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International Issues Update

By December 9, 2022No Comments

ON OUR DESKS

  • Analyzing final National Defense Authorization Act (NDAA)
  • Preparing submissions for USTR’s Section 301 tariff review
  • Assisting with due diligence reviews for client meetings
  • Mapping new Congress members’ ideological alignments
  • Investigating Ukraine reconstruction financing

These are just examples of client service. 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

Up next:

  • December 15: Ambassador of Australia Arthur Sinodinos, U.S.-Australia cooperation on political and economic issues (please note this will be the last WIBC discussion of 2022)

January 2023 schedule will be published next week.

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

YOU NEED TO KNOW

China

China announced significant changes its “Zero COVID” policies this week, allowing those with mild symptoms to quarantine at home, relaxing testing and traveling restrictions, and prohibiting cities from locking down entire neighborhoods and districts. Other restrictions like mandatory masking remain in place, but China’s low vaccination rate could see the changes lead to a new COVID surge. The changes follow widespread public protests, but media reports indicate the government was motivated by economic concerns including lobbying by a major technology supplier.

While Chinese President Xi visited Saudi Arabia this week to deepen bilateral and regional ties on technology, infrastructure, and energy, U.S. action against China continued apace. Representative Kevin McCarthy (R-CA), presumptive incoming Speaker of the House, announced a new Select Committee on China to be chaired by Wisconsin Republican Mike Gallagher.

The  Federal Communications Commission (FCC) prohibited or severely limited use of products from several Chinese national technology champions, including Huawei and ZTE.

Contact: Pat Sheehy, Ethan Knecht

NDAA

House and Senate negotiators agreed on the final text of the FY2023 NDAA, which passed the House (350-80) and will progress to a Senate vote next week. The NDAA authorizes a record $858 billion in military spending ($45 billion more than the administration requested) and includes increased funding for Taiwan and Ukraine. Congress has yet to pass the federal appropriations bill necessary to fund the NDAA’s authorizations.

Highlights of NDAA provisions include: sanctions on trading with Russia in gold; increased funds for the Pacific Deterrence Initiative (PDI), including up to $2 billion a year through 2027 in military aid to Taiwan; a 2028 ban on federal contractors using Chinese-made semiconductor chips; and large increases in purchases of defense equipment and weapons not requested by the administration.

The agreement continues a prohibition on certain procurement from the Xinjiang Uyghur Autonomous Region of China and prohibits the sale of goods produced by forced labor in U.S. military commissaries and exchanges.

Contact: Chris Benscher

Latin America

In a week of political turmoil for Latin America this week, Peruvian President Pedro Castillo (the fourth Peruvian president in two years) was impeached and arrested. Peru’s ambassadot to Washington resigned, and the members of the Pacific Alliance postponed for the second time a planned summit in Lima.

Meanwhile in Argentina, former president and current vice president Cristina Fernández de Kirchner was sentenced to six years in prison for corruption and banned from holding public office. Kirchner announced she does not intend to run for office in 2024, but she holds immunity due to her current position and during appeals to the Supreme Court.

U.S. National Security Advisor Jake Sullivan visited Brasilia, and the two countries announced that incoming President Lula da Silva will conduct a state visit to Washington likely after his inauguration (contrary to earlier signals that Lula might attempt to visit Washington before taking office). Lula is expected to announce his cabinet soon, with leftist former presidential candidate Fernando Haddad likely to take the key finance minister role, probably indicating a looser fiscal policy for the new administration.

Contact: Ethan Knecht

Europe 

The United States hosted on December 5 the third ministerial meeting of the U.S.-EU Trade and Technology Council (TTC) in College Park, following which the parties announced outcomes  in the areas of technology cooperation, including a joint roadmap on artificial intelligence and an early warning mechanism to address and mitigate semiconductor supply chain disruptions.  In relation to the EU’s concerns over U.S. electric vehicle tax credits included in the Inflation Reduction Act (IRA), European Trade Commission Dombrovskis reported to the EU Parliament that he expects a bilateral task force on the issue will produce “output” by the end of 2022.

Contact: Steve Ziehm

Steel and Aluminum

A dispute settlement panel ruled on December 9 that U.S. Section 232 tariffs on steel and aluminum violate WTO rules. In a December 9 statement, the United States said it “ strongly rejects the flawed interpretation and conclusions in the World Trade Organization (WTO) Panel reports,” which “only reinforce the need to fundamentally reform the WTO dispute settlement system.” The decision could be moot since the United States can appeal the ruling to the currently defunct WTO Appellate Body, leaving any final resolution in limbo.

Separately, the United States has reportedly shared a proposal with the European Union on a Global Arrangement on Sustainable Steel and Aluminum, which would include a tiered system of higher tariffs on higher carbon-emitting steel and aluminum goods.

Contact: Steve Ziehm

Quick takes

  • The European Union and Chile concluded negotiations on an Advanced Framework Agreement to modernize their bilateral trade agreement. Impacts will include increased EU access to critical minerals for green technologies.
  • The EU Commission proposed on December 7 a ninth sanctions package against Russia, including additional designations of individuals and entities, new bank restrictions, export controls, and an investment prohibition targeting the mining sector in Russia.
  • Mexican Economy Minister Raquel Buenrostro said Mexico is considering delaying until 2025 a controversial ban on genetically modified corn, which U.S. agricultural stakeholders have protested vociferously.
  • The World Bank launched a new Sovereign Environmental, Social, and Governance (ESG) Data Portal, which includes data on 71 ESG indicators spanning 60 years and 217 economies.
  • The United States announced it will support the African Union’s inclusion in the G20 as part of next week’s African Leaders’ Summit in Washington.
  • Senate Democrats voted to reinstate Senator Schumer and the rest of his leadership team for the 118th Congress.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly-introduced legislation

House

  • H.R.9483 (Stefanik, R-NY) Would require the disclosure of foreign purchase U.S. agricultural land
  • H.R.9460 (Schiff, D-CA) Would criminalize transnational repression
  • H.R.9438 (Jacobs, R-NY) Would impose a tax on foreign-owned under-utilized residential real property
  • H.R.9464 (Pallone, D-NJ) Would prohibit the Federal Communications Commission from granting certain licenses to non-geostationary orbit satellite systems
  • H.R.9461 (Wenstrup, R-OH) Would extend duty-free treatment to imports from Haiti

​​Senate

  • S.5195/S.5190 (Romney, R-UT) Would develop a strategy to expedite critical mineral mining and processing in the U.S./ Would end China’s developing nation status
  • S.5182 (Kaine, D-VA) Would extend the Independent International Fact-Finding Mission on Venezuela

Upcoming Congressional hearings 

House

Senate

WHO’S WHO

Arrivals

  • Caitlin Kovalkoski, ITA Director for Legislative and Intergovernmental Affairs
  • Dan Burgess, Legislative Director for Senator John Boozman (R-AR)
  • Emily Fischer, USTR Director for Southeast Asia
  • Kelly Fay Rodríguez, State Department Special Representative For International Labor Affairs
  • Neil Kornze, Chief of Staff for Senator Michael Bennett (D-CO)

Departures

  • Leila Elmergawi, NSC Director for International Economic Affairs (Digital Economy)
  • Brian P. McKeon, Deputy Secretary of State for Management and Resources

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

UPCOMING EVENTS

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

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