With help from Doug Palmer, Catherine Boudreau and Hans von der Burchard
ALUMINUM PANDEMONIUM: As the White House prepares to submit the Trans-Pacific Partnership to Congress in the coming months, it has been touting its record on trade enforcement to persuade lawmakers to vote for the 12-nation pact. The United Steelworkers union on Monday upped the ante on that front by asking President Barack Obama to impose a 50 percent duty on aluminum imports from China and other suppliers as soon as July.
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The U.S. International Trade Commission would normally take up to six months to investigate the Section 201 petition for global import relief and make recommendations to Obama, who would have another two months to decide what action to take. However, the union is asking the ITC to make a finding of “critical circumstances” within 60 days so Obama can act quickly to keep additional U.S. aluminum smelters from closing.
If the trade panel makes that determination, the president would then have 30 days to approve some of type of provisional relief while the Section 201 case proceeds for another six to eight months, Terry Stewart, a lawyer for the union group, said.
The timing isn’t ideal for Obama’s TPP push. The aluminum case potentially puts the president on the spot by forcing him to decide whether to impose the 50-percent “provisional” duty sought by the steelworkers while the Section 201 investigation proceeds. If he decides against it or puts in place some lesser relief, that could jeopardize potential votes for the TPP pact. Click here to read the full story from Pro Trade’s Doug Palmer.
IT’S TUESDAY, APRIL 19! Welcome to Morning Trade, where we think it’s awesome that the Associated Press won a Pulitzer Prize for its investigation into the Thai seafood industry, which led to the freeing of more than 2,000 slaves. What other great journalism are you reading? Let me know at [email protected] or @vtg2.
MEAGER OUTCOME OF STEEL TALKS: At least they talked. That’s the positive takeaway from Monday’s high-level talks on the other main overcapacity crisis: steel. The meeting at the Organization for Economic Cooperation and Development reunited representatives from 35 countries in Brussels.
“We are encouraged by the start of the discussions, but we firmly believe more has to be done, beyond talking,” U.S. Deputy Trade Representative Robert Holleyman said. Mexican Economy Minister Ildefonso Guajardo warned “if we don’t find a common solution, it will be a lose-lose situation for everyone.” Yet a press conference with the representatives saw all sides carefully avoiding answers to the most pressing question: Did they see progress in pushing China to make more drastic cuts to its steel production?
Zhang Ji, China’s assistant commerce minister, spoke of “a global issue” that requires a “precise and accurate analysis … [of] what are the true causes leading to this problem” — an answer heard before from China, which is unlikely to calm growing uproar in the U.S., Europe and other parts of the world. A statement by the OECD can be found here.
Top U.S. officials blamed China for the failure of the talks and warned Beijing that it could face additional trade actions. “Unless China starts to take timely and concrete actions to reduce its excess production and capacity in industries including steel … affected governments — including the United States — will have no alternatives other than trade action to avoid harm to their domestic industries and workers,” U.S. Trade Representative Michael Froman and Commerce Secretary Penny Pritzker said in a statement after the steel talks.
OECD: A LOT OF TRADE IS FAKE: In other OECD news, fake goods accounted for about 2.5 percent of global imports in 2013, the organization finds in a new report. Specifically, global imports of counterfeit goods clocked in at $461 billion in 2013, compared with total imports of roughly $17.9 trillion.
“Detailed results show that counterfeit and pirated products can originate from virtually all economies in all continents, with China appearing as the single largest producing economy, when using detailed data from the EU,” the report says. “On average, middle-income countries tend to be the key provenances of counterfeit and pirated goods.”
EX-IM FIGHT, PART TWO: Freedom Partners, a Koch-backed group, doesn’t want the Export-Import Bank’s board to have a quorum, and it upped its game Monday by sending a letter to Senate Banking Committee Chairman Richard Shelby thanking him for blocking pending nominee Mark McWatters from moving through his committee. The lack of a quorum means Ex-Im’s board can’t approve deals above $10 million.
“The Export-Import Bank is not what its supporters make it out to be,” Richard Ribbentrop, senior vice president of policy at the Freedom Partners Chamber of Commerce, wrote in the letter. “It is an outdated federal agency characterized by corruption and a lack of accountability, and keeping the $10 million limit in place is an important step toward reducing the corrupting influence of cronyism and corporate welfare in Washington.” He argues only 11 percent of deals above $10 million benefited small businesses. Click here to read the letter.
USTR PLUGGING AWAY AT TPP IMPLEMENTATION PLANS: Froman said Monday that the administration is working on implementation plans with partner countries and talking with interested groups for input “about how best to strengthen our capability to monitor implementation and enforce obligations.” Key members of Congress have called for countries to lay out how they plan to implement TPP to help assuage worries about what lawmakers view as shortcomings in the deal.
He said the administration has been sending teams to other TPP countries, including to Malaysia, Vietnam, Singapore and Brunei over the past couple of weeks, and others will be heading to Australia, New Zealand and Latin America. He said they were focusing on implementation, as well as capacity building in lower-income countries like Vietnam, Peru or Malaysia, which need help building the resources “to fully meet their obligations.”
The top trade official spoke alongside multiple smart phone application developers that are part of The App Association, which is backing the Asia-Pacific pact. They pointed in particular to TPP provisions that prevent countries from requiring companies to build infrastructure in a foreign market in order to sell there, which for most app developers is financially difficult.
DELAURO USES MALAYSIA IMPORT ALERT TO HIT TPP: On the other side of the TPP fight, Rep. Rosa DeLauro pointed to a new import alert from the FDA, which cited illegal drug residues in shrimp and prawns from western Malaysia, as a problem the deal won’t fix.
“Under TPP, the U.S. will only face more obstacles in dealing with imports and illegal antibiotics,” the Connecticut Democrat said in a statement. “At the same time, it will be easier for foreign exporters to challenge detentions and push seafood into the U.S. market. When the health and safety of the American consumer is at stake, we cannot give other countries preferential treatment.”
The FDA said it’s taking action after sampling between October 2014 and September 2015 detected “a significant increase” in nitrofuran and chloramphenicol residues in products from Peninsular Malaysia. The agency found that about a third of the 138 shipments it examined tested positive for at least one of the antibiotics. Malaysia is one of the top 10 suppliers of shrimp and prawns to the U.S., which imports about 90 percent of its seafood.
MEXICO SAYS YES TO U.S. POULTRY: Meanwhile, U.S. poultry producers have something to celebrate: Mexico has lifted a ban on poultry imports from 14 states that it put in place during the bird flu outbreak last year, leaving restrictions only on imports from Indiana, the U.S. Agriculture Department said Monday.
“By persuading other trading partners to enforce regionalized bans that affect only those areas where [avian flu] was detected, and to rely on internationally accepted science-based standards for trade, USDA has helped preserve billions in U.S. poultry exports,” Agriculture Secretary Tom Vilsack said in a statement. Mexico is the top destination for U.S. poultry, reaching $1.2 billion in imports in 2015, he said.
U.S. COTTON WILL TRY TO REVERSE TURKEY’S TAX ON IMPORTS: The National Cotton Council on Monday blasted Turkey’s decision to place anti-dumping duties on U.S. cotton, arguing the move is merely retaliation for several U.S. trade investigations into Turkish steel imports. The 3 percent anti-dumping duty became effective this weekend, and NCC Chairman Shane Stevens said it puts the U.S. at a competitive disadvantage and compounds the already difficult economic situation for the U.S. industry. Turkey is the second largest export market for U.S. cotton with $850 million in sales last year, according to the NCC. Turkey launched the investigation in 2014 and in February determined the dumping injured its domestic industry.
Stevens in a statement said the NCC will continue to oppose the duties and is looking into ways to reverse them, such as through the World Trade Organization or the Turkish judicial system. Read NCC’s statement here.
ITC SIZES UP CUBA POTENTIAL: Lifting restrictions on trade with Cuba would steadily increase exports of manufactured and agricultural goods, but exports of services probably wouldn’t grow much in the near term, the U.S. International Trade Commission says in a new report.
“This report confirms a commonsense proposition: that there are significant economic opportunities for American producers if restrictions on U.S. trade with Cuba are eased,” Sen. Ron Wyden, the top Democrat on Finance, said in a statement on the report, which he requested. He pointed to “substantial opportunities” for ag products like dairy and wheat, and for manufacturing goods like construction machinery and building materials.
A lot would depend upon Cuba’s actions, however; Havana’s control of trade and distribution, the country’s weak infrastructure, and restraints on investment would continue to limit exports. If — and it’s a big “if” — Cuba responded like a market-based economy to ending the embargo, certain agricultural and manufacturing goods could increase by about $1.4 billion in the medium term, the ITC says. If Cuba removed additional trade barriers to be on par with other developing countries, exports could increase another $442 million, to a total of $2.2 billion.
A special legislative committee in Japan has resumed deliberations on TPP after a break in the wake of powerful earthquakes, the Japan Times reports.
NPR distills the trade debate in the United States.
China could reopen its beef market to imports from six EU member states, according to the Irish Times.
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