On the second day of a World Trade Organization review of U.S. trade policy, U.S. Ambassador Dennis Shea said it's wrong to blame America for the crisis of the multilateral trading system, as he responded to European and Chinese comments from the first day of the hearing (see 1812170007). Shea said China is arguing that it will subsidize, dump products, force technology transfer and steal business information, and claim it is all OK because American consumers pay less for Chinese imports. Any U.S. response is then decried as an abuse of power and irrational, Shea said, according to a summary of the hearing provided by a Geneva trade official. "This is not acceptable," Shea said.
The Office of the U.S. Trade Representative's notice officially delaying a planned tariff increase on goods from China is set for publication in the Federal Register on Dec. 19. Publication is a necessary step for CBP to implement the delay in ACE (see 1812140046). The third tranche of Section 301 tariffs will now go up to 25 percent from 10 percent on March 2, 2019, unless further progress is made in talks with China (see 1812010001).
“Successful negotiation” of a U.S.-EU trade agreement would need to build on World Trade Organization “principles” for removing technical trade barriers, safety consulting and certification company UL told the Office of the U.S. Trade Representative in comments in docket USTR-2018-0035 submitted to help frame U.S. negotiating positions in future trade talks. UL especially wants USTR to be sure a U.S.-EU trade agreement preserves “regulators’ decision making authority,” it said. UL also urges USTR to “consider regulatory cooperation solutions beyond mutual recognition agreements as these are often problematic in implementation.” A successful trade agreement should “enhance the business and investment climate” for services in UL's wheelhouse, including “testing, inspection and certification, that help companies deliver on innovation, compliance, and market access needs as a means to reduce regulatory barriers,” it said. Many other companies and groups offered input in the same docket (see 1812110013).
Agriculture interests, including meat, wheat and grape growers, told the Office of the U.S. Trade Representative that they will lose market share to competitors in Australia, Europe, Canada, Mexico and Chile as those countries begin to benefit from the Trans-Pacific Partnership and EU-Japan free trade agreement. As they testified Dec. 10 on negotiating a U.S.-Japan agreement, they said speed is of the essence.
Express Association of America, which represents DHL, FedEx and UPS, said Japan has not lived up to its postal privatization commitments, and asked the Office of the U.S. Trade Representative to make sure that Japan Post is no longer advantaged compared to private shippers. Michael Mullen, executive director of EAA, testified on Dec. 10 in front of a trade panel that's seeking public views on how to shape negotiations for a U.S.-Japan free trade agreement.
On Dec. 10, the Office of the U.S. Trade Representative will hear from companies, trade groups and unions on what they'd like it to push for in a U.S.-Japan trade agreement. The witness list was posted on USTR's site, and includes many more parties than testified at the U.S. International Trade Commission's Dec. 6 hearing on the potential economic effects of such a trade deal (see 1812060021).
U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue announced Dec. 6 that the government of Morocco will allow U.S. beef imports. Morocco opened its market to U.S. poultry in August. USTR estimated Morocco could buy $80 million a year in beef from the U.S. Details on the beef export requirements are on the FDA website.
The National Council of Textile Organizations announced Dec. 6 that it endorses the U.S.-Mexico-Canada Agreement, and will lobby for it. The organization said the U.S. exported $11.8 billion in textiles within the NAFTA region in 2017. The trade group views USMCA as an improvement on NAFTA because the rewrite has stronger rules of origin for sewing thread, pocketing, narrow elastics and some coated fabrics; it has stronger customs enforcement rules; and it closes what NCTO calls the Kissell Amendment loophole. The Kissell Amendment, which covers Department of Homeland Security uniform and body armor purchases, allows sourcing from NAFTA partners, not just American producers. According to a 2017 GAO report, 58 percent of DHS spending on uniform body armor procurement is for imported items. If USMCA becomes law, apparel purchased for the agency will have to be sewn in the U.S., an NCTO spokesman said. He said the change affects "more than $30 million worth of contracts on an annual basis."
China used to levy a 25 percent tariff on the BMWs, Mercedeses, Lincolns and Teslas its dealers imported from the U.S., but it recently dropped tariffs on other countries' cars by 10 percentage points, and hiked tariffs on American autos to 40 percent. U.S. Trade Representative Robert Lighthizer, in a late-afternoon announcement Nov. 28, said that's not fair. “China’s policies are especially egregious with respect to automobile tariffs," he said. "Currently, China imposes a tariff of 40 percent on U.S. automobiles. This is more than double the rate of 15 percent that China imposes on its other trading partners, and approximately one and a half times higher than the 27.5 percent tariff that the United States currently applies to Chinese-produced automobiles." He said that at the president's direction, "I will examine all available tools to equalize the tariffs applied to automobiles."
The Office of the U.S. Trade Representative announced eligibility for "trade surplus" tariff-rate quotas (TRQs) for sugar originating in certain free trade agreement countries for calendar year 2019. USTR found Colombia, Panama and five members of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) eligible for the TRQ. The agency found the Dominican Republic, Chile, Morocco and Peru do not qualify.