The Comprehensive Agreement on Investment between China and the European Union will not pass the European Parliament in its current form, predicted former EU trade minister Cecelia Malmstrom at a Peterson Institute for International Economics event on April 21. Due to dueling sanctions over human rights violations in China's Xinjiang province and the agreement's lack of substance on key areas such as sustainable development, Malmstrom opined that, without alterations and a breakthrough on sanctions, the agreement would not pass.
The U.S. and Congress should impose more sanctions on the Russian financial sector if the government doesn’t release political opposition leader Alexei Navalny from prison, Sen. Bob Menendez, D-N.J., said. Speaking during an April 21 Senate Foreign Relations Committee meeting, Menendez, the committee chairman, said Russia should immediately provide Navalny with medical care after reports of his deteriorating health surfaced this week. If Russia doesn't act, he said, the U.S. should add to Russian sanctions and export controls announced by the Commerce and State departments last month (see 2103170022 and 2103020067). “We must be perfectly clear that if he is not afforded this care, we are prepared to impose sanctions not only on individuals, but on the Russian banking and financial sector,” Menendez said.
The Senate Foreign Relations Committee passed its comprehensive China bill with several amendments, sending a bill to the Senate floor that could update China-related sanctions, export controls and foreign investment reviews. Senators said they expect the Strategic Competition Act of 2021 -- which would authorize a host of measures to address trade and technology competition issues with China and expand the jurisdiction of the Committee on Foreign Investment in the U.S. (see 2104080066) -- to garner broad bipartisan support before the full Senate.
Despite more scrutiny from the U.S., Chinese foreign direct investment in North America grew by almost half in 2020 compared to 2019, according to an April 19 Baker McKenzie report. But trade and investment experts cautioned industry about placing too much stock in those numbers, saying two-way U.S.-China investment remains “very low” and Chinese firms are still wary about gaining approval from the Committee on Foreign Investment in the U.S.
Beth Baltzan, a former Democratic trade counsel at the House Ways and Means Committee and career staffer in the Office of the U.S. Trade Representative, has been named a senior advisor to USTR Katherine Tai. “She understands the connective tissues in our economy and I look forward to leaning on her expertise and guidance as we shape a worker-centric trade policy,” Tai said in a statement announcing the appointment. Baltzan has testified before Congress that the World Trade Organization hobbled trade remedies (see 1905220038) and has been critical of the impulse to lower tariffs as the primary approach of trade policy (see 1905220038).
Four Republicans senators reintroduced a bill last week that would require that the executive branch impose sanctions on foreigners responsible for taking U.S. hostages, even if those responsible are government officials. It also creates a mechanism for Congress to require that an administration open a review if a government official was responsible for a hostage taking, and therefore, must be covered by the sanctions. The bill was sponsored by Sen. Tom Cotton, R-Ark., Sen. Ted Cruz, R-Texas, Sen. Todd Young, R-Ind. and Sen. Rick Scott, R-Fla., and introduced April 16. Hawley and Cotton sponsored another bill, called the Global Hostages Act, in 2019 that did not move in committee. Although it is called the Global Hostage Act, it would also apply to politically motivated harassment, abuse, extortion or arrests of American citizens and permanent residents, not just imprisonment or detainment.
The chief trade counsel for the Democratic majority on the Senate Finance Committee, and Joe Biden's former head of economic and domestic policy when he was vice president have been nominated as deputy U.S. trade representatives. Sarah Bianchi, who works at Evercore ISI, and senate staffer Jayme White were named by the White House on April 16. Senate Finance Committee Chair Ron Wyden, D-Ore., White's boss, called both “top-notch” choices, adding, “I am excited to see these nominations move forward as soon as possible.”
Top Republicans on the Senate Judiciary, Finance and Banking committees asked the Treasury Department to brief them on how Treasury plans to handle foreign governments that try to evade U.S. investment screening tools. Sens. Chuck Grassley of Iowa, Mike Crapo of Idaho and Pat Toomey of Pennsylvania “remain concerned” that China and other foreign governments are attempting to evade reviews by the Committee on Foreign Investment in the U.S. “to undermine U.S. superiority in leading edge technologies,” they wrote in an April 13 letter to Treasury Secretary Janet Yellen. They asked the administration to provide a briefing by May 1 on how it will “approach and handle” CFIUS evasion attempts as well as any actions Treasury has already taken. Treasury didn't comment.
Two Republican lawmakers urged the Biden administration to increase sanctions against Nord Stream 2, the Russian gas pipeline, after reports that Russia is preparing to further invade Ukraine. Rep. Michael McCaul of Texas and Jim Risch of Idaho, the two top Republicans on the House and Senate’s respective foreign affairs committees, applauded the administration’s increased Russian sanctions last week (see 2104150019) but said more should be done. “While yesterday’s sanctions on Russia are a positive half-step, they did not include the one U.S. action that would have an immediate impact -- sanctioning and stopping the Nord Stream 2 pipeline,” the lawmakers said April 16. They said the pipeline is a “key source of Russian malign influence” and called on the administration to “fully” implement sanctions against the project “without delay.” Several other lawmakers from both parties have asked the administration to increase sanctions against the pipeline (see 2102170013, 2103240014 and 2008110016). The White House didn’t comment.
The U.S. will likely continue to update the regulations for the Committee on Foreign Investment in the U.S., which has created some complications for industry, trade lawyers told the American Bar Association April 15. The recently revised regulations have also severely reduced incoming Chinese investments, which could have long-term implications, one lawyer said.