Discussions of auto rules of origin are getting more specific as NAFTA talks continue, according to Canada's Foreign Minister Chrystia Freeland, who spoke to reporters outside the headquarters of the Office of the U.S. Trade Representative on April 25. "We are starting to get into a more detailed conversation, which is absolutely necessary, given the fiendish complexity of rules of origin for cars -- and I think it's a really good thing we're starting to dig into the details," she said. Some say that the U.S. has compromised very little on its higher rules-of-origin demands (see 1804230048), as U.S. Trade Representative Robert Lighthizer is not convinced by auto companies' complaints.
The Office of the U.S. Trade Representative, which is reviewing whether India, Indonesia and Kazakhstan should continue to be Generalized System of Preferences recipients (see 1804130027), announced the date of a public hearing on the matter. The hearing will be held June 19 at 10 a.m. EDT, and public comments are due by June 5.
The Office of the U.S. Trade Representative accepted the Consumer Technology Association’s request for Sage Chandler, vice president-international trade, to testify at the May 15 public hearing in opposition to the Trump administration’s proposed 25 percent tariffs on certain goods imported from China, a CTA spokeswoman said in an email. Of the 1,300 "product lines" in the USTR's list of proposed tariffs, CTA members have so far identified 190 HTS codes representing goods they import from China, and those goods were worth $25 billion last year, Chandler said in comments posted April 25.
Best Buy wants to testify at the May 15 hearing on the Trump administration’s proposed 25 percent tariffs on goods imported from China (see 1804040019), the company said in a “request to appear” filing with the Office of the U.S. Trade Representative. At the hearing and in written comments Best Buy will submit by the May 11 deadline, Chief Marketing Officer Mike Mohan will urge the USTR to eliminate from the list of targeted products flat-panel TVs under HTS subheading 8528.72.64, the filing said. “Best Buy intends to provide testimony on the inefficacy of the proposed tariffs in achieving the objectives outlined by USTR”; the impact tariffs will have on Best Buy, the industry and U.S. consumers; “and alternative remedies that USTR should consider instead of the tariffs,” it said. Analysts estimate TVs classified under the subheading include virtually all the sets that are imported from China, including Best Buy’s Insignia-brand private-label product (see 1804090008). Nearly 19 million TVs with a value of $3.9 billion were imported from China in 2017 under the classification.
Business interests who depend on NAFTA are trying to piece together a strategy for how to handle changes under a new deal, but there are differing opinions on what will happen to car rules of origin. Trade lawyer Daniel Ujczo, who chairs the Canadian-U.S. trade practice at Dickinson Wright, said in an interview that the U.S. trade representative is looking for a 75 percent North American content on high value parts, such as the engine and transmission, but may allow lower percentages for other tiers of parts. But Ujczo said his understanding is that the lower hurdle for parts doesn't eliminate the top-line requirement that 85 percent of cars' value must come from NAFTA partner countries in order to qualify for duty-free status.
The American Association of Port Authorities urged the U.S. trade representative to consider the economic impact of tariffs before implementing them. "While AAPA does not comment on specific trade sanctions, prior to implementing any trade remedies or sanctions, we urge you to carefully consider the negative impacts these actions would have on port and other trade-related American jobs nationwide, including the effects of likely retaliatory responses from our trading partners," the trade group wrote to Robert Lighthizer on April 19.
The Mexican presidential front-runner is prepared to pick up NAFTA negotiations where the current government leaves off, according to Graciela Marquez Colin, a top economic advisor to Andres Manuel Lopez Obrador. Colin, who was speaking April 17 to a Washington audience, said Lopez Obrador appreciates the U.S. trade representative's goal of raising wages in the Mexican auto sector. "We support the idea of wage increases in NAFTA in autos because there would be spillover to other high skill industries," she said. But she cautioned, "Regional content changes should preserve the region's competitiveness." The Lopez Obrador administration does want to return to the growth rates of the '50s and '60s, but not to the tariff walls in place in Mexico at that time, she said. "It's not a return to protectionism." Colin said investor protections in NAFTA have worked well, and eliminating them would be NAFTA 0.5 rather than NAFTA 2.0. And, she said, a five-year sunset clause would be like renegotiating NAFTA all the time. If Lopez Obrador wins on July 1, Colin said, she and her colleagues are prepared to implement an agreement, if one exists, or to continue working. But, she said, Mexico would want a deadline to reach an agreement. "You have to be clear you're not negotiating NAFTA all the time." President Donald Trump recently said as far as he's concerned, NAFTA negotiations can go on forever, because the uncertainty is dissuading American companies from opening Mexican plants.
Eight months after it was first announced (see 1708170046), Argentina and the U.S. have hammered out the details of how U.S. pork exports to Argentina will resume, 26 years after that country banned the product. Agriculture Secretary Sonny Perdue and U.S. Trade Representative Robert Lighthizer announced the agreement on April 13. "This breakthrough is the result of efforts by this Administration to help America’s farmers and ranchers reach new markets and ensure fair trade practices by our international partners," Perdue said in a statement. "Once the people of Argentina get a taste of American pork products after all this time, we’re sure they’ll want more of it." The U.S. estimates volumes could be $10 million a year -- which is one-tenth the size of the Chinese market, where new 15 percent tariffs have been applied to U.S. pork (see 1804020009). The National Pork Producers Council welcomed the news with a statement from President Jim Heimerl.
Bahrain has signed a memorandum of understanding with the U.S. that clarifies that Bahrain will continue to accept U.S. export certifications on food and will consult with the U.S. before adding new requirements on agriculture or food imports from the U.S. The Office of the U.S. Trade Representative announced the agreement April 9. Bahrain imported $76 million in agricultural products and seafood from the U.S. in 2017.
The Office of the U.S. Trade Representative is seeking input on a U.S. challenge to Indian export subsidies at the World Trade Organization (see 1803140039), the agency said in a notice. Comments are due by April 16. The U.S. contends that five Indian government programs provide $7 billion in illegal subsidies for exports and are no longer legal because India has grown beyond the low-income country category.