USMCA

Nearly 50 business groups -- mostly not representing metals importers -- sent a letter to U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross suggesting that the tariffs on aluminum and steel in the NAFTA region must be lifted in order for the groups to lobby Congress to approve the new NAFTA, known as the U.S.-Mexico-Canada Agreement. "For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA," the Jan. 23 letter said. The groups -- including the U.S. Chamber of Commerce, the United States Council for International Business, the National Foreign Trade Council and more than a dozen agriculture advocacy organizations -- said the tariffs are hurting steel- and aluminum-consuming companies. They said they want the matter resolved so "we can turn our attention to working with you to gain prompt Congressional approval of the USMCA."

After the March 1 deadline, President Donald Trump could declare victory in the trade war, or his administration could decide the Chinese have not offered substantial changes in response to America's complaints about industrial policies and discrimination against U.S. firms. "It probably depends on what he's seen on Fox News this morning," Center for Strategic and International Studies' William Reinsch said at a CSIS program on Asia in 2019 on Jan. 23. Still, he said, Trump has a pattern of "lots of bluster, lots of threats, occasional use of a threat, and then at the end of the day, he tends to settle for much less than he asked for."

Rep. Earl Blumenauer, an Oregon progressive who supported fast track authority in 2015, will lead the House Ways and Means Committee's Trade Subcommittee, winning the seat instead of Rep. Bill Pascrell, the New Jersey Democrat who served as ranking member when the Democrats were in the minority. Blumenauer only chose to assert his seniority after his idea of an infrastructure financing committee didn't come to pass (see 1811140049). Blumenauer released a statement after his selection Jan. 16 that said: "We have an outstanding subcommittee primed to make progress and fight for Democratic values like meaningful, effective trade enforcement, access to affordable medicines, and strong environmental protections at home and abroad."

The Corn Refiners Association, which represents those who process corn into sweeteners, starch, feed and oils, announced Jan. 3 that it will be lobbying for a swift ratification of the U.S.-Mexico-Canada Agreement. The trade association's CEO, John Bode, said, "Mexico and Canada are the two largest export markets for refined corn products, averaging over $900 million in shipments per year. CRA is pleased that the USMCA maintains the zero tariffs that were originally achieved for corn wet milled products under NAFTA, as well as the expansion and improvements to critical text concerning sanitary and phyto-sanitary measures, good regulatory practices, customs procedures, and cooperation on biotechnology."

President Donald Trump predicted he'll make a "fantastic deal" with China, and, when asked by the TV interviewer how he could be so confident, said, "I know what I'm doing. It's business." He said during his "tremendous" four-hour meeting with Chinese President Xi Jinping in Argentina, "everything was agreed on. Now if we get it down on paper, that'll be another story, but I think we will." He said the meeting was so tremendous because he's levied 25 percent tariffs on $50 billion in Chinese imports and is willing to levy tariffs on all Chinese imports to get the concessions he wants. "That would be devastating for China. They have now agreed to go buy soybeans, tremendous amounts of soybeans. You see that already happening," he said.

A corporate farmer, a farmers' lobbyist and a farm economics researcher discussed the politics and pocketbook effects of tariffs in the sector, and how much sway farmers will have in the outcome of trade policy. The trio -- along with former Agriculture Secretary Tom Vilsack -- spoke on a panel at the Council on Foreign Relations Dec. 13. "Farmers want to stay with President Trump. A lot of them supported Trump," said Brian Kuehl, executive director of Farmers for Free Trade. "But I think the trade war is biting. Even for farmers we talk with ... who support the president, that patience is starting to wear thin."

President Donald Trump, whose demands for more border wall funding have run aground in Congress, tweeted early on Dec. 13 that the revised NAFTA will save so much more money that it pays for the wall. He said: "Our new deal with Mexico (and Canada), the USMCA, is so much better than the old, very costly & anti-USA NAFTA deal, that just by the money we save, MEXICO IS PAYING FOR THE WALL!"

The two excluded sectors from planned Europe trade talks -- agriculture and autos -- both want to be included, according to comments filed with the Office of the U.S. Trade Representative ahead of the Dec. 14 public hearing on negotiation priorities. More than 150 organizations and individuals shared their views in the USTR docket ahead of the Dec. 10 deadline for comments.

Automakers, titanium producers and drug industry players shared diverging views inside their respective sectors of how Office of the U.S. Trade Representative negotiators should approach a U.S.-Japan free trade agreement. The department invited the public to share opinions Dec. 10 on what priorities negotiators should pursue, and how the new deal should be similar or diverge from the path forged for the U.S.-Mexico-Canada Agreement and the Trans-Pacific Partnership. Autos are the single biggest import from Japan, making up $51 billion of the $136 billion in goods imports in 2017, according to USTR.

The National Council of Textile Organizations announced Dec. 6 that it endorses the U.S.-Mexico-Canada Agreement, and will lobby for it. The organization said the U.S. exported $11.8 billion in textiles within the NAFTA region in 2017. The trade group views USMCA as an improvement on NAFTA because the rewrite has stronger rules of origin for sewing thread, pocketing, narrow elastics and some coated fabrics; it has stronger customs enforcement rules; and it closes what NCTO calls the Kissell Amendment loophole. The Kissell Amendment, which covers Department of Homeland Security uniform and body armor purchases, allows sourcing from NAFTA partners, not just American producers. According to a 2017 GAO report, 58 percent of DHS spending on uniform body armor procurement is for imported items. If USMCA becomes law, apparel purchased for the agency will have to be sewn in the U.S., an NCTO spokesman said. He said the change affects "more than $30 million worth of contracts on an annual basis."