than some tariffs on steel -- which is actually small, what do we have?"