Thursday, February 11, 2010

Thursday Quick Hits

A little trade news street-plowing on this thank-god-it-finally-stopped-snowing Thursday night:
  • US and Mexican officials have announced formal talks to bring the year-long US ban on Mexican trucks to a close.  As you'll recall, the ban resulted from some good ol' fashioned Teamster-love in the 2009 Omnibus Appropriations Act, and Mexico responded by lawfully imposing $2.4 billion in retaliatory tariffs against US exports.  Now Mexican officials are "optimistic" that the dispute will be resolved this year, and there is some reason for optimism: (i) the 2010 appropriations bill did not include the ban, and (ii) the Obama administration is really pushing exports these days, and $2.4 billion ain't chump change.  However, the plan has to be approved by Congress (yes, the same one that imposed the original ban), and the Obama administration has been sitting on a Transportation Department fix since last September out of fear of angering the Teamsters and thus jeopardizing ObamaCare.  Well, ObamaCare might be comatose (pun!), but we're quickly approaching the 2010 election cycle, so the near-term resolution of this boondoggle remains far from certain.
  • Speaking of retaliation, Brazil is inching closer to retaliating against American exports as a result of US non-compliance with multiple WTO rulings against its Cotton subsidies.  The WTO has sanctioned several hundred million dollars in retaliation, and BusinessWeek reports today that Brazilian President Lula has enacted a change in domestic law that would allow Brazil to lawfully infringe upon US intellectual property rights (an alternative form of protection to traditional import tariffs).  Brazil also announced yesterday that it will announce on March 1 its final list of about 220 US products that will face over $500 million in tariffs because of the same WTO infractions.  Brazil has delayed this announcement a few times, and the US claims to still be trying to negotiate a settlement, but the Brazilians appear to be getting ready to finally and officially lay the retaliatory smack down.  Oh, goody.
  • President Obama today gave a lengthy (and defensive!) interview with Bloomberg and hit on a few international trade matters.  He (fortunately) signaled a stern-yet-non-confrontational approach to China's currency ("his administration is 'going to have some very serious negotiations' with China that are 'going to be bumpy'"), and then stated that "he would press for passage this year of free-trade agreements with South Korea, Panama and Colombia, though he cautioned that 'different glitches' must first be negotiated with each country."  The China response sounds like good news, as it doesn't appear that direct antagonism (through, for example, the Treasury Department's semi-annual report on "currency manipulation") is in the cards.  The FTA statement will probably get a lot of free traders (as well as Colombians, Panamanians and South Koreans) excited, but please keep in mind: (i) his "glitch" condition means that the company line on FTAs ("unresolved issues!") still applies, and (ii) President Obama could easily "press for passage" of these FTAs by submitting their respective implementing legislation to Congress (which his party controls, by the way) and thus "starting the clock" for an up-or-down vote on each agreement, as required under Trade Promotion Authority (which applies to these FTAs because they were signed before TPA expired).   And yet.....
  • The White House released the 2010 Economic Report of the President today.  The Report's discussion of international trade starts on page 274.  I'm going to blog on this over the weekend, but I didn't want you to have to wait for that.  However, if you decide to check out the ERP before I blog on it, I highly recommend that you (re)read this blog entry first just to get in the right frame of mind.
That's all for now, folks.

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