The summer of TPP tour
With help from Megan Cassella, Alberto Mucci and Catherine Boudreau
THE SUMMER OF TPP TOUR: The Obama administration’s TPP blitz continues this month with Deputy U.S. Trade Representative Robert Holleyman scheduled to visit Atlanta on Monday for a TPP event hosted by Atlanta’s World Affairs Conference. The event — which will also feature UPS CEO David Abney and former Sen. Saxby Chambliss, now a partner at DLA Piper — is sponsored by UPS and YKK Corporation of America, the Marietta, Ga.-based subsidiary of Japan’s YKK Group, which makes everything from its iconic zippers to aluminum building products.
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The Atlanta visit comes after Treasury Secretary Jack Lew stopped in Minneapolis on Monday. Lew met with Minnesota Gov. Mark Dayton and Minneapolis Mayor Betsy Hodges for a roundtable that also included the CEOs of three Minnesota-based Fortune 500 companies — U.S. Bank, Ecolab and Land O’Lakes — and other company executives and academic leaders, according to a Treasury readout.
Commerce Secretary Penny Pritzker last week said the administration is planning at least 30 trade events by the end of the month. That effort, similar to last year’s “all of Cabinet” push for trade promotion authority, is expected to shift to Capitol Hill in September when lawmakers return from their summer break.
BRADY: TRADE TRUMPS RHETORIC: House Ways and Means Chairman Kevin Brady offered a strong rebuttal to Donald Trump’s plans to withdraw from the TPP and renegotiate NAFTA — points the Republican presidential candidate reiterated in an economic speech on Monday.
“I would advise him as presidential nominee not to withdraw from TPP because if America abandons the Asia-Pacific field, then China, Japan, and Europe will have a huge advantage over American companies when competing for the millions of middle-class customers in that region. So America will lose out,” Brady said in a statement to POLITICO. “However, if he chose to strengthen TPP, for example to better protect American intellectual property like drug breakthroughs, that makes the overall TPP agreement a significant win for American technology, agriculture, and manufacturing workers.”
Brady said he is “right there with” Trump on his insistence that China play by the rules. But on NAFTA, Brady argued that the U.S. maintains a manufacturing surplus with Canada, Mexico and other trading partners and the TPP will modernize the North American trade pact to allow the U.S. to sell more products into our neighboring countries.
“The bottom line is, over 90 percent of America’s goods and services trade deficit is with countries we don’t have a trade agreement with, like China,” Brady said. “If you want to make America’s economy stronger we need more good trade agreements, not fewer. America needs to lead on trade again.”
WISCONSIN PRIMARY RESULTS: House Speaker Paul Ryan easily crushed primary opponent Paul Nehlen, a factory manager who parroted many of Trump’s talking points, which included a tough stance against the TPP. Nehlen’s attempts to paint Ryan as a “soulless, globalist snake” because of his support for TPP seemed to have fallen on deaf ears — he received 15 percent of the vote to Ryan’s 85 percent.
In another important race for trade, Rep. Ron Kind, a leader of the moderate New Democrat Coalition, easily breezed past his primary opponent, retired high school history teacher Myron Buchholz. Kind, who will be instrumental in maintaining a small group of pro-trade Democrats in a possible TPP vote, moves on to a general where he is unopposed.
The contest is now set between incumbent Sen. Ron Johnson and Democratic former Sen. Russ Feingold, who is looking to take back his seat. Feingold easily defeated his primary opponent Tuesday night. Expect Feingold to push Johnson even harder on whether the incumbent supports TPP. Johnson so far has said he would continue examining the pact until it’s time to take a vote.
NORWAY TO U.K.: DON’T CRASH OUR EU TRADE PARTY: Norway made it clear this week that the United Kingdom wouldn’t be particularly welcome in a trading relationship it maintains with the 28-nation bloc.
“It’s not certain that it would be a good idea to let a big country into this organization,” Norwegian EU Affairs Minister Elisabeth Vik Aspaker told Aftenposten, a Norway newspaper. “It would shift the balance, which is not necessarily in Norway’s interests,” she added.
Norway, Iceland, Liechtenstein and Switzerland maintain trade ties with the EU through their membership in the European Free Trade Association. The EFTA regional group and the EU form the European Economic Area, which allows the free movement of persons, goods, services and capitals between those four countries and the EU. The U.K. could maintain ties to the EU in that arrangement but would still have to make a sizable financial contribution to Brussels.
A lawyer with close knowledge of EFTA and EEA issues, who asked not to be named due to the sensitivity of the issue, told POLITICO: “It is technically possible for the U.K. to join EFTA, but it is certainly not the shortcut some people have made it to be. A country can join the European Economic Area as a member of the EU or EFTA, so if the U.K. leaves the EU but wishes to have continued access to the EEA, it would first have to apply for EFTA membership and that might take some time.”
CHINA CHIMES IN ON TRUMP’S TRADE-BASHING: Trump’s economic policy speech earlier this week was enough to solicit a direct reaction from China. The country’s official state news agency Xinhua on Tuesday denounced Trump’s speech as inflammatory, dangerous and damaging, and it accused him of playing the “China-bashing card” simply to try to “rescue his falling poll numbers.”
“Hopefully, the threat of launching a trade war with China by the current presidential candidates is merely tough talk,” Xinhua wrote. “China-bashing is a recurring theme every four years, and by now it’s become quite dull. Let’s hope the next time around that future presidential possibles have something more substantial to say about America’s relationship with China. U.S. voters deserve better.”
The column, written in response to Trump’s allegations that China “break[s] the rules in every way imaginable,” criticized the real estate mogul for protectionist policies that it said would result in tit-for-tat measures and even trade wars, adding that Trump’s own businesses would not have thrived without decades of ties to China. Read the full column here.
EX-IM HEAD PROMOTES EXPORTS IN ASIA: Export-Import Bank Chairman Fred Hochberg is traveling around Asia this week, meeting with government and business leaders in China and Myanmar to look for new export opportunities in both countries, a bank spokeswoman said Tuesday.
While in Beijing, Hochberg visited with the Export-Import Bank of China and said he is disappointed that China has yet to sign on to a global framework regulating export subsidies, Reuters reported. He also told reporters the deadlock within the U.S. Congress and its refusal to restore the board to its full quorum — a situation that leaves the bank unable to approve deals worth more than $10 million — is “confounding.”
“It’s confounding to U.S. exporters, it’s confounding to U.S. workers and it’s confounding to our overseas buyers,” he said.
Hochberg last visited China in 2014, while his visit to Myanmar will be the first ever by a sitting Ex-Im president, the spokeswoman said.
A TPP FRUIT SALAD IN THE MAKING: TPP countries Peru and Vietnam are already preparing to reap the rewards of the trade deal after the USDA approved the import of a number of agricultural products that will benefit from tariff cuts under the agreement.
The USDA’s Animal and Plant Health Inspection Service determined fresh pomegranates and figs from Peru can be imported safely as long as shipments are irradiated and inspected upon arrival and contain a phytosanitary certificate from Peru’s plant protection organization. The decision is based on two risk assessments conducted by APHIS, which were published on March 14.
The decision, effective today, could be a boon for Peru. Despite a pre-existing free-trade deal with the U.S., Peru faces a 9 percent tariff on those products, which will go down to zero once TPP goes into force. Peru’s Ministry of Agriculture and Irrigation in June estimated that pomegranate exports could total between $15 million and $30 million a year and fig exports more than $15 million annually.
APHIS last month also agreed to allow under similar requirements imports of Vietnamese mangoes. Vietnam faces a 25 percent U.S. tariff on mangoes, which will drop down to 6.2 percent by the third year TPP is in effect.
COMMERCE BOUNCES FROM STEEL TO RUBBER: The Commerce Department on Thursday will announce whether it will pursue anti-dumping duties on imports of rubber used primarily in tires but also for conveyor belts, shoe soles, certain hoses, roller coverings and flooring. The investigation would target imports of emulsion-styrene-butadiene rubber from Brazil, South Korea, Mexico and Poland.
In 2015, imports of ESB rubber from Brazil, South Korea, Mexico, and Poland were valued at an estimated $21.1 million, $621,000, $25.5 million, and $3.4 million, respectively. The companies petitioning for the duties are Lion Elastomers of Texas and Louisiana-based East West Copolymer.
TTIP GOAL HAS ‘NO BASIS’ IN REALITY: German finance newspaper Handelsblatt quoted German economics ministry sources who said there is no way the Transatlantic Trade and Investment Partnership will be concluded by the end of the year, despite Chancellor Angela Merkel saying the opposite in public. The outlet wrote that an internal ministry report says that none of the 30 chapters being negotiated in the EU-U.S. agreement have been fully completed, making the timeline completely unrealistic.
— Democratic vice presidential candidate Tim Kaine said he can’t support TPP because labor and environment groups can’t directly challenge alleged violations of the deal, KERA News reports.
— ICYMI, former USTR and World Bank President Robert Zoellick says in a Wall Street Journal op-ed that Trump is wrong on trade.
— Massachusetts Rep. Richard Neal could play an “important role” in opposing TPP, MassLive reports.
— Illinois Rep. Dan Lipinski argues in a Chicago Tribune editorial that TPP will harm American workers.
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