South Korean and Japanese officials will meet in Beijing this week amid the countries’ trade dispute over export controls, South Korea’s Ministry of Foreign Affairs said Aug. 16. The meeting is the first between the foreign ministers of the two sides in three years, South Korea said, and will feature the foreign minister of China as well. South Korea also said it is trying to hold separate bilateral talks with both Japan and China “on the sidelines” of the meeting in Beijing. The meetings, which South Korea said will take place Aug. 20-22, come as both Japan and South Korea are entrenched in a trade dispute dating back to July 1, when Japan announced restrictions on exports to South Korea involving chemicals needed to make computer chips and other high-tech goods (see 1907010020).

A Japanese newspaper said that Japan and the U.S. have begun working on text for a free trade agreement. "The points of contention have become very clear and discussions have been progressing,” said Kazuhisa Shibuya, a senior policy coordinator at Japan’s Cabinet Secretariat, at a news conference following the talks, a report in The Japan Times said. He also said the two sides are talking about rules of origin, which suggests that the U.S. is entertaining tariff elimination on at least some industrial products, not just rescinding the automobile Section 232 threat in return for agricultural market access.

The recent U.S. decision to designate China as a currency manipulator is said by some analysis to have decreased the chances of a trade deal and increased the likelihood of escalation that could have major economic consequences, according to an Aug. 9 report by the Congressional Research Service. “Many analysts have argued that the currency manipulation designation has complicated negotiations and reduced the likelihood of an agreement in the short-term,” the CRS said, “and in turn have argued that the escalation could begin having significant economic repercussions.” The report also noted skepticism among some analysts that China is trying to unfairly manipulate its currency, saying “many analysts” have argued that China’s decision to allow the yuan to depreciate “is not clearly an effort to gain an ‘unfair’ trade advantage.” The report pointed to one analyst who said there will be no “practical consequences” to the designation, which has been called a “political exercise” by other analysts.

The director of research for the People's Bank of China criticized the U.S.’s decision to list China as a currency manipulator, saying the U.S. has deviated from its own standards and insisting that China does not use its exchange rate as a “tool to deal with trade disputes.” “The US has unreasonably labeled China as a ‘currency manipulator,’ triggering financial market turmoil, and will greatly hinder international trade and global economic recovery, and ultimately will suffer from its own consequences,” research director Wang Xin said during an Aug. 6 Chinese State Council press conference, according to an unofficial translation.

The U.S., China and 44 countries signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, a “cross-border enforcement mechanism” for settlement agreements on trade disputes that arise from a mediation process, the U.N. Information Service said in an Aug. 7 press release. The UNIS said the agreement promotes “sustainable” international trade relationships and will foster the use of mediation.

President Donald Trump held a press conference Aug. 2 at the White House with European officials and U.S. Trade Representative Robert Lighthizer to announce an increase in tariff-free access to U.S. hormone-free beef in the European Union. The changes to the EU's tariff rate quotas will go into effect after the European Parliament approves hem, which is expected in the fall. It was originally announced by the EU in June (see 1906140026).

The U.S.-China Business Council urged the Trump administration to reconsider his threat of a 10 percent tariff on $300 billion worth of Chinese goods, saying the threats will hurt the reputation and businesses of U.S. exporters, in an Aug. 1 press release.

A new provision in the U.S.-Mexico-Canada Agreement’s rules of origin for automobiles should prevent automobile manufacturers from having to segregate parts on the production line and also make origin calculations less burdensome, U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee in one of a series of written answers to questions the committee posed to him at a June 18 hearing. Under the renegotiated NAFTA, called USMCA, certain “core parts” listed in Column 1 of Table A.2 must be originating for a vehicle to be originating, but Article 3.9 permits producers to bundle the parts under Column 1 together as a “super core” part when calculating the value of non-originating material (VNM) for origin purposes. “Many vehicle producers do not segregate core parts when producing vehicles, but use or bundle them within different modules along the production line,” USTR said. “The ‘super core’ calculation allows such producers to meet the core parts requirement without having to segregate each of the parts and do separate, burdensome calculations. The super core calculation incentivizes U.S. producers to use more originating content and maintains their competitiveness without accruing any possible efficiency losses from having to segregate core parts,” the agency said.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin traveled to Shanghai for July 30 and 31 talks on a comprehensive U.S.-China trade deal, the White House said July 30. Vice Premier Liu He and Commerce Minister Zhong Shan led the Chinese delegation, it said. “The two sides discussed topics such as forced technology transfer, intellectual property rights, services, non-tariff barriers, and agriculture.” The Chinese “confirmed their commitment to increase purchases” of U.S. agricultural exports, it said. “The meetings were constructive, and we expect negotiations on an enforceable trade deal to continue” in Washington in early September, it said. The Shanghai meetings were the 12th round of negotiations that started in December, and were the first face-to-face talks between the sides since the negotiations broke down in May over Trump administration allegations that the Chinese reneged on previously agreed-to commitments. Overhanging the talks is the threat that the administration could put the List 4 Section 301 tariffs into effect at any time on virtually all Chinese goods not previously dutied.

President Donald Trump told a Brazilian reporter July 30 that the U.S. will work on a free trade agreement with Brazil. Trump, who spoke about Brazilian trade talks at gaggles both before and after his trip to Jamestown, Va., said, "Brazil is a big trading partner. They charge us a lot of tariffs, but other than that we love the relationship." He said he's sure they'll be successful at trade talks. "I have a fantastic relationship with your president," he told the Brazilian reporter. "And he's a great gentleman. He was here, as you know. In fact, they say the 'Trump of Brazil.' I like that. That’s a compliment."