GHY Tradelines

(Bloomberg)

U.S. rejection of TransCanada Corp.’s Keystone XL pipeline would be a “significant irritant” to the relationship between Canada and its biggest trading partner, said Canadian Trade Minister Ed Fast.

Fast said that he’s optimistic the project will be approved if the decision is made based on science and the economic benefits that it would bring to both countries.

“If the Keystone XL pipeline is turned down, clearly it would be a significant irritant to the Canada-U.S. relationship,” Fast said. “That said, we will continue to be each other’s largest trading partners. There’s no doubt in my mind that the governments of both countries will continue to find new ways of deepening and expanding our trade relationship and using that relationship to drive prosperity in both of our countries.” Read more here.
 

(Keith Bradsher – NYT)

The Obama administration and the European Union have each decided to negotiate settlements with China in the world’s largest antidumping and antisubsidy trade cases involving China’s roughly $30 billion a year in solar panel shipments to the West, officials and trade advisers in Beijing, Brussels and Washington said.

The plan that is starting to take shape would essentially carve up the global solar panel market into a series of regional markets. It would sharply raise the price of solar panels exported from China, the world’s dominant producer, by requiring Chinese companies to charge more while limiting the total number of solar panels they could ship.

In exchange, Chinese companies would no longer be charged steep taxes on their exports of solar panels. The United States is already collecting tariffs totaling about 30 percent while the European Union is expected to impose similar tariffs of about 50 percent on June 5, and may backdate them to March 5. Read more here.
 

(International Trade Administration)

U.S. Acting Secretary of Commerce Rebecca Blank today honored 57 U.S. companies and organizations that export goods or services at the 2013 President’s “E” Awards ceremony. This year marks the 51st anniversary of the “E” Awards, which recognize significant contributions to increasing American exports. Today’s set of honorees, many of which are small and medium-sized enterprises, was the largest group in three decades to receive this distinguished award.

“These companies truly represent the spirit of American business and entrepreneurship – bringing some of the best and most innovative products and services to the global marketplace with the sought after ‘Made in the USA’ label,” said Acting Secretary Blank. “Exports continue to be the engine of our economy, supporting nearly 10 million good, high-wage jobs in cities and communities across the country. Furthermore, the success of these exporters reflects historic progress in U.S. export growth. In 2012, U.S. exports hit an all-time high of $2.2 trillion, with record levels of sales to more than 70 trading partners, including major emerging markets and 11 free trade agreement (FTA) partners.” Read more here.
 

(BBC News)

Barack Obama and Xi Jinping will meet from 7-8 June at an estate in Rancho Mirage, a U.S. statement said. Topics on the agenda are likely to include North Korea, cyber espionage, tensions in the South China Sea and Syria.

The meeting will be the first between the two since Mr Xi was named president of China in March. Mr Xi, 61, made his first visit as president to Russia, followed by three African nations. He has visited the U.S. in the past, and spent time there as a young man.

The two men would hold “in-depth discussions on a wide range of bilateral, regional and global issues”, the White House said. “They will review progress and challenges in U.S.-China relations over the past four years and discuss ways to enhance co-operation, while constructively managing our differences, in the years ahead.” Read more here.
 

(Mark Weisbrot – Huffington Post)

The Trans-Pacific Partnership (TPP) is a very special trade agreement. It is so special that our government officials who are negotiating it want to keep it completely secret from us. It’s like a special Christmas present so they want it to be a surprise! And to make sure it’s a surprise, they won’t even let a single member of Congress see what they are negotiating. However, hundreds of corporations have been given access to the draft text.

This should give you some idea of our government’s trade agenda. President Obama says that he wants to create jobs through trade, but this agreement is more likely to cost jobs here than to create them. Leaked drafts of parts of the agreement indicate that our negotiators are trying to increase patent protection for pharmaceutical companies, for example. This will not create jobs, although it may make our big drug companies and their shareholders richer.

When our government tells us such an agreement will create jobs in the U.S., they are saying that the agreement will increase our exports faster than imports. So, for the TPP, they are saying that we will increase our exports to Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and now possibly Japan faster than our imports from these countries. That is unlikely. We were promised the same thing with NAFTA two decades ago, but it didn’t work out that way at all. Read more here.
 

(Huffington Post)

President Barack Obama and British Prime Minister David Cameron on Monday pledged to pursue a broad trade agreement between the U.S. and European Union, amid growing domestic unrest with the Obama administration’s plans to include new political powers for corporations in the deal.

Negotiations have not formally begun, but a series of meetings between U.S. and EU officials have established some ground rules and the preliminary scope of the talks. Since tariffs are already low or nonexistent, the agreement will focus on regulatory issues. That emphasis has concerned food safety advocates, environmental activists and public health experts, who fear a deal may roll back important standards.

Obama and Cameron were vague on Monday, while celebrating the potential for a trade pact to create jobs. “Our extensive trade with the U.K. is central to our broader transatlantic economic relationship, which supports more than 13 million jobs,” Obama said at a press conference Monday. “I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive.” Read more here.
 

(Marietje Schaake – EurActiv)

With the eurozone in crisis, a downward spiralling economy, rising unemployment taking centre stage throughout the EU, one word has created a positive buzz in Brussels lately: TTIP (pronounced: Tee-TIP). From Commission officials and trade MEPs to business and consumer rights organisations, the prospect of reaching a broad Transatlantic Trade and Investment Partnership has brought much needed energy and excitement to Washington and Brussels.

It is not the first time the world’s largest trading blocs have tried to break down remaining barriers in the vast amounts of trade and investment crossing the Atlantic. This time the momentum seems right and stakes are high. Political capital has been invested by President Barack Obama and EU leaders alike. Besides the US and EU economies languishing for jobs and growth, the window of opportunity to jointly set standards for future economies is closing rapidly. Emerging trade blocs are evolving into powerhouses wishing to play increasingly active and competitive roles on the world stage. Read more here.
 

(Danielle Kurtzleben – US News)

If confirmed, the wealthy Hyatt Hotels heiress would be the second CEO named to Obama’s second-term cabinet

President Obama nominated Penny Pritzker on Thursday to be the next Commerce Secretary. The seat has been filled by Acting Secretary Rebecca Blank since last summer, when John Bryson resigned, citing health concerns.

“Penny is one of our country’s most distinguished business leaders,” Obama said on Thursday, speaking from the Rose Garden. “She knows that what we can do is to give every business and ever worker the best possible chance to succeed by making America a magnet for good jobs.”

Pritzker has an impressive business resume and pedigree alike: she is the CEO of investment firm PSP Capital Partners and Pritzker Realty Group, and is also an heir to the Hyatt Hotels fortune. Here’s why the president chose this real estate magnate and one-percenter to be a top economic official… Read more here.
 

(USA Today)

Delivery trucks from Mexico line up early in the morning at the border crossing in Tijuana, where 20 million flat-screen TVs were manufactured last year. Traffic studies found cargo trucks, even empty ones, wait 90 minutes on average to cross into the USA as U.S. Customs agents check vehicles for contraband, and then spend at least an hour waiting to get back into Tijuana.

“Trucks that are a critical element of a competitive supply chain may spend three to four hours waiting in line during a day,” says Kenn Morris, president of the Crossborder Group, a San Diego consultancy, which commissioned the traffic studies. “These kinds of delays are both too typical and really strangle border economies … and put more barriers between what should be two strong economic partners.”

Improving on the way goods flow from Mexico to the USA is what President Enrique Peña Nieto intends to emphasize Thursday when President Obama visits Mexico City. […] U.S.-Mexican trade has risen as Mexico becomes an increasingly attractive locale for U.S. manufacturers that are seeing the cost to produce goods in China go up. Trade between Mexico and the USA topped $500 billion in 2012. Read more here.
 

(Journal of Commerce)

President Barack Obama today said he will nominate Michael Froman to serve as U.S. Trade Representative. The pick was welcomed by business groups, Politico reports.

Peter M. Robinson, president and CEO of the United States Council for International Business, praised the selection of Froman. “This is an excellent choice,” he said. “Michael Froman has been a positive force for trade within the Obama administration, and is well respected in the business community. His nomination could not come at a better time, as the U.S. begins trade and investment talks with the European Union and pursues the Trans-Pacific Partnership.” Read more here.
 

(STR Trade Report)

President Obama is expected to announce this week his intention to nominate Michael Froman as U.S. trade representative and Penny Pritzker as commerce secretary.

Froman currently serves as Obama’s deputy national security adviser for international economic affairs and is generally regarded as an experienced negotiator with close access to the president. These traits are likely to be key to successfully concluding and then securing congressional approval of sweeping free trade agreements with 11 Asia-Pacific countries as well as the European Union. A Financial Times article quoted a former Bush administration official as saying that “Mr. Froman as USTR is good news for all those wishing to see a more globally engaged United States.”

Pritzker is a Chicago businesswoman who played significant roles in the president’s 2008 and 2012 campaigns. Press reports indicate that she was considered for the position of commerce secretary during Obama’s first term and has undergone a “long vetting process” this time around.

Both Commerce and USTR are currently without Senate-confirmed chiefs, as former USTR Ron Kirk departed in March and former Commerce Secretary John Bryson left for health reasons last summer. Deputy USTR Demetrios Marantis is currently serving as acting USTR and will likely return to that post once Froman is confirmed. Acting Commerce Secretary Rebecca Blank will take the position of chancellor of the University of Wisconsin this summer.

Still unclear is whom the president will nominate as commissioner of U.S. Customs and Border Protection, which is currently being helmed by Acting Chief Operating Officer Thomas Winkowski after Acting Commissioner David Aguilar retired March 30.
 

(Mike Palmedo – Infojustice.org)

Pressure on Capitol Hill for Trade Promotion Authority (TPA) is growing.

TPA – called “fasttrack” in the 1990s when it was used to negotiate NAFTA – allows the executive branch to negotiate trade agreements that Congress cannot amend during the ratification process.  It also sets procedural rules under which trade agreements are negotiated, and the objectives of the United States for the outcomes of trade negotiations.

At last week’s Senate Finance Committee hearings on the Trans Pacific Partnership, Chairman Max Baucus said that he “would like to see a bipartisan TPA [Trade Promotion Authority] bill introduced by June.” [...]

TPA was last granted to the executive branch in the Trade Act of 2002, but the authority expired in 2007. The Trade Act of 2002 included specific negotiating objectives for USTR for each section of trade agreements, including intellectual property.  Assuming the upcoming TPA legislation is structured the same way as the expired TPA, this presents an opportunity for public interest IP advocates to weigh in on what USTR’s goals should be when it tables text for future agreements. Read more here.
 

(Dean Baker — Aljazeera)

The US-EU free trade pact and TPP are about securing regulatory gains for major corporate interests, writes Baker.

In polite circles in the United States, support for free trade is a bit like proper bathing habits: It is taken for granted. Only the hopelessly crude and unwashed would not support free trade.

There is some ground for this attitude. Certainly, the US has benefited enormously by being able to buy a wide range of items at lower cost from other countries. However, this does not mean that most people in the country have always benefited from every opening to greater trade.

And it certainly does not mean that the country will benefit from everything that those in power label as “free trade”. That is the story we are seeing now as the Obama administration is pursuing two major “free trade” agreements that in fact have very little to do with free trade and are likely to hurt those without the money and power to be part of the game. Read more here.
 

(The Economist)

An historic trade pact between America and Europe needs saving

In an age of small-bore politics, America and the European Union have a chance to achieve something large: a transatlantic pact that would, at a stroke, liberalise a third of global trade. At a time when emerging powers are closing fast on a fretful West, a free-trade area covering America and the EU would offer something more. Done right, it could anchor a transatlantic economic model favouring openness, free markets, free peoples and the rule of law over the closed, managed visions of state capitalism.

Right now, the pact is in trouble, beset by small-mindedness and mutual suspicion. This is madness. A free-trade pact has never had such support in the chancelleries of Europe, as well as in the West Wing of the White House. It is backed by compelling logic. Yet supporters also know that time is desperately short: this political window may close in just 18 months, says a European official at the heart of the process. This must be done swiftly, on “one tank of gas”, says a senior American. Read more here.
 

(U.S. State Dept.)

As the pace of technological advance accelerates, and as technological capability spreads around the world, the need to update our Export Controls is increasingly urgent. We are no longer in an era in which a handful of countries hold the keys to the most sensitive technologies, as was the case during the Cold War. Today, a whole range of nations have advanced technological capability.

At the same time, because of the diffusion of technology, many U.S. companies must collaborate with foreign partners to develop, produce and sustain leading-edge military hardware and technology. Their survival depends on it.

But because our current export controls are confusing, time-consuming, and – many would say – overreaching, our allies increasingly seek to ‘design out’ US parts and services, thus avoiding our export controls and the end-use monitoring that comes with them in favor of indigenous design. This threatens the viability of our defense industrial base, especially in these austere times.

Click here to read the complete testimony of Tom Kelly, Acting Assistant Secretary, Bureau of Political-Military Affairs made before the House Foreign Affairs Committee Hearing on Export Control Reform.

Related: Officials Detail Export Control List Reforms, Offer No Timeframe on Additional Changes (STR Trade Report)

(Jerry Zremski – Buffalo News)

The federal government is considering imposing a fee on passenger vehicles and pedestrians crossing the Canadian and Mexican borders.

The Department of Homeland Security suggested studying the imposition of such a fee in its fiscal 2014 budget proposal, which was released last week. But the idea attracted little notice until Thursday, when Rep. Brian Higgins, D-Buffalo, lashed out at the idea as a potential killer of cross-border business.

“At a time when we are looking to increase economic activity at our northern border, we should not be authoring proposals that would do the reverse,” Higgins said in a letter to Homeland Security Secretary Janet Napolitano. Read more here.
 

(STR Trade Report)

U.S. federal agencies are preparing for negotiations on a free trade agreement with the European Union that could begin as early as June. Interested businesses have several upcoming opportunities to raise specific issues in the context of these negotiations.

The International Trade Commission launched April 17 an investigation of the probable economic effect of duty-free imports under the Transatlantic Trade and Investment Partnership. The ITC will also evaluate the probable economic effect of eliminating tariffs on certain EU agricultural products (see below for link to complete list) on U.S. industries producing those goods as well as the U.S. economy as a whole. The ITC expects to submit its confidential report to the Office of the U.S. Trade Representative by Sept. 26.

The ITC will hold a public hearing in connection with this investigation on June 5, and requests to appear at this hearing are due no later than May 16. The ITC is also inviting written submissions for the record no later than June 18.

As previously reported, USTR is conducting its own inquiry into U.S. interests and priorities in the TTIP to help it develop negotiating positions. Less than 30 days remain to meet the May 10 deadline for businesses to submit input to USTR on the reduction or elimination of tariff and non-tariff barriers, specific concessions that should be sought, and various other issues. May 10 is also the deadline for requests to present testimony at USTR hearings to be held May 29 and 30.

To learn how the TTIP could affect your company and what steps you can take to impact the final outcome, contact Nicole Bivens Collinson in ST&R’s Washington, D.C., office at 202-730-4956.
 

(STR Trade Report)

The Obama administration issued April 12 a presidential permit for the construction, connection, operation and maintenance of a second bridge between the U.S. and Canada in the Detroit area. The State Department said this permit “contributes to ensuring that our border infrastructure supports increased competitiveness, job creation and broad-based prosperity” and that the planned bridge “will help to meet future capacity requirements in a critical travel corridor” and “promote cross-border trade and commerce.”

The so-called New International Trade Crossing is expected to be built about two miles south of the 84-year-old Ambassador Bridge, which is the busiest border crossing in North America and carries about 25% of all goods shipped between the U.S. and Canada each year. Businesses have complained for years of congestion and backups at this bridge that result in delayed deliveries and production slowdowns. They worry that the problem will continue to worsen, with the 2.7 million trucks currently crossing the bridge each year likely to double by 2035. A second bridge, with updated customs facilities and improved connections to highways, is expected to make transportation easier and thus aid automakers and other industries with production facilities on both sides of the border.

Press sources report that construction of the bridge is not likely to begin until 2015 and could be completed by 2020 unless delayed by legal disputes already filed by the owner of the Ambassador Bridge.
 

(STR Trade Report)

The fiscal year 2014 budget proposal released by President Obama this week includes funding increases for many federal agencies with trade-related responsibilities.

Commerce

- $520 million (up $64 million from FY 2012) for the International Trade Administration to support the National Export Initiative, including $22 million for the Interagency Trade Enforcement Center and $20 million to support implementation of the SelectUSA program, which encourages foreign direct investment in the U.S.

- $12 million for the Economic Development Administration to create a Regional Export Challenge, a competitive grant program that will support U.S. regions that develop and implement sustainable export action plans to proactively identify and support firms and sectors with the greatest export potential

- $112 million (up $11 million) for the Bureau of Industry and Security to support ongoing work under the Export Control Reform Initiative, including an additional $8.3 million for expanded export licensing and enforcement operations as controlled items shift from State Department jurisdiction

- the expansion of export control officers to Germany (covering Europe), Turkey (covering Malta, Cyprus, Syria, Jordan, Egypt, Lebanon and Israel) and the United Arab Emirates (covering Pakistan, Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and Yemen)

- organizational changes such as focusing on higher priority enforcement and compliance activities such as antidumping and countervailing duty casework and ITEC; reducing the number of Global Markets specialists who combat non-tariff barriers in customs, standards and transparency in markets that are not priorities or have a limited return on investment; and consolidating GM staff to cover priority markets such as free trade agreement partners, emerging markets such as China and India, and next tier markets such as Turkey and Indonesia

CBP

- $12.9 billion for U.S. Customs and Border Protection, including $221 million for 1,600 new CBP officers and mobile equipment to speed the processing and inspection of passengers and cargo at U.S. ports of entry

- $3.3 million for the automation and centralization of CBP processing of all single transaction bonds

- increases in customs inspection user fees

- transfer of land border port of entry facilities from the General Services Administration to CBP

FDA

- an additional $295.8 million to bolster the Food and Drug Administration’s food safety efforts, primarily through implementation of the Food Safety Modernization Act

- new user fees for food facility registration and inspection, food importers, and cosmetics and food contact substance notifications

- a $10 million increase for FDA efforts to detect and address the risks of food and medical products and ingredients manufactured in foreign countries

Other Trade Agencies

- $85.1 million for the International Trade Commission (up $5.1 million)

- $56.2 million for the Office of the U.S. Trade Representative (up $5 million)

- $117 million for the Consumer Product Safety Commission (up $2 million)

- $25 million for the Federal Maritime Commission (up $1 million)

(Aircargo Asia-Pacific)

Not every area of the recent proposed US budget involves cuts, with Transportation seeing a 50.2% increase to US$127 billion to pay for improvements to the nation’s runways, railways, roads, bridges, transit systems and border crossings. Key to the increase is their link to new jobs.

Forty billion dollars would be earmarked for critical infrastructure projects such as urgent repairs to roads and fixing nearly 70,000 structurally deficient bridges across the country. Another US$10 billion would go to state and local innovation in infrastructure development. Read more here.