June 26, 2019

Washington Wire: One Voice Submits Comments on Negotiating Objectives for U.S.-Japan Trade Agreement

12/12/2018

One Voice Submits Comments on Negotiating Objectives for a U.S.-Japan Trade Agreement  

 
On November 26, 2018, One Voice submitted comments to the Office of the U.S. Trade Representative (USTR) on negotiation objectives for a trade agreement between the U.S. and Japan, focusing on the removal of non-tariff barriers, particularly in the automotive and medical device markets, currency manipulation, and market access. Nearly half of One Voice companies are direct exporters of goods, however, 82 percent manufacture a product whose end use is for a finished good that is exported. Unfortunately, a significant imbalance remains for our members’ products, which we hope to see addressed in an Agreement.
 
Japan is the third largest auto market in the world, yet one of the most closed to U.S. manufacturers. Imports into Japan account for less than 10 percent of all vehicle sales compared to 55 percent in the U.S. Similarly, the National Trade Estimate report indicates with medical devices, U.S. exports to Japan account for only 23 percent of the $22 billion market. Historically, the Japanese Government has restricted market access by setting discriminating reimbursement rates for U.S. and European medical devices limiting their sales and availability in the Japanese marketplace.
 
Currency manipulation by Japan remains a major concern for U.S. manufacturers and is a significant contributor why many U.S. exports to Japan lag behind those of other nations. Japanese intervention in its currency is an indication of a state-managed economy and gives its manufacturing exporters a significant subsidy and a competitive advantage in the U.S. market.
 
In addition, One Voice’s comments advocated that any agreement must immediately lift tariffs on steel and aluminum from Japan, prevent 232 automotive tariffs, and address existing countervailing and antidumping duties in place on tool steel. The price of steel in the U.S. is now nearly double that of China and $310 more per metric tonne over Western Europe for hot-rolled band steel commonly used in the automotive industry. Most of our members source their raw materials domestically, however, many specialty metals are not available domestically, particularly for tool and die makers and medical device and aerospace manufacturers. An Agreement should also review duties imposed by the Department of Commerce on imported Japanese raw materials in short supply in the U.S. and not further disrupt established supply chains.

 

 

 
U.S. and China Agree to Suspend January Tariff Boost
 
After a meeting on the sidelines of the G20 Summit between the U.S. delegation led by President Trump and the Chinese Delegation led by President Xi, the countries agreed to a 90-day trade truce, suspending scheduled tariff boosts from 10 percent to 25 percent on $200 billion in Chinese goods scheduled for January 1, 2019. However, the rate on these 5,745 items will increase on March 1, 2019, to 25 percent if the President does not believe enough progress is made. In return for the U.S. tariff suspension, the Chinese agreed to purchase an unspecified amount of American agricultural, industrial, energy, and other products. During this 90-day trade truce the countries plan to reach a broader trade agreement by its March 1 deadline. Currently, negotiators are working on an agreement where China, over the next several years, will increase purchases of American goods and services by as much as $1.2 trillion. While negotiators seem optimistic a deal will be reached in time, actions by either country during this period, like last week’s arrest of a Chinese national over alleged violations of U.S. sanctions, could make reaching an agreement that much harder.

 

 

 
U.S. to Impose Duties on Chinese Aluminum Sheet Imports
 
On December 7, the U.S. International Trade Commission (ITC) ruled unanimously that imports of Chinese common alloy aluminum sheet unfairly injured the U.S. aluminum industry. The action allows the Commerce Department to issue antidumping and countervailing duties. Sources indicate the antidumping duties will range from 49.85 to 59.72 percent and the countervailing duties will range from 46.48 to 116.49 percent.

 

 

 
Trump Administration may Withdraw from NAFTA to Force Vote
 
President Trump said he plans on withdrawing from the North American Free Trade Agreement (NAFTA)in a move designed to force Congress to either vote for the U.S.-Mexico-Canada Agreement (USMCA) or have no deal at all. Under the terms of NAFTA, the U.S. can withdraw from the agreement six months after notifying Canada and Mexico. Late January, the administration must send to Congress its list of changes needed in law, setting up a vote at the earliest in April or May. One Voice is working with the administration and lawmakers to remove the tariffs on imported steel and aluminum from Canada and Mexico, which remain in place even after the three countries signed the new agreement on November 30.

 

 

 
White House Releases STEM Plan
 
On Tuesday, December 4, 2018, the Trump Administration released a five-year plan for strengthening STEM (science, technology, engineering, and math) education. The plan, titled Charting a Course for Success: America’s Strategy for STEM Education, was developed by the National Science and Technology Council Committee on STEM Education and the White House Office of Science and Technology Policy.
 
The strategy relies on four intersecting paths:
 
  1. Developing existing and new strategic partnerships among educational institutions, employers and communities;
  2. "Engaging students where disciplines converge," described as making STEM more meaningful and inspiring, including through science fairs, robotics clubs, gaming workshops, and invention challenges that promote problem solving using knowledge and methods from multiple disciplines;
  3. Building digital ("computational") literacy, teaching students to use computational thinking as a critical skill to solve complex problems, not just to use digital tools effectively; and
  4. Base STEM programs on transparency and accountability in terms of programs and investments in STEM.
 
The administration’s goal is threefold: building stronger STEM literacy foundations; increasing diversity, equity and inclusion in STEM; and preparing the workforce of the future. While the plan is intended to guide Federal Agency actions and investments over the next five years, the White House did not indicate how much funding it would seek for these investments.

 

 

 
EPA Proposes Changes to Waters of the U.S. Definition
 
In a December 11 announcement, the EPA proposed changes to the definition of the Waters of the U.S. (WOTUS), restricting federal protections on some waters. Currently under WOTUS, EPA may consider industrial ditches as “tributaries,” leading to costly maintenance activities, and expensive and time-consuming dredge and fill permits. This proposed change would apply to wetlands not connected to larger waterways or riverbeds that flow only after rainfall. In addition to reducing the number of waterways protected under the Obama-era WOTUS rule, the EPA is still seeking to repeal the rule in its entirety. One Voice has worked with regulators and lawmakers for several years to address concerns about the EPA overreaching beyond what the law intends.