Mara Lee

The meeting six weeks from now between the presidents of China and the U.S. is unlikely to change the confrontational trajectory the two countries are on, according to a panel of China experts speaking at the Global Services Summit Oct. 17. "This has been a long, slow burn to this boil," said Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce. "It's hard to see how we step down from this without some kind of radical compromise on both sides."

The Office of the U.S. Trade Representative is holding a meeting to review Generalized System of Preferences eligibility for eight countries on Nov. 29, the USTR said in a notice. The Trade Policy GSP Subcommittee is examining whether Ecuador is acting in good faith to enforce an arbitration award, a dispute originated by Chevron (see 12092604). It is examining whether workers in Bolivia, Georgia, Iraq, Thailand and Uzbekistan have rights up to international standards, challenges brought by the AFL-CIO or another labor nonprofit (see 1511240017 and 11110124). And it is continuing to examine whether Laos should join the program. The committee is examining whether Indonesia and Uzbekistan are adequately protecting intellectual property rights. The meeting will begin at 10 a.m. at 1724 F St. NW in Washington, DC.

While the changes are likely at least a year away, a KPMG managing director of Trade & Customs Services, Gisele Belotto, told clients that the "changes [to NAFTA] are pretty extensive, and a lot more than changing the name." KPMG held a webcast on understanding the trade implications of the United States-Mexico-Canada Agreement on Oct. 16. While media coverage has been extensive on the changes to the auto rules of origin, and how that will make it more difficult for Mexican and Canadian autos to enter the U.S. duty-free, KPMG professionals noted that many other products' rules of origin became looser, making it easier to qualify the imports as originating in one of the NAFTA countries.

U.S. Trade Representative Robert Lighthizer informed Congress on Oct. 16 that the Trump administration will begin trade negotiations with the European Union, Japan and the United Kingdom. "We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers, and businesses," Lighthizer said. Negotiations cannot begin for 90 days, and no later than 30 days before they begin, the USTR must publish negotiating objectives. Lighthizer said that the negotiations may proceed in stages, if Congress blesses that approach.

The United States Hide, Skin and Leather Association and the American Apparel and Footwear Association called for changes to the 9802 program, in an opinion piece in The Hill on Oct 14. Those groups say the value of a hide sent from America to China to be made into shoes should be deducted from the value subject to tariffs when a U.S. firm imports the shoes. Similarly, nylon yarn that will be made into fabric in India should be deducted from the value. "If a company uses a U.S. component that is further processed abroad before it is assembled into an article, it is disqualified," they explained, which means that yarn doesn't count, since it is made into fabric, nor do hides, which must be tanned before they're made into leather. There are no more tanneries in the U.S., so hides that will be in shoes, furniture or clothing are sent offshore unprocessed.

Companies moving containers through the ports of Los Angeles and Long Beach will no longer have to pay congestion surcharges and instead will pay a flat fee of either $31.52 per 20-foot equivalent unit or $63.04 for other size containers starting Nov. 19, PierPass said. Companies will need to register with PierPass if they have not already, because all trucks bringing containers out of the ports will need to make an appointment. Nine of the 12 terminals at the two adjacent ports already use appointment systems, so most trucking firms serving the ports are already using these systems, the press release announcing the change said. The marine terminals will offer common appointment windows and common last appointment times for each shift.

Three Democratic senators wrote a letter to the Federal Trade Commission, asking it to do a better job of enforcing its "Made in the USA" standards. "In the cases of Nectar Sleep, Sandpiper/PiperGear USA, and Patriot Puck specifically, we are concerned that the Commission chose to forgo financial penalties and did not require admissions of guilt," they wrote. "In all three instances, the companies brazenly and fraudulently affixed 'Made in the USA' labels to foreign-made products, most of which were imported from China." The three companies settled with the FTC in September, but did not admit guilt. Sens. Sherrod Brown of Ohio, Tammy Baldwin of Wisconsin, and Chris Murphy of Connecticut wrote: "If the consequences of misusing the 'Made in the USA' label do not include paying fines or admitting wrongdoing, it is unlikely that bad actors [such as these] will be deterred from using the same deceptive tactics to sell their products in the future."

President Donald Trump said American consumers aren't paying more as a result of his tariffs. He said the Chinese don't have enough ammunition to retaliate at the same scale that the U.S. has in what he called a trade skirmish, not a trade war. Trump, who was speaking in a wide-ranging interview on CBS's 60 Minutes Oct. 14, said, "I called it a battle. But, actually, I'm gonna lower that. I consider it a skirmish. And we're gonna win." He said the Chinese want to negotiate, and he might levy more tariffs.

The International Trade Commission is seeking testimony and submissions for its analysis of how the U.S.-Mexico-Canada Agreement will affect industry, consumers and the economy as a whole. The ITC is charged with producing such a report for Congress to use as it decides whether to ratify any new trade agreement. It must do so within 105 days of the president entering into the agreement.

Dennis Shea, the U.S. ambassador to the World Trade Organization, says that China's interventions in its economy make it incompatible with the rule-based international trading system, and that more countries need to speak out about it. The U.S., the European Union and Japan are working on a common view of what the problems are with China, and what might be done to encourage changes. After that agreement is reached, they will be looking for more allies. Shea warned during a presentation Oct. 12 at the Center for Strategic and International Studies that "friends of the system," as about 40 countries are known in Geneva, "want to be middle-of-the-roaders when they really need to pick a lane."