U.S. Trade Representative (USTR)

Congressional reactions to the Office of the U.S. Trade Representative’s statutorily mandated report on the trade policy agenda for 2017 largely hewed to party lines, with Republicans cheering the plan and some Democrats calling for more substance. Senate Finance Ranking Member Ron Wyden, D-Ore., said in a statement (here) that many of President Donald Trump’s trade objectives laid out in the report (here) submitted March 1 to Congress are “laudable,” but that “there remains little substance” about how Trump plans to approach trade during his time in office. “While some of the priorities of the Administration are laudable -- such as strictly enforcing U.S. trade laws and negotiating new and better trade deals -- the report includes no indication of how they would be achieved,” the statement says. “This omission is particularly surprising given the many statements the president has made over the past year, and continues to make, regarding American trade policy.”

Members of the U.S. beef industry pleaded to the interagency Section 301 Committee on Feb. 15 to assess proposed retaliatory tariffs in response to its allegations of EU discrimination against U.S. beef exports, while representatives of the motorcycle, rayon fiber, and confectionery industries cautioned against the move. The Office of the U.S. Trade Representative in December issued a list of 85 headings and subheadings from the EU that the U.S. is considering for retaliatory tariffs, including food and a smattering of other products (see 1612270025).

The Senate Finance Committee is drafting waiver legislation to smooth the path for the confirmation of U.S. Trade Representative nominee Robert Lighthizer’s confirmation, following questions of his legal eligibility for the post because of past foreign government representation, committee Chairman Orrin Hatch, R-Utah, said during a brief interview Feb. 6. While at the Skadden Arps law firm, Lighthizer represented the Brazilian Ministry of Industry and Commerce (see 1701250061). The Trade Act of 1974 prevents anyone who represented other governments on trade issues with the U.S. from serving as USTR or deputy USTR.

The Trump administration will examine possible improvements to all existing U.S. trade deals, including those with Trans-Pacific Partnership nations, White House Press Secretary Sean Spicer said Jan. 31 during a press briefing (here). “You would examine those to see if we can improve upon them and then look at the other countries in there and see if there's a willingness to engage with some of those other countries,” he said. Of the 11 current TPP nations, Australia, Chile, Canada, Mexico, Peru and Singapore currently have free trade agreements with the U.S. Spicer said Senate confirmation of President Donald Trump’s nominee for U.S. Trade Representative, Robert Lighthizer, would be an important first step before the administration starts its evaluation of current trade deals. The Finance Committee has not scheduled a confirmation hearing for Lighthizer yet, and is reviewing whether he might need a waiver absolving him of any non-compliance of past trade representation he performed on behalf of the Brazilian government with a statute that prevents the USTR from having represented foreign governments in trade matters, a committee majority spokeswoman said last week (see 1701250061).

The Office of the U.S. Trade Representative on Jan. 30 sent a letter to all signatories to the Trans-Pacific Partnership and the TPP depositary, formally withdrawing the U.S. from the agreement, USTR said (here). “This letter is to inform you that the United States does not intend to become a party to the Trans-Pacific Partnership Agreement. Accordingly, the United States has no legal obligations arising from its signature on February 4, 2016,” Acting U.S. Trade Representative Maria Pagan said in the letter (here) to the Ministry of Foreign Affairs and Trade in New Zealand, which serves as the TPP depositary. The U.S. "remains committed to taking measures designed to promote more efficient markets and higher levels of economic growth, both in our country and around the world. We look forward to further discussions as to how to achieve these goals.” President Donald Trump issued an executive order on Jan. 23 that instructed the USTR to withdraw from the deal (see 1701230041).

Outgoing U.S. Trade Representative Michael Froman and Mongolia Ambassador to the U.S. Bulgaa Altangerel signed and exchanged letters certifying that their nations completed the bilateral Agreement on Transparency in Matters Related to International Trade and Investment, setting the stage for the agreement to activate on March 20, the Office of the U.S. Trade Representative said (here). The transparency agreement includes joint commitments to provide opportunities for public comment on and to publish final proposed laws and regulations, and includes the obligation to publish final laws and regulations in English, which should make it easier for U.S. and foreign companies to conduct commerce in Mongolia, USTR said. Other commitments include disciplines on bribery and corruption, USTR said. “The U.S.-Mongolia transparency agreement will help to improve and deepen the U.S.-Mongolia trade relationship to the benefit of both of our economies and our workers and businesses,” Froman said in a statement. “Transparency is critical to the proper and efficient functioning of international trade and investment, and the implementation of this agreement will help provide producers, suppliers, exporters and investors with the needed predictability that comes with a clear understanding of the policies and practices that are going to be applied.” The U.S. and Mongolia signed the transparency agreement itself in September 2013. The Jan. 19 signature of letters starts the 60-day clock for the agreement to enter into force.

The Obama administration on Jan. 18 requested World Trade Organization consultations over regulations that the Office of the U.S. Trade Representative says discriminate against the sale of U.S. wine in grocery stores in British Columbia, U.S. Trade Representative Michael Froman announced (here). Regulations that allow only British Columbia wine to be sold in regular grocery stores in the province violate WTO commitments and hurt U.S. wine producers, the USTR said. “American winemakers produce some of the highest-quality, most popular wines in the world,” Froman said in a statement. “The discriminatory regulations implemented by British Columbia intentionally undermine free and fair competition, and appear to breach Canada’s commitments as a WTO member.” Froman and Acting Agriculture Secretary Michael Scuse said British Columbia is a new and growing export market for U.S. wine.

The U.S. on Jan. 12 requested World Trade Organization consultations over alleged Chinese subsidies to certain producers of primary aluminum, the Office of the U.S. Trade Representative said (here). The Obama administration’s action -- its 16th case filed against China at the WTO -- alleged that subsidies have artificially expanded Chinese aluminum capacity, production and market share, and have significantly lowered the global price for primary aluminum, causing “serious prejudice” under WTO rules to U.S. interests, USTR said. China appears to subsidize through “artificially cheap” bank loans and artificially low-priced inputs for aluminum production, such as coal, electricity and alumina, USTR said.

A World Trade Organization dispute settlement panel found in favor of all 18 of the U.S.’s claims that Indonesia is restricting and prohibiting imports of horticultural products, animals and animal products inconsistently with WTO rules, the Office of the U.S. Trade Representative announced (here). The U.S. requested consultations with Indonesia in January 2013 over “unjustified and trade-restrictive” import licensing regimes for those products (see 13011114), which USTR says have been in place since 2012. Alongside New Zealand, the U.S. filed additional complaints in August 2013 (see 13083024) and May 2014 (see 14050930). Specifically, the dispute panel found (here) that Indonesia’s import-restricting measures for horticultural products were inconsistent with General Agreement on Tariffs and Trade Article XI. Measures challenged by the U.S. include Indonesia’s requirement for importers to import at least 80 percent of the quantity for each product allotted on each license or face steep penalties, its restriction on horticultural imports during harvest periods to avoid competition with domestic products, and constraints on importing certain products when market prices fall below government-determined “reference prices,” USTR said. Indonesia has 60 days to appeal the panel’s decision.

The Office of the U.S. Trade Representative released the results Dec. 21 of its 2016 Special 301 out-of-cycle review on IP infringement, which redesignated major Chinese e-commerce company Alibaba and its Taobao online shopping arm to its blacklist. The annual report included Alibaba/Taobao among 21 online markets, along with ExtraTorrent, The Pirate Bay, Putlocker and other websites that have repeatedly appeared in the USTR rankings. The report also included 19 physical markets engaged in selling counterfeit copyrighted materials, including six markets in China.