Mara Lee

All of the remedies proposed to protect the U.S. aluminum and steel industries are overly broad, and will destroy more jobs than they create, warns a letter sent to the Trump administration Feb. 27, signed by 25 trade groups. "We understand your goal of supporting these two important sectors of our domestic manufacturing base," said farmers, auto and engine manufacturers, metal parts makers, food processors, and oil and chemical industries.

The House Ways and Means Committee will consider whether all enforcement tools under the Trade Facilitation and Trade Enforcement Act are being used, the committee said in a letter outlining the year's priorities. It will also be addressing fiscal year 2019 budgets for the Office of the U.S. Trade Representative, CBP and the International Trade Commission in the coming months. In its "views and estimates" letter on the budget, the committee noted that it will be working closely with the Trump administration to modernize NAFTA and on U.S.-Korea Free Trade Agreement negotiations. Also, the committee will work with the administration "to determine appropriate partners for additional trade negotiations as well as negotiating priorities," the letter said. To be reviewed as well is the Synthetics Trafficking & Overdose Prevention (STOP) Act, which aims to end the importation of fentanyl and carfentanil through international mail.

After a visit at the White House, House Ways and Means Chairman Kevin Brady, R-Texas, told reporters at the Capitol that he told the president that the next step after tax reform is expanding export opportunities. "NAFTA was a good part of our discussions," he said Feb. 26. "I think there's potential major wins for President [Donald] Trump in NAFTA." Brady pointed to improvements in customs, digital trade, intellectual property and agriculture.

The Japanese Business Federation (Keidanren) and the United States Council for International Business wrote to U.S. governors suggesting that foreign-owned U.S. auto and auto parts factories could be endangered if the U.S. trade representative insists on "economically unsustainable" rules of origin for automobiles. "As of 2015, Japanese companies had invested a cumulative $421 billion in the U.S., supporting more than 856,000 jobs in communities throughout the U.S. with average salaries of more than $80,000," the Feb. 21 letter said. The two groups say it's time to update NAFTA to deal with digital trade and intellectual property rights, but that they wish "to emphasize the need to 'do no harm'" in the rewrite.

The Department of Defense agrees with a Section 232 investigation that concludes that systematic unfair trade practices that erode the industrial base pose a risk to national security. However, Defense Secretary James Mattis' position is that any tariffs or quotas aimed at shoring up the domestic steel and aluminum industries may have "negative impact on our key allies." Mattis, in an undated memo released by the Commerce Department on Feb. 22, wrote that there is no immediate problem with sourcing steel and aluminum for military uses, since military consumption is just 3 percent of U.S. production. The Commerce Department's report, which became public last week (see 1802160020), noted that as well.

Courier and delivery services could greatly benefit from a modernized NAFTA, the Coalition of Services Industries said in a report released Feb. 21. The lobbying group said negotiations are in a critical stage, and if the U.S. withdraws from the agreement -- as President Donald Trump has repeatedly threatened -- services industries are among the groups that will be hurt most. The services coalition said NAFTA could change rules on cross-border trucking and Mexico's requirements to use Mexican brokers.

All of the Democrats on the House Ways and Means Committee, except ranking member Richard Neal of Massachusetts, signed a Feb. 22 letter asking the chairman of the Trade Subcommittee to hold a hearing on NAFTA. The group says a hearing is necessary so that Congress can provide appropriate oversight of the U.S. trade representative's negotiations for a revised NAFTA. "More than 25 years ago, this Committee held the administrations negotiating the original NAFTA to a high standard of accountability, requiring United States Trade Representatives, Secretaries of Labor, and Administrators of the Environmental Protection Agency to appear before it multiple times," the lawmakers said. "American workers, businesses, and other stakeholders of today deserve as much accountability, if not more, from their negotiators and from their representatives."

With less than a week before the seventh round of NAFTA talks begin, top Mexican officials are talking about working with the country's auto industry to shape a proposal on auto rules of origin. The Office of the U.S. Trade Representative has suggested that vehicles contain 85 percent North American content to qualify as duty free, and that half of the content come from the United States (see 1712120022). Detroit automakers have said that would be massively disruptive and make cars more expensive.

Steel industry interests testified Feb. 16 that duty evasion is pervasive, and that customs enforcement cannot keep up. "Customs and duty evasion and circumvention occurs because there's opportunity and because there's lack of enforcement," said Scott Paul, president of the Alliance for American Manufacturing. "Our border protections with regards to fairly traded goods are underfunded."

Worldwide tariffs on steel and aluminum or worldwide quotas on imports of those metals are two of the Commerce Department’s three recommendations on how to respond to plant closures and job losses in the domestic steel and aluminum industries. A flood of steel and aluminum, dumped at prices that undermine U.S. producers, is threatening the industrial base, and therefore national security, Commerce Secretary Wilbur Ross told the White House in January. On Feb. 16, he shared the details of those reports with reporters on a conference call, and posted redacted versions of both reports on the department’s website.