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International Issues Update 2023/32

By August 25, 2023September 8th, 2023No Comments

ON OUR DESKS

  • Coordinating with the U.S. International Trade Commission on its greenhouse gas emissions investigation
  • Assisting with outreach to foreign embassy officials
  • Providing contacts for engagement with the End Plastic Pollution International Collaborative (EPPIC)

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

In case you missed it:

  • August 22 (VIRTUAL): Senate Finance Committee Chief International Trade Counsel Sally Laing and Senior International Trade Counsel Virginia Lenahan, Trade priorities in the 118th Congress

Upcoming WIBC events:

  • September 6: State DAS for International Organization Affairs Brian Grimm, Expectations and priorities for the 78th UN General Assembly
  • September 12: DFC Managing Director of Business Development and Impact Roxanne Alozie, Opportunities for international business engagement with the DFC

REMINDER: Our client portal, WIBC calendar, and other resources are available at redflag.global/washington.

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

YOU NEED TO KNOW

Asia 

President Biden hosted Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol for a trilateral security summit at Camp David on August 18.  The leaders committed to annual meetings for themselves and their foreign ministers, defense ministers, and national security advisors. They also issued a joint statement, “The Spirit of Camp David,” establishing a “commitment to consult” each other on all security issues, crises, and issues of shared concern. The three made concrete commitments to collaborate on development finance and to better align themselves in a variety of economic statecraft areas. This alignment will include establishing a shared monitoring system for supply chain disruption in critical areas, collaboration on R&D, preventing technological theft, and export controls. South Korea will reportedly establish new export controls authorities in response to this commitment. 

ASEAN economic ministers met on August 19 in Semarang, Indonesia. Ministers expressed optimism in a joint statement “regarding the projected growth rates of 4.6% in 2023 and 4.9% in 2024.” They warned, however, that “geopolitical tensions can potentially disrupt international trade and supply chain links, thus, impeding efficiency gains derived from globalization…ultimately diminishing market confidence, reducing investment, and adversely affecting long-term growth prospects in the region.” Vice President Harris will attend the upcoming ASEAN Leaders’ Summit September 4-7. 

The G20 Trade and Investment Ministers’ meeting concluded August 25 in Jaipur, India, with ministers agreeing to five deliverables: the digitalization of trade documents, efforts to increase access to information for MSMEs, endorsement of a G20 standard for mapping global value chains, sharing best practices on professional services Mutual Recognition Agreements (MRAs), and holding a G20 Standards Dialogue in 2023.  U.S. Trade Representation Katherine Tai called for a focus on WTO reforms in advance of the 13th WTO Ministerial Conference in 2024.

India will now host the G20 Leaders Summit September 9-10. President Biden will attend and could possibly meet with Chinese leader Xi Jinping on the sidelines. Ahead of this, U.S. Commerce Secretary Gina Raimondo will start a four-day visit to China, visiting Beijing and Shanghai from August 27 to 30 to meet with senior Chinese government officials and American business leaders. The visit may be contentious as it comes following the issuance of an executive order restricting certain investments into China. Raimondo’s Commerce Department is also finalizing additional restrictions on certain semiconductor related exports, another point of friction. 

In the face of Republican opposition, the State Department is negotiating a six month extension of the U.S.-China Science and Technology Agreement, which expires on August 27. An amendment would add a commitment to limit the agreement to non-security cooperation.

Contact: Pat Sheehy

Government Procurement

The White House’s Office of Management and Budget (OMB) has published its long-awaited guidance on the implementation of the Build America, Buy America (BABA) provisions of the Bipartisan Infrastructure law.  The OMB rules will become effective 60 days from Federal Register publication and are considered guidance rather than regulations since it will be the responsibility of other government agencies to implement the rules. 

The BABA requires that when federal grants are used for infrastructure projects, all “construction materials” must be of U.S.-origin and “manufactured products” must have greater than 55% U.S. content. The OMB final rule confirms that BABA domestic content requirements only apply to non federal projects that are funded with federal grants, thus only to federal finance assistance programs for infrastructure.

The final guidance provides additional definition, clarity and standards of key BABA terms, such as “construction materials,” “manufactured products” and the definition of cost of components and “predominantly of iron and steel.” Finally, the guidance provides an extensive discussion on its international trade agreement implications.  OMB notes that federal financial assistance awards “are generally not subject to international agreements because these… obligations only apply to direct federal government procurement activities.”

Contact: John McDermid

United States-Mexico-Canada Agreement (USMCA) 

Indicating increasing trade tensions between the United States and Mexico, U.S. Trade Representative Katherine Tai announced on August 17 that the United States is establishing a dispute settlement panel under the United States-Mexico-Canada Agreement (USMCA) regarding Mexican restrictions on biotech corn.  USTR is challenging measures set out in Mexico’s February 13, 2023 decree which ban the use of biotech corn in tortillas or dough, with an instruction to Mexican government agencies to gradually substitute —i.e., ban— the use of biotech corn in all products for human consumption and for animal feed. The United States argues that Mexico’s measures are not based on science and undermine Mexico’s USMCA market access commitments.

Additionally, on August 22, USTR invoked procedures under the USMCA to request – for the first time ever – a panel under the agreement’s Rapid Response Labor Mechanism (RRM). This action was initiated due to a labor dispute at a mine in the Mexican state of Zacatecas.  This announcement follows a June request by the United States asking Mexico to review whether workers at the mine were being denied the rights to freedom of association and collective bargaining. 

Another potential trade dispute was avoided this month when the United States welcomed Mexico’s efforts to address global non-market excess capacity in the steel sector amid a surge of imports. On August 15 it was announced that Mexico would raise its tariff on imports of steel from countries without a free trade agreement from 15% to 25% to strengthen its domestic market. The new tariff, effective from August 16, will last until July 31, 2025, for steel products like rebar, wire rod, hot-rolled coil, cold-rolled coil, coated flat steel, rectangular hollow sections, steel tubes, among others. 

Contact: Stephen Ziehm, Liv Leone

BRICS 

The BRICS Summit in Johannesburg concluded August 24 with a notable announcement that the bloc will admit Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates as members. The six new candidates will formally become members on Jan. 1, 2024. The decision to expand both opens a path for future enlargement and reflects a growing appetite for world order to reflect current geopolitical powers. China and Russia remain focused on expansion to counter Western dominance, but Brazil and India have both been strengthening ties with the West. 

A Chinese press release notes that more than 20 countries have submitted applications to join the bloc. It is unclear what shared goals the newly expanded bloc might hope to pursue outside of opposition to the western-led international system as members have sharply different economies and priorities.  However, U.N. Secretary-General Antonio Guterres attended the expansion announcement, reflecting the bloc’s growing influence. He stated at the event that current “governance structures reflect yesterday’s world,” in seeming agreement with the BRICS countries’ ongoing calls for changes to the U.N. and multilateral finance systems.

In a potentially major development, Chinese Leader Xi Jinping and Indian Prime Minister Narendra Modi met on the sidelines of the summit and agreed to take steps to de-escalate tensions at their shared Himalayan border. China has encroached multiple times on territory claimed by India in the area.  

Contact: Pat Sheehy, Alix Hess

Quick takes

  • An in-person negotiating round for the U.S.-Taiwan Initiative on 21st Century Trade concluded in Washington, D.C. on August 18, with the two sides discussing proposed texts covering agriculture, labor, and the environment. Taiwan shared aims to “broaden export opportunities for Taiwan’s agricultural products and service industries, help SMEs expand their international markets, and advance the capabilities of Taiwan’s digital economy” through these negotiations.
  • Senators Mitch McConnell (R-KY) and Senate Agriculture Committee Chair Debbie Stabenow (D-MI) have confirmed that the Farm Bill will not pass before the program expires on September 30. Congress aims to move the legislation later in the year.
  • The Treasury Department and the Internal Revenue Service (IRS) released proposed crypto tax regulations on the sale and exchange of digital assets by brokers in an effort to crack down on tax cheats.
  • The U.S. Department of Agriculture has reported a surge in demand for animal and vegetable oils and fats with the expansion of global biodiesel production. Imports from China are soaring ($290 million in the first six months of 2023, up from around $1 million in all of 2022) as U.S. renewable diesel makers turn to Chinese feedstocks to capitalize on green subsidies.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly Introduced Legislation

House

  • H.R.5259–H.R.5263 (Slotkin, D-MI) Would increase oversight of the process of mitigating and removing the risks of PFAS contamination.
  • H.R.5255 (Mace, R-SC) Would require every federal contractor to enact vulnerability disclosure policies (VDPs), which requires the reporting of cyber hacking and payment incidents.
  • H.R.5245 (Barr, R-KY) Would enforce congressional supervision on any scientific and technological partnership agreements between the United States and China.
  • H.R.5215 (Johnson, R-SD) Would reinstate country of origin labeling for beef to fall in compliance with WTO rules.
  • H.R.5209 (Neal, R-FL) and (Dunn, R-FL), Would apply export controls and sanctions in efforts by China to introduce genetic mapping.
  • H.R.5199 (Slotkin, D-MI) Would amend the 1998 Agricultural Research, Extension, and Education Reform Act to reauthorize the Specialty Crop Research Initiative.
  • H.R.5188 (Gallagher, R-WI) Would limit presidential authority to adjust imports that are determined to threaten national security.

WHO’S WHO

Arrivals

  • Brendan Danaher, Special Assistant to the President and NEC Deputy Director 
  • Celeste Drake, Deputy Director-General of the International Labor Organization
  • Ella Lipin, Deputy Assistant Secretary of State for International Organization Affairs 
  • Jeff Nesbit, HHS Assistant Secretary for Public Affairs
  • Sven Alkalaj, Ambassador of Bosnia and Herzegovina to the United States

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.

Any issue areas you would like highlighted? Have a specific monitoring request? Reach out to us.

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