trade

Rousseff Signs Investment Agreements with Peña Nieto

May 27, 2015

by AQ Online

Brazilian President Dilma Rousseff met Tuesday with Mexican President Enrique Peña Nieto in Mexico City to foster a closer relationship between the two largest markets in Latin America and the Caribbean. This event was Rousseff’s first official visit to Mexico since she first became president in 2011.

Rousseff kicked off her official visit to Mexico on Monday evening and was welcomed by the Minister of Foreign Relations José Antonio Meade. She arrived with a delegation of business representatives interested in exploring investment opportunities in Mexico.

On Tuesday, Rousseff and Peña Nieto signed investment agreements and other accords to increase air travel and tourism. They also agreed to review their bilateral preferential trade agreement (the acuerdo de complementación económica Brasil–México, known as ACE 53) in an effort to lower tariffs overall and extend reduced tariffs to over 6,000 new products. As ACE 53 currently stands, less than half of the products that Brazil exports to Mexico are included in the list of goods with reduced tariffs.

Together, the Brazilian and Mexican economies comprise 62 percent of Latin America’s GDP and make up 58 percent of Latin America’s exports. The bilateral trade between the two countries stood at $9.2 billion in 2014, up from $ 5.7 billion in 2006. With the new agreements, the countries hope to double their trade within the next decade.

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Tags: Dilma Rousseff, Enrique Peña Nieto, trade, investment

U.S. Senate Votes Against Fast Track for Trans-Pacific Partnership

May 13, 2015

by AQ Online

The U.S. Senate voted 52-45 on Tuesday against a bill that would grant President Barack Obama a “fast track” to close the Trans-Pacific Partnership (TPP) deal. This outcome not only marks a defeat for one of Obama’s trade priorities, but also highlights the challenges he faces within his party ranks.

The TPP is a multilateral trade agreement among 12 countries that together represent approximately 40 percent of world GDP and nearly a third of world exports. Chile, Mexico and Peru are the three countries from Latin America that are included in the agreement.

In a joint press conference with Japan's Prime Minister Shinzo Abe in April, Obama said, "TPP will help level the playing field. [It] will have strong protections for workers and the environment and help us set high standards for trade in the 21st century." 

Yesterday’s results fell just shy of the 60 votes Obama needed to enact a legislative procedure known as Trade Promotion Authority (TPA), which enables trade deals such as the TPP to be voted on by Congress with a “yes” or “no” approval without amendment. Congress has enacted TPA since 1974, but it expired on July 1, 2007. Under current law, the trade promotion authority must be voted on and renewed by Congress every two years.

Democrats have been the most vocal opponents of the TPP. Massachusetts Senator Elizabeth Warren co-authored an opinion piece in the Boston Globe with Connecticut Representative Rosa DeLauro earlier this month, citing corporate influence and a lack of transparency as reasons to reject the deal.

“Powerful corporate interests have spent a lot of time and money trying to bend Washington’s rules to benefit themselves, and now they want Congress to grease the skids for a TPP deal that corporations have helped write but the public can’t see,” they said.

In addition to these issues, other bipartisan concerns about the TPP include the lack of provisions on human trafficking, currency manipulation, child labor laws, displaced workers, and unfair trade practices, among others. These pending concerns reveal that TPA is not the only hurdle the TPP deal is facing right now.

 After the vote, Obama called on ten Senate Democrats who had publicly backed the fast track provisions in order to discuss the outcome and work on a strategy to get the votes he needs. The outcome of these discussions are yet to be disclosed, but will certainly shed more light on the future of TPP.  

 

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Tags: TPP, trade, President Obama

Ecuador Reacts to U.S. Watch List of Intellectual Property Rights

May 1, 2015

by AQ Online

The government of Ecuador released a statement on Thursday dismissing the headline of an earlier article by the Spanish international wire service EFE that Ecuador is on a United States “black list” of countries in violation of intellectual property rights. The EFE story was an interpretation of an annual report, also released on Thursday, issued by the Office of the United States Trade Representative (USTR) titled “Special 301,” which evaluates U.S. trading partners on their protection and enforcement of intellectual property rights. The Ecuadorian government said that the EFE headline misconstrued the intentions of USTR and that the report was not a black list.   

The second section of the Special 301 report gives country-specific details and is divided into two parts titled ”watch list” and “priority watch list.” Ecuador appeared on the watch list of last year’s report, but has been elevated to the priority watch list for 2015. The report states, “This decision is based on Ecuador’s 2014 repeal of its criminal [Intellectual Property Rights] provision….the current lack of criminal procedures and penalties invites transnational organized crime groups that engage in copyright piracy and trademark counterfeiting to view Ecuador as a safe haven.”

The statement released by Ecuador’s Ministry of Foreign Trade on Thursday highlighted a section of the report indicating that the U.S. will reconsider downgrading Ecuador from its status on the priority watch list if Ecuador “reinstates the repealed provisions or adopts new acceptable procedures and penalties by December 30, 2015.” The Ministry of Foreign Trade remarked that such a statement in the report “implies a tacit recognition of the process of regulatory change that [Ecuador] conducts.”

The statement by Ecuador’s Ministry of Trade also asserted that it is working on improving its compliance with international standards on intellectual property rights and foreign trade. On April 23, the Ministry of Foreign Trade asked Ecuador’s Justice Commission of the Assembly to accelerate reforms that would criminalize offenses against intellectual property. The reforms outline penalties against offenders that include 31-45 days of imprisonment and fines consistent with the value of stolen intellectual properties. Thursday’s press release by the Ministry of Trade stated that the Justice Commission of the Assembly will consider the reforms in the coming days.

The proposed reforms were reportedly issued to protect trade relations with other regions of the world. Ecuadorian Minister of Foreign Trade Diego Aulestia stated on April 23 that if Ecuador fails to address proper compliance with international intellectual property standards, it would have “serious consequences for national interests”.

The USTR report listed a total of 13 countries on its priority watch list— Argentina, Chile and Venezuela join Ecuador on the list.

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Tags: Intellectual Property Rights, trade, Piracy

U.S.-Mexico Border Means Opportunity, Not Just Drugs and Thugs

December 18, 2013

by Kezia McKeague

The U.S. House Foreign Affairs Western Hemisphere Subcommittee chose the fitting location of Tucson, Arizona, to convene a field hearing on trade facilitation in the border region on December 9. Dotted with cacti, this college town lies at the heart of the desert landscape that belonged to Mexico until the Gadsden Purchase of 1853. Today, Mexico is Arizona’s largest trading partner, yet perceptions of the border often identify it as a security threat rather than as an economic opportunity.

Last week’s hearing marked a refreshing effort to rebalance policymakers’ attention. In his opening statement, Chairman Matt Salmon (AZ-R) defined the objective: “to get at what we need to do in the public and private sectors to improve border infrastructure and better facilitate trade without letting down our guard on security efforts.” Recognizing that the two economies are deeply intertwined, he pointed to “the good news”—that the commercial relationship continues to grow—and “the bad news”—that ports of entry face significant challenges in keeping up with this growth.

Western Hemisphere Subcommittee Ranking Member Albio Sires (NJ-D) alluded to the solutions needed to resolve tensions between border security and trade facilitation, while Representative Kyrsten Sinema (AZ-D) criticized “long and unpredictable wait times” at the border. Representative Ron Barber (AZ-D) unequivocally stated that “we must expedite the legal flow of traffic,” and Representative David Schweikert (AZ-R) cited the “amazing opportunity” represented by the potential for lower energy costs bolstering a manufacturing renaissance on both sides of the border.

On both sides of the aisle, the consensus was that the security-versus-trade debate has been overly skewed towards the former.

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Tags: Mexico, Mexico-U.S. Relations, trade

A Trade War of Words between Brazil and the U.S.

October 17, 2012

by Lucy Jordan

Protectionism made news again in Brazil recently, when Finance Minister Guido Mantega announced that Brazilian firms could avoid a 30 percent tax increase on the auto industry by improving fuel efficiency, using Brazilian-made parts and investing in Brazilian research and development. Foreign automakers without a manufacturing plant in Brazil will be subject to the tax hike, Veja noted.

The program is designed to encourage innovation in technology and fuel efficiency, Mantega argued. Any negative effect on foreign imported cars, he said, was merely collateral damage.

It’s no surprise he is feeling a little defensive.

Last month, Brazil and the United States had something of a war of words over trade issues.

First of all Mantega, in an interview with the Financial Times, called the United States’ latest round of quantitative easing (QE) “protectionist.” QE, which has been deployed liberally by the U.S. and other industrialized nations in response to the economic crisis, floods the market with dollars—which Brazil has complained drives up the value of the real, making Brazilian exports less competitive.

“Any country that manipulates its currency is practicing protectionism,” Mantega told the FT. “We don’t do that.”

The U.S. responded in kind, with a leaked letter criticizing Brazil’s announcement of plans to increase import tariffs on some 100 items, including potatoes, tires and x-ray equipment, with more tariff hikes expected to be announced this month.

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Tags: Brazil, tariffs, trade

U.S.-Mexico Trade War Looms in Tomato Dispute

September 28, 2012

by Kezia McKeague

Fears of a trade war between the United States and Mexico escalated on Thursday following a preliminary decision in the politics of tomatoes. In a surprising and premature ruling, the Commerce Department sided with Florida tomato producers in terminating an agreement that has set a minimum price on Mexican tomatoes imported into the United States over the past 16 years.

The Mexican Government has already threatened to retaliate, with ramifications for other commodity producers caught in the cross-fire. Earlier this week, Secretary of Economy Bruno Ferrari had promised that if the United States makes a hasty decision, instead of conducting a standard 270-day review, “Mexico will use all our legal means to defend our producers.” A final ruling could also endanger talks over other bilateral trade disputes.

For Mexican tomato growers, termination of the agreement would allow U.S. growers to file formal complaints accusing the Mexicans of unfair trade practices, which they did repeatedly before the agreement’s adoption in 1996. The Mexicans argue that they are being punished for their success—for growing a superior product and for honoring the pact over 16 years.

Thursday’s announcement seemed particularly harsh given the timing: Mexican tomato producers were scheduled to meet with officials at the Commerce Department on Friday to discuss ways to resolve the dispute. The growers have said they are willing to accept a higher floor price for their tomatoes.

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Tags: Mexico, tomato growers, trade

U.S.-Mexico Trade War Looms in Tomato Dispute

September 28, 2012

by Kezia McKeague

Fears of a trade war between the United States and Mexico escalated on Thursday following a preliminary decision in the politics of tomatoes. In a surprising and premature ruling, the Commerce Department sided with Florida tomato producers in terminating an agreement that has set a minimum price on Mexican tomatoes imported into the United States over the past 16 years.

The Mexican Government has already threatened to retaliate, with ramifications for other commodity producers caught in the cross-fire. Earlier this week, Secretary of Economy Bruno Ferrari had promised that if the United States makes a hasty decision, instead of conducting a standard 270-day review, “Mexico will use all our legal means to defend our producers.” A final ruling could also endanger talks over other bilateral trade disputes.

For Mexican tomato growers, termination of the agreement would allow U.S. growers to file formal complaints accusing the Mexicans of unfair trade practices, which they did repeatedly before the agreement’s adoption in 1996. The Mexicans argue that they are being punished for their success—for growing a superior product and for honoring the pact over 16 years.

Thursday’s announcement seemed particularly harsh given the timing: Mexican tomato producers were scheduled to meet with officials at the Commerce Department on Friday to discuss ways to resolve the dispute. The growers have said they are willing to accept a higher floor price for their tomatoes.

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Tags: Mexico, tomato growers, trade, U.S. Commerce Department

The Politics of Tomatoes: U.S. Risks Trade Dispute with Mexico

September 13, 2012

by Kezia McKeague

On October 8, Mexico is set to become a full partner in the Trans-Pacific Partnership (TPP) negotiations.  As Mexican Ambassador to the United States Arturo Sarukhan is fond of saying, with TPP Mexico and the U.S. are playing chess, not checkers. Indeed, Mexico’s participation in the high-standards pact represents a unique opportunity to consolidate our strategic bilateral partnership and deepen our economic integration in the context of like-minded countries along the Pacific Rim.

Yet even as we celebrate cooperation at the level of geopolitics and multilateral negotiations, we cannot ignore the more prosaic frictions that inevitably arise in such a broad and dynamic relationship. Recently, these have included spats over chickens and washing machines, while the latest issue revolves around tomatoes.

Tomato disputes have a long history. With the advantages of ideal soil and climate conditions and low labor costs, Mexico became a major player in the U.S. market following the embargo placed on Cuba in 1962. After decades of tomato trade wars, the signing of the North American Free Trade Agreement (NAFTA) in 1992 eliminated tariffs on Mexican tomatoes over a ten-year transition period, despite the opposition of Florida agricultural producers. In 1996, at the behest of Florida’s tomato industry, the U.S. Commerce Department initiated an anti-dumping investigation to determine whether tomato imports from Mexico were being sold at less than fair market value. To suspend the investigation, Mexican producers agreed to a minimum price for imports. This so-called “suspension agreement” has been honored for 16 years, with two renewals as well as adjustments of the reference price.

Fast forward to the electoral year of 2012, and Florida tomato growers have requested that the Commerce Department end the suspension agreement so they can initiate a new anti-dumping investigation against Mexican tomatoes. They argue that the agreement is outdated and fails to protect them against the Mexican competition; their critics accuse them of a transparent attempt to use a swing state’s political clout on behalf of protectionist interests. 

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Tags: trade, Arturo Sarukhan, Mexico, Trans-Pacific Partnership

India and CELAC: Beyond Commodities

August 28, 2012

by Hari Seshasayee

On August 7, India’s foreign minister held the country’s first dialogue with a troika representing a recently formed 33-nation Latin American group, the Comunidad de Estados Latinoamericanos y Caribeños (Community of Latin American and Caribbean States—CELAC). The meeting drew little attention, and most media outlets dismissed it as a routine affair, akin to India’s engagements with other multilateral blocs. A more nuanced look, however, indicates a window of opportunity for both India and Latin America.

First, we must explore Latin America’s changing geopolitical priorities over the past few years.

The very nature of the CELAC grouping is reflective of this shift: it was formed in defiance of the Organization of American States to leave out the United States from its political confabulations. Latin America now looks less to its traditional trade partners—Europe and the U.S.—which are preoccupied with their debt crises and political transitions, and the region also no longer sees them as a model they can emulate.

As a result, China is a dominant player in Latin America, with an annual trade of $240 billion. The Chinese presence there is maintained by two pillars: primarily, by a massive exchange of commodities and natural resources, and secondly, by a large Chinese diaspora totaling upwards of 2 million people. This will continue to sustain China’s relationship with Latin America, though more recently there has been a subtle change of policy positioning toward Beijing. Some perceive the flooding of Chinese goods into their markets as a risk; others simply want to engage with new markets.

This is where India comes in. It presents Latin America with an opportunity to diversify and opens the door to a large and promising market.

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Tags: trade, energy, Agriculture, India, CELAC

Argentina Suspends Automobile Trade Agreement with Mexico

June 27, 2012

by AQ Online

Yesterday the Argentine government announced it would suspend the Acuerdo de Complementación Económica (Economic Complementation Agreement, also known as ACE-55) with Mexico for three years, discontinuing tariff preferences in the automotive sector for the latter. The agreement was suspended following Brazil and Mexico’s agreement in March of this year to limit their trade in automobiles and set specific export and import quantities for the next three years, which violated the established terms of the ACE-55, the Argentine government said.

The ACE-55 was signed in 2002 between Mexico and the countries of the Mercosur bloc, comprising Argentina, Brazil, Uruguay, and Paraguay, and entered into force on January 1, 2003. Its principal objective was to promote free trade between Mexico and Mercosur countries and integration of their automotive sectors. In 2007 Mexico and Argentina signed a Strategic Partnership Agreement to increase economic cooperation and coordinate trade approaches. In the agreement signed with Brazil earlier this year, Mexico agreed to limit automobile exports to Brazil to help prop up Brazil’s ailing automobile industry.

Mexican Minister of the Economy Bruno Ferrari requested that the Argentine government reconsider the decision to cancel the ACE-55, which he said “has proven to be beneficial to the bilateral trade relationship.” Further, Ferrari said that Mexico will maintain a strong position in this situation and will use every legal means at the international level to defend its interests. Mexico and other countries are currently preparing to challenge Argentina before the World trade Organization over protectionist policies.

Tags: trade, Mexico, Argentina, Argentina-Mexico relations

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