Exactly how the U.S. Trade Representative has agreed to change the 10-year biologics exclusivity period in the U.S.-Mexico-Canada Agreement is unclear, but insiders are saying it will be less favorable to the pharmaceutical industry.
France and the EU will retaliate if the U.S. goes forward with new tariffs on French goods, according to multiple reports. The proposed new U.S. tariffs are a result of a Section 301 investigation into the digital services tax in France. The Office of the U.S. Trade Representative said the tax unfairly targets U.S. companies.
Two prominent Republicans questioned the suitability of switching tariffs for quotas because of currency manipulation in Brazil and Argentina, as President Donald Trump said Dec. 2 he is doing. Sen. Pat Toomey, R-Pa., the leading critic of Trump's trade policy, issued a statement that night that said, “He is justifying these tariffs by citing Section 232 of the Trade Expansion Act. This provision is exclusively meant for national security threats. Yet, the President has acknowledged that the real purpose of this action is to combat currency manipulation -- which does not pose a national security threat. Furthermore, even if this action were legitimate, the statutory window for imposing these tariffs has closed. These actions further underscore that Congress should take up my legislation that would reassert congressional authority regarding imposition of national security tariffs.”
The top negotiator for Mexico on the new NAFTA told reporters in Canada on Nov. 29, “I think we are almost there.” Jesus Seade, who was in Canada meeting with his counterparts, had been in Washington the day before Thanksgiving to talk to U.S. Trade Representative Robert Lighthizer about whether Mexico could live with the edits to the new NAFTA the Democrats had asked for. Seade told reporters that the edits might be finalized “sometime in the next week,” but if not then, he said he hopes it will be before Congress leaves town for the Christmas holiday. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said in a speech on the Senate floor Dec. 2 that “if a deal cannot be reached by the end of this week, I do not see how USMCA can be ratified in 2019. As it is, the window of opportunity for 2019 is extremely tight.”
Although the U.S. trade representative found a way to avoid a congressional vote on a U.S.-Japan trade deal by limiting the size of the initial U.S. tariff reductions, Democrats on the Ways and Means Committee are questioning whether the deal is allowed under the fast-track law. A letter sent Nov. 26, led by Rep. Bill Pascrell, D-N.J., and signed by every Democrat on the committee except the chairman and Rep. John Lewis, D-Ga., did not explicitly say that Democrats believe the law is not being followed, but repeatedly asked under what authority the agreement was reached. Among the specific issues raised were rules of origin or marking rules and whether there would be changes. The letter also asked if there is such a provision, why wasn't it mentioned in the notification to Congress.
House Speaker Nancy Pelosi said the Democrats “are within range” of agreeing on a new NAFTA, adding that “we need to see our progress in writing from the Trade Representative for final review.” Pelosi released the statement in the evening of Nov. 25. She said that the original draft of the U.S.-Mexico-Canada Agreement that USTR reached with Canada and Mexico “still left American workers exposed to losing their jobs to Mexico, included unacceptable provisions to lock in high prescription drug prices, and fell short of key environmental standards,” but most of all, it had no concrete enforcement mechanisms. If Pelosi reaches agreement with USTR, the next step will be a draft implementing bill from USTR, and mock markups in the House Ways and Means Committee and Senate Finance Committee to shape the final bill.
Those who advise NAFTA stakeholders say that it looks like a factory-level inspection regime will be part of what Democrats get in their edits to the U.S.-Mexico-Canada Agreement, but how disruptive that will be for businesses is completely cloudy. Kellie Meiman Hock, a managing partner at McLarty Associates, said she thinks there are ways the inspections could be done that would not make Mexico feel like American government officials are deciding whether Mexican labor laws are being followed. Hock said the two governments could select inspectors who travel together, or it could be a coalition of non-governmental organizations, as was mobilized after more than 1,000 textile workers died in a factory collapse in Bangladesh.
Geneva is growing increasingly frustrated with the United States’ approach to the looming deadline of the dissolution of the World Trade Organization’s dispute settlement body, a former member of the body said. Although there are ways for the U.S. and WTO members to ensure the appellate body continues to operate, trade experts said they are skeptical much will get done before the Dec. 10 deadline, throwing the international rules-based trading system into question.
House Democrats and the administration have gotten close enough on what the edits to the new NAFTA should be that they have narrowed differences to three, “maybe two and a half," the Ways and Means Committee chairman said Nov. 21. Chairman Richard Neal, D-Mass., had just exited a meeting with U.S. Trade Representative Robert Lighthizer and House Speaker Nancy Pelosi, and Neal said that at the beginning of the meeting, there were five issues separating them.
When the Ways and Means Trade Subcommittee held a hearing on the U.S.-Japan mini-deal, the Office of the U.S. Trade Representative declined to send anyone to testify. Rep. Ron Kind, D-Wis., one of the biggest boosters of free trade in the Democratic caucus, said that absence represents “the disdain the current administration has" for Congress, and its role in setting trade policy. He predicted that "this will have serious ramifications for the next time" Congress has a vote on fast-track authority.