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What we’re covering this week --

  It’s another relatively quiet week in Washington, since all eyes will be on Philadelphia where the Democratic National Convention is being held.


 Here are some of the events we’ll be following this week:

             ●          Monday, the Alliance for American Manufacturing live-streams a program from Philadelphia on trade, manufacturing and jobs.  Democratic nominee Hillary Clinton’s economic adviser, Gene Sperling, is among the speakers.

             ●          Tuesday, the Center for Strategic and International Studies sponsors a program on US-Taiwan commercial cooperation in the information and communications sector.

             ●          Wednesday, the State Department’s Advisory Committee on International Economic Policy holds a public meeting.

             ●          The Delegation of the European Union in the United States live-streams a program from Philadelphia on US-EU relations, with speakers including EU Vice President Federica Mogherini and Rep. Gregory Meeks.

             ●          Thursday, the Atlantic Council sponsors a program on French leadership in a post-Brexit Europe with speakers including French Ambassador Gerard Arnaud.


 Volume 25, Number 147                             Monday, July 25, 2016

Trade Reports International Group

_________________________________________________________                                             

US, Mexico Presidents Meet


 When they met at the White House on Friday, President Obama and Mexican President Peña Nieto defended the North American Free Trade Agreement, while at the same time emphasizing that the TransPacific Partnership Agreement will correct many of the flaws critics find with NAFTA (WTD, 7/23/16).

 Both governments are working hard to get the TPP ratified, Mr. Obama said at a press conference following the meeting.

 NAFTA has been a success on both sides of the border, creating supply chains for US and Mexican manufacturers, Mr. Peña Nieto said.  And, with TPP “we now have eventually the conditions to modernize it, to update NAFTA and potentialize this agreement even more,” he said.

 President Obama agreed, saying TPP addresses some of the criticisms raised about NAFTA.  It will “make sure that the process of global integration is serving not just large companies, but is helping small companies and small businesses and workers,” the US President stated.

Not Possible to Build a Wall

 It is not possible to “build a wall” around globalization, Mr. Obama continued.  “And for all the talk about starting trade wars or increasing protectionist barriers between countries, when you actually examine how our economies work – auto plants in the United States, for example, would have a very hard time producing the number of automobiles the produce – and they’ve been having record years over the last several years – if they’re not getting some supplies from companies in Mexico.  And companies in Mexico are not going to do well if they don’t have some connection not just to markets but to suppliers and technology from the United States.”

 “So we have to focus on how do we ensure the economy works for everybody and not just a few,” President Obama said.  “And the TransPacific Partnership is consistent with that.”

 The two leaders agreed Friday to institutionalize the bilateral high-level economic dialogue so that it will continue into the next US Administration.

 The United States sells more to Mexico than it does to China, India and Russia combined, President Obama noted.

       



Starting Off E-Commerce Talks

 Geneva – Efforts in the World Trade Organization to launch negotiations on electronic commerce gained some traction last week after several countries separately circulated joint proposals to be discussed at today’s dedicated session (WTD, 7/5/16).

 Close on the heels of a recent proposal from the United States, the European Union, Canada, Chile, Colombia, Côte d’Ivoire, South Korea, Mexico, Paraguay and Singapore issued their own nonpaper on Friday for starting discussions with a tentative list of trade-related elements relevant to e-commerce.

 Elements cluster around regulatory frameworks, open markets, initiatives facilitating the development of e-commerce and transparency of the multilateral trading system.

 E-commerce negotiations were started in 1998, but remained stalled because of continued differences between the United States and the European Union over specific classifications and areas for framing rules.

 But given that the understanding of trade in the digital economy has evolved, all sides agree it now should cover the production, distribution, marketing, sale and/or delivery of goods and services by electronic means.

 The WTO General Council will oversee the work and four committees will contribute – the Council for Trade in Services, the TRIPS Council, the Council for Trade in Goods and the Committee on Trade and Development, the nonpaper suggests.

 In a separate proposal, Colombia, Costa Rica, Hong Kong, Israel, Malaysia, Mexico, Nigeria, Qatar and Singapore called for kick-starting discussions on issues that are relevant to developing countries.  The nine countries suggest issues in four areas – trade facilitation, building infrastructure to enable e-commerce, access to payment solutions and online security.

 In a third proposal submitted last week, Brazil stressed the importance of key concepts/policy choices related to e-commerce.  It said the Internet should remain free and open for all legitimate commercial and development purposes, including by allowing increased access to information, knowledge and new technologies.

 As a general rule, Brazil argued, rights and obligations should be the same and apply equally offline and online.  It also might be necessary to discuss the rights of governments to adopt exceptions to eventual new rules.

       



TISA Talks Galloping

 Geneva – Negotiators pursuing a plurilateral agreement on trade in services concluded an intensive 19th round of meetings last week in which they cleaned up several annexes and decided to re-calibrate in areas where there is little support – such as government procurement and state-owned enterprises, WTD has learned (WTD, 7/8/16).

 At the end of a marathon round of meetings that lasted some 10 days, trade officials reviewed areas where credible results can be achieved as well as sectors that need to be dropped from the final outcome because of lack of support, trade envoys said.

 How much progress can be made from now on depends on revised market access offers that are expected from TISA participants by October 21.  The 23 TISA members intend to reach an agreement by the end of the year.

 If some members cannot undertake commitments in the final agreement then they will have to leave the plurilateral deal, one TISA envoy suggested.

Annexes

 During the latest round members discussed annexes in transport, electronic commerce, telecommunications,  localization, domestic regulation and financial services.  They also held bilateral and small group meetings on horizontal market access and the complex area of institutional provisions.

 European Union demands in government procurement is likely to be dropped due to lack of support, said a trade envoy familiar with the developments.

 The United States climbed down from its demand for comprehensive commitments in state-owned enterprises, WTD was told.

 In all areas there will be an exercise of re-calibration in various annexes to achieve the best outcome.  Some proponents will have to adjust their level of ambition in road and maritime transport, Mode 4 and federal and sub-federal entities, WTD was told.

 Despite the impending exit of Britain from the European Union, Brussels has not altered its position – including financial services which is largely based on London’s core area of interest, a trade envoy said.

 The United States continued to insist on horizontal national treatment commitments in new services in which TISA members follow a “negative list” approach for national treatment.

 TISA members include – Australia, Canada, Chile, Taiwan, Colombia, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Panama, Peru, South Korea, Switzerland, Turkey, the United States, Pakistan and Mauritius.

       


Rounding the Bend to an EGA

 Geneva – The latest round of negotiations for a plurilateral environmental goods agreement started up yesterday after which the chair will draw-up a revised list of products based on bilateral consultations, WTD has learned (WTD, 7/11/16).

 EGA negotiations chair Andrew Martins will elicit information from each member on their list of products so he can prepare a draft final list that will be put forward for further negotiations beginning the last week of August.

 If all goes well, said one EGA trade envoy, the 17 countries will have a “landing zone” ready for Group-of-20 leaders to consider during their September 4 meeting in Hangzhou, WTD was told.

 EGA countries include Australia, Canada, China, Costa Rica, Taiwan, the European Union, Hong Kong, Japan, South Korea, New Zealand, Norway, Switzerland, Singapore, United States, Israel, Turkey and Iceland.

       



ITC Decisions on Hydrofluorocarbon

 The International Trade Commission on Friday announced its determinations in its final phase antidumping duty investigation concerning hydrofluorocarbon blends and components from China (WTD, 6/23/16).

 The Commission found two domestic like products in the investigation and determined that a

US industry is materially injured.

 All six Commissioners voted in the affirmative with respect to hydrofluorocarbon blends from

China and in the negative with respect to hydrofluorocarbon components.

 As a result of the final determination, the Commerce Department will issue an antidumping duty order on the imported blends.

 The three component HFCs subject to the investigation are used primarily as inputs for the

subject HFC blends but also have limited applications as fire suppressants ® 125) and propellants ®

143a).

       



Around the Globe

Campaign 2016

             ●          The Democrats’ vice presidential candidate, Virginia Sen. Tim Kaine, is reversing course on his support for the controversial Trans Pacific Partnership (TPP) a day after Hillary Clinton announced him as her running mate, CNBC reported (WTD, 7/24/16).  A Clinton aide confirmed to CBS News that Kaine had made a private commitment to Clinton that he would now oppose TPP, falling in line with the former secretary of state’s declared view on the trade deal.

 Previously, Kaine had voted for “fast tracking” authority in the Senate, which would speed trade deals like the TPP through Congress.  And of TPP itself, Kaine had seemed to defend the 12-nation trade pact in an interview with The Intercept earlier this week.  “I am having discussions with groups around Virginia about the treaty itself. I see much in it to like. I think it’s an upgrade of labor standards. I think it’s an upgrade of environmental standards, I think it’s an upgrade in intellectual property protections,” Kaine told the publication Thursday.

 But the Virginia senator had also voiced some hesitations about the trade deal.  “I do see at least right now that there is one element that I do have some very significant concerns about. And that is the dispute resolution mechanism. And I’ve got a lot of concerns about that,” Kaine added. “But long before there would be a vote on that I’m trying to climb the learning curve on the areas where I have questions. So again, much of it I see I think as a significant improvement over the status quo. The dispute resolution mechanism I still have some significant concerns about.”

 Kaine is expected to publicly declare his latest views on TPP, first reported by the Washington Post Saturday, in an official announcement soon.

 GOP nominee Donald Trump, who has called the deal a “rape” of the U.S. economy, bashed Kaine on Twitter because of the senator’s supportive sentiments for TPP.  Trump made no mention, however, of his own vice presidential pick Indiana Gov. Mike Pence, who also strongly backed the passage of TPP.

             ●          The Group of 20 finance chiefs vowed Sunday to use “all policy tools” to pursue growth as Britain’s decision last month to leave the European Union adds to the uncertainty in the global economy already facing terrorism and other challenges, Kyodo news service reported (WTD, 7/21/16).  Finance ministers and central bank chiefs from G-20 major economies condemned recent terrorist attacks “in the strongest possible terms” and agreed to contain all forms of terrorism financing, according to a communique released after a meeting in China.

             ●         Anti-trade rhetoric might be growing across the globe, but finance ministers from the G-20 group of nations are trying to play down its importance.  Mexico’s Deputy Minister for Finance, Fernando Aportela, told CNBC that he’s not concerned about the impact on the country’s relationship with the U.S. (see related report this issue).

 “What we see is that the relationship between Mexico and the U.S. is much more than the relationship of the two governments,” Aportela said on the outskirts of a G-20 meeting in Chengdu, China on Saturday. He added that the integration of communities and business people is strong, and is perhaps the more crucial factor for the U.S.-Mexican relationship.

 Meanwhile, Australia’s Treasurer Scott Morrison also told CNBC that “we have to double down on trade” and that his G-20 counterparts were echoing those sentiments.  Morrison acknowledged that pursuing a free trade agenda at a time of challenging growth prospects would not be an easy sell in their home markets.  Morrison said: “In our recent election, we took our free trade approach to our election and we were successful, so these things can be done and it’s important that we do them because if we don’t, an open and free trading economy like Australia, if we don’t see the increases in world trade that we’ll like to see, that will limit our opportunities.”

 OECD Secretary General Angel Gurria told CNBC in Chengdu that since the global financial crisis in 2008, there have been 1,500 different “protectionist” measures that he has seen, indicating a reversal to the free trade agenda.  “I think those of us who have been around long enough know that succumbing to the short term pressures of protectionism in a slow growth or sometimes even negative growth scenario temporarily, will damage you in the long term,” Gurria said.

 Anti-trade and anti-globalization rhetoric poses risks to global economic growth, the head of the World Trade Organization (WTO) told CNBC on Friday, as would-be U.S. President Donald Trump launched his campaign on a protectionist platform.  “I am concerned. I think that as far as trade is concerned, we are not worse than we were before but we are definitely not much better. We will be growing now at the slowest pace than the last 30 years,” WTO Director-General Roberto Azevêdo said in a television interview.

            ●          The European Commission on Friday approved imports of Monsanto’s Roundup Ready 2 Xtend genetically modified soybean variety, after months of delays that had derailed the U.S. seed giant’s product launch this spring, Reuters news service reported (WTD, 4/12/16). The decision now clears the way for widespread planting next season and removes a hurdle for North American farmers and grain traders, who have to keep close track of unapproved biotech traits that can disrupt trade. Top importer China approved the soybeans earlier this year.

 U.S. grain trader and processor Archer Daniels Midland Co told Reuters on Friday its elevators and processing plants will now accept the Xtend soybean variety. Rivals Cargill Inc, Bunge Ltd and CHS Inc, which had also refused to accept the variety without EU import approval, could not be immediately reached for comment.  The EU is the second largest importer of soybeans and its approval is not expected to have a major impact on merger talks by German suitor Bayer AG, whose sweetened $64-billion buyout offer of Monsanto was rejected last week, as it had been widely anticipated, analysts said on Friday.

 Monsanto expects Roundup Ready 2 Xtend soybeans, designed to tolerate applications of glyphosate and dicamba weed killers, to be planted on 15 million acres next spring and 55 million acres by 2019.  The company is still waiting the U.S. Environmental Protection Agency to approve dicamba use on crops.  The European Commission also approved a Bayer CropScience soybean variety. The EU executive branch took action after EU member states failed to reach an agreement on whether to licence them.  The approval will allow these GMO soybeans to be used in food or animal feed, but not for planting within the EU.

 “Any products produced from these GMOs will be subject to the EU’s strict labelling and traceability rules,” the European Commission said in a statement.

             ●          China said Sunday it has started imposing anti-dumping tariffs on certain steel imports from the European Union, Japan and South Korea, as Beijing itself comes under fire for similar trade practices, Jiji Press news service reported.  Duties on the materials, used in power transformers and electric motors, will range from around 37 to as high as 46.3 percent, the Commerce Ministry said on its website.  The measures are intended to prevent the sale of the product at below cost, a practice known as dumping, it added.

 The world’s second largest economy, which makes more than half the world’s steel, finds itself under attack by EU countries for allegedly flooding world markets with steel and aluminium in violation of international trade agreements.  On Friday Premier Li Keqiang told a group of visiting leaders from the World Bank, International Monetary Fund and other organizations that China “will not engage in a trade war or currency war.”

             ●         Economic activity in Britain in July reached its lowest since 2009, according to British research group Markit, the EU Observer reported. A preliminary purchasing managers’ index (PMI) shows that output and new orders have fallen, and “a number of firms linked this to ongoing uncertainty pre-and post-EU referendum,” the study says.




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On the Web......

 

Africa


Economy.  UNCTAD report on the African economies.  (available at: http://unctad.org )  issued: 7/22/16.



Asia-Pacific


TPP.  AFL-CIO statement on the Democratic position on the TransPacific Partnership agreement.  (available at: http://aflcio.org ) issued: 7/23/16.



Campaign 2016


TPP.  AFL-CIO statement on the Democratic position on the TransPacific Partnership agreement.  (available at: http://aflcio.org ) issued: 7/23/16.



China


Trade.  Remarks by World Trade Organization Director General Azevedo in China.  (available at:  https://www.wto.org/english/news_e/news16_e/dgra_22jul16_e.htm ) issued: 7/22/16.


Trade Policy.  Chinese statement on the World Trade Organization trade policy review of China.  (available at:  http://www.mofcom.gov.cn/article/ae/ai/201607/20160701364813.shtml and http://www.mofcom.gov.cn/article/ae/ai/201607/20160701364701.shtml ) issued: 7/23/16.



Developing Countries


European Union.  European Commission paper on relations with developing countries.  (available at:  http://europa.eu/rapid/press-release_IP-16-2543_en.htm ) issued: 7/22/16.

UNCTAD.  UNCTAD report on its annual meeting.  (available at: http://unctad.org ) issued: 7/22/16.



European Union


Developing Countries.  European Commission paper on relations with developing countries.  (available at:  http://europa.eu/rapid/press-release_IP-16-2543_en.htm ) issued: 7/22/16


Latin America.  European Commission questions to industry on trade with Mercosur.  (available at:  http://trade.ec.europa.eu/doclib/docs/2016/july/tradoc_154821.docx ) issued: 7/22/16.


TTIP.  European Commission proposal on engineering standards for the TransAtlantic Trade and Investment Partnership.  (available at: http://trade.ec.europa.eu/doclib/docs/2016/july/tradoc_154804.pdf ) issued: 7/22/16.



Internet


WTO.  Nonpaper by China and Colombia on a electronic commerce work program for the World Trade Organization.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=230131,230135,230129,230133,230114,230132,230134,230126,230112,230113&CurrentCatalogueIdIndex=1&FullTextHash=371857150 ) issued: 7/22/16.



Latin America


European Union.  European Commission questions to industry on trade with Mercosur.  (available at:  http://trade.ec.europa.eu/doclib/docs/2016/july/tradoc_154821.docx ) issued: 7/22/16.


Mexico


US Relations.  Statements by President Obama and Mexican President Nieto at the White House.  (available at:  https://www.whitehouse.gov/the-press-office/2016/07/22/remarks-president-obama-and-president-pena-nieto-mexico-joint-press ) issued: 7/22/16.


US Relations.  White House fact sheet on relations with Mexico.  (available at:  https://www.whitehouse.gov/the-press-office/2016/07/22/fact-sheet-united-states-mexico-relations ) issued: 7/22/16.



Services


TTIP.  European Commission proposal on engineering standards for the TransAtlantic Trade and Investment Partnership.  (available at: http://trade.ec.europa.eu/doclib/docs/2016/july/tradoc_154804.pdf ) issued: 7/22/16.



Steel


Imports.  American Iron and Steel Institute statement on steel imports.  (available at: aisi.org ) issued: 7/22/14.



World Trade Organization


Internet.  Nonpaper by China and Colombia on a electronic commerce work program for the World Trade Organization.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=230131,230135,230129,230133,230114,230132,230134,230126,230112,230113&CurrentCatalogueIdIndex=1&FullTextHash=371857150 ) issued: 7/22/16.


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Updated: 6/16/16


WTD’S

FRIDAY

AFTERNOON

PODCAST


Straight Talk.

Click the underlined text to hear snippets from WTD’s straight talk. (mp3 files)

 •  Watch President Obama slow jam on the TransPacific Partnership.

 •  Here’s what veteran Congressman Darrel Issa (R-Calif) says about the free-trade conundrum evident in the Presidential election campaign.

 •  Here’s what Senate Majority Leader Mitch McConnell told NPR about working with the White House on Trade Promotion Authority.

  •  Campaign 2016  –  Here’s how Republican Presidential contender Donald Trump is at a loss to explain China’s positive reaction to his sharp criticisms.

 •  Here’s what New Democrat free-trader Rep. Henry Cuellar (Texas) tells WTD in an interview about trade and the upcoming elections.  

•  Here’s an introduction by Woodrow Wilson Center Director Jane Harmon -- a rare species known as “pro-trade Democrats” -- of US Trade Representative Michael Froman on the TransPacific Partnership.

•  Campaign 2016 -- Republican Presidential contender Donald Trump explains his China trade policy to a crowd on Iowa.

•  Campaign 2016 -- Here’s what Republican Presidential contender Donald Trump says about “Made in USA”.

•  Campaign 2016 -- Republican Pr-esidential contender New Jersey Governor Chris Christie says why he’s against the Obama TPP agreement.

•  Here’s why Democratic Presidential contender Hillary Clinton opposes the TransPacific Partnership.

•  A question to and answer from Republican Presidential contender Jeb Bush on the US Export-Import Bank -- and OPIC.

•  Here’s how Nucor steel company CEO John Ferriola describes the Chinese economic monolith.

•  Negotiating in Geneva -- or Can You Hear Me?  --  From chief WTO services negotiator Abdel-Hamid Mamdouh.

•  Here’s how the United States views the future of the Doha Development Round according to Deputy US Trade Representative Michael Punke.

•  Here’s a comment from Senate Foreign Relations Committee Chairman Bob Corker about why he doesn’t want to get into reauthorizing the Overseas Private Investment Corporation -- ala the Ex-Im mess.

•  Here’s a response from World Trade Organization Director General Roberto Azevedo at the Peterson Institute for International Economics on whether the Doha Development Agenda is a vampire.






2016wtdpodcast0722.mp3