Digitrade Digest #66
USTR to host AGOA ministerial, Singapore concludes FTA with MERCOSUR, IPEF first ministerial meeting and more…
Africa
Tai to host AGOA ministerial in December
Insidetrade: U.S. Trade Representative Katherine Tai in December will host an African Growth and Opportunity Act ministerial, USTR announced on Tuesday.
During the Dec. 13 meeting, Tai will engage with sub-Saharan African trade ministers and senior officials on “expanding trade and investment relations” and AGOA implementation, USTR said in a statement.
The meeting will take place during the Dec. 13-15 United States-Africa Leaders’ Summit, which President Biden announced last week.
“The 2022 Africa Growth and Opportunity Act Ministerial Meeting will be a valuable opportunity to re-affirm the United States’ engagement with the continent,” Tai said in the statement. “I look forward to welcoming my fellow trade ministers to Washington, D.C. this December for productive and thoughtful discussions on the future of this important relationship.”
AGOA, a trade preference program enacted in 2000, allows tariff-free access to producers of many goods from sub-Saharan Africa, beyond those already allowed in under the Generalized System of Preferences. GSP has expired but is expected to be renewed, with retroactivity.
AGOA’s 2025 expiration date has prompted discussions about the future of U.S.-Africa trade relations.
During a Senate Appropriations subcommittee hearing last month, Tai told lawmakers “new efforts and new initiatives” are needed “to push ourselves to think about how we can be a better partner to the entire African continent.”
Tai also said AGOA is “not enough” as constructed, adding that USTR is “engaging and stands ready to engage across the board on what a vision is for AGOA going forward.”
The U.S. and Kenya have since announced a “Strategic Trade and Investment Partnership” to negotiate “high-standard commitments” in areas like digital trade, agriculture, small and medium-sized businesses, standards, labor and the environment.
The Trump administration in 2020 launched free trade agreement talks with Kenya but the Biden administration has opted not to continue them. Instead, it is moving forward with what Tai has called new models like the Kenya partnership and the Indo-Pacific Economic Framework for Prosperity.
The U.S. International Trade Commission in February launched a probe into AGOA and its usage following a request from House Ways & Means Committee Chair Richard Neal (D-MA). The ITC is set deliver its report to the USTR by March 17, 2023.
IPEF
IPEF ministers wrap up first meeting without joint statement
PoliticoPro: Top trade officials from the United States and 13 other countries participating in talks on the proposed Indo-Pacific Economic Framework wrapped up their first ministerial meeting Wednesday with a number of questions still unanswered.
"The ministers had positive and constructive discussions and reaffirmed their collective goal to pursue a high-standard and inclusive economic framework through ongoing and intensified engagements," the Office of the U.S. Trade Representative and the Commerce Department said in a readout of the meeting.
However, it's still not clear which countries are participating in each of the four separate pillars of the negotiations. The talks on pillar 1 covering non-tariff aspects of trade are led by U.S. Trade Representative Katherine Tai, while Pillars 2, 3 and 4 covering supply chains; clean energy, decarbonization, and infrastructure; and tax and anti-corruption are chaired by Commerce Secretary Gina Raimondo.
Wendy Cutler, a former senior U.S. trade official who served in both Republican and Democratic administrations, said the ministerial meeting looked to her like a "check-in“ to review progress made by senior officials at a recent meeting in Singapore.
"Ideally, ministers at their next meeting would be in a position to launch the actual negotiations under each of the four IPEF pillars," Cutler said. "The prep work for this negotiation has taken quite a long time as negotiators will soon approach the one-year anniversary of [President Joe Biden] first announcing this initiative at the October 2021 East Asia Summit meeting."
Trade ministers discussed a ministerial statement covering all four pillars, Fiji's Minister of Commerce, Trade, Tourism and Transport wrote on Twitter. However, no document was released at the end of the meeting, indicating more work needs to be done.
The initiative is intended as a U.S. counterweight to China, which is the region's most important trade partner. Beijing has a larger share than the United States of the import market in each of the 13 other IPEF members.
Biden administration officials believe they can expand U.S. exports in the region by creating stronger rules in areas like labor and the environment and reducing red tape and other non-tariff barriers that increase costs and impede trade.
However, it's unclear how the Biden administration will persuade IPEF members to adopt those reforms, since it has taken the traditional U.S. trade policy tool — tariff cuts — off the table in the talks.
Malaysian Trade Minister Mohamed Azmin Ali seemed to touch on that concern in one of several tweets during the course of the meeting.
"It is critical that tangible benefits are offered to partner countries for establishing strong policies and standards, provided that binding provisions are also accompanied by clear and binding commitments to allow for technical assistance and capacity building," he wrote on Twitter.
The brief USTR and Commerce Department readout did not say how soon trade ministers would be meeting again. One possibility is when Indonesia host the G-20 trade ministers meeting in September, but U.S. officials have not confirmed that.
Despite the slow start, the Biden administration is expected to push for a conclusion of the agreement by the time the United States hosts the annual Asia-Pacific Economic Cooperation summit in late 2023, said Robert Holleyman, a former deputy U.S. trade representative who served in the Obama administration.
"I think we'll know more in about six months" whether that's possible, he added.
The 14 IPEF countries are Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and the United States.
Malaysia urges Indo-Pacific Economic partners to set up CoE
nst.com: Making the call at the virtual IPEF Ministerial Meeting on July 26-27, Senior Minister and Minister of International Trade and Industry, Datuk Seri Mohamed Azmin Ali said such a centre should be set up to bring together experts in areas such as supply chain resiliency, energy sector transformation and decarbonisation of emission-intensive industries.
"We strongly believe there is a need to go beyond the general scope and area of cooperation, to incorporate programmes, action plans and the requisite legislation, supported by capacity building, technical assistance and funding," he said at the two-day meeting chaired respectively by US trade representative Katherine Tai and commerce secretary Gina Raimondo.
The meeting was attended by ministers from Australia, Brunei Darussalam, Fiji, India, Japan, South Korea, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
Asia
S'pore and South American trade bloc Mercosur conclude FTA talks
TheStraitTimes: The MCSFTA is the first trade deal between the bloc and Singapore and presents more opportunities for companies to trade and invest, said MTI.
Trade and Industry Minister Gan Kim Yong said the dynamics of international trade have shifted significantly since the FTA's first round of negotiations in Buenos Aires, Argentina, in April 2019.
"There have been increasing tides against globalisation, tendencies towards protectionism, and supply chain uncertainties. Amid these trying times, the Mercosur member states and Singapore have persevered in building a strong trade architecture and staying plugged into global networks," he said via videoconference from Singapore on the sidelines of the Mercosur Summit in Paraguay on Wednesday.
There are more than 90 registered companies from the bloc's countries here and nearly 70 overseas affiliates of Singapore businesses in Mercosur.
Singapore firms' interests in Mercosur lie in the oil and gas, agribusiness, digital, manufacturing, hospitality, logistics and infrastructure sectors.