[CTC] Trump’s list of top USTR contenders takes shape

[Arthur Stamoulis]

http://www.politico.com/tipsheets/morning-trade/2016/12/trumps-list-of-top-ustr-contenders-takes-shape-217863 <http://www.politico.com/tipsheets/morning-trade/2016/12/trumps-list-of-top-ustr-contenders-takes-shape-217863>

Trump’s list of top USTR contenders takes shape
By MEGAN CASSELLA <http://www.politico.com/staff/megan-cassella>   12/14/16 10:00 AM EST
With help from Doug Palmer and Adam Behsudi

TRUMP’S LIST OF TOP USTR CONTENDERS TAKES SHAPE: President-elect Donald Trump may be inching closer to a decision on who to tap for U.S. trade representative after Wayne Berman, a senior executive with the Blackstone Group, stopped by Trump Tower this week for an unannounced meeting, a source familiar with the transition told POLITICO. Berman and Bridgewater Associates President David McCormick, who met with the president-elect last month at his golf course in Bedminster, N.J., have both been added to the list of top candidates Trump is considering to lead the trade agency, another source familiar with the list said.

The two business executives, who join Dan DiMicco <https://www.politicopro.com/story/2016/11/trumps-battle-scarred-trade-warrior-138346> and Robert Lighthizer <https://www.politicopro.com/trade/story/2016/12/lighthizer-checks-all-the-boxes-as-ustr-pick-139918> as candidates Trump’s considering, both have a history of government service: Berman worked in the Commerce Department under President George H.W. Bush before chairing the government relations department at the K Street firm Ogilvy, which he left for Blackstone in 2012. McCormick, meanwhile, served under President W. Bush as the Treasury Department’s undersecretary for international affairs from 2007 to 2009, following stints in the Commerce Department as the undersecretary for industry and security and in the White House as Bush’s deputy national economic security adviser for international economic policy.

In contrast to DiMicco and Lighthizer, who both have strong ties to the steel industry, which tends to view trade in more combative tones, Berman and McCormick would likely bring more of a mainstream Republican “internationalist” perspective to U.S. trade policy, one longtime trade observer told Morning Trade.

That might not be what the Trump team is looking for, however. Dan Ikenson, director of the Cato Institute's Center for Trade Policy Studies, noted that “considering his previous role on K Street in conjunction with his accumulated wealth, Berman seems like the kind of person Trump’s ‘drain-the-swamp’ supporters would find offensive.” Read more on the candidates from POLITICO’s Anna Palmer and yours truly here <https://www.politicopro.com/trade/story/2016/12/dimicco-blackstones-wayne-berman-top-shortlist-for-ustr-140591>.

IT’S WEDNESDAY, DEC. 14! Welcome to Morning Trade, where we’re wondering if we should make our Twitter handles more uniform the way the @realDonaldTrump’s team may be doing. (Lookin’ at you, new Twitter user @realWilburRoss <http://twitter.com/realwilburross> — if that really is an account belonging to the Commerce Secretary-nominee, that is.) Any trade news that you’re hearing out there? Let me know: mcassella at politico.com <mailto:mcassella at politico.com> or @mmcassella <http://twitter.com/mmcassella>.

COMMERCE’S HEAVY HAND: No matter who is ultimately picked to lead USTR, he or she will almost certainly stand beneath the shadow of billionaire investor Wilbur Ross, the president-elect’s pick for Commerce secretary. Ross is expected to lead the trade agenda for the incoming administration, one of the sources confirmed to POLITICO, adding that Ross will be the most influential Commerce secretary in decades and will lead the effort to change the trade agenda to meet Trump’s vision.

In that regard, both Berman and McCormick could perhaps be a better fit for the Trump administration given their experience working in the Commerce Department. For those who support more open trade and trade deals, however, McCormick’s experience at Treasury and the White House, in addition to Commerce, could suggest that he would have a more open mind about the benefits of trade, Ikenson noted.

As for Ross, the expected Commerce nominee swung by Trump Tower on Tuesday, according to a pool report.

MILLER TO ADVISE TRUMP ON POLICY: Trump may be filling his Cabinet with pro-TPP nominees, but the man who will have his ear on policy while in the White House once called the president-elect during the campaign “the only way to stop TPP” and warned that the deal would cause “the steady, dramatic bleeding of U.S. sovereignty.” Stephen Miller, a longtime congressional adviser to Sen. Jeff Sessions and an aide on the Senate Budget and Finance Committees, will head to the White House in January as assistant to the president and senior adviser to the president for policy, the Trump transition team said Tuesday.

In a statement announcing the appointment, Trump praised Miller for being “deeply committed to the America First agenda” and noted he played a “major role” in forming a pro-worker agenda on trade and migration policy. “He is a strong advocate for protecting American workers, and will fulfill a crucial role in my administration as my senior adviser on matters of policy,” Trump said.

TRUMP TEAM TOUTS TILLERSON’S RUSSIA TIES AS ‘INVALUABLE’:Exxon Mobil CEO Rex Tillerson, Trump’s pick for secretary of State, has come under heavy fire for what is seen by some as a cozy relationship with Russian President Vladimir Putin as well as for his support of the TPP. But talking points <http://www.politico.com/f/?id=00000158-fa0f-da32-a1dd-fb4f69b00002>sent from the Trump team to Capitol Hill Republicans show the transition believes that relationship will be a benefit to the administration, POLITICO’s Seung Min Kim reports <http://www.politico.com/story/2016/12/rex-tillerson-russia-ties-trump-invaluable-232587>. “President Putin knows Mr. Tillerson means what he says,” the Trump team says in the memo, which was obtained by POLITICO.

Perhaps more important, the team lauded Tillerson as a “top-tier negotiator” whose business skills will benefit him as he fights for the American people — a description Trump has also used to describe himself. “While he was a businessman, Mr. Tillerson was a forceful advocate for the interests of his company, employees and shareholders,” the talking points say. “As secretary of State, he will be a forceful advocate for America’s interests. The American people will once again have a world-class player working on their behalf.”

** A message from the Alliance for American Manufacturing: With 16,000 layoffs in America’s vital steel manufacturing sector, we simply cannot afford more job losses! It’s time to act now! What you need to know about the harmful effects of illegal Chinese steel. http://www.americanmanufacturing.org/campaign/entry/the-china-threat <http://bit.ly/2h0PXuH> **

BUSINESS GROUPS STAND AGAINST GOP’S BORDER TAX PLAN: As House Ways and Means Committee members prepare for a two-day retreat focusing in part on plans to rewrite the tax code, more than 75 business associations signed a letter <https://www.politicopro.com/f/?id=00000158-fad2-d307-a3f9-fff7f9720001> Tuesday to Chairman Kevin Brady and ranking member Richard Neal to express concerns over the proposed “border-adjustable” business tax, Pro Tax’s Brian Faler reports <https://www.politicopro.com/trade/whiteboard/2016/12/more-than-75-business-groups-sign-letter-opposing-gops-border-adjustable-tax-plan-081027>. The border-adjustment provision, aimed at making the corporate code more internationally competitive, would impose new taxes on imports while allowing exports to be sold tax-free.

“Companies that rely on global supply chains would face huge business challenges caused by increased taxes and increased cost of goods, which would in turn likely result in reductions in employment, reduced capital investments and higher prices for consumers,” the letter said.

The groups that signed the letter, including the National Retail Federation and the American Apparel & Footwear Association, said they “stand ready to work with Congress and the administration on a pro-growth comprehensive tax reform,” though one “without the border-adjustment provision.”

MAKE U.S. RELATIONS IN ASIA GREAT AGAIN: That was the message Tuesday from ambassadors from Singapore, Australia and South Korea. The diplomats said they were keeping a close eye on Trump’s travel schedule in the region as a way of determining his priorities for the Asia-Pacific. Singapore’s envoy, Ashok Mirpuri, urged Trump to continue the yearly appearances President Barack Obama made at the East Asia Summit and Asia-Pacific Economic Cooperation summits.

Regardless of whether the incoming administration decides to pursue a modified TPP or a whole new economic arrangement, U.S. credibility in the region has suffered.

“The fact that the U.S. was very involved in leadership of it [TPP] and then couldn’t deliver and has chosen now not to deliver is hugely damaging to the United States’ reputation in Asia,” said Australian envoy Joe Hockey.

Trump’s dream of a manufacturing revival could heavily depend on the more than 500 million people expected to enter the middle class in the region over the next 10 years, the ambassador said. “If you want American manufacturing to turn into American exports to turn into consumption in Asia, then you need to engage with Asia,” Hockey said. Read more here <https://www.politicopro.com/trade/story/2016/12/envoys-urge-trump-to-make-us-engagement-with-asia-great-140597>.

PORTMAN CALLS FOR BILATERAL DEALS WITH CHINA, JAPAN: In the same vein, Sen. Rob Portman, a former U.S. trade representative, also called on Tuesday for continued engagement in Asia, telling The Wall Street Journal <http://blogs.wsj.com/washwire/2016/12/13/u-s-should-consider-trade-deals-with-china-and-japan-rob-portman-says/?mod=e2twe> in an interview that now that the TPP is all but dead, the United States should pursue bilateral trade deals with China and Japan.

“Right now we’re losing out” on potential exports, Portman told the newspaper. “We’d want an agreement that opens the Chinese market to our products in a fair way and we’d want to create more of a rules-based system to insure trade is fair.”

The Ohio Republican, a longtime free-trader who turned against the TPP this year during the heat of his Senate reelection campaign, said that while “too many Republicans are afraid to talk about trade,” the route to political success on the issue is through boosting exports while cracking down on unfair trade. “That’s where most Americans are,” he said.

TRUMP ADVISER PUSHES U.K.-U.S. TRADE DEAL: The president-elect could move quickly once in office to initiate a bilateral trade deal not in Asia but between the U.S. and U.K. as part of a broader alliance with “the English-speaking trade world,” a top campaign adviser said Tuesday.

CNBC senior contributor Larry Kudlow, speaking to POLITICO’s Ben White at a Morning Money event, argued a trade deal with the United Kingdom could offset some of the negative fallout from other Trump trade moves.

"There's a strong chance there will be some punitive actions taken someplace," Kudlow said. "Putting Britain up there though will be positive actions, very positive actions. In fact, we might have an even broader context. I mean, I call it the English-speaking trading world. I'm a big believer in [that].”

Kudlow also sought during the same event to assuage worries over those punitive actions, telling the audience that he expects Trump to put more emphasis on negotiating trade deals than slapping tariffs on countries like Mexico and China.

"I think the general thrust of his trade policy will be negotiation and renegotiation. The art of the deal," he said. "I think there are going to be carrots and sticks here. ... I don't believe he is a major protectionist in its purest form. I don't expect him to start slapping tariffs here and there."

The former staff economist at the Federal Reserve Bank of New York added that while he does believe China “lies, cheats and steals,” he does not believe the Asian nation is manipulating its currency — a charge the president-elect has made many times. “All that stuff has got to be looked at and dealt with," Kudlow added, a reference that also included issues like cyber hacking and WTO rules. But, he said, “I don't think he's a knee-jerk tariff guy."

COMMERCE BEEFS UP COMMITTEE ON NUCLEAR TRADE: Commerce Secretary Penny Pritzker announced on Tuesday that more than three dozen senior-level, private-sector representatives have been appointed to the Civil Nuclear Trade Advisory Committee, which focuses on boosting the United States’ export competitiveness in certain sectors. The eight-year-old program advises the Commerce secretary on programs and policies designed to boost the global flow of U.S. civil nuclear products and services, an industry Pritzker said was “critical to [the] country’s economic vitality.”

Some of the new names included on the list are Josh Freed, vice president of the clean energy program at the Washington, D.C.-based think tank Third Way; Jeffrey Merrifield, a partner at the firm Pillsbury Winthrop Shaw Pittman; and Jarret Adams, the CEO of Full On Communications in Middleburg, Va.

INTERNATIONAL OVERNIGHT

— For Trump’s Cabinet nominees — including billionaires like Commerce pick Ross and Linda McMahon, his pick for Small Business Administrator — the first obstacle to reaching the Cabinet will be vetting by Congress that for many will include the release of tax returns and the revealing of potential conflicts of interests, The New York Times reports <http://www.nytimes.com/2016/12/12/us/politics/donald-trump-cabinet.html>.

— While many economists argue that Trump’s tariff threats could lead to a trade war, which would damage the U.S. and global economy, it’s also possible that protectionism could cause U.S. trading partners to adjust their policies to America’s benefit, Fortune reports <http://fortune.com/2016/12/13/trump-china-trade/>.

— Sugar has emerged as a main sticking point in negotiations for a free trade deal between Australia and Indonesia, The Weekly Times reports <http://www.weeklytimesnow.com.au/news/national/indonesiaaustralia-free-trade-agreement-sugar-a-sticky-issue/news-story/5db7fcdbc168dfe11fdfd2756cd7c88f>.

— One day before meeting with Trump in New York today, IBM CEO Ginni Rometty announced her company will hire 25,000 new workers over the next four years, Pro Technology’s Tony Romm reports <http://www.politico.com/blogs/donald-trump-administration/2016/12/ibm-new-jobs-hiring-pledge-ginni-rometty-232585>.
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