EU in search of good procurement offer

With help from Doug Palmer, Adam Behsudi and Catherine Boudreau

EU IN SEARCH OF GOOD PROCUREMENT OFFER: A U.S. offer to open government procurement to European companies will go beyond anything the United States has put on the table in past negotiations, but don’t expect the European Union to be happy about it, Pro Trade’s Adam Behsudi reports. European businesses have high hopes that the Transatlantic Trade and Investment Partnership will deliver major access to more than $1.9 trillion in annual U.S. public procurement contracts. But if a U.S. offer earlier this month is any indication, U.S. Trade Representative Michael Froman might never be able to deliver on EU expectations.

Story Continued Below

“Certainly, a lot of EU asks are not there,” said one source in Brussels closely following the talks.

The U.S. has added a handful of federal agencies to the list of those that will be required to open their bids to EU firms, although officials wouldn’t provide details. But high-dollar projects funded by the Federal Highway Administration and Federal Aviation Administration, which would provide major gains to European construction and railway multinationals, will still be largely off limits. The Obama administration is also unlikely to approach states to urge them to open their procurement contracts to foreign bids. Click here to read more: http://politico.pro/1Lunatz.

IT’S FRIDAY, MARCH 18! Welcome to Morning Trade, where your host is bringing home a new dog this morning. Any tips for doggy care? Let me know: vguida@politico.com or @vtg2.

FROMAN-MALMSTRÖM PART DEUX: Government procurement is likely to be one of the subjects covered by Froman and European Trade Commissioner Cecilia Malmström today, who are scheduled to follow up their short pow-wow last week with a full-day meeting in Brussels. The two will then speak together at 6:45 p.m. Brussels time (1:45 p.m. Washington time) at the German Marshall Fund’s Brussels Forum, which will be streamed live on the GMF website: http://bit.ly/1R6ONFR.

OPENING THE HATCH TO PHARMA SUPPORT FOR TPP: If the administration can score the support of Senate Finance Committee Chairman Orrin Hatch for the Trans-Pacific Partnership, the pharmaceutical industry will likely be close behind, believes Brian Pomper, a former chief trade counsel for the Finance Committee who represents drug company interests.

“I do think they have long viewed Chairman Hatch as their champion … I think they will follow his leadership,” Pomper said Thursday at a Washington International Trade Association event, though he stressed that he was not speaking directly for the industry. Pharma companies have complained that the TPP fell short because it did not provide 12 years of data protection for biologic drugs. The final deal provides an option of eight years protection or five year plus “other measures … and market circumstances … to deliver a comparable outcome.”

Pomper, now an attorney at Akin Gump Strauss Hauer and Feld, said a potential solution could provide clarity on what “other measures” and “market circumstances” actually entail. Hatch and other lawmakers could also be satisfied with a general agreement that other TPP countries will live up to their general intellectual property obligations under the deal, especially for countries that have transition periods over which to implement those commitments.

RYAN SAYS GOP VOTERS STILL TRADE FANS: Meanwhile, House Speaker Paul Ryan doesn’t think Republican voters are anti-free trade despite their support for GOP presidential front-runner Donald Trump, who has criticized NAFTA and TPP.

“I don’t think that that’s necessarily the message,” Ryan said in an interview with CNBC that posted Thursday. “They say no more bad trade deals. They say good trade deals. Donald Trump says, ‘Let’s have good trade deals.’ I don’t think people are saying, ‘Put up a wall and stop trading with the rest of the world.’ How can you do that if we’re 5 percent of the world’s population?”

Ryan did not address when Congress might vote on TPP, which he and other Republican lawmakers have criticized for falling short in a number of areas, like rules on data protections for biologics. However, he said the United States has to strike trade deals to forge the best competitive environment for its companies and workers. “We are in a global economy, whether we like it or not,” Ryan said. “And we believe, I believe, that America should be at the table, writing the rules of the global economy instead of China.” Click here to watch the interview: http://cnb.cx/1U9zClm.

CUBA TO SCRAP DOLLAR SURCHARGE: Cuba has announced that it will scrap the 10 percent penalty charged to convert its domestic currency to dollars, making it cheaper for U.S. companies to do business in Cuba, the Associated Press reports. Cuban Foreign Minister Bruno Rodriguez told reporters that his government will attempt to make a series of international financial transactions in the coming days, and if they work, the surcharge will be lifted, according to the wire service. The move comes just days ahead of President Barack Obama’s historic visit to Havana.

Speaker Ryan criticized Obama on Thursday for what he described as a misguided focus on new business deals with Cuba, rather than on human rights. “Unfortunately, it is doubtful that the president will bring up the need for reform during his visit” to Cuba next week, Ryan said at his weekly news conference. “Instead, he is set to announce new commercial deals between U.S. companies and the Cuban regime, deals that will legitimize and strengthen the communist government.” The speaker also warned Obama not to go too far in easing restrictions on trade with Cuba without permission from Congress.

FOOD COMPANIES, HOTELS OPTIMISTIC ABOUT CUBA PROSPECTS: The U.S.-Cuba Trade and Economic Council, in a new survey Thursday, found that the sectors of agriculture and food, hospitality, consumer products and law were the most optimistic about their prospects of trading with Cuba. The survey, which combined responses from 437 people who worked for U.S.-based companies and had traveled to Cuba since December 2014, said that 91 percent of respondents in food products, 87 percent in consumer products, 82 percent in ag commodities, 81 percent in law firms and 77 percent in hospitality were hopeful about opportunities for their respective field. Click here to read the survey: http://bit.ly/1nSjWo3.

STUDY ON FOREIGN AG UNDERSECRETARY MIA: Robert Aderholt, chairman of the House Appropriations Committee’s agriculture panel, pressed USDA at a hearing Thursday on why it’s taking so long to produce a study on the creation of a new undersecretary position for trade and foreign agricultural affairs. The 2014 farm bill directed the department to report to Congress six months after enactment, and the fiscal 2016 omnibus appropriations law set a new deadline for June.

Alexis Taylor, deputy undersecretary of the farm and foreign agricultural service, said the task is much more complicated than originally thought, and the department aims to have it done before the end of the year.

“When you look across the seven mission areas and 17 agencies [of USDA], many of them have some component to international activities,” Taylor said. “And it’s not just the international components, it’s also the domestic components. You would be changing leadership structures. That’s why i think it’s taking the department a little while to look at this question.”

ALUMINUM EXTRUSION INTRUSION: The Commerce Department this week launched an investigation to determine whether Chinese aluminum company China Zhongwang is circumventing trade remedy orders on 5050 alloyed aluminum extrusions. Click here to read the petition from the Aluminum Extruders Council: http://bit.ly/1RpsZEE.

INTERNATIONAL OVERNIGHT

Despite the excitement, little has happened to expand trade between the U.S. and Cuba, Bloomberg reports: http://bloom.bg/1XzcPxf.

CNBC’s Jim Cramer agrees with Donald Trump on trade: http://cnb.cx/1LtYnWs.

The White House is highlighting continuing efforts to enforce trade agreements: http://1.usa.gov/22ow7vS.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: abehsudi@politico.com and @ABehsudi; vguida@politico.com and@vtg2; dpalmer@politico.com and @tradereporter; mkorade@politico.com and @mjkorade; and jhuffman@politico.com and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.

Leave a Reply