Washington Trade Daily

Calendar Trade Links Who We Are Take a Trial

If you have a hand in trade, you need an eye on Washington.  Washington Trade Daily gives you the information you need about international trade in Washington, Geneva and around the globe when you need it. WTD is emailed  every evening from Washington.  Subscribers also receive special email alerts whenever important breaking news happens throughout the day.

A one-year subscription costs only $875 for 260 issues; $450 for six months or $1,700 for two years.

Take a look at the sample issue and the latest calendar on the next page.  If you like what you see, request a FREE no-obligation four-week trial subscription by clicking here or e-mailing us at washingtontradedaily@gmail.com

 Volume 24, Number 163                                                                                                                              Monday, August 17, 2015

Trade Reports International Group

We’re Off – To Paris

   We’re off to Paris.

 Will be back on September 8.

 Enjoy the break! –  Jim and Mary Berger


Sen. Brown’s Hold on USTR’s Lago

 Senate Finance Committee member Sherrod Brown (D-Ohio) said yesterday that he will block a vote on the nomination of Marisa Lago as Deputy US Trade Representative because of the Administration’s continued secrecy about the TransPacific Partnership negotiations (WTD, 8/6/15).

 The White House is refusing to make text fully available to policy advisors with the requisite security clearances, Sen Brown charged.  He is unhappy that Congressional staffers with security clearance are barred from looking at the text unless accompanied by a member of Congress.

 “It shouldn’t be easier for multinational corporations to get their hands on trade text than for public servants looking out for American workers and American manufacturers,” the senator said in a statement.

 Finance approved Ms. Lago’s nomination earlier this month by voice vote.

 But Sen. Brown said he will not allow the full Senate to vote on her nomination unless the Administration makes the TPP text available to all individuals with the proper security clearance.


China’s Acquisition of Micron

 Democratic member of the Senate Banking Committee Sen. Charles Schumer (NY) on Wednesday urged the Treasury Department to block the planned acquisition of US-based Micron Technology for national security reasons

 The senator said he was “deeply concerned with the potential national security and economic

ramifications of allowing a Chinese state-owned enterprise to acquire a major US technology firm, especially the principal American manufacturer of computer memory chips.”

  The senator is urging the inter-agency Committee on Foreign Investment in the United States – chaired by Treasury – to investigate and take appropriate action to “withhold approval of any US technology firm’s acquisition by any Chinese SOE until China has undertaken reforms to their existing policies that constrain US technology firms’ access to China’s markets and violate US. intellectual property rights,” the senator wrote.

 The senator said that China’s indigenous innovation policies have continued to plague US high-technology firms trying to do business in China.  Since 2006 the policies have been used by China to limit US market access in China and extort US intellectual property to develop China’s own industries.

 “These policies have been focused on consolidating entire industries in China into state owned enterprises (SOEs) with sweeping regulatory authority.”


Around the Globe

             ●          The yuan halted a three-day slide after China's central bank raised its reference rate for the first time since Tuesday's devaluation and said it will intervene to prevent excessive swings (WTD, 8/14/15).  The onshore spot rate rose 0.11 percent, strengthening in the final minutes of trading for the third straight day and paring its drop for the week to 2.8 percent.

 The People's Bank of China said Thursday there's no basis for depreciation to persist and that it will step in to curb large fluctuations. It raised its daily fixing by 0.05 percent on Friday, after three cuts of more than 1 percent each.  China's first major devaluation since 1994 surprised global investors and fueled concern authorities are struggling to combat a slowdown in the world's second-largest economy. Policy makers are trying to balance the need for financial stability with a desire for stronger exports and the yuan's inclusion in the International Monetary Fund's basket of reserve currencies.

 Under a new methodology used to determine the reference rate, market makers who submit contributing prices have to consider the previous day's close, foreign-exchange demand and supply, as well as changes in major currency rates. The central bank said it uses a weighted average of submissions from both domestic and foreign lenders to set the fixing, without elaborating on how the weights are calculated.

 Yuan positions at China's central bank and financial institutions fell by the most on record in July, a sign of increased capital outflows and central bank intervention to keep the currency stable before Tuesday's shock move.

             ●        Sen. Ron Wyden (D-Ore) told the Portland Business Journal in an interview that protesters of the Trans-Pacific Partnership Agreement, the proposed 12-country trade agreement, have made good points (WTD, 8/14/15). And Wyden has been listening.

 “I have systematically tried to take arguments against it and made changes,” he said.  “People who were protesting were absolutely right there has been way too much secrecy about trade in the past.”  As a result, he called this one of the most transparent agreements. Plus, elements addressing labor, environmental and consumer standards have been added.

 On whether China's latest currency devaluations will derail the TPP:  How this will effect the talks remains to be seen, but Wyden said its important for the U.S. to stay in the game.  “If we walk off the field in that region, everybody else would step in,” he said, particularly the Chinese government.  “Talk about a race to the bottom,” he added.  “Who is going to drive standards up, us or the Chinese?”

 On the proposed Iran deal:  Wyden is still studying the deal and hasn't made a final decision. He noted what makes this a tough decision is two fold. First, it's a government willing to send people to their deaths and second, there is a high likelihood that any money sent to that country as a result of loosened sanctions will end up in the hands of groups such as Hamas and Hezbollah.

Campaign 2016

             ●          Donald Trump is making the future of U.S. auto production a cornerstone of his campaign for the Republican nomination for president (WTD, 8/11/15).  Trump disclosed in an interview with The Detroit News Wednesday that Ford CEO Mark Fields wrote to him explaining the automaker's planned $2.5 billion investment in Mexico after Trump criticized Ford in June. And Trump suggested one way to stop automakers' expansion to Mexico is by moving some production out of Michigan to lower-wage states.

 “I don't like what's happening,” Trump said in the 15-minute telephone interview. “We're losing our jobs. We're losing our wealth. We're losing our country ... Why can't we do it in this country? It's an incredible thing that we're not allowed to make our product.”  Trump said he backs government tax incentives to keep auto production in the United States. He said the U.S. shouldn't open its market to Japanese imports unless it drops trade barriers.

 The United States has lost more than 5 million factory jobs since 2000; Michigan has shed more than one-third of its manufacturing jobs since then. In an appeal to blue-collar workers, Trump vows to keep the more than 12 million manufacturing jobs in the U.S.  “We've got to keep (factories) here. It's not that hard to do,” he said. Without action, he added, “pretty soon all we're going to have is nursing home jobs.”  Trump has repeatedly said that if elected, he would not allow Ford to open a new plant in Mexico. At his campaign announcement speech in New York in June, Trump said he would call Fields to explain the “bad news.  Let me give you the bad news: Every car, every truck and every part manufactured in this plant that comes across the border, we're going to charge you a 35 percent tax,” Trump said. “They are going to take away thousands of jobs.”

 In April, Ford said it would add 3,800 jobs in Mexico as part of a $2.5 billion investment — on top of the 11,300 Ford already employs in Mexico. The investment will include a new $1.1 billion engine plant that's part of an existing facility and a new $1.2 billion transmission plant allowing for exports of engines to the United States and elsewhere. Ford also is investing $200 million to expand engines production at another plant in Mexico.  Ford has repeatedly said it is not closing any U.S. plants as a result of its Mexican expansion. On Wednesday, the automaker said it was shifting production of heavy trucks — the F-650 and F-750 — from Mexico to a factory in Ohio.

             ●          U.S. energy companies eager to export crude oil scored a victory Friday when the U.S. government said it would approve proposals to trade American oil with Mexico, in a further erosion of the nation's four-decade ban on selling its oil overseas (WTD, 7/31/15).  The U.S. Commerce Department has quietly informed members of Congress that it intends to approve an application by Mexico's national oil company, Petróleos Mexicanos SA, to enter into oil trade agreements with U.S. companies under which the companies could exchange U.S. and Mexican oil, according to people familiar with the matter.

 The amount of crude to be allowed under the deal wasn't immediately known, but in the past Pemex, as the company is known, sought permission to exchange as much as 100,000 barrels a day of its heavy crude for the lighter oil pumped in the U.S.  The deal will help American shale drillers, which have been struggling with a world-wide glut of oil that has cut prices in half in the past 14 months. The trading deals may also reduce the justification for the Keystone XL pipeline from Canada, some experts say, because Mexico can send U.S. refiners oil similar to the heavy crude coming from Canadian oil sands.

 American oil companies and their allies in Congress have been pushing the Obama administration to relax restrictions on U.S. oil trade with Mexico.

             ●          The European Commission is making the secret Transatlantic Trade and Investment Partnership (TTIP) trade deal even more secret, introducing a new rule that means politicians can only view the text in a secure ‘reading room’ in Brussels, The Independent reported (WTD, 8/5/15).  An investigation by German news site Correct!v has revealed that the Commission is cracking down on TTIP security following a series of leaks, purportedly by EU member states who had accessed information on the deal electronically.

 EU Trade Commissioner Cecilia Malmström has said that no more reports on TTIP negotiations will be sent to Member States because of “important vulnerabilities in the last rounds of negotiations.”  Officials were told of this change in policy on July 24th at a meeting in Brussels in which the Commission explained that the documents had “been submitted to databases of [member states'] national parliaments” meaning that “hundreds of people have actually uncontrolled access.”

 And so the Brussels ‘reading room’ appears to be the solution, where national and EU representatives will have to go if they want to find out what's happening to the TTIP text.  It's not just TTIP that is taking such extreme measures. The US-Asia equivalent, the Trans-Pacific Partnership (TPP), has a similar super-secure reading room.

             ●          Listed as a priority in the Addis Ababa Action Agenda, aid for trade, according to the resulting document from the third International Conference on Financing for Development, “can play a major role” in mobilizing international trade for development, especially in least-developed countries, devex reported.  Trade, a note from the Organization for Economic Cooperation and Development and the World Trade Organization clarified, is “not a ‘sector' — it covers a wide range of activities and encompasses not just goods, but also services.”

 Aid for trade has a similarly wide-ranging scope. OECD divides the areas to which aid for trade is directed into several broad sectors: transport and storage, communication, energy, banking and financial services, business and other services, agriculture, forestry, fishing, industry, mineral resources, trade policies and regulations, and tourism.  In LDCs, where there is often a lack of trade capacity in terms of information, institutions and infrastructure, aid for trade can help ease the much-needed integration into the world market.

   —  —

On the Web......



TPP.  Statement by Sen. Brown on the TransPacific Partnership negotiations.  (available at:  http://brown.senate.gov )  issued:  8/14/15.


Foreign Investment.  Letter from Sen. Schumer to Treasury Secretary Lew on proposed acquisition of Micron Technology by China.  (available at:  http://www.documentcloud.org/documents/2272282-micron-letter-1.html#document/p1 )  issued:  8/13/15.


US Relations.  White House statement on diplomatic relations with Cuba.  (available at:  https://www.whitehouse.gov/blog/2015/08/14/clone-follow-along-re-opening-our-embassy-havana-cuba   )  issued:  8/14/15.

Export Controls

China.  Letter from Sen. Schumer to Treasury Secretary Lew on proposed acquisition of Micron Technology by China.  (available at:  http://www.documentcloud.org/documents/2272282-micron-letter-1.html#document/p1 )  issued:  8/13/15.

Foreign Investment

China.  Letter from Sen. Schumer to Treasury Secretary Lew on proposed acquisition of Micron Technology by China.  (available at:  http://www.documentcloud.org/documents/2272282-micron-letter-1.html#document/p1 )  issued:  8/13/15.


US Relations.  Joint statement on the US-India cyber dialogue.  (available at: https://www.whitehouse.gov/the-press-office/2015/08/14/joint-statement-2015-united-states-india-cyber-dialogue )  issued:  8/14/15.


India.  Joint statement on the US-India cyber dialogue.  (available at: https://www.whitehouse.gov/the-press-office/2015/08/14/joint-statement-2015-united-states-india-cyber-dialogue )  issued:  8/14/15.


Trade.  Manufacturers Alliance for Productivity and Trade report on manufacturing and trade.  (available at:  http://mapi.net )  issued:  8/14/15.


Doha.  Canadian summary of World Trade Organization proposals on the Doha services negotiations.  issued:  7/15.

World Trade Organization

Services.  Canadian summary of World Trade Organization proposals on the Doha services negotiations.  issued:  7/15.

What we’re covering this week –

  Nothing here.  

  We’re in Paris!    

Our  Blog

Updated:    7/5/15


Friday Afternoon



Straight talk.   

Click the highlighted text to hear snippets from WTD’s straight talk.

•  A brief intellectual exchange on trade between AFL-CIO President Richard Tumka and Peterson Institute for International Economics President Adam Posen heard March 18.

•  Here’s an impassioned response from trade critic Rep. Rosa DeLauro to a stock “blame it on China” response about why we need a TransPacific Partnership agreement given during a House Appropriations agriculture funding hearing by Administrator of the Foreign Agricultural Service Phil Karsting on March 19.

•  The sound of one hand clapping.  Here’s the applause President Obama got on March 9 when he spoke to the National League of Cities asking for their support for his trade policies.

•  Senate Finance Committee Chairman Orrin Hatch tells WTD that he will talk to his ranking Democratic Ron Wyden again on Trade Promotion Authority legislation, but  he is death on any proposal to make trade more difficult than it already is.

•  Comments by two veteran trade officials on secrecy in the TransPacific Partnership negotiations – first Chile Ambassador to the United States Juan Galbriel Valdes and then Taiwan Minister of Economic Development John Chen-Chung Deng.