House Ways and Means Committee Chairman Richard Neal, D-Mass., as he promised in his first letter to U.S. Trade Representative Robert Lighthizer earlier this week, is laying out specific criticisms of the NAFTA rewrite that pertain to Mexico's labor standards. The letter, sent April 11, was signed by every Democrat on the committee, from pro-trade leaders to the most NAFTA-skeptical. "[T]here are particular concerns regarding the enforceability of the violence and intimidation provision in the new Agreement," they wrote.
Toyota does support the renegotiated NAFTA, a top executive said at a trade conference in Washington, even though it will require the company to change some of its sourcing to meet the new 75 percent autos rule of origin. Doug Murtha, vice president of corporate strategy and planning for Toyota's North American division, said that the addition of $3 billion in U.S investments were, "to some extent, changes we had to make for USMCA."
Mexican tomato growers, faced with the possibility of renewed antidumping tariffs (see 1902070024), have proposed raising prices on their exports to the U.S. by as much as 34 percent, and eliminating price differentials between tomatoes grown in the winter and the summer.
Treasury Secretary Steven Mnuchin told CNBC on April 10 that lengthy phone calls between U.S. and Chinese negotiators are continuing to advance a trade deal. "We’ve pretty much agreed on an enforcement mechanism. We’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters," he said.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told reporters that if President Donald Trump were to hike tariffs in violation of what was negotiated in the U.S.-Mexico-Canada Agreement, as he threatened to do, it could blow up the treaty. "More tariffs would create more problems," Grassley said April 10, and he noted the steel and aluminum tariffs are already a major obstacle. "The Congress of the United States won’t bring up that agreement until the tariffs are off," he said.
The sole U.S. producer of titanium sponge, TIMET, argued to the Commerce Department that two Japanese companies and TIMET should be given a price advantage and that all other countries' producers should be restricted through quotas or tariffs that are not subject to drawback. TIMET, which failed to win an antidumping case because the International Trade Commission said its production was not in direct competition with imports used by other U.S. processors, is asking for a preference pricing scheme, similar to those used in suspension agreements for antidumping cases.
The Border Trade Alliance is lobbying lawmakers this week for U.S.-Mexico-Canada Agreement ratification. “While we certainly wish the disruptions at the border weren’t occurring, they have shined a bright light on the importance of cross-border trade to the health of the U.S. economy,” BTA board chair Paola Avila said. The Alliance says the USMCA makes "major and important" upgrades to NAFTA, including in the areas of e-commerce, intellectual property protection and enhanced agricultural access.
The Office of the U.S. Trade Representative's proposal to tariff up to $11 billion worth of goods from the EU as part of a long-running dispute over aircraft subsidies (see 1904090031) adds some new tension to an already fraught trade relationship. Although the trade dispute resolution that the U.S. is asking for pertains to large commercial airplanes, it goes far beyond aerospace, hitting cheeses and other food, wine, clothing and building materials. “This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” USTR Robert Lighthizer said in a news release.
Peru has decided to maintain the independence of the agency that monitors logging, the Office of the U.S. Trade Representative announced April 9, as that office heralded the success of its environmental consultations (see 1901070023). House Democrats had been concerned that Peru was undermining the agency by moving it into the environment ministry (see 1812190033), and USTR quickly asked for consultations. “We are pleased with Peru’s decision to retain OSINFOR as an independent and separate agency, as required by our bilateral agreement,” USTR Robert Lighthizer said in a statement announcing the change. “This shows that strong enforcement works. I am committed to using enforcement tools to ensure that our trade agreements protect the environment and advance the interests of U.S. workers and businesses.”
The European Union and the U.S. have not formally begun the trade talks first agreed to last July, as the 28-member bloc still does not have a mandate to negotiate. Given that, many observers are doubtful negotiations could make substantial progress this year.