Peru has decided to maintain the independence of the agency that monitors logging, the Office of the U.S. Trade Representative announced April 9, as that office heralded the success of its environmental consultations (see 1901070023). House Democrats had been concerned that Peru was undermining the agency by moving it into the environment ministry (see 1812190033), and USTR quickly asked for consultations. “We are pleased with Peru’s decision to retain OSINFOR as an independent and separate agency, as required by our bilateral agreement,” USTR Robert Lighthizer said in a statement announcing the change. “This shows that strong enforcement works. I am committed to using enforcement tools to ensure that our trade agreements protect the environment and advance the interests of U.S. workers and businesses.”
The European Union and the U.S. have not formally begun the trade talks first agreed to last July, as the 28-member bloc still does not have a mandate to negotiate. Given that, many observers are doubtful negotiations could make substantial progress this year.
For months, Democrats have said that the 10-year biologics exclusivity period in the new NAFTA is a reason to reject it. A few days ago, House Ways and Means Trade Subcommittee Chairman Rep. Earl Blumenauer, D-Ore., said it is one of the reasons he doesn't want to advance the treaty (see 1903250061). The U.S. gives biologic drug developers 12 years of data exclusivity, and the new NAFTA requires that all three countries provide 10 years of exclusivity. Currently, Canada provides eight years, and Mexico, five. During negotiations, two California Democrats, along with two Republicans, urged the U.S. trade representative to convince Canada and Mexico to grant 12 years' exclusivity, to preserve the U.S. biologic drug industry's economic position.
Businesses and interest groups have until April 18 to petition the Office of the U.S. Trade Representative to modify the Generalized System of Preferences eligibility of any country; to request a waiver of competitive need limitations or continuation of a CNL over the threshold; to add or remove a product to GSP eligibility; to ask USTR to deny a de minimis waiver; and to ask USTR to redesignate an excluded product. The deadline was announced March 22, but it will be officially published in the Federal Register on March 25.
Changes to the textile and apparel rules of origin in Morocco under the U.S.-Morocco Free Trade Agreement, first contemplated in 2015, will take effect April 1, according to a notice scheduled to be published in the March 22 Federal Register. Some Moroccan garments under Harmonized Tariff Schedule of the United States subheadings 6204.44.40, 6204.59.30, 6206.40.30, 6204.29.20, 6204.52, 6204.63.35, 6204.69.25, 6204.69.90 and 6211.43.00 will now meet rules of origin, even if the rayon, or rayon blends, or polyester blends do not originate in Morocco or in the U.S. (see 1609120033).
The Office of the U.S. Trade Representative requested consultations with South Korea because it says South Korea's approach to free trade investigations violates provisions of the U.S.-Korea Free Trade Agreement (KORUS). The FTA says that a party before the Korea Free Trade Commission or the International Trade Commission should be able to review and rebut the evidence against them. "Following extensive efforts to resolve this concern, USTR is requesting consultations at this time because recently drafted amendments to Korea’s 'Monopoly Regulations and Fair Trade Act' fail to address U.S. concerns that KFTC hearings continue to deny U.S. firms due process rights under the KORUS agreement that are necessary to secure a fair competition hearing in Korea," the office said March 15.
The general counsel to the U.S. trade representative said that after five trilateral meetings with the European Union and Japan, the countries have reached "general agreement" on how the World Trade Organization should address subsidies and state-owned enterprises. He said it's not just U.S. blue-collar workers who have grown dissatisfied with globalization, and pointed to the new populist government in Italy, Brexit and the Yellow Vest movement in France.
Because of the input from industry, the direction of the president, and "progress of the additional rounds of negotiations" with China since December 2018, the Office of the U.S. Trade Representative has announced that the duty for about 5,700 tariff lines will remain at 10 percent "until further notice." List 3 of the Section 301 tariff action was originally due to increase to 25 percent on Jan. 1, 2019, and that increase was delayed until March 2 because of the status of negotiations. This latest announcement was expected, because President Donald Trump tweeted Feb. 24 that the increase would not happen (see 1902240001). The 10 percent rate of additional duty for about $200 billion worth of Chinese products went into effect Sept. 24, 2018. The USTR noted that the Section 301 statute authorizes his office "to modify or terminate any action being taken under Section 301" if the action is no longer appropriate."
It's not clear yet whether the United Kingdom will be leaving the European Union customs union, but nonetheless, the Office of the U.S. Trade Representative released its negotiating objectives late Feb. 28. Many are similar to what was achieved in the NAFTA rewrite.
U.S. Trade Representative Robert Lighthizer and Japan's Economic and Fiscal Policy Minister Toshimitsu Motegi are planning for meetings in April and May, with an aim of defining the scope of trade talks before President Donald Trump meets with Japanese Prime Minister Shinzo Abe in late May, according to a report in Nikkei Asian Review. "Tokyo believes that by starting trade talks in the spring it can dodge [Section 232 auto] tariffs for the time being. But there are concerns that Trump could play the tariff card nonetheless if Japan's approach fails to satisfy," the article said. A USTR spokeswoman said it has no announcement on the next meeting between Lighthizer and Motegi.