The two excluded sectors from planned Europe trade talks -- agriculture and autos -- both want to be included, according to comments filed with the Office of the U.S. Trade Representative ahead of the Dec. 14 public hearing on negotiation priorities. More than 150 organizations and individuals shared their views in the USTR docket ahead of the Dec. 10 deadline for comments.
The U.S. Chamber of Commerce will support the new NAFTA, and will lobby for its passage, the group announced Dec. 10. CEO Thomas J. Donohue wrote that the group will be working to resolve a handful of outstanding issues, but only specifically mentioned the Section 232 tariffs on Mexican and Canadian steel and aluminum. He spent far more time scolding President Donald Trump for his intention to terminate NAFTA "in order to present the incoming Congress with a choice between the new agreement and no agreement. We disagree with this strategy." Donohue wrote, "Issuing this threat against a co-equal branch of government is neither necessary nor productive and could actually cost votes." A prominent free-trade Democrat in the House of Representatives made the same point on Dec. 10 (see 1812100024).
Agriculture interests, including meat, wheat and grape growers, told the Office of the U.S. Trade Representative that they will lose market share to competitors in Australia, Europe, Canada, Mexico and Chile as those countries begin to benefit from the Trans-Pacific Partnership and EU-Japan free trade agreement. As they testified Dec. 10 on negotiating a U.S.-Japan agreement, they said speed is of the essence.
Express Association of America, which represents DHL, FedEx and UPS, said Japan has not lived up to its postal privatization commitments, and asked the Office of the U.S. Trade Representative to make sure that Japan Post is no longer advantaged compared to private shippers. Michael Mullen, executive director of EAA, testified on Dec. 10 in front of a trade panel that's seeking public views on how to shape negotiations for a U.S.-Japan free trade agreement.
Withdrawing from NAFTA to secure approval of its replacement will backfire, warned the chairman of the New Democrats, a group of 68 House of Representatives members generally seen as pro-free trade, in a statement issued Dec. 10. One of the New Democrats who serves on the House Ways and Means Trade Subcommittee, Rep. Ron Kind, D-Wis., is interested in leading that subcommittee next year (see 1811140049). New Dems Chairman Rep. Jim Himes, D-Conn., said withdrawal "will create economic chaos and not build the trust necessary for bipartisan progress." Himes said he met with U.S. Trade Representative Robert Lighthizer on Dec. 7, and had a constructive conversation in which Himes said Lighthizer expressed his desire to work closely with members of Congress. "I agreed that such engagement would be essential to consideration of the revised NAFTA," Himes said. In his statement, he noted that his caucus was integral to getting fast-track legislation passed, as well as "every trade agreement in recent decades.... This administration will need bipartisan support to successfully push trade agreements through Congress and we urge the Administration to engage with us on this and other agreements moving forward."
Automakers, titanium producers and drug industry players shared diverging views inside their respective sectors of how Office of the U.S. Trade Representative negotiators should approach a U.S.-Japan free trade agreement. The department invited the public to share opinions Dec. 10 on what priorities negotiators should pursue, and how the new deal should be similar or diverge from the path forged for the U.S.-Mexico-Canada Agreement and the Trans-Pacific Partnership. Autos are the single biggest import from Japan, making up $51 billion of the $136 billion in goods imports in 2017, according to USTR.
Importers paid more than $6 billion total in tariffs in October, the first full month that there were additional tariffs on $200 billion in Chinese goods, according to an analysis from Tariffs Hurt the Heartland. The group said that amount -- which is $3.1 billion more than was paid in October 2017 -- has not slowed imports on the tariffed goods, but has drastically cut exports that are subject to retaliatory tariffs. The group is funded in part by farm interests, who have been particularly hard-hit by retaliation. Their Dec. 7 release said that imports subject to new tariffs declined 0.6 percent in October, while exports targeted for retaliation fell 37 percent. About two-thirds of the increase is for Section 301 tariffs, while steel and aluminum tariffs cost an additional $446 million. The goods on the Section 301 list would have cost $394 million in tariffs before the action; in October, tariffs on those imports were $2.6 billion. CBP recently said it has assessed more than $10 billion under the recent Trump administration Section 201, 232 and 301 trade remedies (see 1811260010).
Increased material costs was the top cost pressure for 20 percent of CEOs surveyed by the Business Roundtable, and that group's leader said tariffs are the reason why. Only labor costs was mentioned by more CEOs. Business Roundtable CEO Josh Bolten said that while the survey, released Dec. 7, didn't ask which set of tariffs is the problem, he's hearing from companies that metals tariffs are a bigger burden than the Section 301 tariffs. That's because a relatively small amount of production uses inputs from lists one and two of Chinese imports, and steel is used in many sectors. "The ones that have gotten the biggest public attention are the auto manufacturers," he said, "but really it's across the membership."
U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue announced Dec. 6 that the government of Morocco will allow U.S. beef imports. Morocco opened its market to U.S. poultry in August. USTR estimated Morocco could buy $80 million a year in beef from the U.S. Details on the beef export requirements are on the FDA website.
The National Council of Textile Organizations announced Dec. 6 that it endorses the U.S.-Mexico-Canada Agreement, and will lobby for it. The organization said the U.S. exported $11.8 billion in textiles within the NAFTA region in 2017. The trade group views USMCA as an improvement on NAFTA because the rewrite has stronger rules of origin for sewing thread, pocketing, narrow elastics and some coated fabrics; it has stronger customs enforcement rules; and it closes what NCTO calls the Kissell Amendment loophole. The Kissell Amendment, which covers Department of Homeland Security uniform and body armor purchases, allows sourcing from NAFTA partners, not just American producers. According to a 2017 GAO report, 58 percent of DHS spending on uniform body armor procurement is for imported items. If USMCA becomes law, apparel purchased for the agency will have to be sewn in the U.S., an NCTO spokesman said. He said the change affects "more than $30 million worth of contracts on an annual basis."