Obama tries to calm the world’s fears over Trump, trade

With help from Doug Palmer and Adam Behsudi

OBAMA TRIES TO CALM THE WORLD’S FEARS OVER TRUMP, TRADE: The Asia-Pacific Economic Cooperation summit in Lima, Peru, closed out on Sunday with leaders taking what appeared to be a veiled shot at President-elect Donald Trump, pledging in a leaders’ statement to “resist all forms of protectionism” and roll back any protectionist or trade-distorting measures.

Story Continued Below

In his own remarks at the close of the summit, President Barack Obama said that the 11 other nations involved in the TPP “made very clear … they want to move forward with TPP” — with the U.S. on board, if possible.

Obama’s comments came at the end of his final international trip as president, a journey that did not see him celebrating the signing of his signature trade deal as he once wished but working instead to reassure the world that Trump and his campaign pledges to dismantle U.S. trade policy should not be taken as a guarantee of how he would govern.

“My message to you, though, and the message I delivered in Europe is, don’t just assume the worst,” Obama said Saturday at a town hall event in Lima, referring to earlier stops in Germany and Greece. “Wait until the administration is in place, it’s actually putting its policies together, and then you can make your judgments as to whether or not it’s consistent with the international community’s interest in living in peace and prosperity together.”

“There are going to be tensions that arise, probably around trade more than anything else,” Obama added, “because the president-elect campaigned on looking at every trade policy and potentially reversing some of those policies. But once they look at how it’s working, I think they’ll determine that it’s actually good both for the United States and our trading partners.”

IT’S MONDAY, NOV. 21! Welcome to Morning Trade, where your host is expecting a short but busy week for trade and transition news. Got any trade news or tips to share? Let me know: mcassella@politico.com or @mmcassella.

PROGRAMMING NOTE: Due to the Thanksgiving holiday, Morning Trade will not publish on Thursday, Nov. 24, and Friday, Nov. 25. Our next Morning Trade will publish on Nov. 28.

OBAMA TO TPP LEADERS: KEEP WORKING TO PUSH DEAL FORWARD: Obama also met in Lima with leaders of the 11 other members of the TPP and discussed the need to “remain engaged in an increasingly interconnected world,” according to a readout of the meeting provided by the White House. Obama commended the other leaders whose countries, unlike his own, have worked with their legislatures to move forward with TPP approval, the White House said, and he urged the others to continue to work together and advance the deal as well as other trade agreements.

Meanwhile, the 21 APEC leaders reaffirmed their long-term goal of working toward a Free Trade Area of the Asia Pacific (FTAAP) covering all their member economies, using both the TPP and another proposed pact, the Regional Comprehensive Economic Partnership, as “pathways” toward that objective. However, in an annex to the leaders’ declaration that seemed to reflect recent setbacks to complete regional economic integration, they also gave themselves until “no later than 2020” to figure out a way to move from the TPP and RCEP agreements to the final APEC-wide pact.

ROSS WOULD BE COMPLICATED PICK FOR COMMERCE CHIEF: Wilbur Ross, Trump’s expected pick for secretary of Commerce, has earned billions investing in languishing U.S. manufacturing industries like steel, coal and textiles, making a name for himself in dealing with so-called distressed assets, Pro Trade’s Adam Behsudi reports. During the campaign, Ross helped Trump build the case for attacking America’s mounting trade deficit through actions ranging from the renegotiation of “bad” trade deals to “defensive tariffs” aimed at China and Mexico — and he’s closely aligned with the president-elect’s worldview that China and other countries are beating U.S. industry.

But his business dealings and investments — a dizzying array that includes board positions on at least five major public companies and leadership roles in several private firms — would make him a complicated pick to be the official in charge of promoting U.S. business abroad and defending U.S. trade laws. “He might be the second-most complicated person in the administration to vet, behind the president-elect himself,” said Norman Eisen, a Brookings Institution visiting fellow who once served as President Barack Obama’s chief ethics lawyer and was also U.S. Ambassador to the Czech Republic.

Ross’ investments in steel, for example, place him close to an industry that has waged an aggressive campaign for trade cases against foreign competitors in recent years. That could raise questions over whether he would benefit financially from favorable trade rulings by Commerce’s International Trade Administration.

Those investments in manufacturing, more broadly, also likely make him a true believer in the need to ratchet up enforcement, just as Trump wants to do. Read the full run-down on Ross from Pro Trade’s Adam Behsudi here.

A WEEKEND’S WORTH OF JOB INTERVIEWS: The president-elect spent the weekend meeting with dozens of Cabinet hopefuls at his golf course in Bedminster, N.J., seeking input and advice from some and vetting others for a potential spot in his administration. Shortly after 6 p.m. Sunday, Trump stood outside the clubhouse of Trump National Golf Club and was asked about progress in assembling his cabinet: “We’ve made a couple of deals,” he said, according to a pool report. He said it was “pretty true” when asked if announcements on new administration hires would be coming soon.

Of everyone who came and went on Saturday and Sunday, relevant names to the trade world included Ross, who stopped by on Sunday, as well as Republican National Committee Finance Chairman Lew Eisenberg and Todd Ricketts, the co-owner of the Chicago Cubs.

Trump and Ross had a “great discussion” focused on “negotiating the best foreign deals, American manufacturing and job creation,” according to a readout of the meetings provided by the transition team. As for Eisenberg and Ricketts, they could be contenders for the Commerce slot if Trump opts against tapping Ross. Trump discussed “domestic commerce, ingenuity and growth for our country” with Ricketts, according to a readout, and with Eisenberg the chat centered on “plans for America First initiatives, bringing Made in America manufacturing to the forefront and improving infrastructure.”

TOUGH TIMES FOR GREEN GOODS TALKS: Chances of negotiators wrapping up the Environmental Goods Agreement on schedule this year are narrowing after Chinese officials told their counterparts in Lima that they are unwilling to budge on a long list of challenging issues, a senior official involved in the talks told Morning Trade. On the sidelines of the APEC summit, Beijing officials outlined 36 products that they said must be in the pact in order for them to sign on — one item among that group, bicycles, has proven an intensely sensitive issue for some nations involved — as well as a list of “un-doables,” which Chinese negotiators said must be left out. The senior official told Morning Trade that some items that fall in the “un-doables” category are products that other countries feel are very important: small gas turbines and batteries, for example.

“Absent a very significant change in China’s posture, the EGA talks will fail,” the official said.

China’s willingness to engage in the negotiations on the pact, which aims to eliminate tariffs on a list of about 300 environmentally friendly products, has been questioned in the past; but its leadership at a meeting on the sidelines of a Group of 20 summit this summer was widely viewed as an indication that it would work to get the deal done by its December deadline. Now, however, China is hinting at not sending Commerce Minister Gao Hucheng to the concluding ministerial, set for Dec. 3-4 in Geneva, where the talks had been expected to wrap up, the official said.

The increased demands put China out of sync with the 17 other members of the pact, the official said, adding that ministers expected significant progress to be made at the meeting but instead were shocked and immensely disappointed by China’s change in behavior. Still, the APEC leaders statement said countries participating in the EGA talks would “redouble efforts to bridge remaining gaps and conclude an ambitious future-oriented EGA that seeks to eliminate tariffs on a broad range of environmental goods by the end of 2016, after finding effective ways to address the core concerns of participants.”

GENTLE REMINDER ON TRADE FACILITATION: In another area, the leaders also urged APEC and other World Trade Organization members that have not yet ratified the nearly three-year-old Trade Facilitation Agreement to take that step. The pact can not go into force until two-thirds of the WTO’s 164 members ratify the agreement. So far, 96 members have ratified it, leaving another 13 or so to go. Read the full leaders declaration here.

IT’S U.S.-CHINA JCCT TIME! Hot on the heels of President Barack Obama and Chinese President Xi Jinping’s last bilateral meeting in Lima comes the final U.S.-China Joint Commission on Commerce and Trade meeting of the Obama administration, this week in Washington. U.S. Trade Representative Michael Froman and Commerce Secretary Penny Pritzker will host a high-level delegation led by China’s Vice Premier of the State Council Wang Yang.

U.S. Secretary of Agriculture Tom Vilsack will also participate in the 27th iteration of the dialogue, which has a strong focus this year on agricultural trade — beginning today with the release of a report on potential gains in two-way trade that could be realized by reducing tariffs and other barriers in both countries. That will be followed on Tuesday by a conference focusing on advancing mutual goals in food safety.

The official JCCT plenary session takes place Wednesday morning, followed by a U.S.-China press conference to recap key deliverables from the week. Fourteen JCCT Working Groups meet throughout the year to address topics such as intellectual property rights; agriculture; pharmaceuticals and medical devices; information technology, and travel and tourism.

If a U.S.-China Bilateral Investment Treaty can be achieved before Obama leaves office, this would seem to be a good week to seal the deal.

BELL TOLLS FOR TISA: Any remaining hopes that the Trade in Services Agreement could be wrapped up this year were dashed on Friday when top-level trade officials involved in the talks canceled the concluding ministerial meeting set for early next month in Geneva. A technical-level meeting will still take place, a senior official involved in the talks told Morning Trade, but ministers will not be in attendance, since participants decided it wouldn’t be possible to reach a deal this year.

TISA’s outlook had already looked dim after major obstacles between the U.S. and European Union arose late last month. In October, the EU said it might not have a consolidated position on data flows — a key U.S. demand — for several more months. The EU and U.S. were also at odds over whether the deal would commit countries to open their markets to foreign competition in yet-to-be-conceived “new services” — an area where the EU took a red-line position against making any commitments.

The technical-level meeting will focus on packaging the work that has been done so far in order to make any efforts that are undertaken in 2017 go easier, the official said.

CABINET WATCH: TRUMP’S BATTLE-SCARRED TRADE WARRIOR: Dan DiMicco, Trump’s trade adviser and a top potential pick for U.S. trade representative, has already helped launch one trade war that backfired on the U.S. and would be in a prime position to start another if he gets a spot in the incoming Cabinet, Pro Trade’s Doug Palmer reports. A former chairman of steel giant Nucor Corp., DiMicco has won praise from some — including Sen. Rob Portman, a former USTR — for his combative style, but others say his years of experience in an industry struggling with import competition have given him a negative view of trade that he could potentially carry into the office.

“I think Dan DiMicco would be a lousy choice for USTR,” Dan Ikenson, director of trade policy studies at the libertarian Cato Institute, told Pro Trade. “He does not understand the importance of trade and why it is imperative to keep markets open. He holds a parochial worldview, which is informed primarily by his experience as a CEO in one of most heavily protected industries in America.”

DiMicco’s get-tough approach would likely find some fans on the Senate Finance Committee, particularly rust-belt Democrats like Bob Casey of Pennsylvania and Debbie Stabenow of Michigan. He would also be likely fit the bill for Ohio’s Sherrod Brown, who last week wrote Trump a letter urging him to put a manufacturer at the helm of the agency. Others, however, might worry about the collateral damage that could come from a trade agenda that seems more focused on closing U.S. markets to imports rather than opening foreign markets to exports. Read Palmer’s full story here.

CANADA, CHINA WIN: NO DUTIES ON IRON PARTS: The U.S. International Trade Commission found on Friday that imports of iron mechanical transfer drive components from Canada and China do not cause injury to U.S. industry, reversing a Commerce Department decision from last month that found the opposite. In October, Commerce set final duty rates ranging from about 13 percent to more than 400 percent on imports of iron mechanical transfer drive parts from China and Canada, saying they were sold in the U.S. at less than fair value and subsidized by China’s government.

ITC’s unanimous ruling means no duties will be set on imports of the product from Beijing and Ottawa, which totaled nearly a half-billion dollars in trade in 2014.

INTERNATIONAL OVERNIGHT

— Mexican President Enrique Pena Nieto says he will sit down with Trump to talk about modernizing NAFTA, Bloomberg reports.

— A senior Chinese official said at APEC that additional countries, including Chile and Peru, are looking to join the Regional Comprehensive and Economic Partnership, Reuters reports.

— Donald Trump’s plan to consider new country of origin labeling rules for meat is “dead as a doornail,” POLITICO’s Pro Agriculture reports.

— German chancellor Angela Merkel says she will seek a fourth term, Reuters reports.

— Canadian Prime Minister Justin Trudeau says he looks forward to welcoming Trump to Canada, hopefully soon after his inauguration in January, Reuters 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.

Leave a Reply