China has reached out to several members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in the hopes of joining the trade agreement that was originally created to exclude it, Bloomberg reported May 17. Officials from Australia, Malaysia, New Zealand and possibly others have had talks with the Chinese about the agreement initiated by the U.S. to balance China's growing power. President Donald Trump pulled out of the CPTPP in 2017; Japan subsequently took over and concluded negotiations the following year. China would be the largest economy in the pact if it were to join but faces an uphill battle as views of China have become increasingly negative in CPTPP member nations, the report noted.
Mexico and Canada emphasized how the COVID-19 pandemic has proven the need for interlinked supply chains, but U.S. Trade Representative Katherine Tai emphasized supply chains' downside as she, Mexico's economy minister and Canada's trade minister sat down to the first Free Trade Commission meeting of the USMCA. Tai said, "Not only have we discovered the fragility of our supply chains, but we have just begun to appreciate the degree to which they run counter to our collective goals of ensuring that workers within North America, and outside it, are paid a fair wage, in a safe workplace."
Former Trans-Pacific Partnership negotiator Wendy Cutler told an audience for an Atlantic Council webinar that the U.S. cannot rejoin even a renegotiated TPP in the next two years, and maybe not during the next four. Cutler, a vice president of the Asia Society Policy Institute, said that the administration should try to ink mini-deals with TPP countries on digital trade, like it did with Japan, and said that maybe there can be coordination on supply chains or climate and trade. Cutler was also chief negotiator on the Korea free trade agreement.
After the European Union announced May 17 that it will not double retaliatory tariffs on U.S. exports on June 1, exporters expressed relief. More significantly, the joint statement between the EU and Office of the U.S Trade Representative said the two sides are aiming for a united approach to global overcapacity distortions that would allow the 25% and 10% tariffs under Section 232 to be removed at the end of the year. Domestic metal producers welcomed that news, but the union that represents steelworkers reacted with some alarm.
The Bureau of Industry and Security issued more than $100,000 in combined penalties against two companies for illegally exporting thousands of dollars worth of goods to Iran, Russia and Ukraine. BIS imposed a $60,000 fine and temporarily denied the export privileges for Kleiss & Co., a Netherlands-based company that BIS said illegally shipped “extruded butyl sealants” from the U.S. to Iran. The agency also fined Texas-based TeleDynamics $55,000 for illegally exporting rifle scopes from the U.S. to Russia and Ukraine.
The U.S. issued guidance last week to address industry uncertainty and a rising number of questions about export licensing jurisdiction for goods sent under its Foreign Military Sales Program. The guidance -- which includes frequently asked questions developed by Homeland Security, CBP and the Commerce, State and Defense departments -- was issued because the agencies “continue to receive questions” about exports that were moved from the U.S. Munitions List to the Commerce Control List but are exported under FMS authority. They said exporters are “having difficulty” understanding how Commerce’s Export Administration Regulations, the State Department’s International Traffic in Arms Regulations and the FMS Program “relate to each other” for goods that have recently transitioned from the ITAR to the EAR.
The Senate likely will vote on the Endless Frontier Act next week and should pass the bill before the end of the moth, Majority Leader Chuck Schumer, D-N.Y., said May 13. The bill, which would provide more federal funding and incentives for semiconductor research, has “strong” bipartisan support, Schumer said, and will help maintain U.S. technological leadership over trade competitors, including China. “The Endless Frontier Act would right the ship by making one of the largest investments in American innovation in generations,” Schumer told the Senate.
U.S. Trade Representative Katherine Tai generally avoided being pinned down on timing as she was asked about rekindling trade negotiations with the United Kingdom and Kenya, the pause on tariffs on European imports, and a solution for steel overcapacity that could make way for the lifting of Section 232 tariffs.
The U.S. Department of Agriculture Foreign Agricultural Service has noticed higher security on a range of items traded between the U.S. and Panama, USDA reported May 7. The agency said traders should be aware of “increased rules of origin scrutiny” on coffee products, certain rice products, milk, butter, cheese, eggs, beef, pork, potatoes and other food products. USDA warned U.S. exporters to comply with Panamanian customs authorities, which enforce the rules of origin requirements in the U.S.-Panama Trade Promotion Agreement and issue fines and back duty assessments for noncompliance.
Bolivia, Colombia, Ecuador and Peru recently extended measures to promote and facilitate trade in cosmetics, cleaning products and certain hygiene products, the Hong Kong Trade Development Council reported May 10. Through Dec. 31, the Andean Community countries may accept a “commitment letter in lieu of a certificate of free sale or a similar authorisation” of the country of origin when traders are looking to renew sanitary certifications, HKTDC said. In the letter, the trading party must “commit” to provide the certificate within six months after the sanitary notification is issued, renewed or modified. The countries may also extend a deadline by up to 12 months that will allow importers to “exhaust existing stocks” of their cosmetics, cleaning and hygiene products when their sanitary certificate has expired.