President Donald Trump, speaking at an April 15 rally designed to celebrate the tax law's changes, continued to threaten the European Union with car taxes if it doesn't change its policies. "We're in massive trade negotiations, as you know, because our farmers haven't been treated properly for many years," he said. He then said negotiations with China are going well, but said the EU needs to recognize things are different now.
Canada will appeal the portion of the World Trade Organization panel that went against it in a softwood lumber antidumping penalty dispute, Canadian Foreign Minister Chrystia Freeland announced April 15. The decision, which she said questioned some aspects of the U.S. duties' calculation, did allow for zeroing, which had always been ruled out of bounds in previous WTO cases (see 1904100046). "We firmly believe that the U.S. duties on Canadian softwood lumber are unfair and unwarranted. That is why we are challenging these duties at the WTO and under NAFTA," Freeland said. "We welcome the recent WTO panel ruling that the United States did not follow the rules in calculating its anti-dumping duties on Canadian softwood lumber.... Canada will be appealing the WTO panel’s separate findings on the U.S. practice of zeroing and its use of the differential pricing methodology." She noted that the WTO has ruled against zeroing more than 20 times.
A recent blog post by Public Citizen, a nonprofit organization that rallied opposition to the Trans-Pacific Partnership, identifies changes to NAFTA that it says make it possible that Democrats will support the revision. The April 12 post says the "major rollback of investor-state dispute settlement," the wage content element of the auto rules of origin as well as the tighter rule, and the new labor chapter are all reasons that traditional free-trade foes have not lined up to defeat the pact in Congress. "That congressional Democrats, unions and others who have outright opposed past pacts seek improvements rather than the deal’s demise reveals there is a path to build broad support for it," Public Citizen said. The blog ostensibly was an analysis of how the International Trade Commission might estimate the economic impact of the NAFTA revision, but concluded that its "report is not likely to reveal much about either the pact’s probable effects or its prospect for congressional passage."
Mexico's Economy Secretary Graciela Márquez, according to a readout supplied by the Mexican government on April 12, asked Commerce Secretary Wilbur Ross to work toward reaching an agreement on a new tomato suspension agreement as quickly as possible (see 1902070024). The release said both officials agreed that Commerce is seeking to negotiate an agreement that is in the interests of both countries.
Former Rep. Joe Crowley, who is serving as an honorary chairman of Pass USMCA, did not endorse the pre-August timeline that Republican House members have been saying is critical to passing the U.S.-Mexico-Canada Agreement. But Crowley, who was defeated in a primary by Alexandria Ocasio-Cortez last year, said, "I think time is of the essence. I don't think we have forever to do this."
The European Council approved a negotiating mandate for trade talks with the U.S., but says it will not finish a free-trade agreement until the steel and aluminum tariffs on its member countries are lifted. The mandate, which was approved April 15, excludes agricultural trade from the talks.
Now that the World Trade Organization has ruled that Russia was justified in blocking transit of Ukrainian goods across its territory under the General Agreement on Tariffs and Trade's national security exception, lawyers are trying to project how a different panel will view the U.S. use of the same rationale for its steel and aluminum tariffs.
A report in the Japanese press says that Japan's Economic and Fiscal Policy Minister Toshimitsu Motegi will meet with U.S. Trade Representative Robert Lighthizer April 15-16 in Washington, but that auto export quotas, something Lighthizer pushed for in the 1980s, are unacceptable. The free-trade agreement talks, first announced in September 2018 (see 1809260049), could address non-tariff barriers. Nikkei Asian Review reporters say that Japan "is willing to discuss the streamlining of customs procedures should Washington demand them. But it does not plan to negotiate issues that will take years to realize because of the legislative revisions required, including the drug-pricing system, financial regulations and food safety standards." American drug makers are frustrated by new price constraints in Japan, and want that addressed (see 1904030043).
The American Apparel and Footwear Association is endorsing the Mongolia Third-Neighbor Trade Act introduced this week in the House (see 1904110041). "Mongolian cashmere is a brand in and of itself. This bill would provide a market for Mongolia’s authentic cashmere, supporting growth and creating jobs throughout the U.S. cashmere value chain,” AAFA CEO Rick Helfenbein said.
Most of the world is shifting more of its imports to relatively nearby countries -- for instance, trade within Asia, or Western European Union countries importing from Poland, Morocco and Turkey -- according to a new report from the McKinsey Global Institute presented April 11 at the Peterson Institute for International Economics. The cost of managing far-flung suppliers across many time zones, combined with rising wages in China, proved "much higher than expected," according to Susan Lund, leader of the project. But the United States is an outlier. The proportion of North American trade that's done within the NAFTA countries is down over the last five years.