What Ruto wants in Washington

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May 20, 2024 View in browser   By Ari Hawkins QUICK FIX — Kenya’s President William Ruto is pushing for more U.S. investment and the renewal of the African Growth and Opportunity Act, after the speaker of the House denied requests that he deliver a speech to a joint session of Congress. — North American trade disputes are piling up ahead of the USMCA Free Trade Commission meeting this week in Arizona, hosted by U.S. Trade Representative Katherine Tai. — China is probing imports widely used in consumer goods and automotive industries from the U.S., the European Union, Japan and Taiwan. It’s Monday, May 20. Welcome to Morning Trade! To any fellow trade followers who happen to be either a Sagittarius or a Virgo, we’re in for one heck of a rollercoaster this week, apparently. Send us your trade news. Reach us at: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can also follow us on X: @_AriHawkins, @GavinBade and @tradereporter.   JOIN 5/22 FOR A TALK ON THE FUTURE OF TAXATION: With Trump-era tax breaks set to expire in 2025, whoever wins control of Congress, and the White House will have the ability to revamp the tax code and with it reshape the landscape for business and social policy. Join POLITICO on May 22 for an exploration of what is at stake in the November elections with our panel dissecting the ways presidential candidates and congressional leaders are proposing to reshape our tax rates and incentives. 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. Driving the day Ambassador Meg Whitman and President William Ruto in San Francisco. | Photo by Kimberly White/Getty Images for Kenya Business Roadshow. THE FUTURE OF US-AFRICAN TRADE: Kenyan leader William Ruto left for Washington on Sunday to meet with President Joe Biden later this week, where he is expected to call for greater investment and sharper diplomatic focus on his country. The visit marks the 60th anniversary of official U.S.-Kenya diplomatic relations. It also functions as a test for the Biden administration and how it will engage with a region prone to being neglected economically — particularly as the focus of Washington’s trade agenda appears fixed on competition with China and shoring up cooperation with nearby countries. The Biden-Ruto summit will take place on Thursday. The leaders will dive into economic discussions on Kenya’s regional development and security reform. But even though Ruto is being honored with a state visit to Washington, House Speaker Mike Johnson rejected requests that he be allowed to deliver a speech to a joint session of Congress. That could put a thorn in Ruto’s ultimate objective for his trip: to ensure U.S. political alignment in renewing the African Growth and Opportunity Act. That deal provides eligible African countries duty-free access to the U.S. market for more than 1,800 products — and it’s scheduled to expire in September of next year. Lawmakers and officials from both parties have said they hope to renew the program before that deadline. Ruto will still have access to a congressional audience, according to an itinerary released from State House Spokesperson Hussein Mohamed. He will meet with leaders from the Black Congressional Caucus and the Bipartisan Caucus of the Senate to underscore the “urgent need for America’s tangible and practical engagement with the continent.” On Friday, Ruto will participate in a breakfast meeting with the U.S. Chamber of Commerce, where he will “make the case for Kenya as a prime destination for U.S. investments.” That will be followed by a roundtable with Vice President Kamala Harris focused on expanding the U.S.-Kenya digital partnership. Keep in mind: Ruto’s week-long visit comes as the Biden administration continues to prioritize trade arrangements outside of traditional free trade deals, such as the Strategic Trade and Investment Partnership. Meg Whitman, U.S. ambassador to Kenya, said that negotiations on the partnership are “30 to 40 percent” completed and could wrap up before the end of the year, in an interview with a Kenyan radio station last week. The two sides completed their fifth in-person STIP negotiating round in Washington last week, focusing on agriculture, workers’ rights and trade facilitation. Up next? More industry and government voices will get a chance to weigh in on AGOA ahead of its next public hearing on June 27, under USTR’s review of countries’ eligibility requirements for benefits, per a Federal Register notice. USTR will receive public comments until June 6. Around the World IS THE USMCA STILL LEGIT?: USTR Katherine Tai is hosting her Canadian and Mexican counterparts this week in Phoenix for the fourth USMCA Free Trade Commission meeting to take stock of the deal’s implementation progress, ahead of a formal review in 2026. Disputes pile up: But heading into Wednesday, there’s still no resolution to various disputes looming over the North American partners. This threatens to pull focus from negotiations over joint priorities this week and further cast doubt on the pact’s overall effectiveness as a tool to enhance cooperation among the countries. What are the problems? An auto trade dispute brought by Canada and Mexico against the United States. A corn dispute brought by the U.S. against Mexico. And a dairy dispute brought by the U.S. against Canada. U.S. concerns about Mexico’s energy policies also remain unresolved, while Canada is expected to adopt a digital services tax despite the strong objections of big U.S. tech companies who say they are unfairly targeted by the measure. Mexico, Canadian industry on edge: Senior Biden administration officials have hinted at plans to potentially revise the USMCA, much to the chagrin of Washington’s continental neighbors. For instance… White House National Economic Adviser Lael Brainard indicated the year-six review could address current loopholes that enable Chinese products to enter the U.S. via Mexico, your host reports. This could include modifications to rules of origin provisions, which refer to requirements used to determine whether goods qualify for duty-free treatment. Meanwhile, former Republican president and leading GOP contender Donald Trump has pitched tariffs of up to 200 percent on auto imports from Mexico. Opposing view: Kenneth Smith Ramos, a former USMCA negotiator for Mexico said the USMCA’s rules of origin provisions should remain based on the production process of a product. “If we begin discriminating — not products — but [against] countries, it’s a slippery slope, because the European Union, or China, or the rest of Asia could start doing the same against North America,” he said at a CSIS event last week. Up next?: Continental steel and industry groups will get their chance to weigh in next month during a meeting of the North American Steel Trade Committee expected in June. That discussion is expected to gather industry and government agencies from each of the USMCA countries, according to remarks from American Iron and Steel Institute’s Kevin Dempsey. REGULATORY REVIEW CHINA HOLDS BACK: China’s commerce ministry on Sunday announced it is probing imports of polyoxymethylene copolymer, which is used in consumer goods and automotive industries, from the United States, the EU, Japan and Taiwan. China’s anti-dumping investigation could take up to a year and six months, they said. The move is a signal China still intends to retaliate in response to new trade barriers from its partners, but the narrow scope of the probe also underscores limits on China’s ability to push back on what it views as unfair restrictions. Western response: The European Commission said it will “carefully study the contents” of Beijing’s investigation before deciding next steps, according to a spokesperson. WHAT’S OLD IS NEW AGAIN: In a memo to clients last week, crisis comms and strategic advisory firm Brunswick Group warned that Biden’s tariff announcement — and the policy shift of which the tariffs are a result — has “far-reaching consequences for global business.” “U.S. trade policy is now fully established as a national security tool and not just an economic one,” the memo said. “That makes anticipating potential tariff actions more difficult and increases the probability that additional tariffs will be put in place.”   DON’T MISS POLITICO’S ENERGY SUMMIT: The future of energy faces a crossroads in 2024 as policymakers and industry leaders shape new rules, investments and technologies. Join POLITICO’s Energy Summit on June 5 as we convene top voices to examine the shifting global policy environment in a year of major elections in the U.S. and around the world. POLITICO will examine how governments are writing and rewriting new rules for the energy future and America’s own role as a major exporter. REGISTER HERE.     TRADE OVERNIGHT — How a successful global arrangement on sustainable steel and aluminum could function, per a report from the Center for American Progress. — China probes the agriculture minister for suspected disciplinary violations, per Reuters. — Turkey’s trade ban on Israel presents risks, BIS Says, per Export Compliance Daily. — South Africa rides a wave of investor cash before the election, per Bloomberg. — Bain Capital aims to double its investment in Japan, per Nikkei Asia. 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.   Follow us on Twitter Ari Hawkins @_AriHawkins Doug Palmer @tradereporter Gavin Bade @GavinBade Adam Behsudi @ABehsudi Emily Cadei @emilycadei   Follow us

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