Trump backers in Congress oppose TPP

With help from Doug Palmer and Victoria Guida

SUPPORT FOR TRUMP EQUALS TPP OPPOSITION? Rep. Tom Reed, a New York Republican, Donald Trump supporter and previous backer of free trade deals, denounced the Trans-Pacific Partnership again this week, revealing a possible trend of Trump-supporting GOP lawmakers opposing the trade agreement.

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Reed, a Ways and Means Committee member, was among a group of 19 House members from New York who announced their “firm opposition” to the TPP in a letter to President Barack Obama on Wednesday. Reed’s TPP stance, however, goes as far back as November, when the lawmaker announced his opposition to the deal because of its dairy market access opportunities and provisions on intellectual property and currency manipulation.

Both Reed and fellow New York Republican Rep. Chris Collins, who helped organize the opposition group, have endorsed Trump for president. However, Reed was the only one of the 13 Democrats and six Republicans on the letter who voted last year for trade promotion authority. The third-term congressman also voted for the South Korea, Panama and Colombia free trade agreements in 2011.

Reed’s defection from the free trade coalition underscores the difficult path the White House faces to win approval of the TPP, particularly if Trump’s position on trade further emboldens the GOP’s right wing to take a stance against the deal. Other known Trump supporters who outright oppose the TPP include Sen. Jeff Sessions of Alabama and Rep. Duncan Hunter of California, who both voted against TPA. Like Reed, Reps. Scott DesJarlais (R-Tenn.), Lou Barletta (R-Pa.) and Tom Marino (R-Pa.) voted for TPA and the three most recent free trade agreements but have not publicly staked out a position on TPP, although Barletta has been critical of certain aspects of the trade deal. Rep. Renee Ellmers (R-N.C.) also voted for the fast-track bill and the Colombia and Panama trade deals but is likely to oppose the deal over its tobacco provisions.

Collins, who was elected in 2012 and voted against TPA, echoed many of Trump’s attacks on free trade agreements. “They have been stealing our jobs in China. They have been stealing our jobs in Mexico,” Collins said in a statement. “We’re not going to sign any more of these ridiculous free trade agreements.” Read the full letter here: http://1.usa.gov/1UlllSQ.

IT’S THURSDAY, MARCH 24! Welcome to Morning Trade, where we almost forgot that yesterday was national puppy day: http://bit.ly/1MDpDNh. Hopefully you found some way to celebrate. Got any trade news to share? Let me know: abehsudi@politico.com or @abehsudi.

MEXICO MOVES FORWARD WITH TUNA RETALIATION: Mexico pressed ahead with plans to slap tariffs on hundreds of millions of dollars of U.S. exports in a trade dispute over “dolphin-safe” labels for tuna just a day after the Obama administration issued new regulations that it believes should resolve the issue.

The World Trade Organization agreed to create an arbitration panel to rule on Mexico’s request to retaliate on $472 million worth of U.S. exports in the long-running trade spat. Mexico told the WTO’s Dispute Settlement Body on Wednesday that it was still analyzing new rules issued Tuesday by the National Oceanic and Atmospheric Administration, which the agency contends will end discriminatory treatment against Mexico under the labeling program.

The two sides have agreed to cooperate with the arbitration panel so it can finish its work within 60 days. In practice, however, the proceedings can take as long as four to six months. If Mexico decides the NOAA rules do not bring the United States into compliance with its WTO obligations, the administration would likely request a compliance panel to rule on that aspect on the case.

EU NOT GIVING UP ON FINANCIAL SERVICES IN TTIP: The European Union has not stopped trying to convince the United States that financial regulations should be covered under the Transatlantic Trade and Investment Partnership, a senior European Commission official told POLITICO.

The statement was in response to Treasury Secretary Jack Lew’s testimony at a House Financial Services Committee hearing on Tuesday, where he said the EU recognizes the U.S. does not want to cooperate on financial regulations under the trade deal and has shown renewed interest in cooperating in other financial dialogues.

“It is not the case that the EU has given up on this,” said the commission official. “We are negotiating in good faith with the U.S. to set in place the best possible arrangements to beef up regulatory cooperation on financial services between the EU and U.S., and our strong preference is for this to be within TTIP.”

COMMERCE SETS NEW PRECEDENT WITH ZTE DECISION: The Commerce Department’s decision to issue a “temporary general license” allowing U.S. suppliers to continue sending parts to Chinese telecommunications giant ZTE despite its violation of Iran sanctions has never been tried before, a department official said Wednesday.

“It’s a novel idea, but it’s still legal,” Kevin Wolf, assistant Commerce secretary for export administration, said at a business advisory meeting.

The department will make a the license available to U.S. suppliers starting today, a move that indicates the commercial and diplomatic impact of the administration’s initial decision earlier this month to punish the company. The department placed ZTE on its “entity list,” denying all supply shipments, after the company was accused of violating the law by selling telecommunications equipment containing U.S. parts and components in Iran and possibly other sanctioned countries, such as North Korea.

Under the temporary general license, ZTE and subsidiary ZTE Kangxun will remain on the entity list, but U.S. suppliers can continue to maintain their business relationships. The license will remain in effect until June 30 and can be renewed if ZTE continues to meet commitments it agreed to with the U.S. government. Wolf would not specify what those commitments were.

NOTICING INDIA’S TFA COMMITMENTS: India on Wednesday informed the WTO of which parts of the Trade Facilitation Agreement it plans to implement immediately when the deal takes effect. Notably, certain provisions on the publication of proposed regulations and laws and related public comment periods are not on the list.

The agreement requires countries to “provide opportunities and an appropriate time period to traders and other interested parties to comment on the proposed introduction or amendment of laws and regulations of general application related to the movement, release, and clearance of goods.” It must also ensure that “new or amended laws and regulations” related to the same issues “are published or information on them made otherwise publicly available, as early as possible before their entry into force, in order to enable traders and other interested parties to become acquainted with them.” India has not committed to immediately comply with either provision.

New Delhi has expressed some desire to provide a 30-day comment period on the details of legislation, including at a Cabinet meeting in 2014, which was highlighted in a letter from India’s Department of Justice. But implementation has been spotty, said Rick Rossow, an India expert at the Center for Strategic and International Studies. Sometimes New Delhi doesn’t publish laws and regulations until they take effect, and when there are comment periods, they are often less than 30 days, he said. “I think it’s more because the government doesn’t always value businesses’ opinion,” Rossow said. “It’s really only businesses that are going to reply.” Click here to read India’s WTO notification: http://politico.pro/1Rltwe2.

U.S., ARGENTINA ROLL UP SLEEVES ON AG, OTHER TRADE ISSUES: As part of their newly signed Trade and Investment Framework Agreement, the United States and Argentina — both ag exporters — pledged Wednesday to expand global trade in agriculture and “combat non-scientific barriers to trade,” according to a White House release during Obama’s visit to the Latin American country.

The TIFA will provide an official framework for the two sides to work regularly on trade and investment irritants, providing a forum for discussions on such things as market access, intellectual property and “shared objectives” at the World Trade Organization and other international bodies. The agreement comes as Argentine President Mauricio Macri has expressed a willingness to liberalize the country’s economy, which has long been highly protected.

U.S.-MERCOSUR FTA DOWN THE LINE? Obama and Macri said the United States and the Latin American trade bloc Mercosur could eventually sign a free trade agreement, but that it would not happen for quite a while.

“This is a road that is now starting,” Macri said at a joint press conference when asked whether the two had discussed the prospect of a trade deal. “And I told President Obama that we are exporting less than 1 percent of our agri-industrial exports, which means that there is a lot of room for growth as part of a path on which we must first consolidate Mercosur and then think about a broader free trade agreement.”

Following up on Macri’s comments, Obama referenced the TIFA as a good place to “systematically work through” trade barriers. “Organizing an entire free trade agreement may be at the end of the process,” he added. “I think at the beginning, right now, there’s a lot of underbrush, a lot of unnecessary trade irritants and commercial irritants that can be cleared away administratively. And that’s some of the work that we intend to do right away.”

NAM WANTS EMBARGO LIFTED: The National Association of Manufacturers has joined the chorus of groups that support lifting the U.S. embargo on Cuba. “Eliminating the trade embargo on Cuba will allow for increased economic activity between the two nations and provide manufacturers with new access to a market less than 100 miles from our shores,” Linda Dempsey, vice president for international economic affairs at the National Association of Manufacturers, said in a letter to Reps. Tom Emmer and Kathy Castor on Wednesday. Emmer and Castor are the main sponsors of legislation (H.R. 3238) to end the embargo.

Its NAM’s first statement on the issue since the Obama administration began easing restrictions on the communist nation, a spokeswoman said.

WTO APPELLATE BODY REPLACEMENT UNDERWAY: The process for filling a vacancy on the WTO’s Appellate Body is in full swing, with seven candidates under consideration for an open slot. Yuejiao Zhang will leave her position on May 31, when her second four-year term will expire.

Ichiro Araki of Japan, Surya Subedi of Nepal, Zhao Hong of China, Yang Guohua of China, Daniel Moulis of Australia, Muhamad Noor Yacob of Malaysia and Yusuf Caliskan of Turkey were nominated by their countries.

A selection committee will make a recommendation based on interviews of the nominees by May 12, and Dispute Settlement Body members will make a final decision at their May 23 meeting.

INTERNATIONAL OVERNIGHT

A New Zealand lawmaker is being questioned by police after he allegedly drove his car into a group of TPP protesters, the New Zealand Herald reports: http://bit.ly/1LIkqsJ

Former Chinese commerce minister Chen Deming says the U.S. and China should wrap up BIT negotiations by the end of the year, China Daily reports: http://bit.ly/1Ri1ukS

Sen. Chuck Grassley and other senators want the USDA and FDA involved in CFIUS decisions, the Wall Street Journal reports: http://on.wsj.com/1WJj2GO

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.

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