USTR REMAINS MUM ON 301 TARIFF REVIEW PLANS: USTR still has not said how it plans to proceed with a legally required review over the next several months of most of the tariffs that Trump imposed on $350 billion worth of Chinese goods. The first batch of 301 tariffs on $34 billion worth of Chinese goods are set to expire on July 6, the second batch on $16 billion on Aug. 23 and the third batch on $200 billion on Sept. 24 because of the four-year time limit. (Trump imposed duties on another $100 billion or so of Chinese goods in fall 2019, giving them another year of life before a review is required.) The impending deadlines do not mean the tariffs automatically go away, since all of the four-year terminations appear to be subject to review if USTR receives a petition asking for them to be extended from an industry that has benefited from the tariffs In fact, to maximize the potential for such a review, the 1974 Trade Act requires USTR to "notify by mail the petitioner and representatives of the domestic industry … at least 60 days before the date of such termination." That would be by this weekend for the List 1 tariffs, roughly June 23 for the List 2 tariffs and roughly Aug. 24 for the List 3 tariffs. A decision to extend the tariffs would transfer political ownership of the duties from Trump to President Joe Biden, at a time when many companies are pleading for tariff relief to help deal with inflation. In an email sent on April 20, Morning Trade asked USTR whether it would conduct a public comment period or hold a public hearing as part of the upcoming review. Morning Trade also inquired whether USTR would conduct a combined review for Lists 1, 2 and 3 or consider each list separately. After an initial response from USTR acknowledging our inquiry, Morning Trade has heard nothing more, despite several follow ups. The Trump administration held a number of public hearings as part of its original Section 301 investigation and tariff escalation. Those included a sparsely-attended initial hearing on Oct. 17, 2017 as part of its probe, and subsequent hearings each time it published a list of goods that it proposed to hit with retaliatory duties. In one sign of the vast number of industries affected by Trump's actions, the hearings on the administration's plan to impose tariffs on an additional $200 billion worth of Chinese goods ran for six days. A year later, USTR held another seven days of hearings on Trump's plan to impose duties on all remaining Chinese goods. Interesting twist: No industry filed a petition asking USTR to launch the original Section 301 investigation that ultimately led to duties on more than $350 billion worth of Chinese goods. Instead, then-U.S. Trade Representative Robert Lighthizer self-initiated the probe in August 2017 after "after consulting with stakeholders and other government agencies." However, one trade lawyer said he believed the Section 301 statute provides USTR enough discretion to review and extend the current duties, in the same way the agency self-initiated the original investigation. Still, the impending terminations raise the question whether some organization will step forward to formally request the tariffs be extended, he said. As for this Friday's mail notification requirement, USTR may be able to comply by mailing in a Federal Register notice, the trade lawyer joked. Another uncertainty: USTR also faces a court-ordered June 30 deadline to reconsider, or at least further justify, the duties that Trump imposed on more than $300 billion worth of goods under Lists 3 and List 4 in 2018 and 2019. It has not said whether that will factor into the separate statutory reviews required for Lists 1, 2 and 3. VACCINE DEBATE RETURNS TO GENEVA: WTO Director General Ngozi Okonjo-Iweala wants to deliver the text of the proposed agreement to the TRIPS Council as soon as possible, a Geneva-based trade official told Morning Trade last week. (TRIPS stands for Trade-Related Aspects of Intellectual Property Rights.) The council will meet in an informal session on Tuesday and in a formal session on Friday, giving the WTO chief two opportunities to present the text, which emerged in March from a small group discussion with the United States, the EU, India and South Africa. Mixed U.S. message: That "difficult and protracted process has resulted in a compromise outcome that offers the most promising path toward achieving a concrete and meaningful outcome," USTR spokesman Adam Hodge said at the time. Two weeks later, U.S. Trade Representative Katherine Tai sought to calm congressional criticism of her handling of the negotiation by stressing that no final agreement had been reached yet. USTR's most recent intellectual property rights report reiterated that point. "USTR is working hard to facilitate an outcome on IP that can achieve consensus across the 164 Members of the WTO to help end the pandemic," the trade agency said in its news release. Meanwhile, other WTO members have complained of being left out of the small group discussions. Okonjo-Iweala told Tai during a meeting in Washington last week that the TRIPS Council needs to begin reviewing the text for there to be any chance of reaching a final agreement by the time the WTO holds its ministerial meeting June 13-15. Details: POLITICO reported last month that the compromise would allow developing countries that have exported less than 10 percent of the world's coronavirus vaccine doses in 2021 to authorize domestic production of a patented coronavirus vaccine without the owner's consent. That would include both India and South Africa, which each exported far less than 10 percent last year, according to the WTO-IMF Vaccine Trade Tracker . However, it would exclude Russia because it is classified as a developed country within the WTO and it would exclude China, even though it claims developing country status because it accounted for about one-third of global vaccine exports as of January. Still, some U.S. lawmakers would like additional safeguards to ensure that China and Russia don't get free access to the valuable mRNA vaccine technology. REVVING UP FOR THE U.S.-EU TTC MEETING: The Information Technology Industry Council today is releasing a list of its priorities for the TTC meeting, which comes a little more than six months after the first session in Pittsburgh last year. The group's requests include a commitment to accelerate research and development for 6G and coordinated action "to address third-market policies of concern, such as increased data flow restrictions." On Wednesday, the U.S. Chamber of Commerce will co-host an event with the Embassies of Denmark, Finland, and Sweden to highlight "American & Nordic Business Perspectives on the U.S.-EU Trade and Technology Council." One of the featured speakers will be Assistant USTR for Europe and the Middle East Dan Mullaney, who Morning Trade hopes will discuss what to expect from the USTR-led TTC working group on Global Trade Challenges. Procurement cooperation: According to a draft joint statement obtained by our colleagues in Europe, the two sides hope to facilitate "trade through increased cooperation in the area of procurement," an objective that seems somewhat at odds with the Biden administration's heavy emphasis on Buy America requirements to spur U.S. manufacturing. That procurement initiative is tied to the goal of "building resilient transatlantic supply chains" to avoid strategic dependencies, to advance climate and technology leadership and to make U.S. and EU energy supplies "shock proof," the draft statement says. "For this purpose, we [intend] to intensify our cooperation in the area of public procurement, building trusted supply chains with the help of public procurement policies." Climate change peace clause? Another paragraph of the draft 46-page document suggests the two sides would steer clear of imposing countervailing duties against each other's subsidies to address climate change. "In light of the critical role of energy supplies and the need to fight against climate change, we commit to refrain from trade defense measures targeting either side's green and energy transition support schemes," the draft says. It was not immediately clear if that would bar the EU from targeting a proposed expansion of the U.S. tax credit for electric vehicles tha t European officials have already sharply criticized. However, the fate of that legislative proposal remains up in the air, with Sen. Joe Manchin (D-W.Va.) recently criticizing the measure as unnecessary. BIDEN DISCUSSES ENERGY ISSUES WITH MEXICAN PRESIDENT: Biden was expected to raise concerns about Mexican energy policies that threaten U.S. investment in the country's renewable energy sector during a virtual meeting on Friday with Mexican President Andrés Manuel López Obrador. But how deeply the two leaders got into those issues was unclear from the White House readout, which stressed the U.S. desire to work cooperatively with Mexico on a long list of issues, including migration concerns. "At a time of immense global challenges, from Russia's further invasion of Ukraine to economic volatility, the Leaders pledged to work together across the breadth and depth of the relationship between our nations. President Biden and President López Obrador discussed how our countries can continue to advance our shared economic, climate, energy, and migration management goals in line with the High-Level Economic Dialogue, with a special focus on shoring up North American supply chains," the readout said. LIGHTHIZER BACKS BORDER ADJUSTMENT: Former President Donald Trump's top trade adviser Robert Lighthizer is advocating for the idea of penalizing imports of high carbon-polluting goods from top emitting countries like China. The concept pairs a protectionist trade agenda favored by Lighthizer with combating climate change, an issue that the Trump administration disdained. "When you let polluters sell in your market without a border adjustment you are losing U.S. jobs in the competing industries and essentially you are subsidizing the polluters. This makes no sense," Lighthizer told POLITICO's Josh Siegel. Lighthizer, the architect of Trump's trade war against China, said he's spoken about the idea with Republican senators toying with the idea (it's a point of potential bipartisanship, as Josh reported in February). Republicans including Sens. Cramer and Lindsey Graham have reached out to former Trump administration officials to rally support for the policy in order to boost credibility with conservatives who are skittish about being associated with any policy that would address climate change. But Lighthizer said he is opposed to pairing any tariff or fee on imported goods with a corresponding domestic carbon price. Many economists and trade experts say it would be hard to get the WTO to approve a carbon border fee for a country that wants to penalize imported goods based on carbon content without taxing its own products.
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