U.S. Trade Representative Robert Lighthizer said that the trade facilitation agreement that the U.S. and Brazil signed Oct. 19 is very similar to the USMCA trade facilitation chapter, and that traders should expect more incremental progress in coming months. “There’s a lot more that needs to be done,” Lighthizer said during a U.S. Chamber of Commerce program Oct. 20. “We have ongoing negotiations on ethanol. Brazilians like to talk about sugar. There’s a variety of things in the agriculture area.”
U.S. Trade Representative (USTR)
The U.S. cabinet level position that oversees trade negotiations with other countries. USTR is part of the Executive Office of the President. It also administers Section 301 tariffs.
The World Trade Organization announced that the European Union is entitled to hike tariffs on nearly $4 billion in U.S. goods due to the trade distorting effects of tax breaks for Boeing. The tariffs -- the levels of which have not been announced -- are not to go into effect immediately, but could affect civil aircraft, helicopters, tractors, chemicals, hazelnuts, wines, liquor, cotton and other products, according to a preliminary list of targets released last year.
The U.S.-Japan mini-deal is not consistent with World Trade Organization rules, a former White House trade negotiator said, so the two sides mentioned a future phase two deal to cover substantially all trade to convince Japan's parliament to pass the accord. Because of the way the deal was structured, with small tariff reductions for Japanese exporters, it did not require a vote in Congress, Clete Willems, speaking recently on a webinar for University of Nebraska students, said. In calling the mini-deal phase one, “I think both sides were playing it cute, to be honest,” Willems, now at Akin Gump, said. He said Japan was not interested in a comprehensive bilateral trade deal, because it still wants the U.S. to rejoin the Trans-Pacific Partnership.
The U.S. needs to increase engagement with China to convince it to limit restrictions on foreign companies and to end unfair government subsidies, former U.S. Trade Representative Michael Froman said. Although Froman said he is “hopeful” the U.S. can secure these concessions through more trade negotiations, he also said the U.S. may need to focus more on its own industrial policy to remain technologically competitive with China.
The 10% tariffs on Canadian non-alloyed unwrought aluminum will be refunded back to Sept. 1, and the tariffs won't return unless Canadian exporters exceed either 70,000 tons or 83,000 tons in that category (see 2009150040), the Office of the U.S. Trade Representative said on Sept. 15. The office said the limits start at 83,000 for the current month, then go to 70,000, then back to 83,000, then back to 70,000 for December. USTR did not say the tariffs would definitely return if Canadian exporters exceed these numbers by at least 5%, and suggested that if Canadian exporters reduced the next month's shipments by the same amount of the overage, that would satisfy USTR.
Mexico is setting new permit requirements for some steel exports to monitor for transshipment amid a surge in its steel shipments to the U.S., it said in a notice in the Aug. 28 Diario Oficial. The monitoring system will cover exports of standard pipe, mechanical tubing and semi-finished products. It will take effect five days after publication of the notice, and remain in effect until the end of June 2021, the notice said. The Office of the U.S. Trade Representative agreed to keep in place its exemption for Mexico from Section 232 tariffs on steel products, USTR said in a press release.
After the first high-level review of the phase one trade deal, the principals talked about progress and ensuring the success of the U.S.-China trade agreement, but some believe the happy talk can't obscure that China and the U.S. are disentangling their mutual dependency in tech goods and services. “There is a re-alignment that is happening in real time,” Rideau Potomac Strategy Group President Eric Miller said in an Aug. 25 phone interview, the day after the call. U.S. and Chinese trade officials reemphasized their commitment to the phase one agreement during the Aug. 24 call, the Office of the U.S. Trade Representative said.
EU to Eliminate Tariffs on Lobster, US to Reduce Tariffs by 50% on Crystal, Cigarette Lighters, Etc.
The U.S. is reducing by 50% tariffs on certain prepared meals, certain crystal glassware, cigarette lighters and lighter parts, surface preparations and propellant powders, in exchange for the European Union ending tariffs on live and frozen lobster imports. Canada had been taking market share from Maine lobster exports since Canada and the EU signed a trade deal, and Canadian lobsters could enter duty free. The products from the EU have an “average annual trade value of $160 million,” while lobster exports to the EU topped $111 million in 2017, the Office of the U.S. Trade Representative said in a news release Aug. 21. All the tariff reductions are effective as of Aug. 1, 2020.
Former U.S. trade representative Bob Zoellick laughed when a webinar moderator asked him how a pro-free-trade consensus can be re-established. Zoellick was on a Carnegie Endowment for International Peace webinar about the future of the global trading system with European Trade Commissioner Phil Hogan June 30. He said those who support free trade have always had a fight, because politics often align with protecting domestic producers from import competition.
Experts disagreed on the utility of the Trump administration approach to World Trade Organization reform, during a Senate Finance Committee hearing on the topic, and senators on the left and right suggested that the negotiated trade rules disadvantage Americans.