| | | | |  | | By Ari Hawkins | | | With help from Gavin Bade and Phelim Kine
| | — Indo-Pacific Economic Framework countries are unlikely to finalize any trade provisions during this week’s Asia-Pacific Economic Cooperation summit in San Francisco amid domestic pushback from the Democratic chair of the Senate Banking Committee. — The Biden administration is focused on creating a framework for dialogue with China — not concrete deliverables — ahead of a closely-watched meeting between the U.S. president and Chinese paramount leader Xi Jinping confirmed for Wednesday. — Retiring Rep. Earl Blumenauer (D-Ore.), on the Ways and Means Subcommittee on Trade, sat down to share regrets and perspective after more than 25 years in office in a nearly hour-long interview with POLITICO. It’s Monday, Nov. 13. Welcome to Morning Trade!! To all our readers who happen to be making the drive into Golden Gate City for the APEC summit this week, all I can say is may the odds be ever in your favor. Got a pitch? Coverage suggestions? Want a coffee chat? Reach out to: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can also follow us on X: @_arihawkins, @gavinbade and @tradereporter.
| | | | A message from PhRMA: The COVID-19 public health emergency is over. Across the world there is an abundance of affordable, often free, treatments. But the Biden administration is considering proposals that would allow foreign competitors to effectively steal American intellectual property on COVID-19 medicines through another WTO TRIPS waiver that would harm American workers, patients and innovation. It’s time to move beyond this ideological debate and make progress on a trade and health agenda for the future. Learn more. | | | | | | | 
Senate Banking Chair Sherrod Brown (right), facing a tough reelection campaign next year, called on the Biden administration to drop the trade pillar altogether. | Gaelen Morse/Bloomberg via Getty Images | IPEF TRADE PILLAR PUNT: Electoral anxiety may be about to spoil Biden’s big trade rollout in San Francisco. For months, the administration has been planning to unveil the details of its Indo-Pacific Economic Framework at the APEC summit this week in the Golden City. That would show China that its regional neighbors are aligning with the U.S. on new rules for supply chains, sustainability, anti-corruption measures and trade. That last part — the trade pillar — has been the most challenging. The administration called IPEF members to California for last-minute negotiations, scrambling to finalize some legally binding trade rules ahead of the summit this week. The rest is basically done. But now, domestic political concerns — not foreign trading partners — are threatening those talks. Last week, Senate Banking Chair Sherrod Brown (D-Ohio), facing a tough reelection campaign next year, called on the administration to drop the trade pillar altogether. Other Democrats like Senate Finance Chair Ron Wyden (D-Ore.) soon followed. Now, it appears unlikely there will be any finalized trade provisions announced this week at all, two sources with knowledge of the talks said on Sunday. The reason? Brown’s statement has stirred a deep anxiety in the administration and Democrats in Washington that Republicans will paint IPEF as a job-outsourcing global trade deal — as they did in 2016 with the Trans-Pacific Partnership — even though Biden’s IPEF package is considerably less ambitious and does not touch on tariffs or market access issues. U.S. trade chief Katherine Tai has told her colleagues she believes Hillary Clinton’s support for TPP is a key reason why she lost the 2016 election, and opposition from a frontline senator is clearly ringing alarm bells. Brown’s comments “spooked some folks” in the administration, said a source familiar with the talks. “People are taking the time to make sure they do right by him, and he’s up next year.” Never say never: Those close to the talks say no one is walking away from the table, and the sides could still make a final push later this week for a deal, particularly if Brown’s concerns are assuaged, when more senior officials arrive in San Francisco. Already, IPEF members like Japan have told the U.S. that they would step up their negotiations, including by bringing in more senior ministers, if the U.S. moved to pause the trade pillar. But for now, Brown is holding firm, saying he had "made it very clear” in consultations with the administration in recent days “that the trade portion of the Indo-Pacific Economic Framework is unacceptable." "I’m glad to hear the administration has decided not to move forward on an agreement that lacks enforceable labor standards," he said in a statement to POLITICO. "Instead of negotiating trade deals behind closed doors, we should be working to strengthen enforcement so that American workers can compete on a level playing field." Gavin has more here.
| | | | GET READY FOR POLITICO’S DEFENSE SUMMIT ON 11/14: Russia’s war on Ukraine … China’s threats to Taiwan … a war in Gaza. The U.S. is under increasing pressure to deter, defend and fight in more ways — but not everyone agrees how. Join POLITICO's 3rd Annual Defense Summit on November 14 for exclusive interviews and expert discussions on global security and the U.S.'s race to bolster alliances and stay ahead of adversaries. Explore critical topics, including international conflicts, advanced technology, spending priorities and political dynamics shaping global defense strategies. Don’t miss these timely and important discussions. 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. APEC KICKS OFF — NEW DEALS EXPECTED: This afternoon, President Joe Biden will host his Indonesian counterpart Joko Widodo at the White House. During the visit, the countries are expected to formally upgrade ties, positioning the U.S. on diplomatic par with China, a senior administration official told reporters on Sunday. “We are looking at a future pathway for cooperation on critical minerals, but we're in the very early stages of that. We are looking closely at how we can cooperate with Indonesia to help diversify its semiconductor ecosystem,” the official added. The move comes despite criticism from bipartisan lawmakers who argue that a critical minerals trade deal with the country risks undermining domestic mining, congressional oversight, and international environment and labor standards. U.S.-Japan talks on tap: The U.S. and Japan are also holding the second ministerial meeting of their Economic Policy Consultative Committee on Tuesday, according to Japan's Ministry of Foreign Affairs. The committee was launched in July 2022 as a complement to IPEF, Secretary of State Antony Blinken said. WASHINGTON TAPERS BIDEN-XI EXPECTATIONS: When President Joe Biden meets Xi Jinping on Wednesday the two sides aren’t expected to make much headway over central disagreements looming over U.S.-China trading relations, according to Biden administration officials. “This is not a relationship of five or 10 years ago. We're not talking about a long list of outcomes or deliverables,” said one official, who briefed reporters on background under ground rules set by the White House. The Biden administration plans to keep the focus broad rather than delve into specifics, such as bilateral tariffs, the officials said. But the discussion still offers a chance to make progress toward the resumption of military-to-military communications and an agreement to crack down on China’s role in fueling the flow of fentanyl into the United States. “I certainly expect that the question of economic and trade relationship to be on the agenda,” the official said after being asked by POLITICO whether the pair would discuss Section 301 tariffs. “The president at every meeting and engagement [with Xi] has brought up the importance of a level playing field for American companies and of course that's an integral part of the 301. But I don't anticipate that we'll get into the details.” YELLEN, HE LIFENG LAY GROUNDWORK FOR XI-BIDEN: Treasury Secretary Janet Yellen concluded two days of talks on Friday with Chinese Vice Premier He Lifeng, Beijing’s new economic czar, who demanded earnest actions from Yellen on issues including “sanctions on and suppression of Chinese enterprises, export controls against China, and extra tariffs,” Chinese state news agency Xinhua reported on Saturday. BIPARTISAN FLORIDA REPS WANT GSP RE-UP: Florida Reps. Debbie Wasserman Schultz (D) and Mario Diaz-Balart (R) led the majority of Florida's congressional delegation in a letter pushing for the revival of bipartisan legislation that slashes tariffs on thousands of products from developing countries to House Ways and Means Chair Jason Smith(R-Mo.) and ranking member Richard Neal (D-Mass.). Outlook bad: The next best vehicle to revive GSP could be the year-end spending package, but lawmakers and interest groups remain sharply divided over how to reform the bipartisan program, meaning prospects for the policy’s revival are unlikely in the short term. U.S. PUSHES TO EXTEND DST: The Biden administration is pushing to extend a moratorium on digital services taxes likely to expire at the end of this year, per Brian Faler. The Treasury Department is quietly urging the international community to agree to hold off on the special taxes aimed at American tech giants through next year. That would buy more time for the U.S. to sign onto a key provision of a global tax deal designed to displace DSTs.
| | | | A message from PhRMA:   | | | | | | | 
Rep. Earl Blumenauer said the Biden administration is making a mistake by not working closer with Congress to advance its trade agenda. | Francis Chung/POLITICO | BLUMENAUER’S EXIT — Rep. Earl Blumenauer (D-Ore.) said the Biden administration is making a mistake by not working closer with Congress to advance its trade agenda. The top Democrat on the House Ways and Means Trade Subcommittee, who recently announced plans to retire at the end of this term, sat down with POLITICO to discuss the evolution of trade policy over more than two decades at the center of the national debate. The following is a snippet of the interview, which has been edited for length and clarity — Doug has more here (for Pros!). You've been involved in national politics for more than 25 years now. What have you learned and how has the trade debate changed over that period? Of all the areas I've been involved with, I think that trade has evolved more significantly. I came to Congress intent on serving on Ways and Means, dealing with tax and trade. It’s part of my earlier career, and a great deal of interest I had. I was a strong proponent of allowing to normalize relations with China and get it into the WTO, because I truly believed that there would be a civilizing impact on the Chinese and it would sort of get them in with the rest of the post-World War II order. And I was just flat-out wrong. I had an opportunity to travel extensively to China, with Speaker [Nancy] Pelosi, meeting all the top dogs, dealing with some of the green energy provisions, and I truly thought that engaging the Chinese would help shape their behavior. But it was not going to overcome 4,000 years of tradition. Putting that aside, I continue to believe strongly that things that we worked on have very significant potential. As you may know, I was deeply involved with illegal logging, crafted the timber annex that allowed us to approve the Peru free trade agreement, part of the negotiations with the May 10th agreement. I think those were very consequential for two reasons: one is that it is a signal with our trading partners of higher expectations, and it was a way for us to break the logjam here, and have a bipartisan consensus to move forward. And I continue to think those tools can be very useful. How has former President Donald Trump affected the direction of trade policy under the Biden administration? Trump clearly complicated the situation. Some of our key trading partners are scratching their heads wondering where we are and how we got here. I think Katherine Tai walks on water … but she’s had to play catch-up, and there isn't a trade consensus in the Democratic Party. [The Trump administration] was toxic, but it created political difficulties. When you embed tariffs, those are hard to unwind, particularly when there isn't a political consensus anymore dealing with international trade. It's one of the reasons why I have politely suggested that the Biden administration does themselves no favors by sidestepping the Ways and Means Committee, deeming things to be FTAs for purposes of, critical minerals or whatever. I think having the opportunity to really work that through with the Ways and Means Committee helps recalibrate that process, and I think it's a missed opportunity if we don't do that. You have your proposal on de minimis reform and the business community wants action on GSP and MTB, and there have been discussions about AGOA. Given divisions in Congress, what do you think is possible to achieve by the end of the term? I think we're seeing a renewed emphasis and excitement about Africa. I think that is very encouraging. I mean – GSP and MTB, we offered up proposals that shouldn't be that controversial. Yes, we're going to have environmental provisions, but that's not inconsistent with what we did with the NAFTA revisions. These are things that shouldn't be deal breakers, and I continue to be invested in doing that. What I hope to do is to be able to go back to dealing with GSP and MTB. Things that we offered up and passed when we were in charge. I continue to have this conversation with my Republican colleagues. I don't think it should be a deal breaker considering where people have voted in the past. I think the de minimis is very important, because it is such a graphic example of how the United States has been played, lost its focus. I have tales of woe – people come in and have had successful companies run out of business overnight, because [other] people do their mail order bridal gowns [for example] faster and cheaper.
| | | | JOIN US ON 11/15 FOR A TALK ON OUR SUSTAINABLE FUTURE: As the sustainability movement heats up, so have calls for a national standard for clean fuel. Join POLITICO on Nov. 15 in Washington D.C. as we convene leading officials from the administration, key congressional committees, states and other stakeholders to explore the role of EVs, biofuels, hydrogen and other options in the clean fuel sector and how evolving consumer behaviors are influencing sustainable energy practices. REGISTER HERE. | | | | | | | | | — Tesla has been excluded from the European Commission’s list of companies that are being examined in a probe of Chinese subsidies for electric vehicle companies as the bloc tries to shield itself from a growing flood of Chinese imports, our European colleagues report. — United Auto Workers members at multiple General Motors facilities have voted against the union's tentative contract agreement with the company, one of the first meaningful signs of concern since the union called off its work stoppage, per Nick Niedzwiadek. — Ukraine is open to the possibility of attacking Russia’s oil and gas infrastructure if Moscow ramps up its targeting of Ukraine’s electric system this winter, Ben Lefebvre reports. — The United Arab Emirates is using its leverage as an oil producer and host of the upcoming United Nations climate talks to prod some of the world’s most secretive state-run oil companies to reduce their greenhouse gas emissions, Zack Colman reports. 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 ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade.
| | | | A message from PhRMA: Treatments for COVID-19 are widely available around the world. Expanding the IP waiver is – and always has been – unnecessary and harmful. As the U.S. International Trade Commission’s recent report highlights, intellectual property is essential for innovation and voluntary partnerships produce COVID-19 treatments for over 4 billion people in developing countries. The Biden administration should reject continued efforts by foreign competitors to steal American IP. Read more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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