China and New Zealand updated their 12-year-old free trade agreement to increase trade in goods, revise certain rules of origin and address technical barriers to trade, China’s state-run news agency Xinhua reported Jan. 26. The deal's provisions include addressing trade barriers on certain wood and paper products and requiring New Zealand to lower its threshold for reviewing Chinese investments.
As the text of the EU-China Comprehensive Agreement on Investment was released Jan. 22, analysts are evaluating how much of a difference the agreement, if ratified, would make in the economic relationship between the parties to the pact. The Institut Montaigne, a French think tank that supports free markets, published a policy paper that said, “Overall, the EU-China CAI has been oversold and underpowered.” It noted that most of the annexes, that actually list the sectors in China that would be open to European investment, are still not published. Moreover, author François Godement said that there are qualifiers in the text that make some commitments unenforceable, such as China's pledge to pursue ratifications of International Labor Organization standards on forced labor.
Even though the Joe Biden administration will have a very different approach to trade than did the Trump administration, that will not mean a wholesale rejection of what its predecessors did, analysts said during a Center for Strategic and International Studies webinar Jan. 21.
European Union Director General for Trade Sabine Weyand told an audience Jan. 15 that resolving punitive tariffs are “a prerequisite for creating a good atmosphere” so that the EU and the U.S. can coordinate on confronting China's trade abuses and creating a carbon border adjustment.
The U.S. Chamber of Commerce said further decoupling from China is certain if China doesn't do more to step up on industrial subsidies, intellectual property rights protection, trade secret theft and other U.S. companies' priorities. Myron Brilliant, head of international affairs for the Chamber, told reporters on a Jan. 13 call that there's not much political space for incoming President Joe Biden to roll back tariffs, even as his campaign was critical of the economic consequences of the trade war.
The United Steelworkers, the Steel Manufacturers Association, the American Iron and Steel Institute and two other trade groups wrote to President-elect Joe Biden on Jan. 11, telling him that weakening or removing 25% tariffs and quotas on imported steel “before major steel producing countries eliminate their overcapacity and the subsidies and other trade-distorting policies that have fueled the steel crisis will only invite a new surge in imports with devastating effects to domestic steel producers and their workers.” The letter said the Section 232 tariffs allowed idled mills to reopen and laid-off workers to regain their jobs. “Continuation of the tariffs and quotas is essential to ensuring the viability of the domestic steel industry in the face of ... massive and growing excess steel capacity,” they said, pointing to China, Vietnam and Turkey as countries that did not slow down steel production during the COVID-19 pandemic-induced recession.
China issued guidance on its free trade deal with Mauritius (see 2012180017), which took effect Jan. 1 and is expected to eliminate tariffs on more than 90% of goods traded between the two countries, China said. The agreement will “play an active role” in improving cooperation between China and Africa, and Chinese companies will “gain more advantages” when entering the African market, according to an unofficial translation of the guidance.
The United Kingdom and Turkey signed a free trade agreement that will maintain existing preferential tariff levels and ensure trade continues as usual after the Brexit transition period ends, the U.K. said Dec. 29. The U.K. also said the accord lays the “groundwork for a more ambitious trade relationship” with both sides committed to working on a more comprehensive free trade agreement.
Wendy Cutler, the lead negotiator for the Trans Pacific Partnership, and James Green, who was the Office of the U.S. Trade Representative's senior official in China, are questioning whether a new European Union-China investment agreement will undercut the united front President-elect Joe Biden wants on Chinese economic abuses.
Witnesses overwhelmingly argued against tariffs on Vietnamese imports, during a virtual hearing Dec. 29 hosted by the Office of the U.S. Trade Representative, with numerous business representatives saying it was the choice not to sign the Trans-Pacific Partnership, not any kind of currency issue, that makes it harder for U.S. exports to penetrate Vietnam. Trade groups representing importers from Vietnam noted that their members moved sourcing from China to Vietnam precisely to avoid Section 301 tariffs, and some said putting comparable tariffs on Vietnamese imports would cause companies to relocate back to China.