U.S. dairy industry launches fight in the name of cheese
With help from Adam Behsudi and Tony Romm
U.S. DAIRY INDUSTRY LAUNCHES FIGHT IN THE NAME OF CHEESE: Three U.S. dairy trade associations are releasing an economic analysis today showing the negative effects of geographic indications on U.S. farmers and consumers, a move meant to illustrate the “economic consequences” of U.S. negotiators backing down to their European Union counterparts over common cheese names.
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The issue has become a major sticking point in negotiations with the European Union on the Transatlantic Trade and Investment Partnership, with the European Commission arguing for protection of certain foods under the deal based on geographical origin. The EU argues the move would protect makers of cheeses like Parmigiano Reggiano or Feta, who say that foreign imitations should be distinguished by carrying different names. U.S. producers, on the other hand, worry that if EU negotiators win out, they may be forced to stop using generic names such as Parmesan.
Today’s report, commissioned by the Consortium for Common Food Names and presented by the three dairy groups — the National Milk Producers Federation, the U.S. Dairy Export Council and the International Dairy Foods Association — will show that the EU’s approach to geographical indications could cost the U.S. dairy industry billions of dollars as U.S. consumers turn away from domestic products with generic names in favor of imported cheeses with familiar ones. Domestic cheese consumption would likely drop, potentially pushing dairy farm margins below the break-even point, closing family farms and eliminating thousands of rural jobs, the report will say.
“On the backs of U.S. companies that built this market, Europe would prosper at the expense of American manufacturing jobs and farmers,” the report will say. It will also note the economic costs of losing the GI fight that could stretch beyond the dairy industry, possibly rippling through other food sectors as well as the grain farming and transportation sectors. The full report will be unveiled in a webinar at 11 a.m.
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OBAMA ADMIN TO DOUBLE DIGITAL TRADE ADVOCATES ABROAD: As tech companies increasingly turn to the U.S. government for help in battling back what it sees as onerous international regulations, the Obama administration is expected to announce plans today to double the number of tech advocates it has stationed abroad. Commerce Secretary Penny Pritzker will tell a conference in Menlo Park, Calif., that her department is planning to double the number of so-called digital attachés from six to 12, with the goal of ensuring the program remains in place even after the administration leaves office, Pro Technology’s Tony Romm reports.
Since March, the department — through a program based out of the International Trade Administration — has stationed these digital trade officials in six regions, including Brussels, Brazil and China. They have intervened on behalf of U.S. tech companies in fights over rules on how they store data, known as localization requirements, and whether tech giants must censor their websites or restrict sales of their devices within a country’s borders. But as more foreign governments eye the tech sector, the industry has clamored for even more digital trade assistance.
“Here’s the challenge that’s being faced by American companies: We have nations around the world that are embracing policies that are stifling competition, innovation, free expression and undermining our vision of a free and open internet,” Pritzker told POLITICO in an interview.
“When I first started [as secretary], data localization was a new concept; content controls were not happening as much as we’re seeing today,” she continued. As a result, Pritzker said her agency “learned we need to have specialists in markets where there’s a lot of digital services being sold so our companies have a go-to person in that country.” Read Romm’s full story here.
APEC TAKES CENTER STAGE IN ASIA CONFERENCE: Though the Asia-Pacific Economic Cooperation forum in Peru in November is still more than a month a way, it’s likely to be a major topic of conversation at today’s Asian Architecture Conference at the Center for Strategic and International Studies. The daylong event — which will feature speakers including Deputy USTR for APEC Affairs Kenneth Schagrin, Deputy Commerce Secretary Bruce Andrews and New Zealand Ambassador to the U.S. Tim Groser — is expected to focus on the upcoming summit and challenges facing infrastructure development in Asia.
The speakers, some of whom will be coming from the State Department, the Asian Development Bank and the Thai Chamber of Commerce, will also discuss what the next U.S. administration might do to “take full advantage of Asia’s regional architecture,” CSIS said in announcing the event.
Leaders at the Nov. 19-20 summit in Peru are expected to receive a study examining the potential for crafting a “Free Trade Area of the Asia Pacific” covering all 21 APEC member economies. However, no decision to launch a negotiation is expected at the meeting, which will come just as the White House is hoping to win approval of the TPP in the lame-duck session of Congress.
WHAT THE WORLD NEEDS NOW, IS TRADE REFORM: The world needs a new approach to trade policy, and this is the time to do it, says Dutch Trade Minister Lilianne Ploumen.
Political angst over trade exists on both sides of the Atlantic that may force officials to re-examine an official mandate EU member states set out for what they wanted out of the TTIP. It may also force a “pause” on the more than three-year-old trade talks.
Under Ploumen’s proposal, trade must include global goals such as increasing sustainable growth, reducing inequality or fulfilling the Paris climate agreement, the minister writes. This also means that not only investors should be protected, but also citizens’ rights “or the environment when it is harmed as a result of increased trade.” Secondly, Ploumen demands increased transparency and a deeper dialogue with the society, including TTIP advisory groups not only at EU but every member state’s level. Third, people should be “empowered and protected” by laying out a safety net for those who might lose their job under new trade deals, while also putting a stronger focus on consumer protection.
Ploumen, who leads trade policy efforts for one of the major shipping points in Europe, spoke about her vision and more on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Washington. During her visit, she said she shared her proposal with White House chief economist Jason Furman and sent a copy to U.S. Trade Representative Michael Froman, who was in Cuba during her visit. She also discussed with POLITICO her hopes for trade’s future. Read more here.
U.S. INVESTMENT IN PHILIPPINES SLOWS AMID DUTERTE’S DEFIANCE: Philippine President Rodrigo Duterte has made headlines around the world recently for his stream of anti-American statements, including threats to “break up” with the United States and telling President Barack Obama he can “go to hell.” With Duterte showing no signs of letting up in his attacks — which have also targeted the European Union and United Nations — American and European companies are either beginning to halt investments in the island nation or sending them elsewhere.
“The anti-American comments are beginning to harm some new opportunities for the Philippines, as we know several trade missions and BPO investment plans have been canceled,” John Forbes, American Chamber of Commerce of the Philippines’ senior adviser, told the Philippine Star. “This is regrettable.”
European manufacturing companies have also put expansion on hold and are beginning to reconsider the Philippines as a place to invest, European Chamber of Commerce of the Philippines President Guenter Taus told the newspaper. He added that several trade and investment missions from Europe were also at risk of being canceled. “So unfortunate for all the work the entire world initiates just to go to waste,” Taus said.
At the same time that Duterte defies the U.S., however, key members of his economic team in Washington are touting his reform efforts and plans to boost foreign investment, Pro Trade’s Doug Palmer reports. Despite the international outcry over such remarks, Duterte is extremely popular at home, Philippine Secretary of Finance Carlos Dominguez told POLITICO on the sidelines of the International Monetary Fund’s annual fall meetings late last week.
He’s not a protectionist, for one, said Benjamin Diokno, secretary in charge of the Philippines’ Department of Budget and Management. But the Filipino officials did add that the Duterte administration has not yet decided whether it would like to join the TPP. “I’m sure we’ll seriously consider it. Right now, it hasn’t been top of our mind,” Dominguez said. “Frankly, it doesn’t look like it’s going to pass anytime soon here in the United States. But I could be wrong.”
MEXICAN ECON OFFICIAL PUSHES TPP VOTE AS WAY TO CEMENT DEAL: That’s the thought of Economy Secretary Ildefonso Guajardo, anyway, who is urging his country to ratify the TPP regardless of what happens in the United States. Guajardo argued this week that if Mexico and the other nations involved in the agreement vote to approve the deal this year, before the next U.S. administration takes office, it would send a strong message to the next president that the agreement cannot be opened for renegotiations.
Voting for it “would send a very important message to the rest of the countries on the commitment and conviction of creating this new global platform,” he said in Spanish to the Mexican media outlet El Economista.
SPEAKING OF MEXICO… As negotiations to review the sugar suspension agreements currently in place between the United States and its southern neighbor grow more complicated, U.S. imports of sugar from Mexico have dropped sharply from a year ago, according to an analysis by global trade data company Panjiva.
U.S. imports of the products in August were 41 percent lower from a year earlier, Panjiva data show. Worldwide, the drop was slightly smaller but still stark: Mexican exports fell 35 percent globally in the same time frame, the data show. At the same time, Mexican exporters are diversifying, sending only 74 percent of exports covered under the agreement to the U.S. in the first eight months of this year versus 83 percent the year before.
The Commerce Department’s review of the suspension agreements, which lifted anti-dumping and countervailing duties against Mexican sugar imports in exchange for caps on price and export volume, was launched in February and is expected to wrap up by the end of the year.
SWEDISH STUDY SEES ECONOMIC WOES AHEAD IF TRUMP WINS: Economists ’round the world are continuing to watch the U.S. election closely, and a new report out from the Swedish banking group Swedbank shows that at least in that Scandinavian country, a Trump presidency would put Swedish jobs — particularly in the manufacturing and automotive sectors — at risk.
The analysis notes that while Hillary Clinton and Donald Trump have both “endorsed protectionism” throughout the campaign, it is Trump’s extreme rhetoric, including his threat to withdraw from NAFTA and slap tariffs on Mexico and China, that is of greater cause for concern. The nation’s large bilateral trade surplus with the U.S. is “at risk if Trump wins the presidency,” the report notes, as will many thousands of jobs directly and indirectly supported by exports to the U.S.
“A downturn in the U.S. economy could be a major downer for global demand for investment goods,” the researchers wrote. “Investment cycles globally will also be negatively affected by the uncertainty of a Trump trade policy, as firms will not want to invest in, e.g., new plants, machinery, etc. until they have clarity about what tariffs they may face for access to the important U.S. market.”
ICYMI: IMF COUNTRIES PLEDGE TO BOOST GLOBAL TRADE: One of the strongest takeaways from last week’s IMF and World Bank meetings was a pledge to combat growing anti-globalist fears worldwide and a sense that the slowdown in trade and investment was hampering the international economic outlook. To that end, the IMF’s steering committee released a communique as the meetings wrapped up in Washington this weekend promising to combat the rise in protectionism by implementing policies focused on promoting open markets while also addressing the downsides of trade.
“The persistently low growth has exposed underlying structural weaknesses, and risks further dampening potential growth and prospects for inclusiveness,” the committee wrote. “We commit to design and implement policies to address the concerns of those who have been left behind and to ensure that everyone has the opportunity to benefit from globalization and technological change.”
Members committed to using all policy tools at their disposal, including structural reforms and fiscal and monetary policies, in an effort to boost countries’ confidence levels. Strengthening policy tools like the global financial safety net, for example, will help increase cross-border cooperation and ultimately trade, the group added. The group’s next meeting will be held in Washington in late April.
TRADE MISSION AIMS TO FIND OPPORTUNITIES FOR MIDEAST POWER PROJECTS: The Commerce Department is organizing a March trade mission to find opportunities for U.S. companies to supply power projects in the United Arab Emirates and Saudi Arabia, according to a notice published in today’s Federal Register.
The trip will include representatives of companies providing power generation, transmission and distribution equipment, with a focus on renewable energy. The March 12-16 trip would include anywhere between 12 and 15 companies. Recruitment for the mission will be concluded by Dec. 31. Read more here.
— New Zealand Ambassador to the U.S. Tim Groser says “there’s not even a 0.1 percent doubt” that President Barack Obama will submit the TPP text to Congress for a vote during the lame duck, Radio New Zealand reports.
— The Norwegian Foreign Ministry rejected a request from U.K. International Trade Secretary Liam Fox to join the U.K. in establishing a task force to prepare a new trade deal for when Britain formally leaves the EU, the Local Norway reports.
— While Clinton and Trump fight against the TPP, American farmers are trying to save it, Quartz reports.
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