Europe eyes a breakthrough in electric vehicle spat

Presented by the U.S. Chamber of Commerce Global Innovation Policy Center: Delivered every Monday by 10 a.m., Weekly Trade examines the latest news in global trade politics and policy.

Mar 06, 2023 View in browser   By Steven Overly Presented by the U.S. Chamber of Commerce Global Innovation Policy Center With help from Doug Palmer, Kelsey Tamborrino, Camille Gijs and Jones Hayden QUICK FIX — The European Union is looking for a breakthrough on the trans-Atlantic dispute over electric vehicle tax credits this week, as European Commission President Ursula von der Leyen prepares to meet with President Joe Biden on Friday. —  A pair of Senate Democrats is urging Biden to walk back his moratorium on new solar tariffs in the wake of Commerce Department findings that Chinese producers have been flouting U.S. trade laws. — A U.S. court has ruled that “gruyere” cheese can be made anywhere in the world. The Gruyère region won’t be smiling about the decision. It’s Monday, March 6. Welcome to Morning Trade. The disability rights movement lost a titan this weekend with the passing of Judy Heumann, whose lifelong efforts as an activist and government administrator made the world more accessible for all people. Her death coincides with National Disability Awareness Month, and I would encourage you to become more aware of her work. NPR has more on her life and impact here. Send us your trade news: gbade@politico.com, dpalmer@politico.com and soverly@politico.com. You can also follow us on Twitter: @gavinbade, @tradereporter and @stevenoverly.   A message from the U.S. Chamber of Commerce Global Innovation Policy Center: Policymakers have a choice: they can help spur innovation and creativity or stop it altogether. The U.S. Chamber’s International IP Index shows how strong intellectual property (IP) rights protect and empower the work of inventors, engineers, artists, and entrepreneurs. These protections also safeguard consumers from fake and dangerous products. IP is a massive economic driver for American jobs and investment, supporting over $6 trillion in GDP and 45 million jobs.   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. Driving the Day EU WANTS AN EV DEAL THIS WEEK: European Commission President Ursula von der Leyen arrives in Washington later this week with an ambitious task: to clinch a high-level agreement that will allow the EU’s electric vehicle industry to qualify for more of the tax breaks provided by the Inflation Reduction Act. Von der Leyen’s trip will culminate in a meeting with President Joe Biden on Friday and a European official, briefing reporters on the condition of anonymity, said the pair is expected to come to terms on an agreement that could help to mend the most recent rift in the trans-Atlantic relationship. “My assumption would be that the leaders agree in principle they want something like that,” the EU official said Friday. “They might give some cornerstones, some pieces of that, in their statement to make clear we are on the pathway and we should have this in no time.” And the clock is ticking, as Brussels needs to convince Washington of the need for more flexibility on its $369 billion green tech package before the Treasury Department issues its final implementation guidance, expected later this month. Background: The EU and other foreign auto producers have complained about a $7,500 consumer tax credit for electric vehicles provided by the IRA that requires the cars to be assembled in North America to qualify. Another provision requires that a certain threshold of the critical minerals in the battery must be extracted or processed in the United States or in a country with which the U.S. has a free trade agreement. The goal of the deal would be to grant the EU the status of an American trade partner. While the U.S. has formal free trade agreements with Canada and Mexico, meaning producers there can therefore qualify for the subsidies, Brussels doesn’t have such a deal with Washington. What’s in it? The EU official said he did not expect the agreement to eliminate tariffs on critical minerals between the United States and the EU. “That’s not the problem,” the official said, estimating that the EU already has zero duties on 90 percent of its critical mineral imports. However, the final agreement would likely contain commitments on labor and environmental sustainability, the official said. Beijing also in frame: China will also run high on the leaders’ agenda when they meet. U.S. officials are reportedly seeking to call on close allies to impose unprecedented sanctions on China, if Beijing provides military support to Russia for its war against Ukraine. The EU official said Europe shares the U.S. concern about that possibility and could act if needed against Beijing. “I think there is pretty much alignment across the Atlantic that would be an absolute red line. If the Chinese cross this … this would cause reflection on sanctions.” Meanwhile, back in Europe: France and Italy have declared support for industrial policy measures that aim to boost European producers in response to the U.S.’s own industrial subsidies. They are backing a European Sovereignty Fund for industry, softer state aid rules and prioritizing “Made in Europe” for government contracts, POLITICO Europe’s Giorgio Leali reports.   We’re spilling the tea (and drinking tons of it in our newsroom) in U.K. politics with our latest newsletter, London Playbook PM. Get to know all the movers and shakers in Westminster and never miss a beat of British politics with a free subscription. Don’t miss out, we’ve got some exciting moves coming. Sign up today.     CASEY, BROWN CALL WANT SOLAR TARIFFS: Democratic Sens. Bob Casey of Pennsylvania and Sherrod Brown of Ohio are calling on Biden to reverse his decision last year to suspend new tariffs on solar imports until 2024. Their request, written in a letter on Thursday, comes after the Commerce Department issued preliminary findings in December that identified Chinese producers were circumventing existing trade law by routing solar modules through Malaysia, Thailand, Cambodia and Vietnam. “American manufacturers will not have the room to grow unless they are adequately protected from unfair trade practices,” the senators wrote. The White House did not respond to a request for comment on the letter. The push comes as lawmakers eye potential action on a Congressional Review Act resolution to undo Biden’s two-year pause. While the resolution has bipartisan backing in the House, a companion resolution in the Senate has so far only earned GOP support. Spokespeople for Brown and Casey did not respond to inquiries about whether they would support the resolution.   A message from the U.S. Chamber of Commerce Global Innovation Policy Center:   LAWMAKERS ON THE ROAD AGAIN: The House Ways and Means Committee will hold its second field hearing on Tuesday, part of a plan by Chair Jason Smith (R-Mo.) to “partner with the American people to develop solutions that will reverse the course of the Biden economy and deliver results that will improve their livelihoods.” This week’s hearing will take place at a ranch for Clydesdale horses in Yukon, Okla., with witnesses that include the founder of a small meat processing firm, the president of a family-owned drilling supply business, the founder of an oil and gas production company and the former head of a livestock auction house. You can tune in remotely via the committee’s YouTube page. COURT RULES YOU CAN SAY (GRUYERE) CHEESE: The term "gruyere" is a common label for cheese on the American market and can’t be reserved for products from the Gruyère region of Switzerland and France. That was the decision issued Friday by the Fourth U.S. Circuit Court of Appeals in Richmond, Va. The court upheld a prior ruling from the U.S. Patent and Trademark Office. "Cheese — regardless of its location of production — has been labeled and sold as gruyere in America for decades," the court said in its ruling. "Cheese consumers in the United States understand 'gruyere' to refer to a type of cheese, which renders the term generic.”   DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID.     International Overnight — German Chancellor Olaf Scholz on Sunday said China had declared it won’t supply Russia with weapons for its war in Ukraine, POLITICO Europe’s Gabriel Rinaldi and Hans von der Burchard report. — Pentagon officials see Chinese-made cranes that move cargo containers at U.S. ports as a possible security risk, according to The Wall Street Journal. — Mining companies in Canada are worried about the government’s plan to crack down on foreign investors, Reuters reports. — A ship that broke down in Egypt’s Suez Canal is moving again after causing some traffic over the weekend, Bloomberg writes. 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.   A message from the U.S. Chamber of Commerce Global Innovation Policy Center: The 2023 International IP Index warns that storm clouds are gathering for innovators and creators as intellectual property rights face policy headwinds. Key findings: · Mostly stagnant IP environment in 2022: The IP environment in 28 of the 55 economies assessed in the report remained unchanged, suggesting that global progress in enhancing IP protection may be stagnating. · Policy landscape getting stormy: Efforts to weaken IP rights at the World Trade Organization, World Health Organization, and in world capitals could substantially erode the global IP framework and threaten the future of IP-driven innovation. · 5G is a beacon of progress: IP-intensive technologies like 5G not only kept the world connected during the pandemic but also had a powerful economic impact. · Pirates at bay: In 2022, economies made progress in enhancing copyright protection and shutting down access to infringing online content in Asia, Europe, Latin America, and North America.     Follow us on Twitter John Yearwood @john_yearwood Doug Palmer @tradereporter Gavin Bade @GavinBade Steven Overly @StevenOverly   Follow us

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