Sen. Pat Toomey, R-Pa., the strongest free trade advocate in the Senate, said he doesn't know if Republicans will return to their traditional position as pro-free trade. In response to a question from the audience at the American Enterprise Institute Dec. 19, he said it depends on whether President Donald Trump is re-elected in 2020.
A bipartisan group of 161 House members are asking U.S. Trade Representative Robert Lighthizer to open negotiations for a free trade deal with Taiwan. The letter, sent Dec. 19, was led by Rep. Steve Chabot, R-Ohio, Rep. Albio Sires, D-N.J., Rep. Mario Diaz-Balart, R-Fla., and Rep. Gerry Connolly, D-Va. “Taiwan is a longstanding ally and a like-minded partner in the Indo-Pacific region that upholds and shares our values. Taiwan is our 11th largest trading partner worldwide, the 8th largest export market for U.S. agricultural products, a major purchaser of U.S. LNG exports, and the supplier of a significant amount of the semiconductors used by our manufacturers in their finished goods,” they said. “As the trade and investment relationship with Taiwan already supports an estimated 373,000 U.S. jobs, working toward the negotiation of a high-standard and comprehensive U.S.-Taiwan bilateral trade agreement would further enhance our shared goal of enhancing the global competitiveness of U.S. industries while spurring American job creation.”
The U.S.-Mexico-Canada Agreement passed in the House of Representatives with a vote of 385-41, with all but two Republicans and 193 Democrats voting yes. This was the biggest vote for a free trade deal in the House since the Canada Free Trade agreement in 1988, and many of the top Democrats in the House say it will serve as a template for future trade deals. It was a far more resounding “yes” than the original NAFTA vote of 234-200, when just 102 Democrats voted yes.
The Office of the U.S. Trade Representative and the U.S. Department of Agriculture are seeking new members to serve on seven agricultural trade advisory committees, the agencies said Dec. 18. Members will advise both agencies on trade agreements and trade policy, and will provide technical advice on international trade issues that impact both foreign and domestic production in “specific commodity sectors,” the USTR said. The committees will focus on trade in animals and animal products, fruits and vegetables, grains, feed, seeds, processed foods, sweeteners, tobacco, cotton and peanuts. Applicants must have “significant expertise” in agriculture and international trade and will serve four-year terms. Members must also be willing to serve “without compensation for time, travel or expenses,” the USTR said. The committee holds “frequent” conference calls and generally meets in Washington, D.C., twice a year. Applications are due by 5 p.m. on Jan. 31, 2020, and can be found on the USDA website.
The end-of-the-year appropriations compromise worked out between the House and Senate will add tens of millions of dollars for trade enforcement and port technology. The bill, which is expected to pass the Senate by Dec. 20 and has already passed the House of Representatives, will also spend $54 million for the Office of the U.S. Trade Representative.
The House Ways and Means Committee, with near-unanimity, recommended the U.S.-Mexico-Canada Agreement go to the floor. A vote on the replacement for NAFTA is expected on Dec. 19. For about three hours, Democrats and Republicans praised the rewrite of North America's free trade pact, though many Republicans complained that it took a year to get the opportunity to vote for it.
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.
With the last round of consumer goods imported from China spared, and a reduction in Section 301 tariffs on about $120 billion in goods that were first subject to additional tariffs Sept. 1, some business interests welcomed the de-escalation, but warned that the U.S. should stay focused on more significant economic reforms in China. The tariffs on List 4a, which are at 15 percent and apply to about 3,800 8-digit tariff lines, will go to 7.5 percent.
Although the Senate Finance Committee will still have a mock markup on the U.S.-Mexico-Canada Agreement, it will happen after the implementing bill has been sent to Congress, so it will be more “mock” than in past deals. The reason the process of Congress weighing in on a trade deal is a mock markup is that under fast track, or Trade Promotion Authority, Congress cannot amend the deals. But typically, the administration sends up a draft implementing bill, and then does incorporate at least some of Congress's suggestions on language before sending the final implementing bill.
House Democrats and the Office of the U.S. Trade Representative say that the new NAFTA can serve as a template for future trade deals, but experts question how that might come to pass, and a key Republican wants at least one Republican priority restored in future deals.