Blinken to talk competition with China
August 9, 2021With help from Doug Palmer
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— Secretary of State Antony Blinken will argue in a speech Monday that domestic infrastructure investments are key to global competitiveness, a foreign policy stance the Biden administration has been hammering at home.
— Over on Capitol Hill, the Senate is inching closer to a vote on a bipartisan infrastructure package. The bill contains a number of trade-related provisions, as well as a message for Beijing.
— U.S. trade officials have agreed to freshen up the trade and investment agreement with Uruguay before year’s end following meetings in Montevideo late last week.
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BLINKEN TO TALK COMPETITION WITH CHINA: Secretary of State Antony Blinken is slated to deliver a speech Monday afternoon connecting investments in domestic infrastructure to U.S. competitiveness abroad. Blinken’s remarks will come as the Senate approaches final a vote on the bipartisan physical infrastructure package that includes $550 billion for roads, rail, ports and more.
“He will make the case that what we do now in terms of our long-term domestic investments will cement for decades to come our global competitiveness, including vis-à-vis China and the rest of the world, and demonstrate that our democracy can deliver for our people,” according to the State Department.
The message matches the Biden administration’s foreign policy approach so far of pursuing economic prosperity at home in order to maintain influence abroad. When it comes to trade policy, for instance, officials are pressing a worker-centric agenda that necessitates that trade agreements first and foremost uplift the U.S. middle class.
Focus on China: Blinken’s speech is expected to touch on the need to challenge China’s economic and national security ambitions. Just last week, Blinken told leaders from the Association of Southeast Asian Nations that the U.S. views them as central to a “free and open Indo-Pacific,” and pledged to deepen ties throughout the region and cooperate on challenges from coronavirus to climate change.
Of course, China has sought to exert influence throughout the region, too. Beijing signed the Regional Comprehensive Economic Partnership with 14 other countries in the region shortly after last year’s election. That means the U.S. is sitting out two of the region’s largest trade deals, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that former President Donald Trump abandoned.
INFRASTRUCTURE UPDATE: The Senate voted Sunday night to end debate on the bipartisan infrastructure agreement, paving the way for a vote to take place as early as Monday, POLITICO’s Burgess Everett and Marianne LeVine report.
Why we’re tracking: The bill contains provisions that could deliver a boost to U.S. trade, both directly and indirectly. There’s billions of dollars to upgrade ports and freight rail, as well as provisions commissioning studies into forced labor in China and the environmental impact of electric vehicles.
Meanwhile, manufacturers have praised provisions to boost demand for U.S. steel and other construction materials, as well as money to help factories produce or recycle batteries, rare earth minerals, personal protective equipment and other critical goods.
Listen up, Beijing: The infrastructure package also sends a “powerful signal” to China that the U.S. has no plans to cede its global leadership position to its chief economic rival and largest trading partner, POLITICO’s Phelim Kine writes. “I think it's encouraging to see that there is bipartisan recognition of the challenge that China presents,” said Jonathan E. Hillman, senior fellow with the Center for Strategic and International Studies.
Even still, U.S. investment plans are dwarfed by the pace and scale of infrastructure spending in China, and President Xi Jinping is only digging in further. Here’s just one statistic: China spent about $8 trillion on infrastructure investment in 2020, according to numbers from the National Bureau of Statistics. The U.S. federal government spent $146 billion over the same period.
U.S. TO REFRESH TRADE AGREEMENT WITH URUGUAY: Trade officials from the U.S. and Uruguay agreed in talks last week to update their Trade and Investment Framework Agreement by the end of the year, the Office of the U.S. Trade Representative said Friday. They will seek to set “high standards” in areas including trade facilitation, digital trade and anti-corruption.
“As a key outcome of the meeting, the two sides agreed to review the existing TIFA and its Protocols and to develop new instruments to reflect up-to-date trade rules that support competitiveness and economic recovery,” USTR said in its statement.
Assistant United States Trade Representative Daniel Watson led the U.S. delegation to the Uruguayan capital, Montevideo, last week. It marked the ninth meeting of the Trade and Investment Framework Agreement Council, which was formed after the countries inked their agreement in 2007.
Also on the agenda: The U.S. and Uruguay also discussed trade barriers and opportunities in areas including agriculture, intellectual property and services, per USTR. They expressed joint concerns about forced labor and sustainable fisheries, including a “shared ambition for a meaningful outcome in the WTO negotiations on fisheries subsidies.”
The Biden administration has said it will not broker new trade deals until the U.S. economy is sufficiently strong, and the potential to expedite such agreements is now hindered by the expiration of Trade Promotion Authority. As a result, working within existing trade frameworks may be key to appease lawmakers and industry groups that want Biden to expand access to foreign markets.
NEW AG REGULATIONS GOING TO THE DOGS: No, really. The Animal and Plant Health Inspection Service has decreed new rules for dogs being imported into the U.S. from certain regions of the world. They must arrive in cages free of dirt, hay, wood chips or other organic bedding, and be bathed within two days of arriving at U.S. ports of entry.
The measures are intended to prevent the spread of African swine fever, a highly contagious illness that is lethal to pigs. It has been found beyond the African continent in places including China and the European Union, and U.S. officials are eager to prevent it from arriving here.
Big Pig is pleased: The National Pork Producers Council praised the decision. “Each year, several thousand dogs enter the country for resale or adoption,” Chief Veterinarian Liz Wagstrom said in a statement. “If even one of these animals carried ASF into the country, it could put the U.S. swine herd and other livestock in jeopardy and have disastrous consequences for our nation’s agriculture sector.”
THE LATEST CARBON BORDER TAX TO WATCH: Canada is the latest U.S. trading partner to explore a carbon border levy, POLITICO’s Paola Tamma reports. The Canadian government said it will consider different approaches, such as import permits, export rebates and a domestic carbon tax.
The global picture: The EU is pursuing a carbon border adjustment mechanism of its own that would tax imports from countries with weak carbon-reducing policies. It still requires approval across the bloc, but has already raised concerns about a fresh trade dispute between Europe and the U.S.
Congressional Democrats have proposed similar carbon border duties for the U.S., though implementing such a policy could be complicated by the fact that the U.S. does not have an explicit domestic carbon pricing.
For its part, Ottawa aims to “work with like-minded countries to consider how this approach could fit into a broader strategy to meet climate targets in a manner consistent with maintaining our competitiveness in a fair and open trading system,” per a new paper.
WASHINGTON GROUP URGES TAI NEGOTIATE TRADE DEALS: Members of the Seattle-based Washington Council on International Trade urged U.S. Trade Representative Katherine Tai last week to get in the business of negotiating new trade agreements, said Lori Otto Punke, the president of the group.
“Our trade partners and rivals are actively pursuing new opportunities right now,” Punke told Morning Trade. “Unless we make trade agreements and exports a priority, other countries will continue to move ahead of us and set the trade rules in a way that benefits them, not us.”
Tai was in Washington state on Thursday to discuss the Biden administration’s trade agenda with local workers and farmers, as well as to hear their concerns. WCIT members participated in a roundtable discussion with Tai.
“Washington is perhaps the most trade-reliant state in the nation, with 40 percent of jobs linked to international commerce,” Punke said. “Unfortunately, the trade wars have negatively impacted the state. … The consequences of trade disruptions are far-reaching, impacting the many workers, farmers, companies — big and small — and communities in Washington state that rely on robust commerce for their livelihoods.”
According to the most recent statistics, Washington goods exports totaled $41.3 billion in 2020, almost a 31.5 percent decrease from $60.3 billion in 2019 and a 54.4 percent drop from the $90.6 billion peak in 2014, Punke said. The state’s top exports include civilian aircraft, engines and parts; tree fruits (apples, cherries), frozen potatoes and dairy products; and services including software, international tourism, and legal, financial and business consulting.
— Vice President Kamala Harris will discuss vaccines Monday with Mexican President Andres Manuel Lopez Obrador, according to Reuters.
— The passing of AFL-CIO President Richard Trumka is prompting the influential labor federation to figure out its future priorities, The New York Times writes.
— China’s exports continued to grow in July, albeit at a slower rate, due in part to coronavirus outbreaks and extreme weather events, per Bloomberg.
— Chinese regulators met with delivery companies over concerns about their treatment of workers, Reuters reports.
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Source: https://www.politico.com/