December 7, 2023

Washington Wire: Negotiations Continue on China Competition Bill



Negotiations Continue on China Competition Bill
One Voice continues to work with House and Senate negotiators as they discuss a path forward to finalize legislation to incentivize manufacturing in America and counter China’s technological rise. The House passed legislation in February in response to a bipartisan Senate measure that cleared the upper chamber in June 2021. Both bills invest $52 billion to incentivize domestic semiconductor manufacturing, billions for STEM education and workforce, and funds to boost domestic production of critical goods to strengthen supply chains. One Voice is urging lawmakers to include the JOBS Act to allow Pell Grants for short-term training, provisions to inform students about the costs of student debt, and additional resources for apprenticeships. If you have not already done so, you can contact your lawmaker here and urge them to pass the manufacturing supply chain competition bill and include support for workforce.



China Fell Short of Phase One Trade Commitments
China fell more than one-third short of its commitments for the purchase of goods and services under the Phase One trade agreement reached during the Trump administration. Under the deal, China committed to buying an extra $200 billion in U.S. agriculture, energy, manufactured goods, and services over the 2017 level, $76.7 billion more in 2020 and $123.3 billion more in 2021.
However, based on an analysis of trade data released by the Commerce Department’s Census Bureau on February 9, it appears that China bought only 57 percent of the U.S. exports it had committed to purchase under the agreement.
In manufactured goods, where China had committed to the biggest net increase, the nation bought only 59% of the amount promised. Energy was the area where China most missed its targets, buying only about one-third of the exports that it pledged. The nation was closest to achieving its targets for agricultural goods, meeting about 83% of its commitments. 
Despite China’s failure to meet the commitments under the trade agreement, the U.S. is continuing negotiations while considering the next steps on how to hold China accountable and address the U.S. – China trade relationship moving forward. 



Social Cost of Carbon Metric Blocked
A federal district court has blocked the use of the Biden administration’s “interim” social cost of carbon (SCC) estimates to help justify rules and other policies that curb greenhouse gases. The February 11 ruling and preliminary injunction by the U.S. District Court for the Western District of Louisiana concluded that the administration lacked authority to order the use of SCC estimates. The SCC is a government calculation that factors in the economic costs of carbon emissions including the impact on agriculture, health care expenses, and social welfare.
The order directs federal agencies to revert to Bush-era Office of Management and Budget guidance on cost-benefit reviews. Meanwhile, agencies are predicting delays in rulemaking and stalled projects if new environmental reviews must be completed and the Administration is asking the court to stay the preliminary injunction, warning of "dramatic" consequences if the injunction remains intact during the administration's appeal, arguing that the blocking their use of SCC estimates prevents many cost-benefit and environmental analyses.
The administration's interim SCC values largely re-established the Obama estimate of around $50 per ton while correcting for inflation, though many experts predict that final recommendations could more than double the estimated benefits of curbing GHGs to a level over $100 per ton, allowing them to more easily justify restrictions placed on emissions. Final SCC estimates were expected to be released this summer, however, that timeline is now uncertain as the legal challenges move forward. 



EPA Committee to Finalize Soot Standard Recommendation
The Clean Air Scientific Advisory Committee (CASAC) of the Environmental Protection Agency (EPA) is set to meet this week to begin to finalize a recommendation to strengthen the particulate matter (PM) standard. The standard, last set in 2012, was reviewed by the Trump administration in 2020 and left unchanged.
Despite the call to decrease the standard for PM2.5 to between 8 and 10 µg/m3 by EPA career staff and outside experts, the Trump administration ultimately recommended retaining the existing NAAQS levels of 12 micrograms per cubic meter (µg/m3) and 150 µg/m3 for fine particles (PM2.5) and coarse particles (PM10) respectively.
In a draft report released earlier this month, the special CASAC panel on EPA's national ambient air quality standards (NAAQS) for PM favors tightening a key annual limit on fine PM, or PM2.5, from the current level of 12 ug/m3 down to a level in the range 8 ug/m3 to 10 ug/m3. The report says, "the majority of the CASAC finds that an annual average in the range of 8-10 ug/m3 would be appropriate." 
While the EPA is scheduled to release a proposed rule in August 2022 and a final rule by March 2023, an ongoing legal battle could delay the timeline. Two former advisory committee members, who were among those removed by EPA Administrator Michael Regan Regan last year, are seeking to be re-appointed to the panels on which they once served. While a judge ruled on February 16 against imposing a preliminary injunction and allowing the advisory panels to continue to work, should the court eventually rule against the EPA, the panels would have to be disbanded and reconstituted forcing the CASAC to start its review process over. 



USTR Requests Comments on Autos Under USMCA
The Office of the U.S. Trade Representative (USTR) is seeking comments regarding the trade of automotive goods under the United States-Mexico-Canada Agreement (USMCA) as part of a biennial review of the operation of the USMCA and the preparation of a report to be submitted to the Senate Finance and House Ways & Means committees by July 1, 2022.
The agency is soliciting “comments concerning the operation of the USMCA with respect to automotive goods, including the implementation and enforcement of the USMCA rules of origin for automotive goods, as well as whether the automotive provisions of the USMCA are relevant in light of technological and production advances.”
The request for comments comes after Mexico and Canada have joined together to challenge the United States’ strict interpretation of the automotive rules of origin under the USMCA. A USMCA dispute panel is expected to decide on the proper interpretation of such rules around September 2022.