U.S. Trade Representative Robert Lighthizer Dec. 9 announced that he'll be seeking consultations with Mary Ng, his Canadian counterpart, over the way that Canada allocated tariff rate quotas. Canadian processors are guaranteed a percentage of those import quotas, and the U.S. says that undermines American producers' access to Canada. “President [Donald] Trump successfully renegotiated the USMCA to replace the failed NAFTA, and a key improvement was to give U.S. dairy producers fairer access to Canada’s highly protected dairy market,” he said. “We are disappointed that Canada’s policies have made this first ever enforcement action under the USMCA necessary to ensure compliance with the agreement.”
The United Kingdom will stop collecting 15% punitive tariffs on U.S. aircraft; 25% tariffs on more than 100 products, notably agricultural, food and beverage items, including chocolate, ketchup, rum, vodka, frozen orange juice and cotton; and 25% tariffs on equipment, such as tractors, firetrucks and exercise equipment.
Claims that a ban on single-use plastics is a trade restriction prohibited in the USMCA are wrong, seven Democratic senators, led by Sen. Dianne Feinstein, D-Calif., wrote to U.S. Trade Representative Robert Lighthizer and Canada Trade Minister Mary Ng. The senators' Dec. 7 letter said the industry groups incorrectly argue the ban “would not be based on sound science. In fact, the science clearly shows the detrimental impact of single-use plastics. An estimated 11 million metric tons of plastic waste enters the oceans each year.”
The U.S. and Ecuador signed a phase one trade agreement that goes beyond the World Trade Organization's Trade Facilitation Agreement with requirements for online publication of customs information and customs brokers requirements; duties and fees; electronic submission of customs declaration and phytosanitary certificates; a single window for import and export; and advanced rulings that cover classification, valuation, origin, and application of quotas. Ecuador also agreed to no penalties on minor errors, unless they're part of a consistent pattern, and a procedure to correct errors without penalties.
Following reports that President-Elect Joe Biden will be nominating House Ways and Means Chief Trade Counsel Katherine Tai for U.S. Trade Representative, Trade Subcommittee Chairman Earl Blumenauer hailed the decision.“This is a fantastic pick from President-elect Biden. Katherine Tai has played an invaluable role leading the Ways and Means staff while working with members and outside groups on the renegotiated NAFTA and other critical trade issues," said Blumenauer. "She’s knowledgeable, patient, creative, and will be the first woman of color to hold this important job."
The Justice Department plans to announce more indictments involving cases of Chinese technology theft before the Joe Biden administration takes over in January, top U.S. security officials said. Under the agency’s China initiative (see 2008130036), the U.S. has targeted and arrested Chinese nationals for trying to steal export-controlled technology, an effort that has resulted in more than 1,000 Chinese researchers leaving the country since July, said John Demers, the U.S. assistant attorney general for national security.
Sen. John Cornyn, R-Texas, led a bipartisan letter to U.S. Trade Representative Robert Lighthizer arguing that he should not push for returning treatment of foreign-trade zones to the NAFTA approach, and instead, should allow goods manufactured in those zones to receive tariff benefits if they meet USMCA rules of origin. This issue has been hanging up a technical fixes bill since the summer (see 2007200021).
Former U.S. Trade Representative Susan Schwab said that although President-elect Joe Biden has signaled that trade is not a priority for him, he is unlikely to be able to put it on the back burner completely until the COVID-19 crisis and economic recession are resolved. “Trade is going to come to them even if they don’t necessarily want to go to trade,” she said during a Peterson Institute for International Economics Trade Talks interview Nov. 24. When Biden is at a G-7 or G-20 meeting, and other heads of state bring up trade, “What are you going to do? Say, 'I'm not going to do trade for the next two or three years'? So, you can’t underestimate what happens when [India's] Prime Minister [Narendra] Modi wants to talk to you about trade. Or [China's President] Xi Jinping wants to talk to you about trade. Or [German Chancellor] Angela Merkel wants to talk to you about trade.”
House Ways and Means Committee Chairman Richard Neal, D-Mass., said there should be “a reset of our trade agenda,” with less emphasis on tariffs “and more emphasis on international cooperation and multilateral relationships.” Neal, who was speaking to the New England Council on Nov. 23, said that “keeping the heat on China is important, but simultaneously, tariffs are not the only way to do it.”
U.S. Trade Representative Robert Lighthizer said he has no substantive regrets about the policies his office has spearheaded that have raised tariffs on products from around the world. He said the next USTR will also have to prioritize American manufacturers over inexpensive imports, and treat China as a threat. “Those things are going to endure and people will continue to make progress on them,” he said during an evening webinar Nov. 19.