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International Issues Update 2023/44

By December 1, 2023No Comments

ON OUR DESKS

  • Analysis of U.S. policy on Azerbaijan
  • Briefing memo on outlook for U.S.-China relations
  • Evaluation of U.S.-EU negotiations on steel and aluminum
  • Analysis on the outlook for GSP renewal

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.

Note: Following editions on December 8 and 15, the publication of the International Issues Update will be on hiatus for the holidays, with a break on December 22 and 29.  We will resume publication in the first week of the new year. 


WIBC DISCUSSIONS

In case you missed it:

  • November 28: OMB’s Made in America Office Director Livia Shmavonian, The Made in America Agenda
  • November 29: Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Alexis Taylor, Ag and food trade policy priorities

Upcoming WIBC events: 

  • December 7 (Virtual): U.S. Embassy in Brazil’s Economic Counselor Matt Lowe, Commercial and political developments in Brazil

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

Supply Chains

The Biden administration issued regulations on December 1 on the clean vehicle provisions of the Inflation Reduction Act (IRA), providing clarity around the IRA’s foreign entity of concern (FEOC) requirements.   The Treasury Department’s proposed rulemaking, aimed at strengthening the security of America’s supply chains, requires that clean vehicles eligible for IRA tax credits may not contain any battery components that are manufactured or assembled by a FEOC, and, beginning in 2025, an eligible clean vehicle may not contain any critical minerals that were extracted, processed, or recycled by a FEOC.  The Department of Energy also issued proposed rules interpreting the statutory definition of FEOCs in the Bipartisan Infrastructure Law (BIL), which is designed to limit the participation of FEOCs within domestic battery supply chains. With much of the electric vehicle supply chain tied to China, a designated FEOC, the regulations could serve to complicate efforts to expand EV sales in the United States. 

On November 27, President Biden convened the inaugural meeting of the White House Council on Supply Chain Resilience, announcing new actions to strengthen critical supply chains. Among other actions, President Biden will issue a Presidential Determination to enable government investment in domestic manufacturing of essential medicines, medical countermeasures, and critical inputs under the Defense Production Act (DPA).  The Council will complete the first quadrennial supply chain review by December 31, 2024, updating criteria on industries, sectors, and products defined as critical to national and economic security. 

At a meeting of the President’s Export Council on November 29, Chair Mark Ein presented recommendations to the President on manufacturing supply chains, encouraging the conclusion of critical minerals agreements (CMAs) with the European Union and United Kingdom.   The PEC also issued recommendation letters on agriculture and climate, calling for the diversification of U.S. agricultural supply chains and U.S. leadership on infrastructure-led decarbonization.  

Contact: Stephen Ziehm

Investment Screening

Congressional mandates on a new U.S. foreign investment screening program are likely to be left out of the pending National Defense Authorization Act (NDAA) legislation.  Section 1085 of the Senate-passed NDAA would create a new bureaucracy to regulate U.S. investments in technologies with national security implications in countries of concern. House Financial Services Committee Republicans, who oppose the strict investment screening program, sent a letter on November 29 to House and Senate Armed Services Committee leaders urging them to remove Section 1085 from the final NDAA, arguing that the NDAA provision “would have the unintended consequence of limiting Americans’ control, influence, and intelligence gathering in Chinese technology companies.”

Leading proponents of the provision on November 29 introduced alternative legislation focused on China only.  In early November, House Foreign Affairs Chairman Michael McCaul (R-TX) introduced HR 6349, the Preventing Adversaries from Developing Critical Capabilities Act, to codify and enhance limitations on U.S. investment in sensitive Chinese technology sectors.

Also on November 29, the Biden administration resurrected the President’s Export Council Subcommittee on Export Administration (PECSEA) to make sure export controls are tailored to maximize national security protection while still advancing U.S. technology.  Commerce Secretary Gina Raimondo said the PECSEA is expected to be “up and running” next year. A formal request for members will appear in the Federal Register soon. 

Contact: Pat Sheehy, Chris Benscher

Latin America

Libertarian congressman Javier Milei, who had promised to dollarize the economy and eliminate a host of government ministries, resoundingly won Argentina’s presidential election November 19. However, following his election Milei has moderated on key issues, such as by dialing back rhetoric on relations with China and Brazil and by announcing the appointment of a mainstream, center-right former finance minister to lead the economy portfolio. Milei also recently traveled to the United States, where he met with National Security Advisor Sullivan to discuss clean energy, human rights, and supporting democracies around the world.

Venezuela partially met a U.S. deadline to maintain sanctions relief on its oil sector. The United States offered Venezuela temporary relief of sanctions in exchange for free elections and the release of detained Americans, with tangible progress expected by November 30. The Maduro regime cast this plan into doubt earlier this month when a court invalidated opposition candidates’ primary elections. The regime announced late on the evening of November 30 that opposition leaders will be able to appeal the invalidation of their candidacies between December 1-15. It is unclear if this meets U.S. requirements to maintain relief. 

This comes as Venezuelan President Maduro has ratched up tensions with Guyana over Venezuela’s claim to Guyana’s Essequibo region. The Maduro regime has arranged a referendum for December 3 and has taken to increasingly extreme rhetoric on the possibility of forcefully taking the region. In response, the U.S. Defense Department sent two teams to Guyana to meet with local officials while Brazil has repositioned additional troops along its northern border.

Contact: Ethan Knecht, Pat Sheehy

Quick takes

  • A bill to extend tax treaty-like benefits to Taiwan won unanimous support in the House Ways and Means Committee on November 30.  The full House is likely to pass the bill this year. Senate Finance Committee leadership endorsed the legislation, which incorporates both the United States-Taiwan Expedited Double-Tax Relief Act and the United States-Taiwan Tax Agreement Authorization Act.
  • 32 U.S. Senators called on the Biden administration to reverse its decision to abandon long-held digital trade positions at the World Trade Organization (WTO).  The bipartisan letter, led by Finance Committee leadership, states that “with this abrupt change in policy, USTR has not only turned its back on our democratic allies and undermined U.S. credibility in other negotiations and fora around the world, but it has also empowered authoritarian regimes like China and Russia.”
  • U.S. Trade Representative Katherine Tai expressed disappointment with a USMCA dispute settlement panel decision ruling against a U.S. challenge of Canada’s dairy TRQ allocation measures, while House Ways and Means Chairman Jason Smith (R-MO) called the status quo of Canadian dairy restrictions “simply unacceptable.” 
  • EU Trade Commissioner Valdis Dombrovskis said he sees no prospect for an agreement with the United States on a Global Arrangement on Sustainable Steel and Aluminum (GSA) in remarks to the EU Parliament on November 29.  Instead, he will instead seek to improve the administration of the U.S. tariff rate quotas on EU exports of steel and aluminum in order to avoid the reimposition of retaliatory tariffs on the United States resulting from the Section 232 tariff dispute. 

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly-introduced legislation

House

  • H.R.6431 (Ogles, R-TN) – Would suspend Qatar’s designation as a major non-NATO ally.
  • H.R.6453 (Stefanik, R-NY) – Would require reports on and impose sanctions with respect to Iran’s development of space-launch vehicles, intercontinental ballistic missiles, and unmanned aerial systems.
  • H.R.6454 (Van Duyne, R-TX) – Would amend the Internal Revenue Code of 1986 to repeal the excise taxes on taxable chemicals and taxable substances.
  • H.R.6455 (Velazquez, D-NY) – Would establish the Global Climate Change Resilience Strategy, to authorize the admission of climate-displaced persons into the United States.
  • H.R.6478 (Moylan, R-GU-At Large) – Would provide certain assistance for Guam or the Commonwealth of the Northern Mariana Islands.
  • H.R.6491 (Wilson, R-SC) – Would authorize the seizure and forfeiture of assets of Russian kleptocrats.
  • H.R.6502 (Franklin, R-FL) – Would prohibit U.S. representatives from voting at the IMF for any Special Drawing Rights allocations, quota increases, or policy modifications that would benefit certain countries.
  • H.R.6504 (Green, R-TN) – Would prohibit actions to carry out the Department of Commerce’s pause in the issuance of new export licenses for certain exports under the Commerce Control List.
  • H.R.6505 (James, R-MI) – Would strengthen the imposition of sanctions under that Fentanyl Sanctions Act.
  • H.R.6515 (Blumenauer, D-OR) – Would prohibit the importation of certain products and commodities made wholly or in part produced on land undergoing illegal deforestation.
  • H.R.6519 (Dingell, D-MI) – Would amend the Federal Food, Drug, and Cosmetic Act to ban the use of intentionally added perfluoroalkyl or polyfluoroalkyl substances in cosmetics.
  • H.R.6528 (Johnson, R-SD) – Would encourage State and local governments to prohibit certain investment activities in China.
  • H.R.6530 (Lamborn, R-CO) – Would amend the Energy Act of 2020 to provide for energy parity.
  • H.R.6539 (Titus, D-NV) – Would promote U.S.-Mongolia trade by authorizing duty-free treatment for certain imports from Mongolia.
  • H.R.6541 (Wenstrup, R-OH) – Would provide for the liquidation or reliquidation of certain entries of steel and aluminum products retroactively approved for exclusion from certain duties.
  • H.Res.891 (Reschenthaler, R-PA) – Provides for consideration of the bill H.R. 5961 to freeze certain Iranian funds involved in the 2023 hostage deal between the United States and Iran.
  • H.Res.895 (Landsman, D-OH) – Condemns calls from Members of Congress for the expulsion of Palestinians from the United States.

Senate

  • S.3347 (Cruz, R-TX) – Would require the imposition of sanctions with respect to Ansarallah and its officials, agents, or affiliates for acts of international terrorism.
  • S.3354 (Cotton, R-AR) – Would prohibit the sale of food that is, or contains, unsafe poppy seeds.
  • S.3359 (Whitehouse, D-RI) – Would authorize the seizure and forfeiture of assets of Russian kleptocrats.
  • S.3368 (Sullivan, R-AK) – Would promote United States-Mongolia trade by authorizing duty-free treatment for certain imports from Mongolia.
  • S.3371 (Schatz, D-HI) – Would prohibit the importation of certain products and commodities made wholly or in part produced on land undergoing illegal deforestation.
  • S.3376 (Brown, D-OH) – Would provide for the liquidation or reliquidation of certain entries of steel and aluminum products retroactively approved for exclusion from certain duties during the COVID-19 pandemic.
  • S.3384 (Whitehouse, D-RI) – Would combat illicit cross-border financial activity and improve the Trade Transparency Unit program of U.S. Immigration and Customs Enforcement.

Upcoming Congressional Hearings

House

Senate

WHO’S WHO

Arrivals

  • Dr. Carolina Ferrerosa Young, Chief Economic Advisor to Vice President Harris
  • Janice Starzyk, Commerce Department Deputy Director for Space Commerce
  • Miranda Summers Lowe, NSC Director for Cyber and Emerging Technologies

Departures

  • Bi-khim Hsiao, Taiwanese Representative to the United States
  • Courtenay Dunn, NSC Director for Pakistan
  • Sharynne George Nenon, Foreign Agriculture Service Senior Director for Asia Pacific
  • Stavros Lambrinidis, EU Ambassador 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.