Trade Update (January 7)
On Thursday (Jan 3), the 116th Congress was sworn into office and Senate Majority Leader Mitch McConnell (R-KY) announced the Republican committee assignments. Senators James Lankford (R-OK), Steve Daines (R-MT), and Todd Young (R-IN) will all join the Senate Finance Committee. Senator Chuck Grassley (R-IA) received a formal nomination to serve as Chairman of the Committee. House committee assignments should be announced soon.
European Union Steel Safeguards
In March 2018, the European Commission (EC) launched an investigation to determine if steel imports into the EU had increased. The investigation found that 28 product categories of steel, “mostly diverted from the US as a result of the Section 232 steel measures,” threatened the EU steel industry. In order to protect the still recovering steel industry, the EC announced in July that it would impose a Tariff Rate Quota (TRQ) of 25% once imports exceed the average imports over the last three years. The TRQ would remain in place for a maximum of 200 days, at which point the EC would decided whether to impose definitive safeguard measures or not.
On Friday (Jan 4), the EC notified the World Trade Organization (WTO) that they would impose definitive measures to replace the provisional measure. The definitive measure is similar to the provisional TRQ: it “will be imposed erga omnes (against imports from all origins), concern 26 steel product categories and will ensure that trade diversion is avoided whilst maintaining traditional levels of trade in steel on the EU market. They consist of tariff-rate quota by which a duty of 25% will apply when the level of the traditional trade flows is reached.” These definitive measures will remain in place for three years until July 16, 2021. However if circumstances change, the measures can be reviewed at any time.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP)
The CP-TPP entered into force on December 30, 2018 for Australia, Canada, Japan, Mexico, New Zealand, and Singapore. Vietnam will officially ratify the agreement on January 14. According to an Australian media release, “it is one of the most comprehensive and ambitious trade agreements ever concluded and will eliminate more than 98% of tariffs in a trade zone worth AUD $13.8 trillion in GDP and a market of around 500 million consumers.” Brunei, Chile, Malaysia, and Peru have yet to ratify the agreement, but once they do, the CP-TPP will enter into force 60 days after ratification.
Partial Government Shutdown
As of Friday (Jan 4), the partial government shutdown has been in effect for 13 days. The nine departments still without funding are as follows: Agriculture, Commerce, Justice, Homeland Security, Interior, State, Transportation, Treasury, and Housing and Urban Development. Additionally, the Office of Personnel Management, Federal Communications Commission, Executive Office of the President, and NASA are affected.
According to the Commerce contingency plan, the Bureau of Economic Analysis will only keep on 4 of its 500 employees, which publishes economic data including gross domestic product (GDP), inflation, personal income, spending, trade, and new home sales. Thus, no new economic data has been published since December 22, 2018. However, necessary functions of the department such as the International Trade Administration’s enforcement and compliance teams and the Bureau of Industry and Security’s law enforcement and export control regulators continue to work without pay.
 “Trade: Commission imposes provisional safeguard measures on imports of steel products.” European Commission, Brussels, 18 July 2018. http://europa.eu/rapid/press-release_IP-18-4563_en.htm
 “Steel: Commission intends to impose definitive safeguard measures on imports of certain steel products.” European Commission, Brussels, 4 January 2019. https://ec.europa.eu/info/news/commission-publishes-its-findings-steel-safeguard-investigation-2019-jan-04_en
 “TPP-11 kicks-off, delivering benefits for Aussie farmers and businesses.” Minister for Trade, Tourism and Investment, Senator the Hon Simon Birmingham, 30 Dec 2018. https://trademinister.gov.au/releases/Pages/2018/sb_mr_181230.aspx
 Alison Bevege. “Pacific trade pact takes off with tariffs cut in six nations.” Reuters, Sydney, 29 Dec 2018. https://www.reuters.com/article/us-trade-tpp/pacific-trade-pact-takes-off-with-tariffs-cut-in-six-nations-idUSKCN1OT00C
 “Factbox: Impact on U.S. government widens on 13th day of shutdown.” Reuters, 3 Jan 2019. https://www.reuters.com/article/us-usa-shutdown-departments-factbox/factbox-impact-on-u-s-government-widens-on-13th-day-of-shutdown-idUSKCN1OX1HE