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International Issues Update

By January 27, 2023No Comments

ON OUR DESKS

  • Updating advice on Russia-related business risks 
  • Drafting comments on FDA draft rule on “healthy”
  • Counseling on antidumping and countervailing duty petitions

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

February 2023 schedule of events:

  • February 9: Principal Deputy Assistant Secretary of State for Near Eastern Affairs Yael Lempert, Economic and political priorities in the Middle East
  • February 15: Assistant U.S. Trade Representative for Labor Josh Kagan, Labor priorities in trade negotiations and forced labor
  • February 16: Deputy Assistant Secretary of State for East Asian and Pacific Affairs Rick Waters, U.S.-China relations and State’s “China House”

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

YOU NEED TO KNOW

Americas

Secretary of State Blinken and U.S. Trade Representative Tai joined 11 newly-announced partners for a virtual ministerial of the Americas Partnership for Economic Prosperity (APEP), first announced by President Biden at the Summit of the Americas in June 2022. The United States already has free trade agreements with nine of the 11 APEP partners, who are Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay. No dates have been announced for any formal negotiations.

During a January 26 USMCA deputy trade ministers meeting in San Diego, the United States raised concerns over Mexico’s policies impacting energy, medical device supply chains, and agricultural biotechnology, as well as over Canada’s proposed digital service tax. Following the meeting, Senators Wyden (D-OR) and Crapo (R-ID) called on USTR to step up USMCA enforcement on Mexico.

Against the backdrop of the January 24 Community of Latin American and Caribbean States (CELAC) summit in Argentina, several regional players made news on trade. Brazil and Argentina raised eyebrows with an announcement of common currency cooperation, later clarifying they are considering a “common means of payment” that would not replace their own domestic currencies. Brazilian President Lula pledged cooperation on modernizing Mercosur, finalizing the Mercosur-EU FTA, and potential China-Mercosur FTA negotiations.

Neither the United States nor China is a member of CELAC, but Special Presidential Advisor Chris Dodd attended the CELAC summit and met on the margins with Argentina’s president and economic minister to discuss lithium, electric vehicles, agribusiness, and renewable energy. Chinese President Xi praised CELAC as the premier institution for Chinese engagement in the region. St. Vincent and the Grenadines will host the next CELAC summit in 2024.

Contact: Ethan Knecht, Steve Ziehm

Inflation Reduction Act

With intense scrutiny continuing over electric vehicle (EV) tax credits contained in the Inflation Reduction Act (IRA), Senator Joe Manchin (D-WV) introduced a bill (the American Vehicle Security Act) seeking to delay implementation of the tax credits and remove authority provided to Treasury to interpret and implement the IRA’s requirement for origin of qualifying critical minerals and battery components. A white paper issued by Treasury had sought to address allies’ objections to the IRA provisions by broadening the definition of “free trade agreement.”

Senate Finance Committee Chair Ron Wyden (D-OR) has said he has no interest in reopening the IRA, but the new Manchin bill could increase pressure on Treasury’s final implementing rules. Treasury Secretary Janet Yellen on January 24 told the Wall Street Journal that Japan and the European Union would need to negotiate new trade agreements with the United States to meet the IRA’s mineral-sourcing requirements.

Three unions representing autoworkers, steelworkers and machinists teamed up with environmental group Sierra Club and consumer advocacy group Public Citizen to urge the Biden administration not to change the IRA’s EV tax credit rules.

Contact: Chris Benscher

China Tech Controls

The United States reportedly expects to soon reach an agreement with Japan and the Netherlands on restricting the sale of advanced semiconductor manufacturing equipment to Chinese parties. The United States adopted controls last October and has sought Japanese and Dutch cooperation,  as the two countries are home to major semiconductor manufacturers ASML and Nikon. Japan and the Netherlands may not formally announce the move but are expected to implement controls over the coming weeks, following domestic processes.

Further developments are expected in the coming months but likely not before Secretary of State Blinken’s planned February 5-6 visit to Beijing. Commerce may announce technical changes to semiconductor restrictions following the January 31 close of a public comment period. The semiconductor restrictions are expected to be the first in a series of expected controls on advanced technologies like quantum computing, artificial intelligence, biotech, and advanced clean energy.

Congress continues to press for a hard line approach. House Foreign Affairs Committee Chair Michael McCaul (R-TX) has repeatedly requested access to Commerce data on licensed exports to China. On January 24, Speaker Kevin McCarthy announced 12 Republican members of the new House Select Committee on the Strategic Competition between the U.S. and the Chinese Communist Party.

Contact: Pat Sheehy

Quick takes

  • Ecuador’s free trade negotiations with Mexico, and consequently Ecuador’s accession into the Pacific Alliance, deadlocked this week over disagreements on agriculture.
  • Congresswoman Debbie Dingell (D-MI) announced on January 25 a new Heartland Caucus expected to include about 40 members of Congress focused on manufacturing, labor, rural health care, infrastructure, and environment issues from the perspective of “not flyover country.”
  • The Senate Agriculture Committee announced four upcoming Farm Bill hearings, with USDA Undersecretary for Trade and Foreign Agriculture Affairs Alexis Taylor scheduled to appear February 1 for the first hearing.
  • The State Department’s Directorate of Defense Trade Controls (DDTC) hinted during a January 24 webinar at possible adjustments to the International Traffic in Arms Regulations (ITAR) to allow general authorizations for certain exports from the U.S. Reportedly, issues with customs software have been the main factor complicating implementation.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly Introduced Legislation

House

  • H.R.566 (Nehls, R-TX) Prohibits Federal spending in China.
  • H.R.558 (Issa, R-CA) Would prohibit certain foreign countries from purchasing or leasing property near sensitive sites.
  • H.R.554 (Hill, R-AR) Would deter Chinese aggression towards Taiwan by publishing reports on financial institutions with ties to Chinese officials and their families.
  • H.R.552/H.R.551 (Gooden, R-TX) Would prohibit U.S. contributions to UN organizations/Would direct the Attorney General to report on how U.S. research has benefited China.
  • H.R.545 (Buchanan, R-FL) Would support seasonal industries affected by antidumping and countervailing duty investigations.
  • H.R.540 (Kim, R-CA) Would require the Treasury Secretary to provide more equitable treatment of Taiwan in international financial institutions. 
  • H.R.535 (Connolly, D-VA) Would prohibit the U.S. from recognizing any potential referenda in Russian-occupied, sovereign Ukrainian territory.
  • H.R.513 (Jackson, R-TX) Would prevent foreign influence over agriculture production and supply chains.
  • H.R.510 (Davidson, R-OH) Would limit Chinese influence at the IMF.
  • H.R.506 (Cohen, D-TN) Would designate Russian-based mercenary Wagner Group as a foreign terrorist organization.
  • H.R.503 (Buck, R-CO) Would impose sanctions against TikTok. 
  • H.R.499 (Fallon, R-TX) Would require the SEC to require annual disclosures of investments with ties to China.
  • H.R.457 (Cohen, D-TN) Would establish a list of countries based on the level of corruption and sanction individuals involved.
  • H.R.401 (Allen, R-GA) Would prohibit the National Science Foundation from awarding grants to Chinese military companies and their affiliates.

Senate

  • S.125 (Cotton, R-AR) Would withdraw China from receiving normal trade relations treatment.
  • S.104 (Rubio, R-FL) Would support seasonal industries affected by antidumping and countervailing duty investigations.
  • S.85 (Hawley, R-MO) Would impose sanctions against TikTok.
  • S.68 (Tuberville, R-AL) Would prevent foreign influence over agriculture production and supply chains.
  • S.9 (Cruz, R-TX) Would prevent strategic petroleum reserve exports to China.

Upcoming Congressional hearings 

House

Senate

WHO’S WHO

Arrivals

  • Mr. Axel van Trotsenburg, World Bank Senior Managing Director for Development Policy and Partnerships
  • Mr. Brad Grantz, Senate Commerce Committee Republican Staff Director
  • Ms. Courtney O’Hara Taylor, Senate Environment and Public Works Committee Democratic Staff Director
  • Mr. Dan Sullivan, Senate Commerce Committee Republican Chief Counsel
  • Mr. Jeff Zients, White House Chief of Staff
  • Ms. Sarah Ladislaw, NSC Senior Director for Climate and Energy

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

UPCOMING EVENTS

  • EU Agriculture Council (Brussels), January 30
  • Federal Open Market Committee (Washington), January 31-Feb.1
  • EU-Ukraine Summit (Kyiv), February 3
  • Secretary of State Blinken travels to China, February 5-6
  • Brazilian President Lula da Silva travels to Washington, February 9-10

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

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