trade agenda - KEY HIGHLIGHTS
NAFTA: THE LATEST
Last week, USTR Robert Lighthizer announced the first round of NAFTA negotiations will take place in Washington, DC on August 16-20. Moreover, Lighthizer announced that John Melle, Assistant U.S. Trade Representative for the Western Hemisphere, will serve as the U.S. Chief Negotiator for NAFTA discussions.
The announcement followed USTR’s publication of specific negotiating objectives for NAFTA, as required by the Trade Promotion Authority (TPA) process. The objectives highlighted the Administration’s emphasis on deficit reduction, and notably included a chapter on the digital economy and provisions to strengthen the labor and environmental standards codified in NAFTA side agreements, among others.
The House Ways and Means Subcommittee on Trade held its first hearing on NAFTA modernization last week to discuss USTR's objectives and necessary reforms to "bring NAFTA into the 21st century." The House Committee on Agriculture is scheduled to hold a hearing on NAFTA and the agriculture industry today.
U.S.-UK TRADE DEAL:
United Kingdom (UK) International Trade Secretary Liam Fox will be in Washington this week to kick off the first meeting of the UK-U.S. Trade and Investment Working Group. Earlier this month, President Trump expressed a commitment to "a very big, very powerful" bilateral trade agreement between the U.S. and UK following the United Kingdom's departure from the European Union (i.e., "Brexit). The working group will lay the groundwork for such an agreement; however, official discussions cannot commence until the UK has officially departed the EU, a process expected to take two years.
KORUS:
On July 12, USTR Robert Lighthizer officially requested a “special session” of the U.S.-Korea Joint Committee to consider potential amendments to the U.S.-Korea Free Trade Agreement (KORUS). Under Article 22.2 of the agreement, the move triggered a 30-day window by which the countries’ officials must meet, and Article 22.2.4 precludes Korea from vetoing a request for a special session. Importantly, while Korean officials have emphasized that they do not view the talks as a renegotiation of the agreement, President Trump recently stated, “We started, as of yesterday, renegotiating the deal with South Korea.”
Following Lighthizer’s notification to South Korea, the Senate Finance and House Ways & Means Committees sent a letter to Ambassador Lighthizer, cautioning the Administration to "proceed carefully" in pursuing any changes to KORUS, and urging USTR to act in accordance with the TPA process.
U.S.-CHINA COMPREHENSIVE DIALOGUE
Last Wednesday, the U.S. hosted the Chinese delegation for discussions on the U.S.-China Comprehensive Economic Dialogue, co-chaired by Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin. Following the meeting, Secretary Ross and Secretary Mnuchin issued a joint statement devoid of new deliverables, but noted China had acknowledged the need to reduce the trade deficit. According to the Chinese Foreign Ministry, the two countries discussed a one-year economic plan and “extensive consensus was reached,” including an agreement to “cooperate constructively on narrowing trade deficits.”
SECTION 232 INVESTIGATION ON STEEL
Last week, steel industry representatives met with Commerce Secretary Wilbur Ross to discuss the Commerce Department's pending Section 232 investigation. During the meeting, Ross urged executives from the steel industry to put “visible pressure” on the White House to act on the investigation. Ross’s probe under Section 232 of the 1962 Trade Act has been largely hindered by interagency pushback. During recent remarks to reporters, President Trump characterized the U.S. as a “dumping ground” for steel, and with respect to addressing the dumping problem, he stated, "there are two ways - quotas and tariffs. Maybe I'll do both."
On July 13, Secretary Ross briefed members of the Senate Finance Committee on the status of the Section 232 investigation, and stated a report on the national security implications of steel imports - including a “menu of options” for Administration action - would be submitted to President Trump within a week. While the timeline has evidently slipped, Secretary Ross is scheduled to provide a similar briefing to the House Ways & Means Committee this Thursday. Still, the exact timing of the release remains unclear.
NOTEWORTHY HEADLINES
• Fox and Johnson Launch Coordinated Post-Brexit Trade Push - Bloomberg, by Simon Kennedy and Andrew Mayeda
• U.S. Makes Lower Trade Deficit Top Priority in NAFTA Talks - Reuters, by Lesley Wroughton and David Lawder
• Trade Talks Fizzle as China Rebuffs Key Trump Team Demand - Washington Post, by Ana Swanson
• Senior U.S. Republican Questions Trump’s South Korea, Asia Trade Moves - Reuters, by Kevin Drawbaugh
• U.S., Canada, Mexico Agree on Fast-Paced NAFTA Talks - Sources - Reuters, by Anthony Esposito and David Ljunggren
• Trump Curbs on Steel Risk Trade War as ‘Pandora’s Box’ Opens Up - Bloomberg, by Masumi Suga
LEGISLATION OF INTEREST
• H.R. 3339 - a bill to amend the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 to require the publication of certain texts for trade agreements negotiated under that Act, and for other purposes (Introduced by Rep. Debbie Dingell [D-MI] on 7/20/2017).
• H.R. 3233 - a bill to promote fair trade, allow for greater participation in trade enforcement, and improve accountability and transparency in trade matters (Introduced by Rep. David McKinley [R-WV] on 7/13/2017).
• H.R. 3146 - a bill to direct the United States Trade Representative to initiate negotiations with the Government of the Republic of Turkey to seek to enter into a bilateral free trade agreement with Turkey (Introduced by Rep. Alexander Mooney [R-WV] on 6/29/2017).
CONGRESSIONAL HEARINGS
Today, July 26 at 10:00AM – The House Committee on Agriculture holds a hearing on “Renegotiating NAFTA: Opportunities for Agriculture.”
ADMINISTRATION EVENTS
July 27 at 11:00AM – The United States International Trade Commission holds a meeting.
CONFERENCE & INDUSTRY EVENTS
Today, July 26 at 10:00AM – The Center for Strategic and International Studies holds an event, “Renegotiating NAFTA: Energy Opportunities and Challenges.”
