U.S. Chamber’s International Policy Update – January 22

 

Miscellaneous Tariff Bill Advances in Congress

The House of Representatives on January 16 approved H.R. 4318, the Miscellaneous Tariff Bill Act of 2017, with a unanimous vote of 402-0. The legislation will extend temporary tariff cuts to nearly 1,700 imported products. Following passage by the House, Ways and Means Chairman Kevin Brady (R-TX) issued a statement praising the bipartisan legislation, calling it a “win for American manufacturers, their workers, and families across the country. With the temporary tariff relief provided by the bill, our manufacturers will see reduced costs for needed production inputs that are simply not available in the United States. This will help them better compete globally, create more jobs here at home, and make high-quality ‘Made in America’ products more affordable for families.”

The American Chamber was one of several other industry groups to send a Key Vote alert to all members of the House of Representatives urging members to support the bill’s passage. The letter stated: “Over the past three decades, the Miscellaneous Tariff Bill (MTB) has enjoyed strong bipartisan support because it helps manufacturers cut production costs and maintain their competitive edge by providing temporary relief from select tariffs. These are taxes applied to imported materials and intermediate products that are essential to U.S. manufacturers but are generally unavailable domestically.”

 

Brilliant Authors Column on KORUS

U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant wrote an op-ed on the U.S.-Korea Free Trade Agreement (KORUS) that appeared in the January 17 Korea Joongang Daily. The piece was published to coincide with Brilliant’s visit to Seoul for meetings with government and industry. In the op-ed, Brilliant noted the importance of South Korea working swiftly to address outstanding issues to fully implement the agreement. Brilliant wrote:

“To bolster political support for KORUS, it is imperative that Korea act immediately to address longstanding implementation issues that inhibit investment and serve as a barrier to the success of American companies in the market. Longstanding concerns in the pharmaceutical and medical device sectors, fair treatment for electronic payment and express delivery service providers, and barriers related to importing U.S. cars still remain. Furthermore, unpredictable and inconsistent regulations, coupled with Korea-unique standards and thinly veiled industrial policies have given investors pause… The failure to resolve these issues and fully honor the commitments within KORUS has damaged the reputation of Korea in the eyes of certain U.S. government officials and businesses. Clearing some of the regulatory obstacles will help defuse tensions in the relationship, attract further American investment and ultimately benefit broad swaths of the Korean economy.”

The op-ed follows the first formal discussions on January 5 between the United States and South Korea regarding possible amendments and modifications to the trade pact.

 

Coalition Leads Senate Lobby Day on NAFTA

As trade negotiators prepare to begin a sixth round of NAFTA talks in Montreal next week, the Chamber and its coalition partners organized another Senate NAFTA lobby day on January 17. The meetings covered the full breadth of the Senate. Cross-industry groups of more than 10 business and agriculture representatives each conveyed to Senate offices the importance of pressing for a trade-expanding approach to NAFTA modernization, avoiding a disastrous withdrawal from the agreement, and pushing back against “poison pill” proposals now on the table.

In a January 11 interview with the Wall Street Journal, President Trump offered a relatively upbeat account of the negotiations, saying: “We’ve made a lot of headway. We’re moving along nicely.” The Journal reported:

While negotiators have officially set a March deadline to rewrite the continental pact, Mr. Trump said he didn’t have any timetable and was “a little flexible,” taking into account Mexico’s July 1presidential and legislative elections.

Mr. Trump did repeat, in the interview, his longstanding threat to pull out of the pact if he wasn’t happy with the results of the talks, saying: “If we don’t make the right deal, I will terminate Nafta, OK.”

 

Senate Finance Committee Considers Trade Nominees

On January 17, the Senate Finance Committee met to consider the nominations of Dennis Shea to serve as Deputy U.S. Trade Representative to the World Trade Organization in Geneva, and C.J. Mahoney to be Deputy U.S. Trade Representative for Investment, Services, Labor, Environment, Africa, China, and the Western Hemisphere. Opening the hearing, Chairman Orrin Hatch (R-UT) emphasized the importance and focus of the services trade to both USTR nominees, saying:

“The United States exported more than $721 billion in services in 2015. That number reflects something that a Deputy USTR should keep in mind every day he is on the job: no country in the world comes close to the United States in services trade. It is a key competitive advantage for our country and an important driver of our economy. If confirmed, each of our nominees would have the responsibility to establish international trade rules and negotiate international trade agreements that benefit U.S. services providers.”

In his testimony, Mr. Shea noted USTR’s intention to reform the World Trade Organization, saying: “As Ambassador Lighthizer stated during the recent WTO Ministerial in Buenos Aries, the WTO has done an enormous amount of good over the past 23 years. But as he rightly points out, the WTO needs to improve in a number of areas: Too many countries fail to live up to their WTO obligations without any consequence. Too many, including some of the world’s wealthiest nations, seek exemptions from these obligations by claiming status as developing countries. The WTO has shifted from a forum with a focus on facilitating negotiation among sovereign states to a litigation-centered institution. If confirmed, I expect that institutional reform at the WTO will be a major part of the U.S. agenda.”

Mr. Shea also addressed the rising challenge of global trade competition with China, having previously served as Vice-Chair of the U.S.-China Economic and Security Review Commission, noting: “A critical issue now pending before the WTO is whether Members, including the United States, are legally obligated to treat China as a market economy under their own trade-remedy regimes. As both the USTR and U.S. Department of Commerce have made clear, China is and remains a non-market economy and should be treated as such. Bolstering support for this position within the WTO – a position also shared by the European Union – will be a critical task.”

During his testimony, Mr. Mahoney addressed his focus on NAFTA as a major component of USTR’s Western Hemisphere strategy, while noting his intention to preserve the benefits of NAFTA for American farmers, saying: “USTR’s chief priority in the Western Hemisphere at present is the renegotiation of the North American Free Trade Agreement. I fully support the goals set forth in USTR’s published negotiating objectives for NAFTA. These negotiations are an opportunity to modernize the agreement and to create a more level playing field for American workers, especially those in the manufacturing sector. At the same time, however, I am fully committed to preserving and enhancing the gains that our country has achieved in NAFTA, notably for agricultural goods. Especially at a time of already depressed commodity prices, it is important that U.S. agriculture lose no ground and maintain its reputation as a reliable supplier.” Mahoney also addressed the need for greater U.S. market access in China and the development of sustainable trading partners in Africa.

For more information on the hearing, click here.

Later in the day, it was reported that Senator Tim Scott (R-SC) had placed a hold on both nominees based on concern over the Administration’s NAFTA position and negotiations and inadequate consultation with Congress. As of press time, Senator Scott’s hold on both nominees has yet to be lifted.

Separately, the Senate Finance Committee advanced, by a voice vote of 27-0, the nomination of Kevin McAleenan to serve as Commissioner of U.S. Customs and Border Protection (CBP). Following the voice vote, Chairman Hatch lauded Mr. McAleenan and urged a quick approval by the full Senate, saying: “Mr. McAleenan is a well-qualified nominee, with the credentials and experience necessary to lead an agency as critical as CBP. CBP plays an important role in facilitating trade and ensuring the nation’s borders are protected, and it is essential that the agency is led by someone who understands how trade impacts the competitiveness of our economy. Mr. McAleenan is the right man for the job, and I hope he receives swift and fair consideration on the floor.”

 

US Chamber Issues Statement on USTR’s Notorious Markets List

Last week, the US Chamber’s Global Innovation Policy Center (GIPC) issued a statement following the release of USTR’s Notorious Markets List. GIPC President and CEO David Hirschmann said:

“Today’s report on notorious markets demonstrates the real threat counterfeiting and piracy pose for legitimate businesses around the world. Earlier reports by the OECD and the U.S. Chamber have made apparent the enormous global scope of illicit trade, as well as the economic and social consequences for consumers and producers alike. USTR’s report offers an element of accountability, calling out the bad actors and the enablers who proliferate the problem. The business community encourages governments to use this report as a tool in the fight against illicit trade, including piracy devices and apps. We will continue to work to rid global markets of counterfeit economies and protect the safety and validity of the supply chain.”

The US Chamber’s Global Innovation Policy Center is working around the world to champion innovation and creativity through intellectual property standards that create jobs, save lives, advance global economic and cultural prosperity, and generate breakthrough solutions to global challenges.

 

Source: U.S. CHAMBER OF COMMERCE

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