U.S., U.K. trade chiefs go to Charm City for talks

Delivered every Monday by 10 a.m., Weekly Trade examines the latest news in global trade politics and policy.

Mar 21, 2022 View in browser   By Doug Palmer With help from Graham Lanktree Quick Fix — Top U.S. and U.K. trade officials will meet today in Baltimore to discuss the future of transatlantic trade relations, nearly two years after the two countries launched negotiations on a bilateral free trade agreement that fizzled out when Joe Biden was elected president. — A bipartisan group of lawmakers has asked the U.S. International Trade Commission to help farmers struggling with high fertilizer prices by selectively waiving duties in two trade remedy cases, even though it appears the agency has no authority to take that action. — As Biden heads to Brussels this week to consult with allies, a new report from the business community touts the importance of the U.S.-EU economic relationship to job creation and growth on both sides of the Atlantic. It's Monday, March 21. Welcome to Morning Trade. It's the first day of spring, and also a great day to check whether your door and window insect screens need to be fixed, according to my 1974 Popular Science Homeowners Almanac. Fascinatingly, it describes three different types of repairs. All guaranteed to keep those insects from bugging you. Send us your news: soverly@politico.com, gbade@politico.com and dpalmer@politico.com. Driving The Day U.S., U.K. GOING 'SOMEWHERE TOGETHER': U.S. Trade Representative Katherine Tai and U.K. Secretary of State for International Trade Anne-Marie Trevelyan will start the two-day event this morning with a tour of the Port of Baltimore, followed by an afternoon of discussions with U.S. and U.K. labor and business representatives. "This dialogue is about the U.S. and the U.K. learning to understand where we are now and then deciding where to go together," a senior USTR official told reporters on Sunday. "We're going somewhere together. We have a relationship that really matters. And we're trying to build upon it and deepen it," he said. It was less an iron-clad assurance that the United States would finish negotiations on a free trade agreement with the U.K. that were put on hold after Biden defeated Donald Trump in the November 2020 election. "It's important to remember that these agreements are just one tool at our disposal," a second USTR official said. After more talks on Tuesday, Tai and Trevelyan will hold a joint afternoon news conference to answer questions on their plans for moving the relationship forward. 'Hopeful' on steel talks: USTR officials declined to say whether the two sides would announce a bilateral steel and aluminum deal this week, noting that those talks are being led by the Commerce Department. That's because Trump imposed duties on U.K. steel and aluminum using Section 232 of the 1962 Trade Expansion Act, which falls under the Commerce Department's trade authority. "I will say that we're making progress. And we're hopeful," a senior USTR official said. A Commerce Department spokesperson declined to comment. USTR priorities: Tai will emphasize several key priorities in her discussions with Trevelyan, the senior USTR official said. Those include enhancing labor rights, making workplaces safer, supporting domestic investments, building more competitive workforces, decarbonizing the economy, promoting environmentally sustainable practices, promoting gender and racial equity and helping business owners benefit from digital trade. Notably absent was any initiative to open markets by reducing tariffs on either side. U.K ten-point plan: Many of those items overlap with a 10-point agenda of policy areas that Trevelyan hopes to advance with Tai in a series of meetings this year. No location for the next meeting in the U.K. has been announced yet, although an industry official said Scotland has been mentioned as a possible location. Nothing for farmers: A third USTR official said not to expect any discussions this week on sensitive agricultural issues, such as the U.K.'s barriers to U.S. poultry, that were expected to be handled in the FTA talks. The new dialogue is mainly about working together "to make trade policy more inclusive, more worker-centric," he said. China and Russia: One focus will be how the U.S. and U.K. can work together to deal with the competitive pressure from non-market economies such as China, including through the possible use of new tools not yet developed. There could also be some discussion of sanctions already imposed on Russia, but it's not expected to include any new steps that the two sides could take, a USTR official said.   JOIN THURSDAY FOR A CONVERSATION ON CRYPTOCURRENCY AND REGULATION:  Cryptocurrency has gone mainstream. With the market now valued at $1.8 trillion, Washington's oversight of the fast-growing industry remains in its infancy. How should Congress and federal agencies shape future regulation of digital asset markets? Join POLITICO in person or virtually for a deep-dive discussion on what's next for crypto, regulation and the future of finance. Programming will run from 5 p.m. to 6 p.m. EDT with a reception from 6 p.m. to 7 p.m. EDT. REGISTER HERE.     Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. SENATORS ASK ITC FOR FERTILIZER DUTY RELIEF: Sen. Chuck Grassley (R-Iowa) and more than 80 of his Senate and House colleagues urged the ITC to "reconsider the duties" placed on phosphate fertilizer products from Morocco last year, in a letter sent late last week. They also asked the trade panel to "suspend the current process" to impose new duties on urea ammonium nitrate fertilizer from Trinidad and Tobago. The lawmakers don't mention that Russia is also targeted in the two trade remedy cases, presumably because they do not want to pressure the ITC on Moscow's behalf. But Linda Dempsey, vice president of public affairs at CF Industries, the company who filed the urea ammonium nitrate case, said it's impossible to ignore Russia's role in the cases. "Russia is central to the U.S. government's trade cases on both phosphate fertilizers and UAN. Events of the past few weeks have highlighted the importance of making sure America is not dependent on countries like Russia for critical supply chain inputs like fertilizers. CF supports the full enforcement of the laws at issue in these cases, which are designed to remedy foreign trade abuses," Dempsey said. Timothy Brightbill, a trade remedy attorney with Wiley Rein, said he was "not aware of any authority that would allow the commission" to eliminate duties already imposed or to suspend an ongoing trade remedy investigation. And ITC spokesperson Jennifer Andberg suggested the lawmakers should be directing their request to the Commerce Department instead. "While the Commission does not comment on ongoing matters, the concerns noted in the letter seem to be matters for Commerce rather than the Commission," she said. Split responsibilities: Both the ITC and the Commerce Department have a role in setting U.S. anti-dumping and countervailing duties on imports. It's the ITC's job to determine whether U.S. producers are harmed or threatened with injury by the imports, while the Commerce Department calculates how much the price of the imported product is reduced by dumping or subsidies. Last year, the Commerce Department set final countervailing duties on phosphate fertilizers from both Morocco and Russia in a case filed by The Mosaic Co. The U.S. imported $729 million worth of the fertilizer from Morocco and $299 million from Russia in 2019. In a separate ongoing case, the Commerce Department in January set preliminary anti-dumping duties on imports of urea ammonium nitrate solutions from Russia and Trinidad and Tobago that were valued at $137 million and $100 million, respectively, in 2020. The petitioner in that case is CF Industries Nitrogen in Deerfield, Ill., and its subsidiaries. Other options: The lawmakers have other options if they want to help farmers struggling with high fertilizer prices, rather than weakening fairly-won trade remedy protections, Brightbill said. Grassley and several Senate GOP colleagues outlined a number of ideas in a letter sent to Biden on March 11. Those included direct financial support for farmers. BIDEN HEADS TO BRUSSELS THIS WEEK: President Joe Biden is headed to Brussels to meet with allies this week, just days after warning Chinese President Xi Jinping of possible consequences if Beijing provides material support for Russia's war on Ukraine. The trip comes as the U.S. Chamber of Commerce and the American Chamber of Commerce in the European Union are set to release their annual report on Tuesday documenting the benefits of the U.S.-EU trade and investment relationship. "In a global economy wracked by surprises and shocks , the U.S. and Europe remain each other's most important markets and geoeconomic base," the report says, according to an advance copy seen by Morning Trade. "The transatlantic economy generates $6 trillion in total commercial sales a year and employs up to 16 million workers in mutually 'onshored' jobs on both sides of the Atlantic." The transatlantic economy is also still "the largest and wealthiest market in the world, accounting for half of total global personal consumption and close to one-third of world GDP in terms of purchasing power," the report says. Record-setting pals: According to preliminary estimates, the U.S.-EU economic relationship reached record highs on many fronts in 2021, the report says. Transatlantic trade in goods reached an all-time high of $1.1 trillion; U.S. foreign direct investment flows to Europe surged to an all-time high of $253 billion; and European FDI flows into the U.S. surged to the highest levels since 2017, hitting an estimated $235 billion. U.S. LNG displacing Russian exports: The U.S. also is now Europe's largest supplier of liquefied natural gas, accounting for 26 percent of all LNG imported by EU member countriesand the U.K. in 2021. "In January and February 2022, the U.S. supplied more than half of all LNG imports into Europe, shipping more to Europe than ever before. Europe accounted for about 75 percent of all U.S. LNG exports, far outpacing exports to Asia. Moreover, for the first time ever, U.S. exports of liquefied natural gas to Europe exceeded Russia's overall natural gas pipeline deliveries," the report says. GARAGE DOOR OPENER FIRM SEEKS USTR RELIEF FROM ITC ORDER: A U.S. garage door opener company found guilty of violating another company's patent rights has asked U.S. Trade Representative Katherine Tai to help delay an import ban directed at its Mexican supplier that is scheduled to take effect on April 10. Jeff Meredith, CEO of The Chamberlain Group, asked Tai to intervene in the case brought by Overhead Door Corp., a Texas-based subsidiary of Sanwa Holdings, a Japanese company. Meredith requested 10 more months to modify the company's supply chain to comply with the Feb. 9 ruling. He said that would help avoid negative consequences for consumers. "Given our success in the marketplace, it would take our competitors many months to meet market demand, and for some products, like smart garage door openers, they can only satisfy a fraction of the current market demand. This will leave American consumers with little to no options and prices can be expected to skyrocket," Meredith wrote. EU OFFICIAL'S BODY FOUND: We express our deepest condolences to the family and friends of Sibylle Zitko, a Washington-based European Union trade official who has been missing since January. The police have found her body in the Lock 5 area of the C&O Canal, alongside the Potomac River, WTOP News reported.   DON'T MISS POLITICO'S INAUGURAL HEALTH CARE SUMMIT ON 3/31: Join POLITICO for a discussion with health care providers, policymakers, federal regulators, patient representatives, and industry leaders to better understand the latest policy and industry solutions in place as we enter year three of the pandemic. Panelists will discuss the latest proposals to overcome long-standing health care challenges in the U.S., such as expanding access to care, affordability, and prescription drug prices. REGISTER HERE.     International Overnight — Germany's finance minister has called for fresh talks on a possible free trade agreement between the EU and U.S., Reuters reports. — Ukraine war could lead to the creation of a new China-led trade bloc, Reuters reports. — Japan has urged India to take a tougher line against Russia, Aljazeera reports. — Ukraine war puts U.K.-India trade talks under the microscope, POLITICO reports. — Australia and India are expected to strike an interim trade deal before the end of the month, The Hindustan Times reports. — Ukraine war complicates Russia's trade with China, Bloomberg reports. — Turkey faces difficult choices on Russian sanctions as its economy stalls, The Wall Street Journal reports. — RCEP trade agreement has gone into force in Malaysia, The South China Morning Post reports. — Quartz examines why it matters if the Saudis agree to sell oil to China in yuan instead of in dollars. — The Commerce Department on Friday imposed hefty countervailing and anti-dumping duties on organic soymeal from India. The U.S. imported $167 million worth of the meal from India in 2021. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and soverly@politico.com . Follow us @POLITICOPro and @Morning_Trade.   Follow us on Twitter John Yearwood @john_yearwood Doug Palmer @tradereporter Gavin Bade @GavinBade Steven Overly @StevenOverly   Follow us

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Please click here and follow the steps to unsubscribe.