#1 - CLIP OF THE WEEK -- TRUMP: “I DON’T BLAME CHINA”
While every President subtly shifts their rhetoric on foreign soil, Trump’s comment last week in Beijing that he blames the U.S., not China, for trade imbalances was quite the diplomatic departure from the bombs lobbed during the campaign.
Watch the clip that had much of the trade world buzzing above.
#2 - YOU DOWN WITH THE CPTPP?
Over the weekend, on the sidelines of the Asia Pacific Economic Cooperation (APEC) meeting in De Nang, Vietnam, the 11 countires still negotiating the Trans-Pacific Partnership (TPP) announced that they have agreed on the "core elements" of the deal.
They also apparently agreed upon a rebranding strategy.
Now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP (we suspect Canada played a big role in the rebrand), retains the vast majority of TPP provisions, with some notable exceptions.
Those exceptions include 20 provisions that have been "suspended" aka not carried over from TPP, including one of the most important sticking points in the original TPP negotiations - how long a class of drugs known as biologics will be legally protected from being replicated by other entities. The statement the 11 countries released also alludes to four unresolved issues that are covered in this POLITICO story.
What's next? With guardrails now in place - and some controversial issues tossed aside - it's likely that countries could agree as soon as early next year to a deal. But even after a more formal final agreement, each country would have to run its own domestic political processes to ratify and sign the deal.
P.S. Shawn Donnan of the Financial Times is clearly not down with CPTPP:
#3 - AG SECRETARY SAYS NAFTA WITHDRAWAL “MITIGATION” PLAN IN THE WORKS
Agriculture Secretary Sonny Purdue said last Wednesday that he’s in talks, both within the administration and with Capitol Hill, about how to “protect” farmers and ranchers in the event of a NAFTA pull-out.
The contingency quote: "We're talking with the administration and Congress about some mitigation efforts if that were to occur; about how we could protect our producers with that [farm] safety net based on prices that may respond negatively to any kind of NAFTA withdrawal."
Why this worries everyone from the American Farm Bureau Federation, to corn growers, to cattlemen, to almond farmers, to dairy producers: Sec. Purdue has long been seen as the last line of defense against the Oval Office push for NAFTA withdrawal. He famously wielded the map that backed Trump down from the brink of withdrawal earlier this year. Now, it sounds as last defender has become the chief prepper for the fallout from what many see as potential agricultural Armageddon.
#4 – SENATOR FLAKE PLACES HOLD ON CHIEF AGRICULTURAL NEGOTIATOR
The setup: We’ve talked in this newsletter before about the Trump adminstration's highly controversial "seasonality proposal" that would allow some produce growers in the U.S. (mostly in the Southeast) access to trade enforcement actions against Mexico when they feel they are being unfairly swamped with Mexican imports. The plan has generated controversy because the vast majority of growers in the rest of the U.S. think it will lead to retaliation from Mexico and higher produce prices for consumers.
The hold:This week saw the controversy over this provision escalate when Senator Jeff Flake of Arizona placed a hold on the Senate nomination of Gregg Doud, the Trump administration’s pick to be the country’s chief agricultural negotiator because of Flake's objection to the seasonality provision. A hint on motivation: while Flake is generally ticked off at the administration’s trade policy, this particular proposal is a problem for Flake because much of Mexico’s produce flows through his state.
The kicker: This puts U.S. ag groups in a tough spot. On the one hand – they don’t really like the Trump produce proposal because it favors a subset of producers at the expense of the majority of farmers across the country. In other words, they agree with Flake. On the other hand – they’ve lobbied to have Gregg Doud confirmed as quickly as possible because they want an advocate for farmers and producers at the NAFTA negotiating table.
#5 - TRUMP'S MESSAGE TO JAPAN: BUILD MORE CARS IN U.S. & BUY MORE OF OUR MILITARY MIGHT
President Trump’s press conference with Shinzo Abe last week in Japan was typically freewheeling and hit on a number of trade topics. The highlights:
On overall U.S.-Japan trade: “For the last many decades, Japan has been winning….Right now our trade with Japan is not fair and it isn’t open.”
On buying U.S. military equipment: “One of the things I think is very important is the prime minister is going to be purchasing massive amounts of military equipment, as he should. It’s a lot of jobs for us and a lot of safety for Japan.”
On building cars: “Try building your cars in the United States instead of shipping them over. Is that rude to ask?” (On this one, of course, a number of outlets pointed out that Japanese auto companies have made significant investments in U.S. automobile production plants)
You can watch the full 30 minute press conference HERE.
#6 - HOW OTHER COUNTRIES ARE LIMITING DIGITAL TRADE
Last week, the Internet Association - which represents all the household names in tech - released their assessment of the foreign roadblocks holding back what’s consistently cited as an area the U.S. has big advantage in (not to mention a surplus): digital trade.
Their assessment – The IA report - which you can find here - spotlights 100+ foreign measures in 40+ countries that stymie digital trade.
#7 – EX-IM: ALL EYES ON SENS. SCOTT AND ROUNDS
The decision on whether or not to confirm former Congressman Scott Garrett to head the Export-Import Bank now comes down to the decision of two Senators on the Banking Committee: Tim Scott of South Carolina (where Boeing has a major presence) and Mike Rounds of South Dakota. Their decision - and the decision of Banking Committee Chairman Mike Crapo on how all current Ex-Im nominees will be voted on procedurally (all at once or individually) - has kept Ex-Im watchers wondering. For more check out this McClatchy article.