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What we’re covering this week –


  The highlight of this week’s events is the Agriculture Department’s annual outlook forum.  Otherwise, there is not a lot going on in Washington this week, as Congress is on recess because of the President’s Day holiday.


             ●          Wednesday, the US Chamber of Commerce sponsors a program on cross-border data flows and data privacy.  Federal Trade Commission Chairman Maureen Ohlhausen is among the speakers.

             ●          Thursday, the Agriculture Department’s annual outlook forum begins.

             ●          The Brazil-US Business Council holds its 2017 strategic planning meeting.  Commerce Acting Undersecretary for International Trade Ken Hyatt speaks.

             ●          Friday, Agriculture’s outlook forum continues.

             ●          The Delegation of the European Union to the United States sponsors a program on US and EU international trade relations, with speakers including EU Ambassador David O’Sullivan.

 Volume 25, Number 211                     Thursday, October 20, 2016

Trade Reports International Group


Mr. Lighthizer Makes the Rounds

   President-elect Trump’s pick for US Trade Representative, Robert Lighthizer, made the rounds in the Senate yesterday, meeting with Majority Leader Mitch McConnell (R-Ky) and Finance Committee Chairman Orrin Hatch (WTD, 12/21/16).

 Mr. Lighthizer will be an important player in the new Administration since the President-elect “has made it clear he wants to put the US in the best position for strong trade deals,” Sen. McConnell tweeted yesterday following his meeting.

 Finance has not yet scheduled a hearing on Mr. Lighthizer, but Sen. Hatch said in a statement following his meeting that he plans to move quickly.

 It is unclear just how much power Mr. Lighthizer will have in the decision-making process on trade in the new Administration.

How It Will Work

 Commerce Secretary designee Wilbur Ross “will be the Administration’s policy leader when it comes to renegotiating and negotiating better trade deals for the American workers,” Trump spokesman Sean Spicer told reporters yesterday.

 Mr. Ross will be “teaming up” with Mr. Lighthizer and with Peter Navarro, director of the newly created National Trade Council, “who will be in the White House as the point person on trade issues,” Mr. Spicer said.

 The Senate Commerce Committee will hold its hearing on Mr. Ross’ nomination Thursday.

 Outgoing US Trade Representative Michael Froman demurred when asked yesterday for his opinion about the President-elect’s plans to divide trade decision-making among at least three people.  But he had praise for the former Reagan Administration Deputy USTR saying Mr. Lighthizer understands USTR’s role and supports its career staff.

 Speaking at the Washington International Trade Association, Mr. Froman criticized the President-elect for referring to US trade negotiators as “political hacks” during the campaign.  “Anyone who knows and has worked with its staff knows that they are the furthest thing from political hacks.”


Mr. Froman’s Advice to Mr. Trump

 US Trade Representative Michael Froman thinks that President-elect Trump needs to reconsider his opposition to the TransPacific Partnership if he really wants to crack down on China (WTD, 1/10/16).

 In one of his final speeches before leaving office, Mr. Froman said that the President-elect’s opposition to TPP does not mesh with his apparent plans to target China’s unfair trade practices.

 “There simply is no way to reconcile a get-tough-on-China policy with withdrawing from TPP.  That would be the biggest gift any US President could give China, one with broad and deep consequences, economic and strategic.  It would be huge for China,” the USTR told the Washington International Trade Association.

 By walking away from TPP, the United States will cede its economic leadership in the Asia-Pacific region.  It also will find itself losing market share as China and other countries write their own trade deals that disadvantage US exports, the chief US trade negotiator warned.  “Now, I can’t imagine why any President would want to abdicate our leadership in the Asia-Pacific, to be responsible for handing the keys of the castle to China, for driving our historic allies and China’s historic rivals into China’s arms. ....  It would be a strategic miscalculation of enormous proportions.”

 The President-elect suggested using import tariffs to punish China and other countries he believes are not playing fair.  Mr. Froman said he hopes there will not be a trade war as some are predicting because it will be lower-income Americans who are hurt the most when higher tariffs lead to higher prices for basics like clothes and shoes.

 Mr. Froman’s advice to the incoming Administration is to read TPP, decide what changes it wants and then figure out if the 11 other countries involved are willing to make those changes.  But he added that the new Administration needs to be given “time and space” to determine its trade policy.  It took several years for the Obama White House to decide how it wanted to proceed on trade, he noted.

 The USTR said he believes Congress would have passed TPP this year if Congressional leaders had allowed it to come to a vote.  Mr. Froman said he personally met with 100 House Republicans – and almost every one was willing to vote for the TPP.  The support was there, but House Republican leaders never actively whipped for votes, he said.

TTIP Was Within Reach

 Conclusion of the Administration’s other major trade initiative – the TransAtlantic Trade and Investment Partnership – was within reach last year, but Europe balked, Mr. Froman suggested.  Last summer, Washington presented Brussels with a proposal for a final agreement.  But by early fall, it had become clear that the political will did not exist on the European side to tackle the most politically sensitive issues – like agriculture, services and digital trade.

 If the incoming Administration decides it wants to continue these negotiations, it will find that Europe is going to need some time before it is ready to conclude a deal, Mr. Froman stated.  Upcoming elections in several key European countries along with Britain’s withdraw from the EU will create political difficulties in the near term.

 Nevertheless significant progress was made – and when Europe is ready to restart the negotiations, much of the work is already done, the USTR said.

 Trade also has become a political football in the United States, Mr. Froman acknowledged.  Critics have done a far better job of getting their message out than supporters, he said.  “But the critics of trade are on to something.  We do not do a particularly good job as a government or as a country in helping individuals and communities adversely affected by change – whether that change comes from technology, migration or globalization.”

 Given the political environment, Mr. Froman said one lesson to be learned from the TPP failure is that it is no longer possible for supporters of free trade to wait until just before Congress is ready to vote to build support for a trade agreement.  The groundwork needs to be laid far in advance. “And if the ground is allowed to be poisoned by half-truths, it is very difficult to recover,” he said.  “We must do a better job explaining trade earlier in the process and to the broadest possible audience – employees, suppliers, small businesses, neighbors, local leaders, faith leaders, civil society leaders.”


Argentina Defends GSP Readmission

 In front of an inter-agency trade committee yesterday Argentina Under Secretary for Foreign Trade Shunko Rojas said his country is meeting all the criteria that would allow it to be readmitted to the group of developing countries that are part of the US Generalized System of Preferences program (WTD, 11/16/16).

 Argentina lost GSP in 2012 mostly due to inadequate intellectual property rights protection.

 Over the past two years US-Argentina relations have warmed substantially.  Mr. Rojas pointed to creation last year of the Trade and Investment Framework Agreement and the Commercial Dialogue with the Commerce Department in addition to the historic visit there by President Obama last March

 Argentina is the fifth largest Latin American trader with the United States.  US imports from the country were $6 billion in 2015.  US exports to the country for the period amounted to $22.4 billion – leaving a $5.4 billion US surplus.

 But several US officials on the panel said not all concerns about IPR protection have been erased.

 Argentina remains on the “Priority Watch List” under the Special 301 program – one of only 13, one US trade official pointed out.  Issues brought up were special requirements that foreign biotechnology and agricultural chemical companies have their products re-tested in the country.  That involves turning over of patent data to the government, which not only delays sales there but risks leakage of that data to domestic companies and encourages unnecessary relocation of plants and testing facilities.

 There also is uncertainty over the protection of patents pending in the nation.  In addition the government pointed to the large backlog in patent applications.

 Mr. Rojas said legislation is now in Congress that would resolve much of the issue.  He also said the matter is under discussion with the United States in the TIFA.  Buenos Aires also is cooperating on common patent protection procedures with its Mercosur partners – Brazil, Paraguay, Uruguay – along with Mexico and Peru.

 US officials also suggested that Buenos Aires has not fully lived up to last year’s World Trade Organization dispute settlement decision on a variety import-restricting programs.  Imports of US pork to the nation is still banned as is a long list of soy products.

 Argentina is in full compliance with that decision, Mr. Rojas said.  But it also is a topic of discussion within the TIFA.

 Also the country is planning to eliminate – fully by 2019 – its export refund program, according to Mr. Rojas.  Refunds currently amount to 5-percent of the value of the exported product.

 Even if Argentina regains GSP status, it might now last long, another US official suggested.  The country now is just $15 below the $12,475 average Gross National Income per capita level for higher-income developing countries.  The criteria is set by the World Bank.


Final, Final Satellite Export Regs

 The Commerce and State department yesterday published latest revisions to a May 2014 rule on exports of space technology (WTD, 12/8/16).

 The latest final rule pertains to changes in aperture size for spacecraft.  The rule make changes in Export Administration Regulations that would impose more restrictive requirements compared to other Commodity Control List items.

 Yesterday’s rule also addresses some changes in moving the James Webb Space Telescope from State’s Munitions List to Commerce’s CCL.

 Below is an up-to-date chart on the reform effort –







I – firearms ●      

II – artillery projectors ●      

III – ammunition ●      

IV – launch vehicles, guided missiles, rockets, bombs, mines      ●        ●   ●   ●

V – explosives, propellants ●   ●   ●   ●

VI – vessels of war and special naval equipment ●   ●   ●   ●   

VII – tanks, military vehicles ●   ●   ●   ●   

VIII – aircraft, associated equipment ●   ●   ●   ●   

IX – military training equipment ●   ●   ●   ●

X – protective personnel equipment ●   ●   ●   ●

XI – military and special electronics ●   ●   ● ●

XII – fire controls, optical and guidance, range finder, equipment ●   ●  ●  ●

XIII – auxiliary military equipment ●     ●   ●   ●

XIV – toxicological agents ●   ● ● ●

XV – space systems, equipment ●   ●    ●     ●    

XVI – nuclear weapons design equipment ●   ●    ●    ●

XVIII – directed energy ●   ● ● ●

XIX – gas turbine engines ●   ●    ●     ●   

XX – submersible vessels, equipment ●   ●    ●   ●



Washers and Ammonium Sulfate

 The International Trade Commission yesterday determined that a US industry is materially injured by imports of large residential washers from China that the Commerce Department has determined are sold in the United States at less than fair value (WTD, 12/12/16).

 All six Commissioners voted in the affirmative.

 Commerce earlier set antidumping duties at 32.12 percent for LG and 52.51 percent for Samsung.  Whirlpool Corporation, which filed the petition, praised the final determination saying that both producers have been unfairly dumping their products on the US market and moved their production to China after the ITC imposed an earlier antidumping decision on washers from Mexico and South Korea.

 Separately, Commerce made its final affirmative determination yesterday in the countervailing duty investigation of imports of ammonium sulfate from China (WTD, 11/3/16).  Commerce found the companies received countervailable subsidies at a rate of 206.72 percent, based on “adverse facts available”.

 In 2015, imports of ammonium sulfate from China were valued at $62 million.

 The ITC is scheduled to make its final injury determination on February 23.


Around the Globe

             ●         Alibaba Executive Chairman Jack Ma met U.S. President-elect Donald Trump on Monday and laid out the Chinese e-commerce giant’s new plan to bring one million small U.S. businesses onto its platform to sell to Chinese consumers over the next five years, an Alibaba spokesman said according to a Reuters news service report (WTD, 12/22/16).  Alibaba Group Holding Ltd (BABA.N) expects the initiative to create one million U.S. jobs as each company adds a position, company spokesman Bob Christie said in a phone call.

 Alibaba has previously campaigned to bring more small U.S. businesses onto the company’s sites, but this is the first time Ma has discussed specific targets.  Trump and Ma emerged from their meeting at Trump Tower in New York together. The president-elect told reporters they had a “great meeting” and would do great things together. Ma called Trump “smart” and “open-minded.”

 Ma said the two mainly discussed supporting small businesses, especially in the Midwest, such as farmers and small clothing makers, who could tap the Chinese market directly through Alibaba, whose Tmall online shopping platform offers virtual store fronts and payment portals to merchants.  The company has in recent years been aggressively courting foreign brands to set up Tmall stores to sell to China’s vast and growing middle class by offering to smoothen out Chinese sales, payment and shipping processes.

 Trump often targeted China in the election campaign, blaming Beijing for U.S. job losses and vowing to impose 45 percent tariffs on Chinese imports. He also promised to call China a currency manipulator on his first day in office.  Alibaba has deep ties with the Chinese government, working closely on some of the country’s core technology development goals including cloud infrastructure and big data.

 The U.S Trade Representative last month returned the Chinese e-commerce giant to an infamous list of blacklisted online retailers over concerns that the company was not doing enough to stop counterfeiting on their sites.

             ●         Carmakers used the Detroit Auto Show to talk up their U.S. production, in a likely reaction to President-elect Donald Trump’s all-hours tweet storms, an industry analyst said on Tuesday according to CNBC (WTD, 1/9/17).  John Rosevear, senior auto specialist at The Motley Fool, told CNBC’s “The Rundown” on Tuesday that it was a repeated theme at the annual auto show.

 “It’s clearly a new and big movement across the board,” he said. “Every press conference, every discussion we have today, it seems like some executive from any of the automakers is at pains to talk about what they make in the U.S., how much they make in the U.S.”  Rosevear noted that a VW conference highlighted that its SUVs were being made in Tennessee, while Toyota went so far as to display a Camry model with “Made in U.S.A.” painted on the side.  “It’s being talked up obviously at the Detroit-based automakers, but also at a lot of what we call the transplants, the overseas companies doing business here in the U.S. too.”

 Automakers new focus on flag-waving has followed a series of all-hours tweets from Trump lambasting, sometimes inaccurately, plans to produce vehicles in Mexico.  Trump has previously called Ford “horrible” for its plans to move all small-car production to Mexico within three years, and has threatened to impose a border tax on automakers which move production abroad.  Earlier this month, Ford announced that it was scrapping plans for a $1.6 billion plant in Mexico and instead would invest $700 million in the Flat Rock assembly plant in Michigan.

 In a tweet last week, Trump also criticized Japanese automaker Toyota Motor for plans to build a new plant in Mexico. In response to Trump’s tweet, Toyota said in a statement to Reuters that the new Mexican plant will not cut its U.S. employment.  Also this month, Trump issued a separate ultimatum to General Motors: Make its Chevy Cruze cars in the U.S. or expect to pay a big border tax.  GM responded by saying it built the Cruze hatchback in Mexico for global markets with a very small amount sold in the U.S. Of the 190,000 Cruze cars sold in the U.S., 185,500 were built in Lordstown, Ohio, the company said.

             ●         Britain will be in the “front seat” to negotiate a new trade deal with the incoming administration of Donald Trump, a top Republican in the United States Senate said, the BBC reported (WTD, 1/9/16).  Senate Foreign Relations Committee Chairman Bob Corker said after meeting British Foreign Secretary Boris Johnson that a trade deal between the two countries would be a priority as Britain prepares to leave the European Union.

 Ahead of the Brexit vote, President Barack Obama exhorted Britons to stay in the EU and warned that if they left they would be at “the back of the queue” for a U.S. trade deal.  Corker said Johnson knows “full well” that “there is no way the United Kingdom is going to take a back seat. They will take a front seat and I think it will be our priority to make sure that we deal with them on a trade agreement initially but in all respects in a way that demonstrates the long-term friendship that we’ve had for so long,” Corker was quoted as saying by the BBC.

 Trump, while a candidate for the U.S. presidency, hailed Brexit as a “great thing” when visiting Scotland the day after the vote though Britain cannot sign a trade deal until it leaves the EU which under current plans will likely be in 2019.  After visits to see aides in Trump Tower in New York and meet members of Congress in Washington, Johnson said: “Clearly, the Trump administration-to-be has a very exciting agenda of change. One thing that won’t change, though, is the closeness of the relationship between the US and the UK.  We are America’s principal partner in working for global security and, of course, we are great campaigners for free trade,” Johnson was quoted as saying by the Guardian newspaper.  “We hear that we are first in line to do a great free trade deal with the United States. So, it’s going to be a very exciting year for both our countries,” Johnson said.

             ●         Canadian Prime Minister Justin Trudeau has given his cabinet not just a shuffle but a big second-year shakeup by placing trusted players on key foreign files and dropping or demoting weak elements of his governing team, the Toronto Star reported.  Chrystia Freeland, the rookie international trade minister who closed the Canada-EU free trade deal, moves to Foreign Affairs replacing Liberal veteran Stéphane Dion, to steer Canada’s relationship with a newly unpredictable ally and trading partner under Donald Trump as U.S. President.

 Trudeau said in a statement she will have responsibility for the Canada-U.S. relations file, including trade relations.

 Immigration Minister John McCallum, a former bank economist, leaves a 16-year political career as the MP for Markham-Thornhill to become Canada’s ambassador in Beijing, a politically important shift at a time when Trudeau is launching exploratory talks towards free trade with China.

 François-Philippe Champagne, 46, is promoted from parliamentary secretary to the minister of finance to international trade, replacing Freeland as the point person for trade negotiations from NAFTA to the not-yet ratified Trans-Pacific Partnership, both of which Trump has threatened to ditch. Champagne, rookie MP for Saint-Maurice, is a former businessman, lawyer, and international trade specialist. He is quick on his feet, a good communicator and clearly ambitious, enthusiastically defending Trudeau’s economic plans in the face of criticism of mounting deficits.

             ●        According to data from the US Department of Agriculture, in 2016 Mexico managed to position itself as the main supplier of agricultural products for the US, surpassing Canada and the European Union, Fresh Plaza reported.  According to information from the federal agency, Mexico closed 2016 with a 19.9% share of the US agricultural market, while Canada had 19% and the European Union had 18%.

 Mexican agricultural products in the United States began gaining importance after the North American Free Trade Agreement (NAFTA) was implemented.  Jorge Armando Narvaez, undersecretary of Agriculture, Livestock, Rural Development, Fisheries and Food (Sagarpa), recently participated in the Mexico Food Show 2016 event and said that, over time, NAFTA had been instrumental in the development of the agricultural sectors of Mexico, the United States, and Canada.  Currently, Mexico ranks as the twelfth biggest producer of food in the world; its main export products include avocados and tomatoes, among others, Sagarpa stated.

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On the Web......


Imports.  Chinese statement on trade remedies.  (available at:  http://www.mofcom.gov.cn/article/ae/ai/201701/20170102498548.shtml ) issued: 1/10/17.

US Relations.  US-China Business Council report on US-China business relations.  (available at:  https://www.uschina.org/sites/default/files/Oxford%20Economics%20US%20Jobs%20and%20China%20Trade%20Report.pdf ) issued: 1/10/17.

Developing Countries

USTDA.  Annual report of the US Trade and Development Agency.  (available at:  https://www.ustda.gov/about/ustda-fy-2016-annual-report ) issued: 1/10/17.


Semiconductors.  Article by Commerce Deputy Secretary Andrews on the US semiconductor industry.  (available at:  https://www.commerce.gov/news/blog/2017/01/supporting-vibrant-and-competitive-american-semiconductor-industry ) issued: 1/10/17.


Economy.  OECD report on the economy of Mexico.  (available at:  http://www.oecd.org/newsroom/mexico-reforms-starting-to-bear-fruit-but-further-action-needed-to-ensure-inclusive-growth.htm ) issued: 1/10/17.


Economy.  World Bank report on Poland’s economy.  (available at:  http://www.worldbank.org/en/news/press-release/2017/01/10/polands-economic-growth-to-accelerate-in-2017 ) issued: 1/10/17.

Trade Policy

Froman Speech.  Remarks by US Trade Representative Froman to the Washington International Trade Association.  (available at:  https://ustr.gov/about-us/policy-offices/press-office/speechestranscripts/2017/january/Remarks-Ambassador-Froman-WITA ) issued:  1/10/17.

US Trade Representative

Lighthizer.  Statement by Senate Finance Committee Chairman Hatch on meeting with new US Trade Representative Robert Lighthizer.  (available at: http://finance.senate.gov ) issued: 1/10/17.

World Trade

Economy.  World Bank report on the global economy.  (available at:  http://www.worldbank.org/en/news/press-release/2017/01/10/global-growth-edges-up-to-2-7-percent-despite-weak-investment ) issued: 1/10/17.

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Straight Talk.

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

   Here’s what Texas Democratic Representative Joaquin Castro says about President Trump’s tweeting policy.

 •  Here’s Rep. Castro blasting US Chamber of Commerce President Donohue for not standing up for his own members against the President’s naming practices.

 •  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.