China steel in the crosshairs
With help from Doug Palmer and Hans von der Burchard
CHINA STEEL IN THE CROSSHAIRS: The United Steelworkers might have withdrawn their petition for an emergency duty on aluminum imports, but the global overcapacity saga is nowhere close to over. This week’s chapter: U.S. Steel Corp. on Tuesday filed a case with the U.S. International Trade Commission aimed at blocking “all unfairly traded Chinese steel products” from entering the United States.
Story Continued Below
It alleges three reasons to do so: an illegal conspiracy to fix prices, theft of trade secrets and the circumvention of trade duties by false labeling.
“We have said that we will use every tool available to fight for fair trade,” President and Chief Executive Officer Mario Longhi said in a statement. “With today’s filing, we continue the work we have pursued through countervailing and anti-dumping cases and pushing for increased enforcement of existing laws.”
The iconic steel company filed the complaint under Section 337 of the Tariff Act of 1930, targeting the largest Chinese steel producers and their distributors. That legal provision is most often used to block a rival firm’s sales in the United States because of copyright or patent infringement. But it also covers unfair methods of competition and unfair acts in the import and sale of products in the United States, U.S. Steel said in its press release.
The ITC has up to 30 days to evaluate the petition and decide whether to initiate the case. If it goes forward, an administrative law judge would be assigned to the case.
IT’S WEDNESDAY, APRIL 27! Welcome to Morning Trade, where your host has safely arrived in New York City for the TTIP round. What should I sneak out to do between chasing down government officials? Let me know: firstname.lastname@example.org or @vtg2.
WTO MEMBERS WORRIED ABOUT USE OF SAFEGUARDS: Amid global overcapacity concerns in the steel and aluminum sectors, the United States and seven other members of the World Trade Organization expressed concern this week over the increased use of emergency safeguard measures to protect domestic producers from import competition, a WTO official said.
WTO rules allow members to temporarily restrict imports of a particular product if its domestic industry is seriously injured, or threatened with serious injury, by an unforeseen surge. Safeguard measures generally apply to imports from all countries and are expected to last no more than four years.
WTO figures show members imposed 17 safeguards in 2015, down from 23 in 2014. Of the 58 safeguards imposed since 2013, 23 have targeted imports of “base metals and articles of base metal.” Since 2013, India has imposed the most safeguards (12), followed by Chile (6) and Turkey (5).
WTO members, during a meeting of the WTO’s Safeguard Committee on Monday, reviewed 28 safeguard measures on Monday, the WTO official said. The measures that drew the most comments were those adopted by India, Chile and South Africa.
VIETNAM STILL FUMING ON U.S. CATFISH PROGRAM: Agriculture Secretary Tom Vilsack’s recent visit to Vietnam didn’t do much to soothe Hanoi about U.S. plans to enforce new catfish inspection requirements, POLITICO Agriculture’s Ian Kullgren reports. A top Vietnamese trade official on Tuesday demanded the U.S. repeal its new catfish inspection rules, suggesting again that the country will file a formal challenge before the WTO.
“Our product has been a safe and healthy export for years and continues to be,” Nhan Dao, trade minister counselor at the Vietnamese Embassy in Washington, said in an email to POLITICO. “The use of unjustifiable and discriminatory phytosanitary accusations is a disappointing tactic that may need to be addressed in WTO litigation.”
“We hope it would be clear to [Vilsack] after his trip to our country that this program jeopardizes part of that mutually beneficial relationship,” Dao wrote. Click here to read the full story.
U.S.-CHINA DIALOGUE SET FOR JUNE: The United States and China will hold their annual high-level Strategic & Economic Dialogue in Beijing in early June, the departments of State and Treasury announced Tuesday. As usual, Treasury Secretary Jack Lew and Secretary of State John Kerry will lead the U.S. delegation, while Chinese Vice Premier Wang Yang and State Councilor Yang Jiechi will head up the Chinese side.
Likely to feature in that meeting are ongoing negotiations for a bilateral investment treaty. Progress has slowed on the U.S.-China BIT after Beijing didn’t come forward with a new market access offer in March. But Deputy USTR Robert Holleyman said Tuesday that Chinese officials insist the talks are still a priority.
“The Chinese have stated as recently as in the past week, when we had high-level meetings with China, that they continue to have an interest in negotiating a bilateral investment treaty with the U.S.,” he said at the U.S. Chamber of Commerce’s annual China Business Conference. “With that said, China has not indicated when they will have an improved negative list for us.”
The two sides continue to talk, and it is still the U.S. goal to conclude talks before the end of President Barack Obama’s term, he said.
IT’S MTB DAY: The House will consider miscellaneous tariff bill reform today under suspension of rules, which means leadership expects it to sail through. The National Association of Manufacturers and the U.S. Chamber of Commerce both sent letters Tuesday urging lawmakers to approve the bill, and said they would include the vote in their scorecards for individual members. The legislation would put the U.S. International Trade Commission, rather than lawmakers, in charge of vetting petitions for tariff waivers to be included in an MTB package.
Supporters hope the Senate will quickly approve the legislation as well, but Senate Majority Leader Mitch McConnell told reporters Tuesday he had nothing to announce on timing.
ALSO, TRADE SECRETS DAY: The House will also consider the Defend Trade Secrets Act, which would let companies pursue civil remedies for trade secrets theft in federal court; currently, there is only civil enforcement for theft of confidential business information at the state level.
McCARTHY ON TPP: IT’S POLICY THAT MATTERS: Elsewhere on Capitol Hill, House Majority Leader Kevin McCarthy brushed off the suggestion that Republican Party politics were the real reason the White House has not been able to advance the Trans-Pacific Partnership. “When you vote on a bill, it’s the policy that’s in the bill [that matters], and those are the issues that have been brought to me from the members,” McCarthy told reporters at a press briefing.
However, the California representative declined to say if House Republicans would be prepared to move on the trade deal this summer if the Obama administration is able to satisfy their concerns related to financial services, pharmaceuticals and tobacco.
“I wouldn’t pick hypotheticals,” he said. “We’ve been clear with the challenges we see inside it and what’s wrong with it … I’d wait and pass judgment what they think a solution is and what we think a solution is.”
EU COMMISSIONERS TO TESTIFY ON TTIP AG ISSUES IN JULY: European Trade Commissioner Cecilia Malmström and EU Agriculture Commissioner Phil Hogan will speak July 14 at a public hearing in the European Parliament about agriculture concerns in TTIP. Marc Tarabella, a European Parliament member in the Socialists & Democrats Party, broke the news in a piece in French agriculture publication Wikiagri.fr. The hearing comes after the commission initially refused to comment on a November U.S. Department of Agriculture study concluding that Europe’s agricultural sector would lose out in the deal. Read the USDA study here, and Tarabella’s piece (in French) here.
PRITZKER WADES INTO TTIP DEBATE IN GERMANY: Meanwhile in Germany, Commerce Secretary Penny Pritzker on Tuesday defended the U.S.’s decision not to publish its TTIP negotiating proposals the way the EU does.
“We know what the issues [in TTIP] are,” she told a circle of reporters at the Hannover Messe trade fair. “The question is how to resolve them, and frankly that’s not gonna get resolved by making text widely available. … I think it’s very hard to negotiate in the public.” She added that the U.S. should be transparent about “the principles of a high-standard agreement that we are trying to achieve.”
Pritzker also attempted to placate growing skepticism of the trans-Atlantic deal by selling the small-business angle. “The large global corporations already have access to most markets,” she said. “In the United States, over 90 percent of the benefit from having TTIP will go to small and medium-sized companies, and that will be true in Europe also. I’ve heard figures of over 80 percent.”
NOW WHAT FOR THE WTO? The WTO no longer has a clear mandate after ministers in December couldn’t agree to reaffirm the Doha round of negotiations. Discussions in Geneva since then have focused on what, exactly, members should be negotiating.
Malmström in a speech Tuesday weighed in, citing gaps in current WTO agreements on issues relating to technology, global value chains and the changing role of emerging economies like China and India. She said the EU prefers multilateral solutions to these and other issues. “After all, the reason the WTO is such an important forum is because it gathers over 160 countries who represent the vast majority of the world economy,” she said.
“However, we must also be realistic,” she added. “If it’s a choice between making progress with a smaller number of partners or no progress at all, then we will choose to move forward — plurilaterally.” Click here to read the full speech.
PAPER: U.S. SHOULD DO MORE IN SE ASIA THAN JUST TPP: The United States should focus more on helping Southeast Asia develop and integrate, argue the American Council for Capital Formation and International Council for Capital Formation in a new paper.
“Washington lacks a serious, cohesive approach toward Southeast Asia that promotes America’s long-term political and economic interests,” the paper says. Such an approach could include supporting the use of technologies that will boost the region’s energy security, as well as transportation projects that would give countries better access to global markets. Read the full paper here.
THINK TANK: U.S. FTAs HAVE BEEN MOSTLY GOOD: Think tank Third Way in a new report examines the trade relationships with the 17 U.S. free-trade agreement partners. Among the findings of the report: The U.S. goods trade balance with 14 of them improved after the deal went into effect. The exceptions? Nicaragua, Costa Rica and South Korea. The trade balance improved the most with Singapore post-FTA, and worsened the most with Korea post-FTA.
Brazil and Argentina met Tuesday to discuss expanding their relationship, with talks focusing on an expiring automotive deal, according to The Rio Times.
Jared Bernstein, a former chief economist to Vice President Joe Biden, argues in a Washington Post op-ed that globalization is good but free trade deals aren’t providing a good structure for it.
The EU and India still have not agreed on a timeframe for resuming their bilateral free trade talks, The Times of India reports.
THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: email@example.com and @ABehsudi; firstname.lastname@example.org and @vtg2; email@example.com and @tradereporter; firstname.lastname@example.org and @mjkorade; and email@example.com and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.