[CTC] Lawmakers urge Trump to raise trade issues with Abe

[Arthur Stamoulis]

Two articles below…


http://origin-nyi.thehill.com/policy/finance/318854-lawmakers-urge-trump-to-raise-trade-issues-with-abe <http://origin-nyi.thehill.com/policy/finance/318854-lawmakers-urge-trump-to-raise-trade-issues-with-abe>
Lawmakers urge Trump to raise trade issues with Abe

By Vicki Needham - 02/09/17 08:00 PM EST
Several groups of House and Senate lawmakers on Thursday called on President Trump to tackle major trade issues with Japanese Prime Minister Shinzo Abe.

Trump will meet on Friday with Abe at the White House and the two leaders are expected to discuss a wide range of topics from security to trade.

Ahead of the meeting, three groups of lawmakers sent letters urging Trump to discuss currency manipulation, the trade imbalance with Japan and barriers to the U.S. autos among a slew of other trade issues in the context of a possible bilateral trade agreement. 
The two leaders are expected to discuss the prospects of a bilateral trade agreement after Trump withdrew the United States from the 12-nation Trans-Pacific Partnership (TPP) last month. 

Sens. Debbie Stabenow <http://origin-nyi.thehill.com/people/debbie-stabenow> (D-Mich.), Sherrod Brown <http://origin-nyi.thehill.com/people/sherrod-brown> (D-Ohio), Rob Portman <http://origin-nyi.thehill.com/people/rob-portman> (R-Ohio), Gary Peters (D-Mich.), Roy Blunt <http://origin-nyi.thehill.com/people/roy-blunt> (R-Mo.), and Claire McCaskill <http://origin-nyi.thehill.com/people/claire-mccaskill>(D-Mo.) want Trump to make Japan’s "longstanding unfair" trade practices in the auto sector a priority for the bilateral meeting as well as questions about the value of Japan's currency, the yen. 

“We greatly appreciate the strong and lasting U.S. relationship with our ally,” the senators wrote.

"In particular, we urge you to address currency manipulation and auto-related non-tariff barriers," they wrote. 

A senior White House official said Thursday that a discussion of currency manipulation wasn’t high on the administration’s agenda although in could come up in the course of two days of talks. 

“The U.S.-Japan auto-trade relationship hurts American companies and workers and should be addressed with urgency,” the senators wrote.

In a separate House letter, <http://levin.house.gov/sites/levin.house.gov/files/documents/Japan%20Letter%202%209%2017.pdf> Reps. Sander Levin (D-Mich.), Marcy Kaptur (D-Ohio), who is co-chairwoman of the House Auto Caucus, and Bill Pascrell (D-N.J.) said that Japan’s trade practices led to the trade imbalance that has hurt American workers and businesses for decades.

“The U.S. must make it clear that any discussions of a bilateral agreement would address currency manipulation, eliminate all of the non-tariff barriers, include provisions to prevent new barriers, and link any U.S. tariff reduction to demonstrable opening of the Japanese market,” they said.

Last year the U.S. trade deficit with Japan was $69 billion, America's second largest trade deficit, the lawmakers said. 

"Unfortunately, the barriers to American autos in the Japanese market are deeply structural and shifting, and all negotiated agreements in the past have failed to change the market conditions for U.S. businesses," the House members wrote.

"Any increased investment in the U.S. by Japanese companies does not excuse the unfair treatment of U.S. exports to Japan."

In another letter, Reps. Debbie Dingell (D-Mich.) and Mark Pocan <http://origin-nyi.thehill.com/people/mark-pocan> (D-Wis.) also urged Trump to address serious trade impediments facing American manufacturers in the Japanese market.

"While Japan is a very important ally to the United States, these unfair trade practices have had enormous, devastating impacts to the American manufacturing sector," they wrote.

U.S. car manufacturers sold 19,000 cars in Japan in 2015. During the same time, Japanese manufacturers sold 1.6 million cars in the United States, the lawmakers said.

"American workers deserve to have fair access for their products in the global market," they wrote.



http://www.politico.com/tipsheets/morning-trade/2017/02/abes-day-in-washington-218687 <http://www.politico.com/tipsheets/morning-trade/2017/02/abes-day-in-washington-218687>
Abe’s day in Washington 

By Adam Behsudi <http://www.politico.com/staff/adam-behsudi>
02/10/17 10:01 AM EST

With help from Megan Cassella, Doug Palmer and Jason Huffman

ABE’S DAY IN WASHINGTON: Japanese Prime Minister Shinzo Abe sits down with President Donald Trump today for a working lunch where he could be served an extra helping of pressure to start bilateral talks with the United States. The two leaders will at least discuss the need for a “free and rules-based” system of trade, a senior administration official said Thursday.

Trump “has made pretty clear that bilateral agreements are really the way to go for the United States," the official said.

“You can negotiate terms that are more favorable to the United States than you can negotiate in a multilateral agreement where sometimes you're held to the standard of the weakest link in the compact," he added.

Abe will meet with business leaders at the U.S. Chamber of Commerce this morning before he sits down with Trump.

IT’S FRIDAY, FEB. 10! Welcome to Morning Trade, where we’re sad to see our valiant deputy editor Matt Korade leave us today for greener pastures. From the daily whiteboard to dispatches from Bali and Beijing, he’s been there since the launch of our humble trade vertical, suffering through explanations of everything from zeroing to the grave threat of invoking GATT Article XXI. Good luck Matt, we’ll miss you! Please keep those tips coming: abehsudi at politico.com <mailto:abehsudi at politico.com> or @abehsudi <https://twitter.com/abehsudi?lang=en>.

AUTO INDUSTRY DEMANDS PILE UP: Meanwhile, the U.S. auto industry and its champions in Congress are advising Trump to use the meeting to press Abe on what they view as unfair trade advantages, including currency manipulation and other so-called non-tariff barriers that U.S. companies say make it hard for them to sell American cars in Japan. The administration official, however, said the topic of currency manipulation wouldn’t be at the top of the list.

“Whether it [currency] comes up naturally in conversation, we’ll see over the course of that meeting,” the official said.

A bipartisan group of senators called out Japan’s auto market as “the most closed among developed countries,” highlighting that foreign autos only accounted for 6.7 percent of market share in 2015. The lawmakers also say Japan’s auto exports account for 70 percent of the nearly $70 billion trade deficit the U.S. has with the country.

“The U.S.-Japan auto-trade relationship hurts American companies and workers and should be addressed with urgency. In any bilateral talks with Japan, the U.S. should secure reform of Japan’s practices that hurt U.S. automakers, including currency manipulation, and achieve significant access to Japan’s auto market,” states a letter <http://www.stabenow.senate.gov/news/in-advance-of-his-meeting-with-japanese-prime-minister-shinzo-abe-senators-urge-president-trump-to-address-japans-unfair-trade-practices-in-auto-sector> signed by Sens. Debbie Stabenow (D-Mich.), Sherrod Brown (D-Ohio), Rob Portman (R-Ohio), Gary Peters (D-Mich.), Roy Blunt (R-Mo.), and Claire McCaskill (D-Mo.).

Reps. Debbie Dingell (D-Mich.) and Marc Pocan (D-Wis.) also got in on the action with a letter <https://debbiedingell.house.gov/sites/debbiedingell.house.gov/files/documents/DINGELL%20POCAN%20JAPAN%200200917.pdf> to Trump urging him to address the lopsided auto trade between the two countries.

“Japan has directly intervened 376 times in the currency market since the 1980s,” lawmakers wrote. “Currency manipulation by Japan has resulted in large trade deficits which have displaced hundreds of thousands of U.S. jobs. The U.S. should not enter into any trade agreement with Japan without robust, enforceable provisions to prevent currency manipulation.”

Another letter <http://levin.house.gov/sites/levin.house.gov/files/documents/Japan%20Letter%202%209%2017.pdf> from House Democrats also highlighted the issue. Reps. Sander Levin (D-Mich.), Marcy Kaptur (D-Ohio) and Bill Pascrell (D-N.J.) called out barriers to U.S. companies in the Japanese market and Tokyo’s monetary policies.

“Unfortunately, the barriers to American autos in the Japanese market are deeply structural and shifting, and all negotiated agreements in the past have failed to change the market conditions for U.S. businesses,” the lawmakers wrote. “Any increased investment in the U.S. by Japanese companies does not excuse the unfair treatment of U.S. exports to Japan.”

TRUMP TAX THREAT SCARES JAPANESE PARTS MAKER OUT OF MEXICO: Staying on Japanese autos, Nisshinbo Holdings Inc., a Japanese auto parts maker, has abandoned plans to build a brake manufacturing facility in Mexico in response to Trump’s threats of border taxes, the Nikkei Asian Review and Mexico News Daily report. The investment was expected to be worth $90 million. Nissan Motor Company, however, reaffirmed on Wednesday its commitment to build a billion-dollar joint manufacturing plant with German auto manufacturer Daimler AG in Aguascalientes, Mexico, the Mexico News Daily says. Read more here <http://mexiconewsdaily.com/news/japanese-parts-maker-says-adios-mexico/?utm_source=Mexico+News+Daily&utm_campaign=5a1b97c557-February+9&utm_medium=email&utm_term=0_f1536a3787-5a1b97c557-349514993>.

‘BAT’ TAKES A BEATING IN THE SENATE: A House Republican plan to create a “border adjustable” business tax is catching heat from a GOP senator, who warns the proposal would drive up prices for consumers, Pro Tax’s Brian Faler reports.

Sen. David Perdue has circulated a letter <https://www.politicopro.com/f/?id=0000015a-23ae-dcf0-affb-fbff5ea10000> calling their plan a “bad idea” that will push up prices, which in turn will “hammer consumer confidence and lower overall demand, thus putting downward pressure on jobs.” The Georgia Republican’s stand may not be too surprising given his past as CEO of Reebok and Dollar General before being elected to the Senate in 2014. Retailers have emerged as major opponents of the plan.

Perdue’s opposition underscores the plan’s precarious prospects in the Senate, where Republicans have a bare 52-vote majority and the chamber’s deputy Republican leader has raised his own concerns with it. House Republicans have hoped to move the proposal, which would be part of a larger tax reform package, through the Senate on a party-line vote using so-called reconciliation. Perdue’s opposition may help slow action in the House as well, if rank-and-file lawmakers there prove unwilling to vote for a controversial proposal that appears likely to stall in the Senate.

The proposal suffered another setback on Thursday when Sen. Mike Rounds also said he couldn’t support a border adjustment tax. The South Dakota Republican expressed concern about its potential effects on farmers and ranchers as well as on consumers who’ve “benefited from inexpensive imports.”

“Any time we start talking about how we’re going to regulate products going out and products coming in, we better darn well know what the impact on the economy is before we start making major changes,” Rounds said in an interview with CNBC.

EU GETS SERIOUS ON DATA FLOW SOLUTION: The European Commission is making a strong push to try to find a way to address data free flow provisions in trade deals while keeping consistent with its tough data protection regulations, POLITICO Europe’s Laurens Cerulus reports.

The Commission forwarded a “concept paper on data flows in trade agreements,” dated Jan. 27 and seen by POLITICO, to national trade policy experts in the Council of the EU, who discussed it Wednesday. The seven-page document sets out the conditions under which the EU would include rules governing the international exchange of data in trade deals.

Brussels’ concept paper suggests a way out of the impasse by proposing that clauses be inserted in trade agreements to ensure data protection is respected. The suggested language includes controversial elements. The EU would ask trade partners to explicitly recognize that the protection of personal data is a fundamental right — a requirement usually not included in trade deals. It also allows governments to force companies to store data within national borders for a range of reasons, including privacy protections as well as “future exceptions” to cross-border data flows that are yet to be defined. Sources said the final language is being decided by the cabinet of Commission President Jean-Claude Juncker.

Digital trade rules, including free flow requirements and prohibitions on local storage, have been a consistent stumbling block for the EU. The issue is blocking a proposed trade deal with Japan from moving forward, and has bogged down TTIP talks with the U.S. and the Trade in Services Agreement that was being negotiated among a broader group of countries.

** A message from the U.S. Chamber of Commerce’s Global Intellectual Property Center: Fifth place? Unacceptable. Yet the U.S. Chamber’s #2017IPIndex shows that’s just where the U.S. ranks in IP enforcement. Here <http://politi.co/2k1fAdD> are just a few ways that Congress and the Trump administration can partner with innovators to protect American IP and the more than 45 million jobs it supports. **

TILLERSON SAYS HOLA TO MEXICO: Secretary of State Rex Tillerson will head to Mexico City in the coming weeks, the State Department announced on Thursday. It’s a signal of the Trump administration’s next steps to reach out to Mexico after a meeting between the two countries’ leaders was canceled late last month amid controversy over who will pay for a border wall. The visit also comes after Mexican Minister of Foreign Affairs Luis Videgaray came to Washington earlier this week to meet with Tillerson on his home turf.

In a statement, acting State Department spokesman Mark Toner said Tillerson’s conversation with Videgaray was “constructive” and that the two discussed issues “including law enforcement, migration, and security.”

TRUMP BREATHES NEW LIFE INTO EX-IM BANK: There may yet be another life for the Export-Import Bank after a pair of Democratic senators told reporters on Thursday that Trump is committed to bringing the agency back to full capacity and will nominate someone to the board of directors “very soon.”

“Ex-Im Bank was big news, he wants to get that done,” Sen. Joe Manchin, a moderate West Virginia Democrat, said following a lunchtime meeting between Trump and a bipartisan delegation of lawmakers. “He said, ‘I’ve changed my mind completely on that. I’ve seen how it functions and what it can do and we can’t compete if we don’t have a functioning Ex-Im Bank.’ Before, he thought it was different. So he’s changed and he’s 100 percent. He said, ‘You can tell everyone I said that.’”

Trump had given somewhat mixed messages on the campaign trail regarding the bank, which is loathed by conservatives who say it distorts the free-market system. But Sen. Heidi Heitkamp, a moderate Democrat from North Dakota, corroborated Manchin’s account in a statement following the meeting. 

“To support the economy and boost American manufacturing jobs, enabling the Ex-Im Bank to work is a critical step," Heitkamp said. "It’s great news he agreed and said he would nominate someone to serve on the Ex-Im Bank Board very soon so the agency ... can fully function and keep supporting American workers and small businesses, including many in North Dakota, just as it has done for more than 80 years."

One potential hold-up: Any of Trump’s nominees to the agency’s board will have to move first through the Senate Banking Committee, which proved a significant hindrance last year under the leadership of Alabama Sen. Richard Shelby. As chairman, Shelby refused to move on then-President Barack Obama’s nominees, which left the bank without the quorum it needed to approve deals worth more than $10 million. Sen. Mike Crapo has since taken over for Shelby as chairman, but his office did not respond to a request for comment from Morning Trade on Thursday evening regarding whether he would move on the president’s eventual nominee. (Crapo has three times in four years voted against the bank’s reauthorization, congressional voting records show.)

BUSINESSES WARN TRUMP TO TAKE CARE OF NAFTA: Businesses aren’t being shy when it comes to how they feel Trump should handle the renegotiation of NAFTA: They don’t want him to mess it up. Rather than disrupt cross-border supply chains by pulling out of the deal, which Trump has threatened to do if Mexico and Canada fail to agree to still-unspecified terms, business leaders and manufacturers are hoping they can persuade the new president simply to improve and update it.

“As we think about NAFTA, the first [guiding principle] is do not pull up the drawbridge,” Sarah Bovim, director for government relations and international trade policy at Whirlpool Corp., said at a discussion Thursday hosted by the Washington International Trade Association. “Allow us to keep things in place” and focus on modernizing the pact and shoring up assistance programs to help communities and workers adversely affected by trade, she said.

The robust defenses of the pact came as questions swirl regarding what shape, exactly, a new deal may take. “I’m not convinced there is really going to be a serious renegotiation of NAFTA,” said Matt Gold, a former U.S. trade official who now teaches international trade law at Fordham University. 

Officials in all three NAFTA countries know Trump’s threat to withdraw from the pact “is not credible” because of the pain that would inflict on American companies that depend on trade with Mexico and Canada, he said. Read the full story from Pro Trade’s Doug Palmer here <https://www.politicopro.com/trade/story/2017/02/business-to-trump-dont-screw-up-nafta-147931>.

VIDEGARAY: NAFTA REDO CAN BE ‘WIN-WIN’: Videgaray said he was “absolutely” open to a renegotiation of NAFTA, adding that it does not have to be a zero-sum game with the U.S.

“It doesn't have to be a winner and a loser. This is trade and there is always room for making it a win-win situation,” he said in an interview Thursday on NBC’s “Meet the Press Daily” with Chuck Todd.

He was less supportive of a proposal that would use revenue from a border adjustment tax to pay for a wall Trump wants to build between the U.S. and Mexico. Trump has vowed that Mexico would pay for the wall.

“About this idea of taxing imports from Mexico, just think about it. Who's going to pay for that?” he asked. “It's the American consumer. It's going to be making more expensive things that American families buy, from avocados to flat-screen TVs to cars to refrigerators. This is not making Mexico pay for anything. This is actually hurting the American consumer.”

INTERNATIONAL OVERNIGHT

— The National Taxpayers Union offers <http://www.washingtonexaminer.com/the-art-of-the-bilateral-japanese-trade-deal/article/2614413> some suggestions for how Trump could negotiate a great deal with Japan.

— The Reserve Bank of Australia sends a warning about slower economic growth if Trump pursues protectionist trade policies, the Australian reports <http://www.theaustralian.com.au/business/economics/reserve-bank-warns-on-trump-trade-policy/news-story/5ff1574d36a35529f8b703bd4efa7cc9>.

— Goldman Sachs warns investors to brace for a looming trade war with China, Market Watch reports <http://www.marketwatch.com/story/goldman-sachs-warns-investors-to-brace-for-a-looming-trade-war-with-china-2017-02-09>.

— Canada confirms its attendance at a trade summit in Chile in March, CBC reports <http://www.cbc.ca/news/politics/tpp-chile-champagne-1.3974182>.

— Japan’s love of tiny cars could make it harder for Trump to put a dent in America’s massive auto trade deficit with the country, Reuters reports <http://uk.reuters.com/article/uk-autos-trade-usa-japan-analysis-idUKKBN15P01C?il=0>.
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