Thailand and Hong Kong will soon begin a “pre-negotiation feasibility” study on a potential free trade agreement and hope to begin talks in 2021, according to a Dec. 16 report from the Hong Kong Trade Development Council. The feasibility study is expected to begin in February, the report said. Both countries also recently signed a series of memorandums of understanding aimed at increasing trade, better connecting industries and collaborating on innovation and technology. The two sides also discussed a “higher number” of Hong Kong companies potentially moving production sites to Thailand to avoid tariffs from the U.S.-China trade war.
Laos and Myanmar will officially join the single window for the Association of Southeast Asian Nations after completing a pilot phase, according to a Dec. 15 report from Customs News, the mouthpiece for Vietnam’s customs agency. The two countries are expected to connect to the window this month, the report said.
Japan and South Korea met Dec. 16 for another export control policy dialogue to discuss their ongoing trade dispute (see 1907010020), Japan’s Ministry of Economy, Trade and Industry said in a press release. Japan said the two sides discussed “circumstances” surrounding critical technology controls and their export control systems, and agreed to continue talks to “contribute to resolving issues of concern.” The meeting was aimed at better understanding each other’s export control measures, Japan said. The two sides previously met for two rounds of consultations at the World Trade Organization (see 1911080022).
China suspended its tariff increase on U.S. imports scheduled to take effect Dec. 15, according to a report from Xinhua, China’s state-run news agency. The decision to suspend the tariffs, which resulted from an agreement on a phase one deal between the two sides (see 1912130035), covered a planned 10 percent and 5 percent increase on certain goods, Xinhua said. The country will also “continue to suspend” additional tariffs on U.S. vehicles and auto parts and continue to work on tariff exemptions for certain U.S. imports, including pork and soybeans (see 1912060033).
A bipartisan group of more than 45 lawmakers urged the Trump administration to impose strict sanctions on China’s treatment of its Uighur population, saying the October addition of 28 Chinese entities to the Commerce Department’s Entity List (see 1910070076) was not enough. “These measures were a first step that do not go far enough in ensuring accountability for China’s government and Communist Party,” the lawmakers said in a Dec. 12 letter to Secretary of State Mike Pompeo, Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.
With the announcement of a phase one deal, Flexport chief economist Phil Levy said the promise is for stability in tariff levels -- even if the large majority of goods facing Section 301 tariffs will retain the 25 percent hike. But, he noted in a Dec. 16 webinar, many times over the last eight months, “a deal was announced, and it didn't last. That should sort of serve as a precautionary tale.” Levy, like many observers, doesn't believe that a phase two deal, that could lead to rolling back more tariffs, is likely in the next year.
The phase one trade deal (see 1912130035) between the U.S. and China has reduced Chinese “market uncertainty” and the two sides should cancel the remaining tariffs, a spokesman for China’s National Bureau of Statistics said during a Dec. 16 press conference. “It has strengthened market confidence and promoted economic and trade development, both for China and the United States, and for the world,” Fu Linghui said, according to an unofficial translation. “[It is] positive.” He also said the countries are continuing negotiations and should cancel “the levy of tariffs in stages, contributing more power to world economic growth.”
The Treasury’s Office of Foreign Assets Control sanctioned two South Sudan officials for obstructing peace talks, Treasury said in a Dec. 16 press release. OFAC targeted the Minister of Cabinet Affairs Martin Elia Lomuro and Minister of Defense and Veteran Affairs Kuol Manyang Juuk, who have both “perpetuated” the country’s “conflict for their own personal enrichment,” the press release said.
The European Union will renew sanctions against Russia for another six months, the European Council decided Dec. 13, according to a press release. The sanctions, targeting Russia’s financial, energy and defense sectors, were due to expire in January, according to the EU Sanctions blog.
The Commerce Department Bureau of Industry and Security's New England field offices are adding agents and increasing prosecutions and investigations, according to William Higgins, a special agent in charge of BIS’s Office of Export Enforcement. Higgins said the changes are particularly reflected in the OEE’s Boston office, which plans to increase staff to 14 agents before 2020. “There has been a sea change in the last few years, especially in the Boston area,” Higgins said, speaking during a Dec. 13 event hosted by the Massachusetts Export Center. “We’re increasing the amount of agents we have significantly.”