The United Kingdom and the U.S. announced an agreement in the Airbus-Boeing dispute in line with the previously announced agreement between the U.S. and the European Union (see 2106150021). In the agreement, both sides will keep 25% tariffs off a variety of products and 10% tariffs off aircraft for at least five years, and will use a working group to hash out any disagreements on whether either government's support for their large aircraft maker is distorting sales. They also will work together to counter Chinese or other countries' distortions, the June 17 statement said.
Members of Congress told the Federal Maritime Commission that they are hearing again and again about exporters being denied the opportunity to send their goods across the water, either directly, or with last-minute cancellations or unreasonable expectations on time to load, and so they asked why the FMC cannot solve these problems.
The U.S.-European Union joint statement on trade says: "We will engage in discussions to allow the resolution of existing differences on measures regarding steel and aluminum before the end of the year. In this regard, we are determined to work together to resolve tensions arising from the U.S. application of tariffs on imports from the EU under U.S. Section 232." It also says, "We commit to ensure the long-term viability of our steel and aluminum industries, and to address excess capacity."
The Biden administration emphasized how reaching an agreement to end a 17-year-dispute over government subsidies to both Airbus and Boeing does more than just lift tariffs for at least five years. They see the most significant plank of the agreement as the one in which European Union countries agree to prevent foreign investments in the aerospace sector that are done to acquire technology or know-how, and to counter investments by European aerospace companies in China or other countries that are done in response to incentives or because the investments are a condition to sell in that market.
Seven senators, including Senate Foreign Relations Committee ranking member Jim Risch, R-Idaho, are asking the administration to consider removing Nicaragua from the free trade agreement with Central American countries if political conditions in that country continue to deteriorate. Risch was joined on the June 10 letter by Sens. Patrick Leahy, D-Vt., Dick Durbin, D-Ill., Marco Rubio, R-Fla., John Cornyn, R-Texas, Todd Young, R-Ind. and Bill Cassidy, R-La.
The leaders of Japan, Germany, the United Kingdom, France, Canada, the U.S. and Italy agreed to work collectively toward eradicating the use of all forms of forced labor in global supply chains, and said they want concrete suggestions ready before the G-7 trade ministers' meeting in October.
The U.S. and European Union are ending the longest trade dispute in the history of the World Trade Organization, and are moving from litigation to cooperation, the European Commission said in a news release. The White House said the tariffs are suspended for five years, which is a "fresh start," but allows the U.S. "to reapply tariffs if we’re no longer competing on a level playing field." Should the EU "cross a red line and U.S. producers are not able to compete fairly and on a level playing field, the United States retains the flexibility to reactivate the tariffs that are being suspended," said U.S. Trade Representative Katherine Tai during a call with reporters.
European and U.S. former government officials said they think the U.S. and European countries will find much common ground in efforts to make trade work for working people, but that getting on the same page with China will be a challenge.
Rep. Devin Nunes of California, the top Republican on the House Ways and Means Subcommittee on Health, introduced a bill June 8 that would require a congressional vote before the U.S. could agree at the World Trade Organization to waive intellectual property rights on COVID-19 vaccines, a process known as a Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement waiver. The bill, H.R. 3788, “pushes back against the Biden Administration’s effort to surrender expensive American medical technology to foreign competitors,” Nunes said in a news release. “The Biden Administration’s support for surrendering intellectual property protections for American-made COVID-19 vaccines serves only to harm Americans and help hostile foreign powers like Communist China. Indeed, it’s hard to imagine a more self-defeating or unjust policy.”
Dan Ikenson, who spent decades in trade policy at the libertarian Cato Institute, said he defended China's behavior for years after it joined the World Trade Organization. "I was in favor of welcoming China into the trading system," he said. But now, Ikenson said during a June 9 webinar hosted by the R Street Institute, he has come to see that China's last 15 years of state-directed capitalism produced enormous externalities. He said some of those externalities include the rise of populism, the political rejection of free trade, and even, in part, the presidency of Donald Trump.