China's lack of worker rights, weak environmental standards "and anticompetitive subsidies are the hallmarks of China’s artificial comparative advantage. It is an advantage that puts others out of business and violates any notion of fair competition," the annual trade policy agenda from the Office of the U.S. Trade Representative said, and the administration is looking to advance fair competition "through all available avenues," including coordinating with other countries, using existing trade agreements, or new tools, it said.
The Wall Street Journal, citing unnamed sources, said the administration could initiate another Section 301 investigation into China's practices in strategic sectors. It said the sources didn't say which sectors, but said there could also be tighter export controls, with greater cooperation with European and Asian allies on subsidies, and that the administration might increase scrutiny of U.S. companies' investments in China. The article said that a Section 301 investigation has been bandied about for months, but that it has new momentum since the talks to build on the Trump administration's phase one trade agreement have been fruitless. The Office of the U.S. Trade Representative and the White House press office didn't respond to requests for comment.
Edelman Global Advisory hired Everett Eissenstat, who previously was General Motors senior vice president-global public policy, as chair of North America and global trade lead, the company said in a news release. Before joining GM, Eissenstat was a White House deputy assistant to the president for international economic affairs and chief international trade counsel for the Senate Finance Committee. He also has been assistant U.S. trade representative for the Americas.
House Republicans on the Ways and Means Committee told U.S. Trade Representative Katherine Tai that she needs to provide "a detailed analysis" of how China did or did not live up to the phase one trade deal. "We have great confidence in your abilities to address the many challenges China presents to the United States and other market economies, and we hope you will expand detailed communication on these matters so that Congress and the Administration can be partners in developing effective U.S. responses," they wrote Feb. 24.
Sanctions, rather than additional tariffs, are the most likely result of political pressure to not look soft on China, Bank of America analysts Ethan Harris and Aditya Bhave predicted. The two wrote in a Feb. 18 note that it's not surprising that China did not purchase the volume of U.S. exports it promised, but "what's unusual is the lack of follow-through from either side so far, other than empty rhetoric."
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Meetings between Deputy U.S. Trade Representative Jayme White and Ecuador's trade minister, Julio Jose Prado, focused on the U.S. desire for Ecuador to improve its agricultural import licensing system, and Ecuador's concern that the Generalized System of Preferences benefits program has lapsed. A joint statement from the two countries released Feb. 18 said they recognized Ecuador is improving efforts to battle illegal fishing, preserve forests and wildlife, fight climate change and marine debris, and end child labor. It said the U.S. discussed next steps to renew the GSP.
The Office of the U.S. Trade Representative laid out the externalities to other economies of China's state-led economy in a 72-page annual report to Congress. "Since last year’s report, our assessment of China’s record in terms of transitioning to a market economy has not changed," the report said. While the report's framing is about how China complies with World Trade Organization rules, the authors minimized the WTO's ability to constrain China and emphasized that countries must expand domestic trade remedies or develop other tools to deal with China's rise.
The House voted 222-210 last week to pass its China competition bill, which includes a variety of provisions that could expand U.S. export controls, sanctions and investment screening authorities. Although the America Competes Act faced objections from Republicans who argued it wasn’t tough enough on China and didn’t include strong enough export control measures (see 2202020039), several provisions could lead to more China sanctions and further restrict exports of critical American technologies.
The deputy U.S. trade representative whose portfolio covers Asia and Africa acknowledged that it may be more challenging to get buy-in from countries for the Indo-Pacific Economic Framework without the carrot of lower U.S. tariffs, but she said corporate support will help negotiators get agreement.