Evaluating Obama’s Cuba trip
With help from Doug Palmer, Adam Behsudi and Jenny Hopkinson
CUBA: YAY, BOO OR MEH? Despite the group of business deals announced between some U.S. companies and Cuba this week, the trade outcome of President Barack Obama’s historic trip was decidedly small — though, of course, that’s what we were expecting.
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John Kavulich, president of the U.S.-Cuba Trade and Economic Council, put it this way: “The president traveled a great distance, physically, politically, metaphorically; with the only certainty being uncertainty. And the government of Cuba, in response, accepted donations, agreed to purchase nothing, and only accepted from United States companies what offerings would increase revenues.”
But that doesn’t really matter in the context of this trip, said Mark Entwistle, former Canadian ambassador to Cuba and a partner at merchant bank and advisory firm Acasta Capital. “I am much less interested in the business deals, etc., in assessing this trip,” he said. “The respect and open-mindedness with which President Obama spoke about Cuba and to Cubans was unprecedented in the history of the U.S.-Cuba relationship and left a huge impact on Cubans. And President Castro, for his part, showed real leadership in offering his guest the opportunity to speak his mind freely in private and in public.”
And agriculture groups are hopeful Cuba won’t fall out of the spotlight now that President Obama has left. “This is the trip that I think tipped the scale on U.S.-Cuba relations,” said Devry Boughner Vorwerk, chair of the U.S. Agriculture Coalition for Cuba and a senior policy adviser at Akin Gump. “I do believe we are getting closer to the end of the embargo.”
IT’S WEDNESDAY, MARCH 23! Welcome to Morning Trade, where your host has been fascinated by the uniqueness of Obama’s trip to Havana. Do you think the changes he has made with respect to the island are irreversible? Let me know: email@example.com or @vtg2.
MTB = MISSED THE BOAT? We haven’t forgotten about the miscellaneous tariff bill, which was left behind in the flurry of trade bills passed last summer, and neither has House Ways and Means Committee Chairman Kevin Brady. The Texas Republican is exploring possible ways to move forward on the long-delayed legislation, which has gotten snagged in recent years by the House Republican ban on earmarks, a spokeswoman for the committee said Tuesday.
“Chairman Brady is talking with members this week about the legislative path forward on MTB to help American manufacturers and uphold the earmark ban,” spokeswoman Emily Schillinger said in an email. “We expect to announce more details after the district work period.”
U.S. manufacturers had hoped lawmakers would come up with an MTB reform process as part of the package of four trade bills that moved through Congress last year, but the task proved too challenging. The temporary tariff waivers contained in the MTB are considered an earmark under House rules because they benefit only a few individual firms each.
Brady pledged in December to develop a process “consistent with House rules” early this year that would allow the MTB to move forward. The last MTB passed by Congress expired at the end of 2012.
CONSERVATION GROUP PRAISES NEW ‘DOLPHIN-SAFE’ RULES: A California conservation group is praising new “dolphin-safe” label rules issued on Tuesday by the National Oceanic and Atmospheric Administration to shield U.S. exporters from potentially hundreds of millions of dollar of trade retaliation by Mexico in a long-running trade dispute. The WTO has repeatedly ruled the way the United States administers the program discriminates against Mexico. But rather than drop the dolphin-safe label, NOAA says it has modified its rules to more effectively cover all tuna fisheries, not just the Eastern Tropical Pacific, where Mexico industry operates.
“The new regulations demonstrate that the US is taking extraordinary effort to ensure uniformity as sought by the WTO,” David Phillips, Director of Earth Island’s International Marine Mammal Project, said in a statement. “There is no circumstance in which it makes sense for Mexico to use the dolphin-safe tuna label when they engage in the intentional chase and encirclement of dolphins during fishing operations. … NOAA’s new regulations would prevent that from happening, which should demonstrate to the WTO panel that Mexico is not being singled out.” To read Doug Palmer’s full story on the case, click here: http://politico.pro/25kVFcu, and click here for the interim final rule: http://bit.ly/1VCugyi.
HOLLEYMAN TO TECH GROUP: LET’S FOCUS ON EGA: Deputy U.S. Trade Representative Robert Holleyman said he hoped the Group of 20 meetings led by China this year could propel the Environmental Goods Agreement to a successful conclusion, but he downplayed chances of the group being a driving force behind any new digital trade agreement.
“It’s not an either-or proposition, but I think we have to be careful not to chase the next new issue when we have not yet closed out” the EGA and other pending negotiations, Holleyman told the Information Technology Industry Council late Tuesday afternoon.
Holleyman said it would be difficult to find consensus within the G20 on issues like cross-border data flows and forced localization, and the United States did not want to weaken what it had achieved in the Trans-Pacific Partnership in those areas. While there has been talk of negotiating a plurilateral digital economy agreement within the World Trade Organization, there is still no U.S. decision on whether to push for that, he said.
LEW ON FINSERV DATA STORAGE: WE’LL SEE: Treasury Secretary Jack Lew declined to provide lawmakers with details on any side agreement that might be in the works on the financial services data issue in TPP, though he acknowledged such a deal could be “helpful.”
“I can’t tell you right now,” Lew told House Financial Services Committee members in response to a question from Rep. Frank Guinta on what a side deal might look like. “If I knew where this was headed, I’d be happy to say so.” The proposed pact would exempt the financial services industry from a prohibition on the forced localization of data — a move the department has defended as necessary for regulatory purposes.
The treasury secretary emphasized the concerns of U.S. regulators in that regard. “Unfortunately, during the financial crisis there was an incident where, with a major institution, they were denied access in a timely way, and it interfered with both crisis management and resolution,” he said. “So the question is how to make sure they get what they need.”
Lew also attempted to limit expectations on a possible resolution. “There is very limited room to change TPP, so I don’t want to raise expectations,” he said. California Republican Ed Royce, who chairs the House Foreign Affairs Committee and helped in the whipping effort for trade promotion authority, emphasized that he and other lawmakers needed to see “demonstrable progress” on the financial services issue, calling it a “prerequisite to get this issue solved in a credible way.”
LEW: THE EU GETS IT: Lew also said the European Commission recognizes that the United States doesn’t want to cover financial regulations in bilateral trade negotiations, which he said could lead to a renewed effort to coordinate on regulations in other forums.
“In my conversations with the European Commission, I’ve actually heard in the last few months a recognition that opening the prudential issues in TTIP would not be acceptable to us,” he said. “And I’ve heard a renewed interest in using the Financial Markets Regulatory Dialogue as a place to try to drive those discussions, which we think is the right way to do it, and we’re happy to engage them.”
But Missouri Republican Ann Wagner said she had heard the dialogue has not been effective and called Lew’s answer “concerning.”
The U.S. has refused to negotiate on financial services regulations in TTIP, prompting the EU to put financial services market access talks on hold as well. “We have the high standards that we’re trying to pull everyone else up to,” Lew said. “I don’t think a trade agreement that could end up chipping away at some of our protections would be the place for prudential regulation to be reopened.”
DEMS: HUMAN RIGHTS PROGRESS NOW, TPP VOTE LATER: Senate Minority Leader Harry Reid (D-Nev.), Sen. Bernie Sanders (I-Vt.) and 17 other Democrats urged U.S. Trade Representative Michael Froman on Tuesday not to submit implementing TPP legislation until Vietnam, Brunei and Malaysia have complied with their respective action plans for labor and human rights.
In a letter, the senators, who all voted against trade promotion authority in June, said the bill shouldn’t be submitted until those countries “implement the legal reforms stipulated in the respective consistency plans and demonstrate a consistent track record of enforcing these new laws.”
The senators also raised concerns that Malaysia’s upgrade in the State Department’s 2015 Trafficking in Persons report was unwarranted and might call into question “whether we should accept the administration’s assurances that these countries are meeting their commitments.” New Jersey Democrat Bob Menendez, who led the letter, amended the fast-track bill to prohibit trade deals with countries in the worst tier of the TIP report from being fast-tracked. The State Department gave Malaysia upgraded status one month after TPA passed. Click here to read the letter: http://1.usa.gov/1MlpnHI.
WHITE HOUSE HOSTS BUSINESS TRADE MEETING: More than 30 U.S. business leaders from 19 states met with senior administration officials at the White House on Monday to discuss the potential impact of TPP, the pro-trade group Business Forward said Tuesday. The meeting, which was organized by Business Forward and the White House Business Council, was meant to emphasize the importance of the proposed pact to companies across the nation, Business Forward spokeswoman Rachel Harvey said.
Holleyman was among the officials who discussed the ways in which the TPP would affect U.S. businesses. The group of business executives also met with Rep. Jim Himes, one of the 28 House Democrats who voted for trade promotion authority, the business group said. The event was part of a series of trade policy meetings with White House officials and lawmakers organized by Business Forward, the group said.
COMMERCE SOFTENS ON ZTE: The Commerce Department will allow U.S. suppliers to temporarily ship products to Chinese smart-phone maker ZTE after the company was punished earlier this month for circumventing Iran sanctions, according to a Federal Register notice scheduled for publication today. The reversal comes after negotiations between the U.S. government and the company. The changes won’t remove ZTE from Commerce’s bad actors list but will temporarily allow U.S. suppliers to continue to ship to one of the world’s largest telecommunications companies. Click here to read the notice: http://bit.ly/21GmIu9.
China is expanding its ban on ivory imports, Shanghai Daily reports: http://bit.ly/1SgKNoJ.
Foreign banks are still shying away from trade deals with Iran, Reuters reports: http://reut.rs/1PqsE3m.
Indian Prime Minister Narendra Modi will still visit Brussels next week despite the terrorist attacks Tuesday, according to Livemint: http://bit.ly/1RiSpqw.
Belarus expects to join the WTO in the next two to three years, Sputnik International reports: http://bit.ly/1Rxygdx.
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