Clinton’s TPP conundrum to continue

With help from Adam Behsudi and Doug Palmer

CLINTON’S TPP CONUNDRUM TO CONTINUE: If things go right for Hillary Clinton, she’ll be preparing to move back to the White House on Nov. 9 — but her honeymoon, partially made possible through President Barack Obama’s unwavering support, will be short-lived as she mulls one big question: How hard should she work against Obama’s efforts to put TPP to a vote during a lame-duck session?

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The question is easily answered by supporters of Sen. Bernie Sanders: “It will be absurd if the president-elect and the leader of this party, the titular leader, right at that moment isn’t aligning Democrats with her position. Our expectation, our hope, our encouragement will be that she either help prevent a vote or stop it,” said Larry Cohen, a former labor leader who is helping to lead the anti-TPP effort for Sanders’ “Our Revolution” movement.

Cohen said Clinton’s opposition to the deal is appreciated, but Sanders supporters who vote for her on Nov. 8 will expect her to actively work to keep on-the-fence Democrats from supporting the deal if it comes up for a vote. He added that her running mate, Sen. Tim Kaine, is in a prime position to reach his colleagues on the Hill.

“We go through this multibillion-dollar election with both presidential candidates saying this isn’t a deal we support, we’d like a better one, and in the lame duck it is passed?” Cohen said. “It makes a mockery of the election.”

IT’S THURSDAY, NOV. 3! Welcome to Morning Trade, where your host can’t help but wonder if last night’s Game 7 offered any indication of what’s to come on Tuesday. The team with Chicago roots on the brink of making history gets temporarily forced back on its heels after a late-game rally? I’m just saying … In other news, hearing any good trade talk out there? Let me know: mcassella@politico.com or @mmcassella.

BIOLOGICS TALKS INTENSIFY: Talks between the Obama administration and the Senate Finance Committee have intensified over the past month, as the two sides strive to bridge a gap on an important issue blocking a vote on the TPP — the length of intellectual property protection for biologics, Morning Trade has learned.

Senate Finance Committee Chairman Orrin Hatch pressed for 12 years of data protection for life-saving medicines in the agreement, which would be the same as in U.S. law. Instead, the administration negotiated a two-pronged approach that it says will provide at least 8 years of data protection, but which Hatch and many other lawmakers fear guarantees only five.

While a USTR-Hatch deal appears unlikely before the election, talks now are said to be focused on two main concerns: clarifying how TPP countries will implement the commitment and ensuring the sanctity of 12 years of data protection in U.S. law. An agreement could set the stage for a vote on TPP after the election, if other pieces also fall into place. Ultimately, it will be up to Republican leaders to make that call and both Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan have said they do not expect a vote.

RCEP MEETING IN THE PHILIPPINES: Top trade officials from China, Japan, India, South Korea, Australia, New Zealand and 10 Southeast Asian countries meet today in the Philippines to discuss progress on the Regional Comprehensive Economic Partnership. The 16 countries are pushing to finish the mega-regional agreement by the end of the year. The pact is sometimes portrayed as a rival to the TPP but is not expected to be as comprehensive or as trade-liberalizing as the U.S.-led agreement.

SENATORS URGE REJECTION OF CHINA’S BID FOR U.S. ALUMINUM COMPANY: A dozen senators are asking the Obama administration to block the proposed acquisition of a U.S. aluminum producer by a Chinese company, arguing the sale would have a negative impact on national security and domestic infrastructure.

In a letter to Treasury Secretary Jack Lew, Democratic Sen. Ron Wyden and 11 others asked the Committee on Foreign Investment in the United States to “closely review and ultimately reject” the move by Zhongwang USA, a subsidiary of China-based Zhongway International Group, to purchase Cleveland-based Aleris Corp.

The purchase “would directly undermine our national security, including by jeopardizing the U.S. manufacturing base for sensitive technologies in an industry already devastated by the effects of China’s market-distorting policies, and creating serious risk that sensitive technologies and know-how will be transferred to China, further imperiling U.S. defense interests,” wrote the lawmakers, which included third-ranking Senate Democrat Chuck Schumer and Rob Portman, a former U.S. Trade Representative and the lone Republican among the bunch.

STEELWORKERS: CHINA’S MOVE IS ALL PART OF ITS LARGER PLAN: United Steelworkers International President Leo Gerard applauded the lawmakers’ letter, saying in a statement that China has long targeted the aluminum sector for “development and domination” and that Beijing’s move to acquire Aleris is part of that overall strategy.

“The transaction must be rejected on both national and economic security grounds,” Gerard wrote. On the national security side, Gerard noted that Aleris has developed ballistic-resistant products used in a number of military applications. On economics, he said Beijing continues to build up overcapacity that decimates U.S. production, and the proposed purchase is part of China’s leaders’ push to invest overseas as a way to build up its own manufacturing expertise and expand market share.

THE ‘UPSIDE-DOWN WORLD’ OF TRADE: Rich countries such as the United States and those in the European Union have lectured developing countries for years on the virtues of trade liberalization. But now that many developing countries are moving ahead, free trade suddenly has a bad reputation in more prosperous economies, Arancha Gonzalez, executive director of the Geneva-based International Trade Centre, told Morning Trade.

“It’s a bit of a world upside-down when you look at what’s happening,” Gonzalez said, referring to regional integration initiatives in Southeast Asia, Africa and Latin America that are taking place at the same time that the United States and the EU seem to be retreating from trade deals such as the TPP and the TTIP.

The ITC is a joint development agency of the United Nations and World Trade Organization focused on helping small and medium-size enterprises in developing countries participate more in international trade. Gonzalez is in Washington for meetings with USAID, the World Bank, the International Monetary Fund and the Inter-American Development Bank.

“I’m not sure that shooting at trade agreements is going to solve our problems,” Gonzalez said, arguing that advances in technology are a much bigger cause of job dislocations. Just think what self-driving cars could do to all the jobs in the transportation sector, she said.

CLINTON CAMP’S ENDLESS QUEST TO SATISFY LABOR: A pro-trade congresswoman who voted in favor of Trade Promotion Authority told constituents during a meeting in Dallas last fall that Hillary Clinton only opposes the TPP in order to “get labor off her back,” a new email released by WikiLeaks shows.

In the email, purportedly hacked from Clinton campaign chairman John Podesta’s personal Gmail account, Podesta’s assistant sends him a memo written by the campaign’s labor outreach director, Nikki Budzinski, to prepare him for a meeting with AFL-CIO Director Richard Trumka. Under the subhead “Important Notes,” Budzinski writes that she has recently received four calls from labor representatives asking about claims that Rep. Eddie Bernice Johnson, a Democrat and Clinton supporter, made recently at a district meeting where TPP came up in the discussion.

“She claimed in the meeting that she speaks with HRC 2-3 times a week and that she was told by the secretary that the only reason she opposes TPP is to get ‘labor off her back’ and that once she is elected president she will reverse position,” Budzinski wrote in the memo. “This was not helpful with labor.”

Budzinski added she had coordinated an effort to convey to Johnson’s chief of staff to “clarify the inaccuracy of what she said and push back on her comments.”

CALIFORNIA CHECK-IN: HONDA RUNS INTO TPP TROUBLE: Not a good week for eight-term Democratic Rep. Mike Honda, who is now in the fight of his political life in Silicon Valley’s 17th Congressional District, per California Playbook. Honda’s campaign on Tuesday cited WikiLeaks in a news release charging that Democratic challenger Ro Khanna backs the TPP.

The reality is that Khanna opposed the controversial trade agreement — before Honda. The Honda campaign’s release was based on a May 2015 WikiLeaks email between Podesta and Khanna adviser Steve Spinner. “Honda is likely to vote against the TPP despite the White House’s wishes. Ro has come out for it,” Spinner wrote.

But Khanna apparently went his own way on this issue. The former Obama trade official went on record against TPP on Jan. 11, 2016. Honda was silent on the matter until four days later, when he released a statement also opposing it.

COMMERCE’S HYATT HEADS UP TRADE MISSION TO KUWAIT, SAUDI ARABIA: Commerce acting Undersecretary Ken Hyatt is headed to the Middle East to promote U.S. businesses’ export opportunities in the region, particularly in the regional security market, the agency announced today. Hyatt and more than a dozen small- and medium-size companies from across the country will spend time in Kuwait City as well as two cities in Saudi Arabia, Dhahran and Riyadh, meeting with both government officials and industry representatives to explore potential trade opportunities and areas ripe for coordination.

“The Gulf region represents enormous export potential for U.S. companies,” Hyatt said in a statement. “The defense and security markets continue to grow globally, and firms on this mission are well-positioned to enter into partnerships with Kuwaiti and Saudi businesses and government. The Department of Commerce has a proven track record of providing export assistance to companies looking to enter or expand in target markets.”

Saudi Arabia has been the biggest defense market for U.S. exporters during the past two years, Commerce said, adding that it is forecast to purchase $14 billion in security systems and related services in the next three years. Kuwait is also planning to boost investment in safety and security equipment through 2020.

COMMERCE SLAPS DUTIES ON CHINESE AMMONIUM SULFATE: The Commerce Department has set preliminary dumping margins of nearly 500 percent on imports of ammonium sulfate from China, which totaled about $62 million in trade last year. Imports of the chemical have increased more than sevenfold from 2013 to 2015.

Commerce slapped the duties on imports of the chemical compound, which is primarily used as a fertilizer, from all Chinese producers and exporters. No company responded to Commerce’s request for information, the agency said, so it based its determination on adverse facts available. The ruling is a win for Texas-based petitioner PCI Nitrogen LLC. Commerce will make its final determination around Jan. 17 of next year.

INTERNATIONAL OVERNIGHT

— Japan has given up on trying to push a preliminary vote on the TPP before U.S. Election Day after a gaffe from its agriculture minister, the Japan Times reports

— Canada is expecting exports to rise in 2017 for the first time in three years, though anti-trade rhetoric could dampen that expectation, The Wall Street Journal reports.

— A senior Ex-Im official says the bank may be able to operate with a quorum of two as soon as December, Channel News Asia reports.

— The Australian Chamber of Commerce and Industry is stepping back from claims that the TPP would create hundreds of thousands of jobs, Australia’s Canberra Times reports.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: abehsudi@politico.com and @ABehsudi; mcassella@politico.com and @mmcassella; dpalmer@politico.com and @tradereporter; mkorade@politico.com and @mjkorade; and jhuffman@politico.com and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.

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