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International Issues Update 2023/37

By October 6, 2023No Comments

ON OUR DESKS

  • Providing analysis of eligibility requirements under IRA tax credits 
  • Advising on EU emissions disclosure requirements 
  • Speaking at the premier animal agriculture sustainability summit
  • Briefing trade association board on sustainability strategy execution

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:

  • October 5: Canadian Minister-Counsellor for Economic and Trade Policy Carlos Vanderloo, U.S.-Canada relations and Canada’s economic and trade priorities

Upcoming WIBC Events:

  • October 11: State Department Senior Advisor to the Special Presidential Climate Envoy Trigg Talley, U.S. COP28 priorities
  • Special Brussels convening October 11: Senior U.S. Trade Representative to the European Union Rufino Hurtado and European Commission official (TBC), Drivers, dynamics, and developments in transatlantic trade
    You are welcome to forward the invitation to this in-person program in Brussels to appropriate colleagues. Email alix.hess@redflag.global for details.
  • October 17: House Select Committee on China Professional Staff Member Jake Parker, Economic engagement and trade with China

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

Latin America

For the third time since the Biden Administration re-launched the U.S.-Mexico High-Level Economic Dialogue (HLED), Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, U.S. Trade Representative Katherine Tai, and U.S. Ambassador to Mexico Ken Salazar met with their counterparts on September 29 in Washington. Per a joint statement, the two sides discussed new areas of joint collaboration to “promote manufacturing investment” by coordinating on the U.S. implementation of the Inflation Reduction Act (IRA) and CHIPS and Science Act.  The two sides also discussed economic development in Central America, medical devices, clean energy and EVs, IP protection, and improving trade and customs procedures at the U.S.-Mexico border.   The HLED was followed by a High-Level Security Dialogue in Mexico.  On October 4, the United States and Mexico announced the resolution of a labor dispute at an auto parts factory in Mexico that had been reviewed under the USMCA’s Rapid Response Labor Mechanism (RRM). 

According to a letter published by Senator Tim Kaine (D-VA), Chair of the Senate Foreign Relations Subcommittee on the Western Hemisphere, the Biden administration is reportedly shifting the structure of the Americas Partnership for Economic Prosperity (APEP) from a written agreement to a “forum intended to bring leaders together to broadly discuss areas of mutual interest and shared goals.”   President Biden had invited his APEP counterparts to a summit in early November at the White House.

Following recent anti-democratic actions by Guatemala’s departing administration, National Security Advisor Jake Sullivan welcomed Guatemalan President-elect Arévalo to the White House to discuss combating corruption and promoting economic development, including the “importance of private sector investment in creating inclusive economic growth,” such as Vice President Harris’s Central America Forward initiative. The discussion follows numerous other recent meetings and calls by senior administration officials to show support for a peaceful transition of power in Guatemala. 

Contact: Ethan Knecht

China

President Biden said on October 6 that a face-to-face meeting with Chinese President Xi on APEC’s sidelines in San Francisco next month is not yet set up but a “possibility.”  Plans for the meeting are set to solidify when Chinese Foreign Minister Wang Yi visits Washington by the end of October. The news follows a PRC’s Ambassador to Washington Xie Feng’s recent statement identifying increasing direct flights, facilitating visas and cultural exchange programs, and renewing the bilateral science and technology cooperation agreement as Beijing’s immediate priorities in the relationship.  Relatedly, a bipartisan Senate delegation led by Majority Leader Chuck Schumer (D-NY) and Finance Committee Ranking Member Mike Crapo (R-ID) will travel to China next week. The trip marks the first major Congressional delegation to China since the pandemic. 

New controls on U.S. trade with China have continued despite the increasing bilateral dialogue. The Commerce Department’s Bureau of Industry and Security (BIS) on October 4 sent a rule on semiconductor manufacturing for interagency review. The rule will likely build on interim controls imposed last year to limit U.S. persons’ support of China’s semiconductor industry. BIS Senior Advisor Liz Abraham stated last week that the agency hopes to issue the new rules in October.  

These efforts are being increasingly complemented by allies. The European Union on October 3 announced that it would consider controls or other risk mitigations on semiconductors, artificial intelligence, quantum, and biotech.  EU Vice President Věra Jourová described the action as a recognition that “technology is currently at the heart of geopolitical competition and the EU wants to be a player, and not a playground.” EU member states will now conduct an assessment of the risk of “technology leakage” through the end of the year to guide future actions. This action stems from the EU’s Economic Security Strategy, announced this past June. 

Contact: Ethan Knecht, Pat Sheehy

Climate

On October 1, the EU launched the initial phase of the EU Carbon Border Adjustment Mechanism (CBAM). During an initial transitional period, from October 1, 2023 until December 31, 2025, importers or indirect customs representatives of carbon intensive goods, including cement, iron and steel, aluminum, fertilizers, electricity and hydrogen, are required to report on the quantity of imported goods, direct and indirect emissions embedded in them, and any carbon price due for those emissions, including carbon prices due for emissions embedded in relevant precursor materials. Each report covers activities in the previous quarter with the first report due by January 31, 2024 for fourth quarter 2023 EU imports. 

Several countries are planning to challenge the EU’s plans to impose a 20 to 35 percent tariff on imports of high-carbon goods.

Senator Bill Cassidy (R-LA) announced plans to introduce legislation to establish a foreign polluter fee that would apply to imports produced with greenhouse gas emissions higher than those in the United States in order to “to enhance American security and competitiveness, streamline domestic permitting processes, and safeguard the environment.” 

Contact: Chris Benscher

Quick takes

  • The World Trade Organization lowered its trade growth forecast amid a global manufacturing slowdown.  In an updated Global Trade Outlook report, the WTO said the volume of world merchandise trade is now expected to grow by 0.8% this year, down from the 1.7% forecast in April.  
  • UNCTAD’s Trade and Development Report 2023 warns that the global economy is stalling, as the organization calls for reform of central banks’ mandates to move beyond inflation-targeting to balancing the priorities of monetary stability with long-term economic sustainability.
  • U.S. Trade Representative Katherine Tai held a virtual ministerial meeting with countries involved in the trade pillar of the Indo-Pacific Economic Framework (IPEF), with USTR reporting a commitment to make significant progress by the end of the year.  The sixth IPEF negotiating round is scheduled for October 15-21 in Malaysia.
  • USTR hosted the second round of the U.S.-Kenya Strategic Trade and Investment Partnership (STIP) negotiations in Washington, with the talks focused on agriculture, anti-corruption, inclusivity, and services domestic regulation.  
  • A bipartisan group of 67 House members sent a letter to U.S. Trade Representative Katherine Tai raising market access concerns with the EU “deforestation-free” regulation, which went into effect on June 29, 2023.  
  • In a letter to President Biden, 15 Senate Democrats and Independent Bernie Sanders expressed their support for U.S. involvement in a potential normalization agreement between Saudi Arabia and Israel but raised concerns about a potential security guarantee and support for a civilian nuclear program for Saudi Arabia.
  • BIS added 49 entities, 42 of which are from China, to the Entity List, barring them from receiving U.S. exports, due to providing support to Russia’s military and/or defense industrial base.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly Introduced Legislation

House

  • H.R.5826 (Wilson, R-SC) – Would require a report on sanctions under the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act.
  • H.R.5830 (Burchett, R-TN) – Would prohibit commercial DNA testing services from disclosing the genetic information of U.S. nationals to foreign entities.
  • H.R.5833 (Connolly, D-VA) – Would protect Saudi dissidents in the United States.
  • H.R.5837 (Garbarino, R-NY) – Would protect America’s Property Rights Act
  • H.R.5838 (Gonzales, R-TX) – Would improve immigration adjudicatory capacity.
  • H.Con.Res.71 (Gooden, R-TX) – Expresses the sense of Congress to encourage full participation of Taiwan in the Asia-Pacific Economic Cooperation forum.
  • H.Res.749 (Keating, D-MA) – Supports 30 years of diplomatic relations between the United States and the independent Czech Republic and Slovak Republic.

Senate

  • S.3000 (Peters, D-MI) – Would repeal Freedom Support Act section 907 waiver authority with respect to assistance to Azerbaijan.
  • S.3009 (Scott, R-FL) – Would prohibit the use of federal funds and resources for congressional travel to China.
  • S.3014  (Moran, R-KS) – Would change the Federal Trade Commission automotive retailing rules.
  • S.3028 (Ernst, R-IA) – Would continue Iran sanctions to prevent the waivers until the Government of Iran ceases to attempt to assassinate U.S. and Iranian persons in the United States.

WHO’S WHO

Arrivals

  • Adam Wang-Levine, Treasury DAS for Climate, Environment and Infrastructure
  • Jack Markell, U.S. Ambassador to Italy
  • Kelly Razzouk, NSC Senior Director for Democracy and Human Rights
  • Kit Conklin, Senior Advisor to the House Select Committee on the CCP
  • Mark Lambert, State DAS for China and Taiwan
  • Congressman Patrick McHenry (R-NC), House of Representatives Speaker Pro Tempore
  • Sarah Morris, NTIA Acting Principal Deputy Assistant Secretary

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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