House members that are leaders on trade, in the center and on the left, say that U.S. Trade Representative Robert Lighthizer is recognizing the ways he's going to need to change the new NAFTA to get Democratic votes, but it's not yet clear how far he'll be willing or able to go. Wisconsin's Rep. Ron Kind, a New Democrat and free trader, said in a hallway interview with International Trade Today May 10, "We're kind of at an impasse. They keep telling us there's no way they can open this up and tweak it, and make this minor adjustment and we're saying ... we haven't met a trade agreement yet where members of Congress weren't allowed to get our fingerprints on it a little bit, massage it here and there for it to get to 218 [votes]. So, until somewhat blinks on that front ... ."
Since the NAFTA rewrite was completed, it's been "fascinating" to hear from the groups who have always opposed trade deals in the past, said Rep. Earl Blumenauer, the Democrat from Oregon who leads the House Ways and Means Trade Subcommittee. While he said that union leaders aren't comfortable with NAFTA 2.0, and they want changes to it, they "will kind of acknowledge they don't want to withdraw" from NAFTA, and say that "NAFTA 2.0 represents an improvement."
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, is now saying it's not his stubbornness on getting Mexican and Canadian retaliatory tariffs lifted that stands in the way of the Senate ratifying the new NAFTA. He said he's looking for "any way of moving ahead," but added, "let’s just assume that Chuck Grassley said that we ought to go ahead, regardless of whether the tariffs come off, it isn't going to happen. ... You're never going to get the 51 votes through the United States Senate" in that scenario, he said.
After a day when the stock markets responded as if President Donald Trump's May 5 tweet about raising tariffs on Chinese goods was an empty threat, U.S. Trade Representative Robert Lighthizer told reporters from a number of national outlets that the new tariff rate -- jumping from the current 10 percent to 25 percent -- would take effect at 12:01 a.m. on May 10.
A methodology the U.S. began using in 2017, after the U.S. Trade Preferences Extension Act of 2015, should be talked about more "to ensure such practices do not result in more trade-restrictive effects than necessary," South Korea said at the World Trade Organization Committee on Anti-Dumping Practices meeting, according to a Geneva trade official. The approach, called "particular market situation," is supposed to be better than home market prices in cases of state intervention in markets. Trade hawk Peter Navarro, an assistant to President Donald Trump and the White House's director of Trade and Manufacturing Policy, encouraged its use more often (see 1703240036). The first case was on oil country tubular goods from South Korea. The same methodology also has been used on Indonesian and Thai exports.
Twenty-five House members, led by former New Dems Chairman Jim Himes, D-Conn., asked U.S. Trade Representative Robert Lighthizer not to terminate India as a beneficiary under the Generalized System of Preferences program before a new government is seated in that country. India is in the midst of elections now. India could be terminated as early as May 4, since notice was given March 4. India is the top beneficiary of GSP, accounting for $5.6 billion of the program's $21.1 billion in imports last year, according to USTR. Almost 12 percent of India's exports to the U.S. are covered by GSP.
Calling the Section 232 exclusion process for steel and aluminum products "a master class in government inefficiency," Rep. Jackie Walorski, R-Ind., sent a letter to Commerce Secretary Wilbur Ross pointing out patterns of denials that she suspects mean the Commerce Department puts the burden of proof on requesters, not on the producers who object.
AFL-CIO President Richard Trumka tweeted earlier this week that workers "want to get to yes" on the NAFTA rewrite, and House Speaker Nancy Pelosi said May 2 that Democrats in the House do, too.
U.S. Trade Representative Robert Lighthizer told one Democrat the agency would be starting a Section 301 exclusion process for the largest, third tranche of goods subject to tariffs by the end of April (see 1905020030), but he avoided committing to finishing evaluations of pending exclusions once tariffs are lifted. "USTR will consider all options in the event tariff rates are modified," he wrote to Rep. Jackie Walorski, R-Ind. No exclusion process has launched, even though the April 30 target has passed. USTR's spokeswoman did not respond to a question by press time about when it might launch. All of Lighthizer's responses were posted April 24 as an addendum to the February hearing's transcript.
The World Trade Organization formally adopted the Russia-Ukraine panel ruling, the first time the WTO tackled the national security exception from the General Agreement on Tariffs and Trade (see 1904120022). The case has implications for the Section 232 tariffs on steel and aluminum, which have hit U.S. allies as well as strategic competitors. The panel had found that the Russian Federation had met the requirements for invoking the national security clause in restricting transit of goods across its territory to Ukraine, because Russian seizure of Ukrainian territory (Crimea) counts as a time of international emergency.