The veep vs. veep battle over TPP

With help from Adam Behsudi and Doug Palmer

THE VEEP VS. VEEP BATTLE OVER TPP: The tussle over the TPP could come down to the battle of the Democratic vice presidents: Joe Biden versus Tim Kaine.

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If the trade deal comes up during the lame-duck session this fall, the two could play leading roles on opposite sides of the debate: Kaine as a potentially significant “no” vote should the pact come up for a vote while he’s still in the Senate, and Biden as President Barack Obama’s go-to guy for shoring up Senate support and casting the tie-breaking vote if need be.

Kaine, despite being one of 13 Senate Democrats to vote for fast-track authority last year, has already made clear that he intends to vote against the TPP if Virginia Gov. Terry McAuliffe has not yet appointed his successor by the time it gets to the floor. “I tell you, trade deals, if they’re good enough, can be OK,” Kaine told NBC’s Chuck Todd during “Meet the Press” on Sunday. “But if you embrace a trade deal that’s bad, you deepen people’s skepticism about trade in general. And it’s better to wait and try to find deals that meet your standards and not embrace deals that are substandard.”

Biden, meanwhile, has told House Democrats they should expect to see a lot of him during the administration’s push to win TPP. “I know a lot of you don’t like TPP, but you’re going to have to see me,” Biden quipped at House Democrats’ annual retreat in Baltimore early this year. The agenda of the lame-duck session, of course, also depends largely on the outcome of the election. Pro Trade’s Doug Palmer has the full story here.

IT’S WEDNESDAY, OCT. 26! Welcome to Morning Trade, where we’re enjoying this cartoon on the current state of trade affairs in Europe. You know the deal: Thoughts, news or trade tips? Let me know what you’re hearing and thinking about: or @mmcassella.

WTO CONSIDERS NEW PROPOSAL TO ADDRESS OVERCAPACITY: At the request of the United States, European Union, Japan and Mexico, the World Trade Organization on Tuesday considered a new proposal to address industrial overcapacity and the role of subsidies in contributing to it in steel and other industries, including aluminum.

In the proposal — which was presented by the EU but also gained vocal support from Canada, Russia, South Korea and Australia — countries argued that overcapacity distorts international trade, stifles growth in new industries and leads to a decline of industrial activity even where it already exists.

“While some of the related policies may have been introduced by governments with a view to fostering such industrialisation and development, as well as safeguarding jobs, the longer-term effect is often lose-lose for both the source country as well as its trading partners as prices decline, production becomes uncompetitive and governments are faced with decisions in the context of possible social unrest and ever-strained budgets,” the proposal states.

Despite backing from some major players at the WTO, committee Chairman Jin-Dong Kim, of South Korea, noted that a significant number of members had not spoken out either way and suggested officials discuss the initiative outside of the committee. China, for one, noted that the Group of 20 forum was already working on ways to address overcapacity, saying it felt the committee was not the best place to discuss the issue.

The United States later in the meeting responded by once again taking China to task over failing to provide notifications of its subsidy programs, particularly in the steel industry, according to a Geneva source. The U.S. said it has continually asked for bilateral meetings with Beijing on the issue but China has refused.

FISHERIES REFORM FLOATS BACK TO THE TOP OF U.S. PRIORITIES: In the same meeting, the U.S. delegation once again put forward its proposal to cut down on fisheries subsidies and enhance transparency, saying it was ready to discuss potential negotiations within the WTO. Around a dozen countries followed the U.S. mostly in support of the initiative, the Geneva source said, though Japan wanted a “careful examination” of specific elements of the proposal. India, for its part, also emphasized the need to provide special and differential treatment for developing and least-developed countries, the source added.

APPELLATE BODY DISPUTE BACK ON THE WTO’S AGENDA: The WTO’s Dispute Settlement Body will meet again today with a number of issues on its agenda, including implementation of the DSB’s recommendations in the case involving anti-dumping and countervailing duties on U.S. imports of large residential washers from South Korea. The WTO’s Appellate Body rejected most of the U.S. appeal in the case, part of a long-running dispute between Whirlpool and its South Korean rivals Samsung and LG, early last month.

The last item on the DSB agenda involves “appellate body matters,” likely a reference to open seats on the panel following the U.S. decision not to back South Korean Seung Wha Chang’s reappointment for a second term.

STEEL CAUCUS PUSHES FOR MORE: The leaders of the Congressional Steel Caucus, Chairman Tim Murphy and Vice Chairman Peter Visclosky, sent a letter to Commerce Secretary Penny Pritzker on Tuesday to draw attention to an upcoming steel case regarding imports of carbon and alloy steel cut-to-length plate from 12 countries that totaled more than $700 million last year.

In the letter, the congressmen acknowledge recent wins in steel cases but note that steel producers continue to suffer from “an unprecedented surge in unfairly traded imports.”

“Congress has worked hard to give Commerce new tools to evaluate trade remedy cases, including enhanced discretion to apply adverse facts available where companies or their governments have failed to cooperate,” they wrote. “It is critical that Commerce utilize these tools in calculating the appropriate level of duties in the ongoing CTL plate investigations.”

AFL-CIO OPENS NEW LINE OF ATTACK ON TPP: The AFL-CIO’s efforts to discredit the TPP are now focusing on arguments that the deal is potentially fueling mass migration and inadequately protecting those displaced workers, as laid out in a report released Tuesday.

The TPP “provides no guarantee of equal rights and remedies to migrants for labor violations, no regional task force or other solution to address region-wide trafficking issue and no region-wide restrictions on abusive behaviors by recruiters who prey on desperate workers simply trying to feed their families,” Celeste Drake, the AFL-CIO’s trade and globalization specialist, said during a call with reporters. While the broader deal does not contain migrant worker protections advocated by the labor group, Malaysia is obligated through a separate “consistency plan” to undertake certain reforms for protecting migrant workers.

The labor group also argued that the TPP could drive even more migrants north to the U.S. from Central America as companies relocate factories to the lower-cost labor markets of Vietnam and Malaysia, which are part of the TPP deal. “The government of El Salvador, just to give one example, was here quite a bit lobbying on the TPP because of its fear that it’s going to lose apparel production jobs to Vietnam,” Drake said. “So the migration could be spurred because of the TPP by non-TPP countries.”

USTR dismissed claims that TPP ignored migrant worker protections: “The groundbreaking, fully enforceable worker protections included in TPP extend to all workers in all TPP countries. This is a truly regional solution that includes not only the ILO [International Labor Organization] commitments in the core of the agreement, but the specific commitments made in the fully enforceable consistency plans with countries like Malaysia that face the need for specific legal and institutional reforms to address challenges relating to the treatment of migrant workers,” USTR spokesman Matt McAlvanah said. “Those provisions address issues driving the exploitation of migrant workers like the withholding of passports, and also related issues of victim assistance, freedom of movement, decent housing for foreign workers, recruitment fees, and union rights for foreign workers.”

CANADA’S TRUDEAU WARMS TO TPP: With one of his country’s free-trade deals going up in flames in the European Union, Canadian Prime Minister Justin Trudeau issued his strongest comments to date in support of another agreement on Tuesday when he told a youth summit that he saw it “difficult to imagine” Canada rejecting the TPP.

“It’s difficult to imagine a world where Canada would turn its back on three of its top five trading partners,” Trudeau said in Ottawa, according to a Bloomberg report, referring to the U.S., Japan and Mexico. “We established very clearly during the campaign that we’re a pro-trade party.”

The TPP was finalized before Trudeau took office, and he so far has not taken a formal stance on whether Canada would ultimately ratify the deal. His remarks Tuesday came amid intense heckling from anti-trade protesters who sought to interrupt and drown him out, according to media reports. When he acknowledged during the speech that some people “do not feel that trade is working for them,” he was met with heckling from a protester who yelled that the sentiment is a reality.

WHITE HOUSE HIGHLIGHTS TPP PUSH IN PERU: Within 10 days of becoming a lame-duck president, Obama will head to Peru later next month to participate in the annual Asia Pacific Economic Cooperation leaders summit and meet with fellow TPP ministers. “The president will focus on his continued efforts to make the case to Congress and the American people for approval of TPP without further delay,” the White House said in a statement released Tuesday. “He will emphasize our continued support for the agreement’s high, enforceable standards that will benefit American workers and businesses while furthering our national security imperatives in the Asia Pacific.”

AN ENFORCEMENT WIN FOR U.S. STEEL: Imports of welded stainless steel pressure pipe from India have materially injured U.S. producers, the U.S. International Trade Commission ruled on Tuesday, backing up a Commerce Department finding that imports are subsidized and sold at less than fair value in the United States.

Commerce set preliminary duties in May of about 19 percent on imports of the product, which ITC said in the ruling totaled about $47.5 million last year from India. Combined imports totaled about $150 million from all countries, ITC added.

Another ruling relevant to the steel industry is due today, regarding imports from South Korea of the iron alloy ferrovanadium, which is used mostly as an additive in the manufacture of steel. Commerce will issue its preliminary determination in the anti-dumping investigation on imports of the product, which were valued at an estimated $16 million last year.

CHINA HIT WITH DUTIES ON AMMONIUM IMPORTS: The Commerce Department also issued preliminary countervailing subsidies of more than 200 percent on Tuesday against imports of ammonium sulfate from China, which totaled more than $62 million last year. The ruling is a win for Texas-based PCI Nitrogen LLC, the sole petitioner in the investigation. Commerce is set to announce its final decision on Jan. 10, at which point the case will head to the International Trade Commission.


— Uruguay says it is interested in pursuing a free trade deal with China, and President Tabare Vazquez also considered the idea of expanding an agreement to also include other members of Mercosur, Xinhua reports.

— Nearly a year after China’s free trade deal with Australia came into effect, Australian agriculture groups are having trouble accessing the Chinese markets, Australia’s Financial Review reports.

— Mexico’s minister of tourism says his country’s government is sending officials to the United States to dispel attacks on Mexico and to support free trade policies, Nevada’s KTNV reports.

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

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