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International Issues Update

By October 7, 2022No Comments

ON OUR DESKS

  • Assessing enforcement outlook for import restrictions related to forced labor in China 
  • Reporting on Russia sanctions compliance developments
  • Preparing communications and government outreach materials for a major client event

How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

In case you missed it:

  • October 6: Assistant U.S. Trade Representative for Japan, Korea, and APEC Michael Beeman, APEC Leaders Summit and U.S. Asia-Pacific priorities

Up next: Register for upcoming WIBC discussions here

WIBC discussions are open to WIBC members only. Not a member? Contact Christina for membership inquiries.

YOU NEED TO KNOW

Clean Energy 

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) on October 5 issued six Federal Register Notices seeking input on key climate and clean energy tax incentives in the Inflation Reduction Act (IRA). The IRA’s electric vehicle (EV) tax credit provisions, specifically requirements that certain battery components be manufactured or assembled in North America, have been criticized by U.S. trading partners. The IRS is accepting comments until November 4 on certain definitions and factors to be considered in rule-making to determine applicability of the $270 billion in IRA EV and energy security tax credits. 

Separately, the Commerce Department is accepting public comments until November 3 on products proposed to be included in targeted analysis of trade data and evaluation of policies to strengthen critical supply chains. In accordance with an Executive Order on “America’s Supply Chains,” the list focuses on: public health and biological preparedness, information and communications technology (ICT), energy, and critical minerals. 

Contact: Steve Ziehm

China export controls

The Commerce Department’s Bureau of Industry and Security (BIS) announced on October 7 new restrictions on the export of advanced computing technologies to China, imposing a host of new restrictions on production of advanced semiconductors and supercomputers. 

Export restrictions on semiconductor manufacturing items go into effect immediately, with other restrictions phased in on October 12 (restrictions on support for development, production, or use of integrated circuits in Chinese facilities) and October 21. BIS has established a Temporary General License (TGL) allowing limited activities related to items destined for use outside the PRC. 

BIS is accepting public comments for 60 days and will host an October 13 public briefing on the complex new restrictions. Further analysis and a summary of the public briefing are available on request. 

Contact: Pat Sheehy

Americas

Former president Luiz “Lula” da Silva held onto a narrow lead over President Jair Bolsonaro in the October 2 first round of Brazil’s general elections and currently holds the advantage for the October 30 run-off. However, far-right and center-right candidates made significant gains in congressional and gubernatorial races and are in position to limit Lula’s policy agenda.

Secretary of State Antony Blinken visited Colombia, Chile, and Peru in advance of the Organization of American States (OAS) General Assembly in Lima, the first to be held in person since 2019. Blinken participated in OAS ministerials on migration and the Summit of the Americas and supported resolutions on human rights in Nicaragua and Venezuela, as well as condemning Russia’s aggression in Ukraine.

In a blow to Venezuelan opposition leader Juan Guaido, more than half of OAS member countries voted in favor of a resolution that would deny Guaido’s government recognition by the OAS. The resolution to remove Guaido’s permanent representative (ambassador) to the organization failed to win the two-thirds majority required to advance to the General Assembly floor, but it reflected waning support in the region for Guaido. 

Meanwhile, signs of thawing in the U.S.-Venezuela relationship include reports of potential sanctions relaxation (contingent on the Maduro regime negotiating democratic reforms with the opposition), on the heels of a high-profile exchange of seven detained U.S. citizens for two nephews of President Nicolás Maduro’s wife. 

Contact: Ethan Knecht, Pat Sheehy

Forecasting the next Congress

Recent statements by Republican leaders of House congressional committees foretell potential policy priorities if Republicans regain control of the House. Areas of interest include:  

Farm Bill: Congressman Scott Thompson (R-PA), ranking member of the House Agriculture Committee, would be expected to oppose efforts to further reorient conservation programs towards climate mitigation and would likely push to increase oversight of foreign investment impacts on national security, trade, and food security.

Export controls: Congressman Michael McCaul (R-TX), ranking member of the House Foreign Affairs Committee, would likely undertake a 90-day review of Commerce’s Bureau of Industry and Security (BIS), with a view toward increasing application of export controls (particularly to control exports to China) and potentially exploring moving export control authority to the Department of State.

Trade and tax: Congressman Vern Buchanan (R-FL), the most senior Republican House Ways and Means Committee member who is not retiring would likely prioritize promoting free trade agreements and Trade Promotion Authority (TPA), urge the Administration to increase USMCA enforcement cases, and work to make Republican tax cuts permanent.

Contact: Chris Benscher

Quick takes

  • President Biden spoke out against OPEC’s announcement it will reduce oil production by 2 million barrels per day starting in November and announced he will consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.
  • Last-minute amendments to the National Defense Authorization Act in the Senate revived chances for passage of trade-related measures, while other trade funding bills remain stuck and unable to be attached to this authorization bill.
  • The WTO forecast a sharp slow-down in trade growth in 2023, as inflation and monetary policy tightening are expected to curb demand.   
  • Malaysia became the ninth CPTPP signatory (out of 11) to ratify the treaty. Brunei and Chile are the final two remaining.  
  • The Americans for Free Trade coalition comprising about 170 business associations called on USTR to immediately extend the Section 301 China tariff exclusions set to expire December 31.  
  • The EU adopted an eighth tranche of sanctions on Russia on October 6. The sanctions include a price cap on maritime transport of Russian oil, import and export controls, new services restrictions, and individual sanctions designations. 

NOTICES, BILLS & HEARINGS

Federal Register Notices

Legislation

 House

  • H.R.9140 (Wilson, R-SC) Prohibits acting as an agent of foreign adversary countries.
  • H.R.9120 (Pfluger, R-TX) Requires military assessment of the ability Baltic countries have to deter Russian aggression.

WHO’S WHO

Arrivals

  • Ami Morgan, NSC Director for Strategic Planning
  • Ariel Dorsey, USTR Director for Innovation and Intellectual Property
  • James O’Brien, Professional Staff Member on the House Subcommittee on Trade
  • Leah Uhrig, Legislative Director for Congressman Ted Lieu (D-CA)
  • Nina Hachigian, Special Representative for Subnational Diplomacy

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

  • Annual IMF and World Bank meetings, (Washington DC), October 10-16
  • Annual EU Budget Conference (Brussels), October 10
  • UN Committee on World Food Security (Rome), October 10-13 
  • FAO/WHO Joint Meeting on Pesticide Management (Rome), October 11-14
  • EU Committee of Permanent Representatives meetings (Brussels), October 12&14

Looking farther ahead? Find the most recent full international events calendar here.

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