TALE OF TWO TRADE PACTS: The fourth negotiating round for the U.S.-led Indo-Pacific Economic Framework came to a close on Saturday in South Korea — one day before the U.K. formally signed a treaty to join a major Indo-Pacific trading bloc. Light on the details: The USTR and the Department of Commerce said the 14 IPEF countries “continued to make progress” on the pact’s pillars centering on trade, clean energy and the economy, without going into detail on the status of any of those discussions. The latest round of negotiations built off progress made at prior rounds in Singapore and the Ministerial meeting in the U.S. in May, per a joint readout released Sunday, which added that “additional details regarding the next in-person negotiating round will be announced at a later date.” The lack of news from the IPEF negotiations stands in stark contrast to the excitement across the pond. The U.K’s official entrance into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership comes with tangible economic deliverables, including loosening restrictions on trade between the country and the 11 others in the pact. “This will be a big boost for British businesses and open up huge opportunities and unparalleled access to a market of over 500 million people in the Indo-Pacific and beyond,” said trade minister Kemi Badenoch on Sunday after signing the agreement. The expansion of CPTPP, while discussions over the Biden administration’s signature economic framework IPEF remain up in the air, underscores some of the difficulty the White House has found in ironing out its new approach to trade. The White House has focused on expanding Washington’s influence in the Indo-Pacific to confront the rise of China. But the approach has prioritized joint cooperation over disputes involving the supply chain, like environmental and labor rights, rather than eliminating barriers to trade. Critical difference: That makes the aim (and appeal) of IPEF fundamentally different to that of CPTPP, which functions as a free trading agreement and includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Market access granted by CPTPP has outsiders clamoring to join, as member countries weigh six further accession requests, per a statement. Members of the pact met in Auckland, New Zealand on Sunday to discuss the applications of Taiwan and China, which have divided the opinions of member nations. In contrast, it’s not clear what enforcement mechanisms IPEF may have, and countries like Malaysia and Japan have signaled their involvement with the U.S.-led pact is aimed at eventually nudging Washington to join the CPTPP or something with similar benefits. Holding out hope: “I still hope that the U.S. will in time join,” Liz Truss, the former U.K. prime minister and trade chief who launched Britain’s application, told our colleagues in London. The deal, she said, “is an essential bulwark against China.'' GOODBYE KENYA, HELLO BRUSSELS: Tai and Dombrovskis will meet in Belgium this Thursday and Friday for more talks on a proposed sustainable steel and aluminum agreement, as the partners race to permanently resolve a trade dispute that’s loomed over trans-Atlantic relations since the Trump administration. All eyes on Tai: The second meeting this month between the two officials “reflects the strong ongoing commitment from the U.S. and the EU to reach consensus on the agreement by the October 2023 deadline,” said USTR. Both sides have kept negotiations mostly under wraps, with Dombrovskis only remarking he had a “useful exchange” with Tai over the sustainable steel and aluminum pact earlier this month. But this week’s meeting could deliver the clearest look yet into how those talks are shaping up, after diplomats and industry observers on both sides of the Atlantic told POLITICO discussions have already soured over critical portions of the agreement. Quick refresher: The U.S. and EU in 2021 agreed to temporarily end a festering dispute over the tariffs imposed by former President Donald Trump in 2018, eliminating a source of friction and paving the way for the allies to form new agreements. The two sides are striving to reach a permanent deal by the end of October to encourage trade in steel and aluminum produced with fewer carbon emissions, while also putting pressure on China to reduce its excess production capacity. If no deal is reached, the Biden administration could reimpose Trump’s steel and aluminum tariffs as soon as Jan. 1, 2024, replacing the temporary tariff-rate quota system now in place. The EU's retaliatory measures would also go into effect. Looking ahead: At the request of Tai, the International Trade Commission launched an investigation in early July to assess the greenhouse gas emission intensity of steel and aluminum products produced in the United States. SOUTH AFRICA FIGHTS TO KEEP AGOA BENEFITS: South Africa is fighting to keep trade benefits under the African Growth and Opportunity Act that have been put at risk due to U.S. concerns over the country’s relations with Russia and China. South African Trade Minister Ebrahim Patel told Morning Trade that his country wants to use the opportunity to host the AGOA Forum this year to explore how the program could complement the African Continental Free Trade Agreement. South Africa would also like to conduct a “serious exploration of how industrialization can be advanced” and examine how the “groundbreaking work” the United States is doing on antitrust and competition policy could be applied in Africa, he said. Pretoria also envisions an expanded AGOA Forum this year with participation from business and labor groups from across the African continent and the United States, in addition to the government-to-government discussions, Patel said. The trade chief urged Congress to renew AGOA well before it expires in 2025 to keep investment flowing to the continent. Lawmakers should also consider expanding the program so it covers all African nations, not just those in sub-Saharan Africa, he said. Read more from the interview here. YELLEN: HOPES OF LIFTING TARIFFS 'PREMATURE’: U.S. Treasury Secretary Janet Yellen on Sunday said she was eager to work more closely with Beijing on areas of “mutual concern,” speaking ahead of a meeting of Group of 20 finance ministers and central bankers in India, but added that it was “premature” to relax trade restrictions. “The tariffs were put in place because we had concern with unfair trade practices on China’s side and our concerns with those practices remain. They really have not been addressed and China put in place retaliatory tariffs of its own,” she told reporters in India. Yellen added that “perhaps over time this is an area where we could make progress, but I would say it’s premature to use this as an area for de-escalation, at least at this time.” How we got here: The Biden administration has thus far resisted pressure from the business community to lift tariffs on more than $300 billion in Chinese goods first imposed by then-President Donald Trump back in 2018. Beijing continues to enforce retaliatory tariffs on Washington, targeting agricultural products including soybeans. WTO FISH TALKS HEATING UP: WTO members have “a real sense of urgency” to complete negotiations aimed at prohibiting subsidies that contribute to overfishing and overcapacity by the end of this year, Iceland’s ambassador to the WTO, Einar Gunnarsson, said Friday. That would set the stage for trade ministers to adopt the agreement in February, when they gather in the United Arab Emirates for the 13th Ministerial Conference. COZYING UP TO CENTRAL AMERICA: The State Department announced a new partnership on Friday with the government of Costa Rica, aimed at expanding the country’s industry and diversifying the global semiconductor supply chain. The move is part of the Biden administration’s efforts to reduce dependence on China for critical technology, and encourage the development of new supply chains with friendlier nations. PAPER BAG PROBE MOVES FORWARD: The U.S. International Trade Commission on Friday voted to continue investigations into whether imports of certain shopping bags could materially harm domestic industry, in a move that could lead to new tariffs on products from Cambodia, China, Colombia, India, Malaysia, Portugal, Taiwan, Turkey and Vietnam. What’s next: Now that ITC has ruled in the affirmative, the case goes to the Department of Commerce, which is expected to render a preliminary decision on the countervailing duties by Aug. 24, while the preliminary antidumping decision is scheduled for Nov. 7. Those deadlines are subject to change. LAWMAKERS PUSH FOR HAITI TRADE PREFERENCES PROGRAMS: The Congressional Black Caucus is putting fresh pressure on congressional leadership to reauthorize duty-free access to certain apparel products from Haiti, which are set to expire in 2025.
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