U.S. Chamber of Commerce

International Policy Update

March 25, 2022

U.S., Allies Add to Pressure on Russia

Chamber Welcomes Announcement of New Transatlantic Data Transfer Agreement

Chamber Statement on the EU’s Digital Markets Act

U.S., UK Reach Section 232 Deal, Discuss Trade Engagement

Chamber Underscores Importance of Transatlantic Relations

Keshap Conducts First Visit to India as New USIBC President

Senate Works to Tee Up Bipartisan Innovation Act Conference

Chamber, Business Groups Press Congress on Trade Remedy Legislation

CBP Shares Resources on Uyghur Forced Labor Prevention Act

U.S. Chamber Statement on the Passing of Secretary Madeleine Albright

ICYMI: Trade Agenda Hearings Expected March 30, 31

Commentary

CPTPP: Can We Expect Additional Southeast Asian Members Soon?

On the Road to Global Vaccinations, the Last Mile Remains the Hardest

U.S., Allies Add to Pressure on Russia

The United States and its allies have continued to announce punishing sanctions on Russia in response to its invasion of Ukraine, as the Chamber has summarized in recent updates to members. Among the global financial and economic consequences of the Russian invasion of Ukraine and the sanctions on Russia are the following:

The Treasury Department, in tandem with Western allies, on March 24 further targeted Russia’s defense industrial base, imposing sanctions on dozens of the country’s defense companies. The agency also targeted more than 300 members of the Russian Duma as well as the head of Russia’s biggest financial institution. It also explicitly stated that any transactions involving gold are prohibited.

Additionally, the U.S. and European Union reached an agreement to reduce Europe’s dependency on Russian energy by increasing natural gas supplies in Europe. President of the U.S. Chamber’s Global Energy Institute Marty Durbin issued the following statement regarding the agreement:

“We are pleased to see the Biden Administration recognize the critical role that the U.S. should play to provide clean, reliable natural gas supplies to Europe and other allies. Today’s announcement is an important signal that must be followed up with policy and actions to encourage domestic oil and natural gas production and associated pipeline and export infrastructure. A broader long-term strategy built around energy security and accelerating the clean energy transition is also required to face global threats. The American business community stands ready to support this effort.”

The March 24 announcement was made while President Biden met with NATO leaders in Brussels to discuss deterrence strategies, military aid and humanitarian relief for Ukraine, and future sanctions on Russia. He is also participating in G7 meeting, a European Council summit, and a visit to Poland to meet with President Andrzej Duda.

President Biden warned this week that the Russian government “is exploring options for potential cyberattacks” in retaliation for U.S. sanctions on Russia. The White House detailed steps companies should take to protect against a potential attack. On that note, U.S. Chamber Senior Vice President for Cyber, Intelligence, and Supply Chain Security Policy Christopher Roberti stated:

“Today’s advisory from the Biden administration, while not identifying specific threats, suggests a change in the government’s threat assessment for cyberattacks. In our ongoing conversations with businesses, the U.S. Chamber has been highlighting the importance of maintaining a heightened state of alert, implementing enhanced security controls, and lowering thresholds on reporting cyber incidents to incident response firms. The Chamber will continue to work collaboratively with the government and private sector to ensure the safety of our critical networks.”

The Chamber also published a blog post on the rapidly changing cyber threat environment to provide important information for the business community.

On other fronts, a bill to suspend Permanent Normal Trade Relations (PNTR) with Russia and Belarus is stalled in the Senate following House passage last week. Senate Majority Leader Chuck Schumer (D-NY) is facing pushback from senators on whether to combine the PNTR bill with a bill banning oil imports from Russia and concerns with the House-passed amendments to the Global Magnitsky Act.

However, Russian parliamentarians have drawn up their own bill to withdraw from the WTO, which the country joined in 2012. If enacted, Russia could face higher tariffs from the remaining 163 WTO member countries. Additionally, the U.S., European Union, and a dozen other World Trade Organization members formally opposed Belarus’s accession to the WTO.

In addition to the Chamber’s updated summary of recent sanctions activity, members are directed to the United States Treasury’s Office of Foreign Assets Control (OFAC) frequently-updated FAQs and the OFAC hotline/feedback account (ofac_feedback@treasury.gov) for information and guidance on sanctions compliance. The Department of Commerce’s Bureau of Industry and Security (BIS) also published resources for companies including compliance guidance, seminar opportunities, and contact information.

The Chamber will continue to monitor developments and engage with the administration and Congress as these policies are implemented. For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com) or Director for International Policy Isabelle Icso (iicso@uschamber.com). On matters related to Ukraine’s humanitarian crisis, please contact U.S. Chamber of Commerce Foundation Senior Vice President Marc DeCourcey (mdecourcey@uschamber.com).

Chamber Welcomes Announcement of New Transatlantic Data Transfer Agreement

U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant issued the following statement in response to the announcement of a new agreement for transatlantic data transfers:

“Today’s announcement is most welcome. A new agreement will provide companies of all sizes the legal certainty to transfer, analyze, and use data on both sides of the Atlantic. The ability to move data is critical in today’s digitally connected economy.

“We are grateful for President Biden and European Commission President von der Leyen’s active leadership on this issue. This new agreement demonstrates the importance of trust within the transatlantic relationship and what can be achieved through dialogue and cooperation. We look forward to working with policymakers on both sides of the Atlantic as the agreement is finalized and implemented.”

For further information, please contact Senior Vice President for European Affairs Marjorie Chorlins (mchorlins@uschamber.com).

Chamber Statement on the EU’s Digital Markets Act

U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant issued the following statement in response to news of a political agreement on the European Union’s Digital Markets Act (DMA):

“While details are still emerging, we are disappointed that the European Union has opted to target a handful of largely American companies with the DMA. A policy of de facto discrimination against U.S.-headquartered companies threatens to undermine much needed transatlantic cooperation on tech policy at a time when unity and leadership are essential to develop rules of the road for a rapidly digitalizing global economy.

“Unfortunately, the EU elected to target a limited number of specific firms rather than address harmful business conduct. Companies captured by this new regulation have little in common other than their size and offer dramatically different product and services. This sort of one-size-fits-all regulatory policy runs the risk of significant unintended consequences and threatens to undermine innovation and investment in Europe’s digital economy. It also sets a dangerous precedent as other countries will be more likely to explicitly target foreign investors and favor national champions in the future.

“Many questions about the DMA remain unanswered, including exactly which services are in scope and who will enforce the new rules. With U.S. and European leaders set to meet in France for the next Trade and Technology Council meeting in May, we urge policymakers to work together to ensure that transatlantic security and geopolitical considerations, as well as the principle of fair and non-discriminatory treatment, guide the DMA and consideration of other European digital policy measures.”

For further information, please contact Senior Vice President for European Affairs Marjorie Chorlins (mchorlins@uschamber.com).

U.S., UK Reach Section 232 Deal, Discuss Trade Engagement

On March 22, the U.S. and the United Kingdom reached an agreement to settle the Section 232 tariff dispute stemming from the U.S. Section 232 tariffs on steel and aluminum imports first imposed in 2018. Similar in structure to agreements reached with the European Union and Japan, this deal reworks the U.S. Section 232 tariffs by replacing them with a new tariff-rate quota (TRQ) system for steel and aluminum imports that will take effect June 1. The UK will in turn remove its retaliatory measures on U.S. exports, which affected U.S.-produced whiskeys, jeans, and motorcycles.

U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant made the following statement upon the announcement:

“American workers and companies negatively impacted by soaring metals prices and escalating shortages will welcome today’s deal, but further action is needed. When these tariffs were imposed in 2018, the Chamber warned they ‘would directly harm American manufacturers, provoke widespread retaliation from our trading partners, and leave virtually untouched the true problem of Chinese steel and aluminum overcapacity.’ All of that came to pass. This deal marks a step toward remedying these problems.

“Meanwhile, Russia’s invasion of Ukraine and its economic fallout have rattled metals markets worldwide. Some analysts say steel consumers should lock in steel supplies now, whatever the price, as severe shortages are imminent.

“U.S. trade policy can provide relief. Section 232 tariffs and quotas remain in place on imports from many other countries. The U.S. should take comprehensive steps now to avert further harm to American workers in the manufacturing and construction sectors.”

Under the agreement with the U.K, the U.S. will replace the existing 25% tariff on U.K. steel products and 10% tariff on aluminum products under Section 232 with TRQ levels based on a historical baseline of U.K. import volumes between 2018-2019. Any steel or aluminum products entering above-quota will continue to be subject to the Section 232 tariff. There is no language about the UK entering into concurrent negotiations, as in the EU deal, on “green steel.” However, the UK must undertake an audit of British Steel (partially owned by Chinese investors) to “assess influence from the People’s Republic of China government” in the company.

The agreement can be found here, the U.S. announcement here, and the U.S.-UK joint statement here.

The Section 232 agreement was announced at the conclusion of the first U.S.-UK “Dialogue on the Future of Atlantic Trade.” The Chamber’s U.S.-UK Business Council Executive Director Marjorie Chorlins participated in the conference in Baltimore and provided views on how the U.S. and UK can take incremental approaches to expand trade and investment opportunities bilaterally and work together on shared global challenges. The Chamber also emphasized the preference for the U.S. and UK to consider returning to the table for more fulsome negotiations towards a free trade agreement.

Initial focuses of the Trade Dialogues will include:

For further information, please contact Senior Vice President for European Affairs and Executive Director of the U.S.-UK Business Council Marjorie Chorlins (mchorlins@uschamber.com).

Chamber Underscores Importance of Transatlantic Relations

On March 22, the Chamber, in partnership with AmCham EU, released the Transatlantic Economy 2022, an annual study of job creation, trade, and investment ties between the United States and Europe. This year’s study features new insights into how the war in Ukraine affects the transatlantic relationship, the impact of the COVID-19 pandemic, prospects for the recovery, global supply chain issues, relations with China and the transatlantic energy economy. The study includes dedicated profiles for more than 30 European countries and all 50 U.S. states.

One key takeaway is that the commercial relationship across the Atlantic is in very good shape despite the myriad global challenges. Last year set records for total trade in goods, investment, and profits earned by U.S. companies in Europe and European companies in the United States.

On March 16, the European Affairs team hosted Ireland’s Taoiseach (Prime Minister) Micheál Martin during his annual St. Patrick’s Day visit to Washington for a keynote address and awards ceremony followed by an executive roundtable. In his address, the Taoiseach outlined his vision for ensuring the future of the transatlantic economic relationship brings mutual benefits to companies and workers on both sides of the Atlantic. During the roundtable discussion, he underscored key areas of bilateral cooperation, such as digital, tax, and energy policy at the national and EU levels, as well as joint efforts to counter anti-competitive practices from non-market economies.

For further information, please contact Senior Vice President for European Affairs Marjorie Chorlins (mchorlins@uschamber.com).

Keshap Conducts First Visit to India as New USIBC President

Ambassador Atul Keshap made his first visit to India as President of the U.S.-India Business Council (USIBC) this week. In his new role, Ambassador Keshap and USIBC’s policy team held meetings with ministerial-level officials, political leaders, and member companies. Ambassador Keshap engaged with the Ministers of Foreign Affairs, Trade, Infrastructure, Digital Economy, and Energy.

Key themes included the logic of U.S.-India geostrategic convergence, how Indian and American companies can help forge a resilient and dependable free-world supply chain, and how American firms are well-positioned to help India address defense needs, technology ambitions, and reduce commodity and energy prices triggered by the Russia-Ukraine crisis.

In an Interview with The Print Atul Keshap made the following statement:

“This is where our industrial might, our strength as stable democracies is absolutely crucial because our companies, Indian and American, can work together to drive down energy prices, they can work together to drive down commodity prices, they can work together to drive down the prices of finished goods, they can address the needs of people caught up in this, because of this war, and its affecting American consumers, its affecting Indian consumers, it is going to have even more effects going forward.”

In other news, Ambassador Keshap on March 1 offered testimony at a House Foreign Affairs Committee briefing on developing the proposed Indo-Pacific Economic Framework. Ambassador Keshap shared the Chamber’s recommendations and made the case for the framework to advance an ambitious trade agenda for the region.

As Ambassador Keshap stated:

“The Indo-Pacific Economic framework can be bolstered both by constructing a trade architecture that enables strategic cooperation and creates a secure supply chain for the free world, and by spearheading an abundance agenda that raises living standards for Americans and billions of friends in the region. As the world’s sixth largest and fastest growing economy, a site of both critical manufacturing capability and scalable research & development, robust demographics, and the world’s largest democracy, India will be an essential partner in generating mutual prosperity and creating a global free world supply chain.”

On a related note, the Office of the U.S. Trade Representative (USTR) is seeking comments on the “Fair and Resilient Trade” pillar of the IPEF. The Department of Commerce also issued a request for comments on the three pillars it will lead: 1) supply chain resilience; 2) infrastructure, clean energy, and decarbonization; and 3) tax and anti-corruption. Both sets of comments must be submitted by April 11.

The Chamber previously shared business recommendations with administration officials engaged in the development and formulation of IPEF. The recommendations will serve as the basis of the Chamber’s comments to USTR and Commerce.

For further information, please contact President of the U.S.-India Business Council Atul Keshap (akeshap@uschamber.com).

Senate Works to Tee Up Bipartisan Innovation Act Conference

The Senate voted 66-31 on March 23 on the motion to proceed to consideration of the House-passed “America COMPETES Act,” a necessary step toward conference proceedings on what is now being called the Bipartisan Innovation Act. This move was one in a series of “procedural hoops” the Senate must jump through in order to move to conference, Senate Majority Leader Chuck Schumer (D-NY) said on the floor Wednesday.

As an overview of the formal conference process, the Senate must take the House bill (H.R. 4521), replace the House text with the “United States Innovation and Competition Act (USICA)” text, and then re-pass the USICA language as H.R.4521. At that point, House and Senate can name conferees to work on a compromise bill, which then must pass both the House and Senate.

Given the breadth of issues the package covers, it is likely chairs and ranking members of Senate Commerce, Finance, Homeland Security, and Foreign Affairs committees are named as conferees. Additional conferees could be pulled from committees with expansive jurisdiction. A similar cross-section of conferees will likely be named in the House.

Senator Todd Young (R-IN) told reporters this week that he anticipates the conference will begin “before the end of the work period,” which is slated to start April 11.

Additionally, Sen. Sanders on Thursday demanded a roll call vote on two amendments before the Senate moves to conference. The first would remove the CHIPS funding section of the bill and the second would remove language Sanders says gives funds to Blue Origin, which was founded by Jeff Bezos.

Sanders made similar fruitless attempts during the NDAA vote in December — introducing an amendment that would put guardrails on companies receiving CHIPS funding — to which the U.S. Chamber responded with opposition. The Sanders amendments are not expected to pass but will delay the process.

The Chamber is engaged in efforts to shape the final bill as House and Senate lawmakers look to reconcile differences in their two versions. For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).

Chamber, Business Groups Press Congress on Trade Remedy Legislation

On March 22, the U.S. Chamber led a coalition of business groups in sending a multi-association letter to Congress expressing strong opposition to the inclusion of the “Eliminating Global Market Distortions to Protect American Jobs Act of 2021” in any final bill stemming from the Senate-passed “United States Innovation and Competition Act (USICA)“ and the House-passed “America COMPETES Act.” The groups argue in the letter:

“This legislation would make far-reaching changes to U.S. antidumping and countervailing duty laws without being subject to the thorough Congressional deliberation required for such modifications. Proponents of this legislation contend it aims to address Chinese market-distorting activities and overcapacity in the steel sector. However, it would result in the application of more and higher tariffs on a diverse array of imported goods from all U.S. trading partners, not just China — including products from economies that are not unfairly subsidized or dumping into the U.S. market. This would penalize legitimate trade and contribute to the inflationary pressures on American businesses…

“At a time when Congress is aiming to enhance the global competitiveness of American industry and the attractiveness of the United States as a venue for both domestic and international investment, heaping new tariff burdens on American industry would send exactly the wrong signal. By substantially raising prices for a host of industrial inputs, this measure will undermine the growth of the innovative, value-added manufacturing industries that the United States should be working hard to support and attract. Indeed, fostering the growth of these globally competitive industries here in the United States should be a top goal of American policymakers. If Congress were to include this measure in a final legislative package aimed at increasing U.S. competitiveness, the irony would be notable. Lessening the tariff burden would allow companies to hire more workers, who are currently on the sidelines waiting for more certainty.”

The Chamber weighed in last week on the broader bill and other provisions under consideration for inclusion in a final package, to be called the Bipartisan Innovation Act.

For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).

CBP Shares Resources on Uyghur Forced Labor Prevention Act

Following the signing of the Uyghur Forced Labor Prevention Act (UFLPA) into law in December, U.S. Customs and Border Protection (CBP) has launched a new UFLPA webpage and inbox to help distribute UFLPA implementation updates and manage questions before it takes effect on June 21. CBP has stated that the website will be updated frequently with the latest information, and the inbox is consistently monitored for questions from the trade community and public. As a reminder, the Forced Labor Enforcement Task Force (FLETF) will hold a public hearing, as required by the law, on April 8.

For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).

U.S. Chamber Statement on the Passing of Secretary Madeleine Albright

U.S. Chamber Executive Vice President Myron Brilliant released the following statement upon the passing of Secretary Madeleine Albright:

“Throughout her life in public service, Secretary Madeleine Albright served her country with strength and grace. She was also an inspirational figure for people across the globe.

“As our nation’s top diplomat and foreign policy adviser, she advanced American leadership in the promotion of democracy and freedom. Her work to strengthen NATO and build international coalitions remains as vital today as ever and will be an enduring legacy in our nation’s history.

“Secretary Albright was also a great friend to the U.S. Chamber and offered invaluable insights on a multitude of topics. We will miss her and extend our deepest condolences to her family and all whose lives she touched.”

ICYMI: Trade Agenda Hearings Expected March 30, 31

The House Ways and Means Committee and Senate Finance Committee will convene hearings on March 30 and March 31, respectively, on the Biden administration’s 2022 Trade Policy Agenda, featuring U.S. Trade Representative Katherine Tai as the sole witness.

USTR released its 2022 Trade Policy Agenda and 2021 Annual Report on March 1. In the agenda, USTR maintained its focus on implementing a “worker-centered trade policy” as well as continued work with allies. USTR highlighted five areas through which it supports workers: 1) labor rights, 2) decarbonization and sustainable environmental policies, 3) agriculture, 4) supply chain resiliency, and 5) combatting Covid-19. The agency also emphasized its commitment to vigorous enforcement efforts and inclusive stakeholder engagement.

Commentary

The Diplomat (March 10) by Shannon Hayden and Javiera Heine

U.S. Chamber (March 16) by Robert Grant