An expert panel evaluating the changes associated with the labor chapter under the U.S.-Mexico-Canada Agreement say that there are a lot of unknown details on the rapid response mechanism to enforce complaints about collective bargaining in Mexico. The panel spoke at the Washington International Trade Association on Jan. 16.
The tariffs on billions of dollars worth of European goods because the World Trade Organization found the EU illegally subsidized Airbus puts Europe in a position where it will need to take similar action, assuming the WTO rules that state tax credits for Boeing also distorted trade. “This is where I don't want to be,” European Union Commissioner Phil Hogan said during a press roundtable with reporters late Jan. 16.
Whether the flow of counterfeit goods shipped from China will abate as a result of the phase one U.S.-China trade agreement is yet to be seen, but Craig Allen, president of the U.S.-China Business Council, said the “language was pretty detailed and complete.” Allen, who was responding to a question from International Trade Today during a Jan. 16 conference call, said this represents “a huge shift in the official Chinese attitude. We should be appreciative of the Chinese government commitment here to better police that [counterfeit problem] internally and at their own border.”
The joint statement on how to confront Chinese abuses through the World Trade Organization (see 2001140044) has been the highlight of the first visit to Washington by Phil Hogan, the new European Union Trade Commissioner. Hogan, who spoke to the Center for Strategic and International Studies Jan. 16, acknowledged that the WTO doesn't have the capacity to act on these ideas “quickly enough.”
The Senate overwhelmingly passed the new NAFTA, though it wasn't by quite as wide a margin as in the House, where more than 95 percent of votes were for the trade pact. The vote, which happened just before the reading of the impeachment articles against President Donald Trump on Jan. 16, was 89-10, with only one Republican voting no. Most of the Democrats who voted no did so because the U.S.-Canada-Mexico Agreement doesn't address climate change.
The Senate passed the U.S-Canada-Mexico Agreement, the replacement for NAFTA, with an 89-10 vote. Now the implementing bill heads to President Donald Trump's desk to be signed. The Canadian parliament must also still ratify the agreement.
Four Senate committees reported the U.S.-Mexico-Canada Agreement out, clearing the way for a floor vote Jan. 16. The Foreign Relations Committee and Commerce Committee had voice votes. The Health, Education, Labor and Pensions Committee voted 22-1 in favor, with Sen. Bernie Sanders, independent senator from Vermont, the only no vote, though Sen. Bill Cassidy, R-La., who previously voted no in the Finance Committee, was not present and did not vote by proxy. In the Appropriations Committee, 29 senators voted for the implementing bill, and two voted no -- Sen. Jack Reed, D-R.I., and Sen. Brian Schatz, D-Hawaii.
The U.S. will reduce tariffs on about 3,800 8-digit tariff lines from 15 percent to 7.5 percent in 30 days, a senior administration official said. That's the day the phase one agreement with China will go into force, he said on a conference call with reporters. Aside from that issue, most of the agreement affects exporters and companies that invest in China more than it does importers.
If Europe, Japan and the U.S. are able to convince the World Trade Organization to rewrite the language on subsidies and countervailing measures from the Uruguay Round Agreements, cases against Chinese subsidies -- or antidumping and countervailing cases responding to them -- would be tilted in favor of the market economies. The U.S. trade representative, Europe's new trade minister and the Japanese trade minister issued a joint statement Jan. 14 that the agreement on subsidies needs to have additional language prohibiting all “unlimited guarantees; subsidies to an insolvent or ailing enterprise in the absence of a credible restructuring plan” and subsidies to companies operating in sectors with overcapacity that can't get long-term financing from independent commercial sources. They also agree that “certain direct forgiveness of debt” should be categorically prohibited in international trade law, but they did not specify what forgiveness crosses the line.
The Senate Environmental and Public Works Committee sent the U.S.-Mexico-Canada Agreement out of committee on a 16-4 vote, and the Budget Committee moved the implementing bill with a voice vote, though several senators voted no there, as well.