[CTC] Fwd: U.S. business leader outlines hopes for IPEF ministerial

Tue Sep 6 07:07:32 PDT 2022

---------- Forwarded message ---------
From: POLITICO's Weekly Trade <weeklytrade at email.politico.com>
Date: Tue, Sep 6, 2022 at 10:00 AM
Subject: U.S. business leader outlines hopes for IPEF ministerial
To: <arthur at citizenstrade.org>

Delivered every Monday by 10 a.m., Weekly Trade examines the latest news in
global trade politics and policy.
Sep 06, 2022 View in browser
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By Doug Palmer <dpalmer at politico.com>
Quick Fix

— *American business leaders hope the Indo-Pacific Economic Framework
ministerial meeting* that U.S. Trade Representative Katherine Tai and
Commerce Gina Raimondo will host this week in Los Angeles provides more
clarity about what to expect from the initiative.

*— Civil society groups want the IPEF negotiations to be much more
transparent* than previous trade negotiations. That means the regular
publication of draft texts and an increased opportunity for groups to weigh
in before provisions are final. And one area the campaigners are closely
watching is digital trade.

*—* *You may have thought that USTR already was conducting a four-year
review of the tariffs* that former President Donald Trump imposed on more
than $300 billion worth of Chinese goods, but it’s actually just started.
Or will soon.

*It’s Tuesday, Sept. 6. Welcome to Morning Trade. *I’m not sure what it
means to be “pushily yoga,” but that’s an anagram for a top trade official
from an IPEF country. If you think you know who, be the first one to send
us your answer and you could see your name in tomorrow’s edition! Also,
send your trade news: gbade at politico.com, ahawkins at politico.com and
dpalmer at politico.com.

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Driving The Day

*IPEF: A BUSINESS VIEW:* The first face-to-face ministerial meeting to
discuss goals for the proposed Indo-Pacific Economic Framework for
Prosperity starts on Thursday in Los Angeles, which is home to both
Hollywood and America’s biggest port.

There’s still a number of questions about what to expect, including whether
we’ll know by the end of week which of the 13 other countries are
participating in the talks on each of the four pillars. Morning Trade asked
Jake Colvin, president of the National Foreign Trade Council, to share some
of his thoughts on the meeting. Some answers have been trimmed slightly for
space considerations.

*MT: What are you hoping to see from this week's ministerial? Could we
actually see detailed negotiating texts at this early stage? *

*Colvin: *“The business community will be looking for a roadmap that
suggests prospects for commercially-meaningful commitments on trade and
supply chain issues as well as a roster of countries that will participate
across the initiatives.

“I would be surprised to see detailed negotiating texts to emerge from this
particular set of conversations.”

*MT: Since tariff cuts are off the table — for now anyway — what's the most
commercially meaningful aspect of the IPEF? *

*Colvin: * “A commercially meaningful agreement ought to feature
gold-standard language on digital trade and trade facilitation, including a
permanent ban on customs duties on intangible goods, as table stakes
(meaning, at a minimum).

“There are several other areas that could be of particular interest,
including strengthening regional supply chain coordination, developing
shared approaches to address the root causes of forced labor, and
collaborating on standards and good regulatory practices.

“A standstill agreement to avoid new trade barriers would be an important
and commercially-meaningful short term signal that countries could send
about their intentions.”

*MT: How seriously do you think other countries are viewing the initiative,
given that the United States seems to be willing to offer very little in
exchange for whatever it asks other countries to do?*

*Colvin:* “There is no doubt that other countries are taking IPEF
seriously, though I don’t see every single country on the initial roster
anteing up for something like a high standard digital trade agreement.

“There’s frankly a gap in policy ambition between a country that is already
part of a trade pact like CPTTP (see footnote 1) and another that declined
to join the less ambitious Regional Comprehensive Economic Partnership (see
footnote 2).

“It’s going to be incumbent upon the United States to help resolve that
tension between breadth of participation and policy depth.”

1 - Australia, Brunei, Japan, Malaysia, Singapore and Vietnam
2 - India

*MT: What do you think are the administration's goals for the agreement?   *

*Colvin:* “You’ll have to ask the administration that. But to say it a
different way: This is an opportunity for the Biden Administration to begin
to translate the new energy on trade that Ambassador Tai talks about into
concrete deliverables that enable more inclusive access to the global
marketplace for American businesses and workers.”

*CIVIL SOCIETY GROUPS CALL FOR MORE TRANSPARENCY: *Heading into the
meeting, groups such as Public Citizen, Rethink Trade and Trade Justice
want more detail about what’s being negotiated, especially in key areas
like labor, digital trade and climate concerns.

The groups are planning a rally Thursday outside the Los Angeles hotel
<https://go.politicoemail.com/?qs=c909467047cad2cbc1f5d639bfd03990a6dd3bd5b7d7aa0f6f2e32d52c3dfd0c5ed857bc9ba060600722503dbd49545b>
where the talks are being held to drive home that point. More than a
hundred similarly-minded organizations signed a letter this summer
<https://go.politicoemail.com/?qs=128bf591940b3e2b57d72cedb8bad8293527a80ca5f585646c10b49d6111660823a2b187d90f15b33db59ef754a525e2>
calling on the administration to drop the usual veil of secrecy surrounding
most trade negotiations by publishing all proposals made by countries, as
well as any consolidated draft texts as they emerge.

*Morning Trade has asked both the Commerce Department and USTR for any
draft texts* that ministers will be considering this week, but has not
received any documents. Earlier this summer, the Bilaterals.org website
published what appeared to be a draft text
<https://go.politicoemail.com/?qs=128bf591940b3e2bd70c3215b0dd54db5c2ba62c0b87a2118a7fd4f2310aa8391f3f11cf77689ce7b0b7ffc318ddb7d5>
for the USTR portion of the agreement, known as Pillar 1.

“The Biden Administration is engaging a wide range of stakeholders as we
develop the Framework, and their feedback will continue to inform our
process,” a Commerce Department spokesperson said. “We remain fully
committed to providing information to stakeholders as discussions progress.”

*THE IPEF DIGITAL DIVIDE: *As Colvin indicated, the business community sees
the digital trade negotiations as one of the most important areas of the
negotiations.

*The Coalition of Services Industries,* whose diverse membership includes
Amazon, Google and Facebook, devoted nearly all of the comments it
submitted to USTR to the need for the agreement to fashion strong and
enforceable digital economy rules.

“The IPEF should include commitments to remove discriminatory and
protectionist barriers to data flows, which is crucial for building global
value chains and to allow companies, large and small, to access the global
market and increase efficiency,” CSI said.

A high-standard digital agreement would preserve and increase American jobs
“not just in the services sectors, but across the economic spectrum,” CSI
said. “Other governments, including China, are actively working to shape
the rules of the road for digital trade, often at odds with democratic
values and the principles of openness and transparency.”

*Lori Wallach and Daniel Rangel at Rethink Trade* cast the digital trade
talks in a more sinister light in the comments they filed with USTR.

They accused Big Tech companies of trying to use the IPEF negotiations “to
lock in binding international rules that limit governments from regulating
digital firms’ behavior in the public interest and from fighting corporate
concentration and monopoly power.”

“If this ‘digital trade’ ploy succeeds, Big Tech interests could weaken
existing policies worldwide and stop U.S. policies that constrain digital
entities’ monopolistic abuses and anticompetitive power, that protect
privacy and individual rights over personal and non-personal data, that
fight algorithm discrimination, that hold platforms liable for dangerous
products and violent incitement and that protect gig workers’ labor
rights,” they wrote.

*180 degree turn sought: *“USTR’s objectives for IPEF negotiations must be
the opposite of past ‘digital trade talks’” by allowing countries to
maintain “full policy space for digital standards that protect workers,
consumers, small businesses and civil rights,” the Rethink team wrote.

*USTR SORT OF BEGINS NEXT PHASE OF TARIFF REVIEW: *USTR on Friday
formally acknowledged
it has received hundreds of requests
<https://go.politicoemail.com/?qs=128bf591940b3e2bc5eecd32714ac9b5dcd4e509ed68c31f0985ada9f5cb4affebf65e5bb9118cdddecdba00d364d63d>
to maintain the tariffs that Trump imposed on more than $300 billion worth
of Chinese goods. That signals the start of a formal review, but the agency
still hasn’t said how long it will take to conduct that assessment and
whether it will hold any public hearings as part of the process.

*TTC THREE: AUSTIN VERSUS MIAMI: *That’s the rumor out of Brussels, anyway.
It’s the United States’ turn to host the semi-annual U.S.-EU Trade and
Technology Council meeting and the two sides are said to be considering
either Miami or Austin for the location of the third meeting, sometime in
December or January. (Although one U.S. industry official said they thought
Washington was also a possible venue.)

Six officials involved in the upcoming meeting told our Brussels colleague
Mark Scott
<https://go.politicoemail.com/?qs=128bf591940b3e2baac78c8b24821e541e49982c0850ec6c31e7cdfc805f03605ffa26f44b1cab89e406049c07f05061>
that so-called “deliverables” were expected to be finished by late October.
European policymakers visited Washington in July with the aim of laying out
goals for both the U.S.-based get-together and the subsequent meeting in
mid-2023 somewhere in Europe.

“We have to start showing results,” said one of those officials, who — like
the others — spoke on the condition of anonymity to discuss internal
transatlantic deliberations. “The first two meetings have shown what we can
accomplish. Just look at how we came together on Russian sanctions over
Ukraine.” Another highlighted how some of the working groups, or regular
meetings of mid-tier officials, were working out better than others. He
cited those on investment screening and data governance as successes, while
working groups focused on climate change and small businesses had proved
less fruitful.

*Concern about the EU’s ‘cybersecurity scheme’: *The EU, along with Japan
and South Korea, have raised concern about the United States’ revised tax
credit for electric vehicles, which is available only for cars that have
final assembly in North America.

So, it wasn’t surprising to see that issue mentioned in USTR’s readout
<https://go.politicoemail.com/?qs=128bf591940b3e2b7401187bda1805284da503b13503c9f8a947a1ca1fb3c94554a7d724c924c8c568d73d88e78ccc02>
of Tai’s virtual meeting last week with European Commission trade chief
Valdis Dombrovskis. However, USTR paired those concerns with “issues
related to the EU cybersecurity scheme” — the first time Morning Trade
recalls seeing the matter included in a USTR statement.

USTR did not respond to a request for further information. But earlier this
summer, the American Chamber of Commerce in the EU and several other
business groups issued a joint statement
<https://go.politicoemail.com/?qs=128bf591940b3e2b98ebc30f574146ac3f703a709b8af0e4068943a9faf6eea45c1d9badb02d57125a7ebd21dca2060e>
to express concerns over several procedural and substantial elements in the
EU’s proposed Cybersecurity Certification Scheme for Cloud Services.
International Overnight

— Six months into its invasion of Ukraine, Russia is being throttled by a
severe technology deficit inflicted by sanctions, our colleagues in
Brussels report
<https://go.politicoemail.com/?qs=128bf591940b3e2b5f3f53598455d86021881de0121e89623a88fdb32c6b4f7c2b82091424dc2df1534051f31d6b3dd2>
.

— Finance ministers from the Group of Seven major economies announced an
agreement to impose a cap on the price importers pay for Russian oil, POLITICO
reports
<https://go.politicoemail.com/?qs=128bf591940b3e2bdf3999a3a4f6a79f3c5b1b7bb9af7937ef231bcc0a947c53ce1f0ceda388861df82a40a6faa0f46a>
.

— The energy battle between Russia and the West escalated dramatically,
with Western countries pushing a cap on energy exports, our colleagues in
Brussels report
<https://go.politicoemail.com/?qs=128bf591940b3e2b5781206b1d8682d5c947e90547719abe5489c16ea3ca74f89164c3b5e5480a6026b95b9a59e67bbd>
.

— France's foreign minister heads to Turkey on Monday to emphasize to
Ankara the importance of its firms not circumventing Western sanctions on
Russia, Reuters reports
<https://go.politicoemail.com/?qs=128bf591940b3e2b93216c1e3e8e2f101c65e23d74b2ed5779d0508db55f5f3d6fe4b7185cec65c4457e2f3fbd1bf962>
.

— Matteo Salvini, the leader of Italy's far-right League party said
sanctions against Russia harm Italy and should be reformed, our colleagues
in Rome report
<https://go.politicoemail.com/?qs=128bf591940b3e2bea86ffcac15efb294946902516331a649ce2abac7718e9d99789d900c9615291f0ba92c69fece341>.

— EU calls on incoming U.K. Prime Minister Liz Truss to abide by Brexit
deal, The Guardian reports
<https://go.politicoemail.com/?qs=128bf591940b3e2ba5af303112405a2f0c200114f4d4ab25958c349dddbdbcac4833eec59e70057b3826251f48c00f1e>.

— The WTO has suspended a dispute settlement panel tasked to sort out a
years-long canola fight between Canada and China, our Canadian colleagues
reports
<https://go.politicoemail.com/?qs=128bf591940b3e2b47849d297ce6adc50778a0fe754c4368a03c44887bcf003364986bddb3c5672b133754d28541c37d>.

— The South Korean government has identified slowing trade with China as a
major risk and vowed to strengthen economic cooperation with its neighbor
after the country logged its highest ever trade deficit in August, The
South China Morning Post reports
<https://go.politicoemail.com/?qs=128bf591940b3e2b8db78a8cccb5cfe6f336058eed46a173bbe1fb9afb3637be08e07fc15bffb6465872ebacc7204ccd>
.

— Concerns over India's widening trade deficit and its impact on the
broader economy have increased, The Economic Times reports
<https://go.politicoemail.com/?qs=128bf591940b3e2ba8c6f12fe885cb327914846c88f9adb2d6417cbd620fc28293c5cbfbb03098b22b92575580e28494>
.

— Japanese Finance Minister Shunichi Suzuki said on Friday that Tokyo will
take "appropriate" action as needed on the yen's slide to a fresh 24-year
low against the dollar, Reuters reports
<https://go.politicoemail.com/?qs=128bf591940b3e2bed26b4c58355d44faa76bbbd28f76ea1f049b02bb49f4fa1e1a4055e3f96c35ed98a8c2cb46e4912>
.

*A WOMEN RULE CONVERSATION ON LEADING FROM THE GROUND UP: * Join POLITICO’s
Women Rule on Sept. 15 for conversations focused on creating and leading
sustainable, healthy and inclusive communities. The program will feature a
Member Exchange panel followed by a keynote discussion exploring the most
pressing issues facing women in their communities and women in leadership
roles who are best positioned to solve these problems. REGISTER HERE
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*THAT’S ALL FOR MORNING TRADE! *See you again soon! In the meantime, drop
the team a line: dpalmer at politico.com, gbade at politico.com and
soverly at politico.com. Follow us @POLITICOPro
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and @Morning_Trade
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*Follow us on Twitter*

John Yearwood @john_yearwood
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