Who’s on the AGOA chopping block? – POLITICO – POLITICO

With help from Doug Palmer and Camille Gijs

— President Joe Biden is expected to announce this week whether any countries have been suspended — or reinstated — in the African Growth and Opportunity Act trade benefit program.

— Washington’s top trade official Katherine Tai and the European Union’s Valdis Dombrovskis are returning to the negotiating table to hammer out a steel and aluminum dispute after talks nearly broke down at a transatlantic summit earlier this month.

— China’s Foreign Minister Wang Yi spoke with the American president on Friday in the latest signal both countries are gearing up for a leaders-level meeting on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco.

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BIDEN NEARS DECISION ON AGOA ELIGIBILITY: Joe Biden will help set the direction of Washington’s trade policies with African countries for years to come this week when he unveils whether any countries have been stripped or reinstated from AGOA. The pending decisions add an element of suspense as U.S. Trade Representative Katherine Tai heads to Johannesburg for this year’s AGOA Forum with trade ministers from sub-Saharan Africa.

“The annual AGOA eligibility review is an extensive process that started in the spring and engages many stakeholders through both a written submission process with the Federal Register notice and a virtual public hearing,” USTR spokesperson Heather Barmore said. “As a culmination of this year’s review, the president will make his decision on AGOA eligibility for the 2024 calendar year in the coming days.”

AGOA rules require 60 days’ notice if the president decides to suspend any participant for the upcoming calendar year, driving the decision ahead of this year’s forum, which traditionally has been held in August, thereby avoiding the current awkward timing.

Mauritania: House Democrats are concerned that Mauritania could be reinstated in the program. The West African country was suspended from AGOA beginning in 2019 due to insufficient efforts to address forced labor, in particular hereditary slavery. A USTR team visited the country in February to assess the current situation. “We have pretty strong views that Mauritania should not be reinstated,” a House Democratic aide said.

Ethiopia: Biden suspended AGOA benefits for Ethiopia beginning in 2022 for human rights violations and other issues related to an internal conflict. Some Democrats support reinstating Ethiopia, which had been one of the biggest program users, but others want to see more progress, the House Democratic aide said. Both Mali and Guinea were also suspended in 2022 following an “unconstitutional change” in their governments.

South Africa: Some lawmakers have called for South Africa, this year’s AGOA Forum host, to be suspended because of its ties to Russia. However, it would be awkward for Biden to make that move just as Tai is arriving in Johannesburg for the meeting.

Meanwhile, the administration and Congress face big decisions over the future of AGOA, which is set to expire in less than two years. Doug has more on that here.

EXCLUSIVE: COMMERCE EYE ON AFRICA: Deputy Commerce Secretary Don Graves will travel to South Africa in an effort to strengthen the U.S.-African commercial trade partnership. He will also participate in the African Growth and Opportunity Act Forum’s two-day ministerial meeting and co-host the event’s Private Sector Forum.

U.S.-EU STEEL TALKS TO RESUME: EU trade commissioner Valdis Dombrovskis and USTR Katherine Tai met Saturday on the margins of the G7 meeting. According to a readout from Washington, they “discussed the next steps for the negotiations in the coming weeks.”

The statement is a signal that officials from Washington and Brussels are ready to return to the negotiating table after talks on steel and aluminum tariffs all but broke down earlier this month.

Reminder: With no deal, Trump-era tariffs and EU counter-tariffs could snap back on Jan. 1. The two sides want to reach a deal on critical minerals to round the edges off of Washington’s massive splurge on its homegrown green industry.

Also at the summit: Tai met with French Trade Minister Olivier Becht, where she “reiterated the United States’ commitment to remain at the negotiating table in order to reach a meaningful outcome” on the metals dispute and emphasized the need for the U.S. and the EU “to work together in a productive manner over the next several months,” USTR said.

Quick catch-up: Trade ministers from the group of seven advanced economies gathered in Osaka for a two-day meeting over the weekend which focused on cooperation “towards sustainable growth of the global economy,” according to Japan’s Ministry of Foreign Affairs.

Tai also spoke with WTO Director-General Ngozi Okonjo-Iweala and expressed optimism ahead of the 13th Ministerial Conference, expected in February 2024 in Abu Dhabi, United Arab Emirates. She noted positive developments in talks with the United Kingdom over a critical minerals pact and with Canada in discussions over its proposed digital service tax.

ONE STEP CLOSER TO XI-BIDEN MEETING: President Joe Biden spoke with China’s Foreign Minister Wang Yi on Friday and agreed to work together toward an expected meeting between the American president and Chinese paramount leader Xi Jinping at next month’s APEC summit in San Francisco.

During the hour-long discussion, the American president “emphasized that both the United States and China need to manage competition in the relationship responsibly and maintain open lines of communication,” according to a readout of the meeting from the White House.

China’s top diplomat Wang said the countries “agreed to work together towards the realization of the San Francisco Summit,” in a statement published on Sunday by the Chinese Foreign Ministry. “At the same time, the ‘road to San Francisco’ will not be a smooth one, and it cannot be on ‘autopilot,’” Wang added.

While a senior administration official told reporters that the White House is making preparations for the meeting, China has yet to officially confirm, potentially to avoid any embarrassment in case a sudden geo-political flare-up forces an abrupt cancellation.

Looking ahead: The Biden administration’s summary describes APEC as an avenue “to advance economic policies in the Asia-Pacific region to promote free, fair, and open trade and investment and advance sustainable and inclusive economic growth.” The 21 APEC countries account for more than 60 percent of U.S. exports, the summary notes.

Threats to progress: Biden is unlikely to budge on his approach to trade policy in the region, which has prioritized cooperation over a narrow set of disputes between countries rather than breaking down barriers to trade. Participating countries’ wide range of views on geopolitics and the Israel-Hamas war is also bound to loom over the conference.

APEP LEANS INTO PRIVATE INVESTMENT: The Biden administration and leaders from Latin American countries are gearing up for a flurry of diplomatic engagements this week as the White House looks to galvanize private sector investment into the region, culminating on Friday in the summit of the Americas Partnership for Economic Prosperity.

The rundown: On Thursday, the Inter-American Development Bank and the Biden administration will co-host an event highlighting strategic opportunities provided by a more integrated Western Hemisphere and expected to focus on infrastructure, semiconductors, clean energy and medical supplies.

The initiative is part of a broader effort to increase U.S. private investment into countries across Latin America. The presidents of Chile, Costa Rica, the Dominican Republic, Ecuador, Peru and Uruguay are expected to attend.

And on Friday Latin American leaders will stand alongside the U.S. president to unveil broad pillars targeting finance, trade and foreign affairs after international officials urged the administration to sharpen the framework, according to diplomats and persons familiar with discussions who spoke with POLITICO.

Keep in mind: Biden is not expected to lower tariffs or provide other market access incentives that regional partners so fervently want as part of the agreement, keeping with a trade strategy that he has pursued in Europe and Asia despite bipartisan backlash.

No contest: The summit comes as China sinks massive investments into countries across Latin America. Beijing has free trade agreements with Chile, Costa Rica, Peru and Ecuador, and more than 20 countries in Latin America have signed on to join China’s Belt and Road Initiative.

BRUSSELS COMES TO CALIFORNIA: Five members of the European Union’s Committee on International Trade are traveling to San Francisco to discuss “political, trade and investment relations between California and the EU,” according to an announcement.

Bernd Lange, chair of the European Parliament’s trade committee, is leading the delegation after the EU opened an office in San Francisco to focus on advancing the bloc’s digital trade policy. The trip will include meetings with companies in the car-manufacturing, high-tech and semiconductor sectors.

— A historic agreement to support victims of climate disasters is at risk of coming apart — a development that could derail the upcoming United Nations climate summit in Dubai, per Zia Weise, Sara Schonhardt and Karl Mathiesen.

— The United Auto Workers tentative agreement with Ford has a “pathway” to include electric vehicle plant workers under the union’s master agreement with the company, Olivia Olander reports.

— Last-chance negotiations on a trade agreement between Australia and the European Union have fallen through, Australian Trade Minister Don Farrell said on Sunday, Camille Gijs reports.

— A French and German push to extend energy subsidies is risking a rift with smaller countries that want to end payouts they see as harmful, per our colleagues in Europe.

— G7 called for an “immediate repeal” of import curbs on Japanese food products on Sunday in a subtle rebuke of China, Reuters reports.

— Egypt’s natural gas imports have stopped in a move that underscores the impact of the Gaza conflict on the nation which could dash hopes to resume exports to Europe, Bloomberg reports.

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