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.
The U.S. and South Korea reached a deal that will allow for $110 million worth of annual U.S. rice exports to South Korea, the Office of the U.S. Trade Representative said Nov. 19. The agreement will give access to more than 130,000 tons of U.S. rice exports each year and will ensure South Korea is transparent and predictable “around the tendering and auctioning” for U.S. rice. The deal gives the U.S. the “largest volume of guaranteed market access for rice” that it has ever had in South Korea, USTR Robert Lighthizer said. “It will prove enormously beneficial for American producers and their customers in Korea.”
The trade war that President Donald Trump began with China 16 months ago is creating pain for businesses, but there's a deeper strategic mistake to consider, said Matthew Goodman, senior vice president for Asian economics at the Center for Strategic and International Studies. Goodman, who was speaking during the first session in a Congressional Trade Series on Nov. 19, said, “I still don't know what the basic strategic goal is here." He said he didn't know whether the administration wants to get structural changes to China's economy, as it claims, or whether it wants to reduce the bilateral trade deficit, or to contain China's rise.
House Ways and Means Committee Chairman Richard Neal, D-Mass., who leads the working group negotiating with the U.S. trade representative over the U.S.-Mexico-Canada Agreement, said he anticipates that USTR Robert Lighthizer will send over text of the changes to the agreement next week. Neal said he spoke with Lighthizer Nov. 14, to tell him he'd be forwarding “a series of, we think, could be make-or-break issues, and that we hoped that he would digest them and then respond to us, fast."
The Trump administration applauded Brazil’s commitment to implement an annual duty-free tariff rate quota of 750,000 metric tons of wheat imports, saying the move signals a desire to deepen trade ties with the U.S. In a Nov. 14 statement, U.S. Trade Representative Robert Lighthizer said the TRQ will benefit U.S. wheat exporters. It “will allow our wheat exporters to compete on a level playing field,” Lighthizer said. “We look forward to increased exports of American wheat to Brazil.”