Top U.S. and United Kingdom officials will begin a second round of virtual trade negotiations June 15 as both sides continue to push for a quickly completed deal, the U.K. said May 18. The first round of talks, which ended last week, included discussions on customs procedures, rules of origin, trade remedies and small to medium-sized businesses. The U.K.’s Department for International Trade said both sides vowed to “quickly pursue” a stand-alone “Small and Medium Enterprise (SME) Chapter.” Negotiators from both sides will continue meeting virtually on a “rolling basis” until the second round begins, the U.K. added. “Both sides are hopeful that negotiations for a comprehensive trade agreement can proceed at an accelerated pace,” the DIT said. The Office of the U.S. Trade Representative did not comment.
Many details needed for the uniform regulations and the final implementing instructions for the U.S.-Mexico-Canada Agreement remain under discussion, agency officials said on May 14. Many specifics have not been agreed to, either between Mexico, Canada and the U.S., between the Office of the U.S. Trade Representative and the auto industry, or between CBP and USTR. “There's still even discussions with USTR and the [auto] industry on what constitutes a core part,” Maya Kumar, director for textiles and trade agreements, told members of the trade community on a conference call.
The director general of the World Trade Organization will resign in August, citing personal reasons and adding that the organization needs a new leader for “post-COVID realities.” Roberto Azevedo made the announcement during a virtual meeting with WTO members on May 14, saying he hopes the WTO continues its reform efforts. He also urged members to “promptly move ahead” to select the next director general. “I urge you not to treat the process of selecting the next DG as business as usual. This organization must start 2021 … ensuring that the multilateral trading system responds to new economic realities, above all the post-COVID recovery,” Azevedo said. “It cannot afford to be distracted by a protracted search for a new DG.” Azevedo will officially step down Aug. 31, one year before his term was set to end.
World Trade Organization members should do more to prevent export restrictions on medical goods and keep medical and food supply chains open, said Zhang Xiangchen, China’s ambassador to the WTO. Zhang also called on more cooperation between WTO members to combat the pandemic, which he said hasn’t materialized and has helped cripple the WTO. “The reason behind the poor performance [of the WTO] is not only due to the nature and the scale of the crisis,” Zhang said during a May 12 webinar hosted by the Asia Society, “but also the lack of leadership and the diminishing trust among members.”
Trade groups that have been active in pushing for different intellectual property approaches in India have formed a new coalition called the Alliance for Trade Enforcement, they announced May 13. Brian Pomper, a former Senate Finance Committee chief trade counsel, is the AFTE executive director. The group includes manufacturing trade groups, pharmaceutical interests, software and telecom interests, and the National Foreign Trade Council and U.S. Council for International Business. They noted that the Special 301 Report recently released by the Office of the U.S. Trade Representative identified 33 countries that don't adequately protect IP rights, and said “many of those countries are repeat offenders.” Pomper said AFTE will work with the administration and Congress to dismantle trade barriers such as high tariffs, complex and opaque taxes targeting imports, and laws that do not give intellectual property the protection that USTR says is proper.
China is unlikely to meet its purchase commitments under the phase one deal, due to the COVID-19 pandemic, which could lead to China invoking a force majeure clause and further postponing the prospects of a phase two agreement, China trade experts said. “Given the COVID-19 crisis, the target set in the phase one deal will be very hard to achieve,” Xu Gao, chief economist at Bank of China International, said during a May 13 webinar hosted by the National Committee on U.S.-China Relations.
The Office of the U.S. Trade Representative is disinclined to offer an informed compliance period for most importers, “because most of the rules of origin have remained essentially the same” as what was in NAFTA, so CBP can honor the U.S.-Mexico-Canada Agreement claims with the same information that backed NAFTA claims, according to Brenda Smith, executive assistant commissioner of CBP’s Office of Trade.
Both the U.S. and China still plan to meet their commitments under the phase one trade deal despite the economic disruption of the COVID-19 pandemic, U.S. Trade Representative Robert Lighthizer said. During a May 7 conference call, he, Treasury Secretary Steven Mnuchin and China’s Vice Premier Liu He agreed “good progress” is being made by both sides to “make the agreement a success,” USTR said. The officials also discussed measures being taken by the U.S. and China to support their economies during the pandemic and agreed to hold more conference calls on a “regular basis.”
If countries place trade restrictions on food supplies similar to those on medical goods, the global supply chain could see significant agricultural shortages within months, trade experts said during a Washington International Trade Association webinar. But even without export controls on food, restrictions on movement and other COVID-19-related controls are already beginning to impact the flow of food goods, the experts said.
The United States notified the World Trade Organization that it has fully complied with the WTO's findings in the Boeing subsidies dispute, the Office of the U.S. Trade Representative said May 6. The European Union and U.S. have been battling for 15 years over whose subsidies to their aircraft manufacturers distort trade. The WTO has said that both sides were in the wrong, and the U.S. currently has Section 301 tariffs on about $7.5 billion worth of European aircraft, food, apparel, linens, tools, wine and spirits in a WTO-sanctioned retaliation for past Airbus subsidies.