[CTC] NAFTA ROO talks begin today (& more)

[Arthur Stamoulis]

http://www.politico.com/tipsheets/morning-trade/2017/01/thune-lighthizer-has-gops-support-218399 <http://www.politico.com/tipsheets/morning-trade/2017/01/thune-lighthizer-has-gops-support-218399>
Thune: Lighthizer has GOP’s support 

By Adam Behsudi <http://www.politico.com/staff/adam-behsudi>
01/25/17 10:00 AM EST

With help from Megan Cassella, Doug Palmer and Catherine Boudreau

THUNE: LIGHTHIZER HAS GOP’S SUPPORT: Robert Lighthizer, President Donald Trump’s pick for U.S. trade representative, is likely to be widely supported by Republicans when his nomination comes up for a vote, Sen. John Thune said Tuesday. The chamber’s No. 3 Republican told reporters after the weekly caucus lunches that while he wasn’t sure how many Senate Democrats would vote in favor of the longtime trade attorney’s nomination, Lighthizer would “be broadly supported by Republicans.”

“I think all of [Trump’s] nominees are going to get confirmed,” Thune added.

Thune’s comments come after a report <https://www.politicopro.com/trade/whiteboard/2017/01/wyden-reviewing-report-of-potential-lighthizer-nomination-problem-082712> was published earlier this week saying Lighthizer had represented several foreign governments between 1985 and 1991, thus potentially disqualifying him for the job. Asked whether Lighthizer would need a lobbying disclosure waiver, Thune responded that he wasn’t sure. “That’s an issue the administration will have to decide on,” he told reporters.

IT’S WEDNESDAY, JAN. 25! Welcome to Morning Trade, where 2017 isn’t looking so good with "athleisure" expected <https://qz.com/890991/if-you-liked-athleisure-the-newest-casual-clothing-trend-is-wearing-pajamas-all-day/> to give way to the hot fashion trend of wearing pajamas all day. Wish you could be in your pajamas 24/7? Any tips to share? Let me know: abehsudi at politico.com <mailto:abehsudi at politico.com> or @abehsudi <https://twitter.com/abehsudi?lang=en>.

SENIOR MEXICAN OFFICIALS READY TO TALK RULES OF ORIGIN: Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo will be among the first foreign officials to visit the Trump administration in Washington and will be in town today and Thursday to discuss trade, security and migration with top officials in the White House. Guajardo’s office said in a statement announcing the visit that the two ministers are scheduled to meet with chief of staff Reince Priebus, special adviser to the president Jared Kushner and National Trade Council Director Peter Navarro, among others. It also said the pair would meet with members of Trump’s Cabinet if they’ve been confirmed by the Senate.

A renegotiation of NAFTA could see heavy focus on rules of origin as Videgaray this week said Mexico wants to maintain free access for its exports to the U.S. without tariffs and quotas, Reuters reported <http://www.reuters.com/article/us-usa-trade-nafta-mexico-idUSKBN1582UQ> on Tuesday. From the story: “Speaking on condition of anonymity, two Mexican government officials and four other people familiar with ongoing discussions said Mexico saw rules of origin as an important avenue to brokering a deal with Trump, provided a fair compromise can be reached.”

Canadian media also reported <http://www.theglobeandmail.com/news/world/us-politics/trump-protectionist-rhetoric-nafta/article33654332/> that Wilbur Ross, Trump’s pick for Commerce secretary who is awaiting a vote on the Senate floor, told Canadian officials rules of origin and dispute settlement panels will be priorities in the talks.

DEMS: TRUMP NEEDS TO DO MORE ON TRADE: Senate Democratic leaders took to the mics on Tuesday to skewer Trump on failing to follow through on a promise to name China a currency manipulator, as he said he would do on the first day of his presidency.

“We await real action on trade, which was one of the president’s signature issues,” Senate Minority Leader Chuck Schumer said at a Tuesday press conference. “The bottom line is there is a giant gulf right now between what the president says he is going to do and what he actually does.”

Schumer also downplayed Monday’s executive order to withdraw from the TPP, arguing that the deal was never in force in the first place.

Sen. Debbie Stabenow called on Trump to also investigate Japan for devaluing its yen. At the leadership press conference, she noted that U.S. auto companies, who Trump met with on Tuesday, opposed the TPP because it didn’t contain enforceable rules against currency manipulation.

Trump also got called out by Sen. Bernie Sanders for paying workers “starvation wages” to produce Trump-branded goods at factories in China, Mexico and Bangladesh. “What a statement it would make to corporate America if he said, ‘I am bringing those jobs back to the United States,” Sanders said at the press conference.

WHITE HOUSE ON CHINA CURRENCY: STAY TUNED: Schumer also took to the Senate floor on Tuesday to challenge Trump to label China a currency manipulator. “Last night at the White House, I mentioned this to the president," Schumer said. "I'm not going to say what he said. He didn't say no. Maybe he'll do it. I hope and pray he does." Asked about the issue, a White House spokeswoman told Morning Trade to be patient: “When we have an announcement on it we will let you know.”

SCHUMER WILLING TO GO ROGUE FOR ‘BUY AMERICA’: Earlier on Tuesday, Schumer said he had the same view of adhering to international trade rules as Trump does and signaled a willingness to deviate from U.S. commitments on government procurement as part of a $1 trillion infrastructure plan <https://www.politicopro.com/transportation/story/2017/01/senate-democrats-flip-the-script-on-infrastructure-plan-145360> unveiled this week.

“I joined the president in not being a big fan of international trading rules,” Schumer said at a press conference on the proposal on Tuesday, adding that he discussed the plan with Trump in a meeting with congressional leaders on Monday.

The Senate Democrats' infrastructure blueprint would “absolutely" call for a major expansion of Buy America laws and rules, the New York senator said. The move to expand domestic purchasing requirements could risk the U.S. running afoul of its trade deals. The U.S. has made commitments, either through the WTO’s Government Procurement Agreement or separate trade deals, to open certain government-funded projects to bids from foreign companies.

“President Trump promised a $1 trillion investment in infrastructure built with American iron and steel, made by American workers,” said Sen. Sherrod Brown, who also spoke at the press conference. “This blueprint we’re unveiling will hold the president accountable for keeping that promise.”

The Ohio Democrat introduced legislation last week that would require any public project using federal funds to source U.S.-made goods.

LAWMAKERS SPLIT OVER THEIR ROLE IN NAFTA TALKS: It may not have been officially announced yet, but congressional Republicans are widely expecting Trump to reopen NAFTA in the coming weeks and appear generally receptive to the idea, saying the decades-old agreement could use an update. The jury still appears to be out, however, over whether members of Congress will actually have any say over the updated deal, or if Trump will be able to reopen and rework the agreement without having to submit it for lawmakers’ approval.

Thune, a member of the Senate Finance Committee, said he would expect Congress to be involved. “If there is a renegotiation at some point, yes … trade agreements have to be ratified by Congress, so if there’s going to be an undoing and sort of a reset or a restart, then I suspect that at some point Congress will be involved,” he told reporters on Tuesday.

But other Republicans were less sure. “I think that’s a step ahead,” House Ways and Means Chairman Kevin Brady told Morning Trade. He said he’s focused at the moment on supporting Trump’s “careful analysis” of the impact NAFTA had on the economy and urging him to improve what can be improved. “But keep what’s positive,” he added, “and keep us competing in those regions.”

BALDWIN MAKES A TRUMP TRADE APPEAL: Following the appeal from Senate Democratic leaders, Sen. Tammy Baldwin is singing from the same book and is highlighting areas where she wants to work together with the White House, which includes a strong focus on the president’s priority of pushing “Buy America” policies.

“I support taking a new approach to trade deals,” the Wisconsin Democrat wrote <https://www.politicopro.com/f/?id=00000159-d238-d723-a35b-deba92db0000> in a letter to Trump on Tuesday. “We need to crack down on countries like China when they cheat American workers, we need policies that keep jobs here at home instead of encouraging outsourcing, and we need a strong ‘Buy America’ plan that requires tax dollars for public infrastructure projects go to American businesses and workers instead of foreign companies.”

ROSS CLEARS COMMERCE COMMITTEE: Ross is one step closer to being named Commerce secretary after the Senate Commerce Committee on Tuesday unanimously approved his selection for the post. The billionaire private equity investor will take a leading role in guiding Trump’s trade policies while also overseeing a huge department with responsibilities for conducting the decennial census, managing the nation's fisheries, approving patents, collecting reams of data on the U.S. economy and tracking hurricanes.

At his confirmation hearing, Ross said the incoming administration's top trade priority would be the renegotiation of the North American Free Trade Agreement, but he also signaled a tougher approach to trade with China, which he called the "most protectionist country of very large countries." The 79-year-old Ross will become the 39th secretary of Commerce and the oldest person to hold the job, according to the Commerce Department's website. His predecessor, Penny Pritzker, was also a billionaire whose family made its fortune in the hotel industry.

ROSS: ‘NEED TO DEAL WITH’ RUSSIA’S SEAFOOD BAN: Meanwhile, Sen. Dan Sullivan (R-Alaska) is pressing Ross to say what the Trump administration plans to do about Russia’s decision in 2014 to ban imports of U.S. seafood in retaliation for U.S. sanctions over its annexation of Crimea.

“If we look at what the U.S. exported to Russia before this ban took effect, we can extrapolate and estimate that we’ve lost well more than $200 million in export value in those two and a half years — most of which would have come from Alaska,” Sullivan said in set of written follow up questions <https://www.politicopro.com/f/?id=00000159-d2ca-dd4c-abf9-fbea3f9f0000> after Ross’ confirmation hearing. “In that same period, the U.S. has imported roughly $1 billion in seafood from Russia.”

“We know that the Trump administration places a high value on having fair trade relationships our trading partners. How will you use your post as Secretary of Commerce to restore fairness to our seafood trade with Russia and other trade partners?” Sullivan asked, to which Ross replied: “Russia undoubtedly and unfairly used seafood as a response to our sanctions. We need to find a way to deal with it.”

Ross also indicated he’ll keep the U.S. lumber industry’s interests in mind if the incoming administration continues negotiations for a new softwood lumber agreement. In response to a question from Sen. Roger Wicker (R-Miss.), Ross said he was in favor of quotas to offset the subsidies Canadian producers allegedly receive as a result of cheaply priced timber. Canada sets “stumpage fees” to access timber on public lands, which U.S. lumber producers accuse of being far below market value.

U.S. lumber companies, who are now engaged in a trade case against Canadian lumber, only want to see a new deal that limits imports through a strict quota system. The previous deal managed imports through a mix of quota and export duties, which U.S. companies complained allowed too much Canadian lumber south of the border.

PERDUE STILL ON DECK: Agriculture secretary nominee Sonny Perdue probably won’t get a confirmation hearing until mid- to late February, a source on Trump's transition team told POLITICO. It will take several weeks for Perdue's financial disclosures, including his business holdings, debt and sources of income to be thoroughly analyzed for any conflicts of interest and for his FBI background check to be completed, the source said.

Perdue's financial statements from his last run for governor of Georgia in 2006 show he was worth about $6 million and his businesses about $2.8 million. He is a founder of the company Perdue Partners, a global trading firm that helps companies source and export food ingredients such as grains, nuts, produce and alcohol, industrial supplies, pet food, and cosmetics. Perdue also has owned a number of grain- and feed-processing and transportation companies.

INTERNATIONAL OVERNIGHT

— Trump flirts with trade barriers to bring back steel jobs, POLITICO Pro reports <https://www.politicopro.com/energy/story/2017/01/trump-flirts-with-trade-barriers-to-bring-back-steel-jobs-145387>
— Japanese Prime Minister Shinzo Abe faces a dilemma in trying to get Japanese citizens to buy U.S. cars, Bloomberg reports <https://www.bloomberg.com/politics/articles/2017-01-24/abe-has-a-trump-problem-how-to-get-japan-to-buy-more-u-s-cars>.

— Canadian Foreign Minister Chrystia Freeland says the TPP is impossible without the U.S. involved, Reuters reports <http://www.news.com.au/world/breaking-news/tpp-trade-deal-dead-without-us-canada/news-story/b7fecd0dc3a75b72115df44c9487ed3f>.

— The European Parliament’s International Trade Committee recommends that a EU-Canada trade be approved by the legislative body, the Globe and Mail reports <http://www.theglobeandmail.com/report-on-business/economy/eu-canada-trade-deal-clears-hurdle-in-eu-parliament/article33714037/>.

— Mexico considers the unthinkable prospect of leaving NAFTA, the New York Times reports <https://www.nytimes.com/2017/01/24/world/americas/trump-mexico-nafta.html?smid=tw-nytimes&smtyp=cur&mtrref=t.co&gwh=697BE54CC364499C655E3E3A9B08DA92&gwt=pay>.

— Vietnamese factories are still operating at full capacity despite TPP snub, Bloomberg reports <https://www.bloomberg.com/news/articles/2017-01-24/vietnam-still-attracts-investors-as-trump-deals-trade-setback>.

THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: abehsudi at politico.com <mailto:abehsudi at politico.com> and @ABehsudi <https://twitter.com/abehsudi>; mcassella at politico.com <mailto:mcassella at politico.com> and @mmcassella <https://twitter.com/mmcassella>; dpalmer at politico.com <mailto:dpalmer at politico.com> and @tradereporter <https://twitter.com/tradereporter>; mkorade at politico.com <mailto:mkorade at politico.com> and @mjkorade <https://twitter.com/mjkorade>; andjhuffman at politico.com <mailto:jhuffman at politico.com> and @JsonHuffman <https://twitter.com/JsonHuffman>. You can also follow @POLITICOPro <https://twitter.com/POLITICOPro> and @Morning_Trade <https://twitter.com/Morning_Trade>.
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