LIGHTHIZER: U.S. NEEDS TO RESET GOVERNMENT PROCUREMENT AGREEMENT: The United States needs to reset its commitments under the WTO's Government Procurement Agreement to allow the White House and Congress to implement stricter Buy American provisions, U.S. Trade Representative Robert Lighthizer said last week. However, as of late Sunday, there was still no word whether U.S. officials decided in a meeting on Friday to formally give 60 days notice to the WTO that the United States intends to withdraw from the agreement. If the Trump administration were to give notice today, it would take effect on Jan. 22. That would give President-elect Joe Biden just a tiny window to reverse the withdrawal, if he wanted to do that. The U.S. is a founding member of the GPA which currently has 48 members, including the EU, Japan and Canada. Participating countries agree to treat companies from other GPA members the same as domestic firms in bidding for public procurement projects. However, countries also designate which government agencies are bound by the agreement. Ahead of Friday's meaning, Lighthizer said he believed the GPA was a "bad" agreement for the U.S. "We're basically giving more than we're getting in the GPA," he said during a video discussion hosted by the Dole Institute of Politics at the University of Kansas. "My own sense is we have to rebalance that a little bit. We have to have more Buy America. And to the extent that we're giving access to [companies from] other countries, as if they were American, we have to get more access from their place than we have so far. So, it was a bad negotiation. It probably needs to be reformed," Lighthizer said. What would Joe do?: It's not clear how Biden would respond to a GPA withdrawal since he also wants to beef up Buy American provisions, including by renegotiating U.S. commitments under the GPA and other trade deals. LIGHTHIZER SAYS U.S. STILL PUSHING FOR AIRCRAFT DEAL WITH THE EU: During the same event, Lighthizer said he has had phone calls "with very senior people in France and the European Commission" in recent days to discuss how to resolve some trade irritants. Those topics include a long-running WTO dispute over government support for Boeing and Airbus, which has led the United States to impose duties on $7.5 billion of EU exports and the EU to impose duties on nearly $4 billion worth of American goods. "We're working with them in respect to the tariffs. We're working with them on a whole variety of areas," Lighthizer said. The two sides are "trying to come up with some rules" to resolve the aircraft dispute, he said, apparently referring to subsidy disciplines. France is one of the four European governments that provides subsidies for Airbus in the form of launch aid loans. It also could face U.S. tariffs on an additional $1.3 billion of its exports in early January because of its plans to begin collecting a digital services tax that the United States believes is unfairly aimed at U.S. internet giants. Lighthizer did not say if that issue was discussed. U.S., VIETNAM TALKS POSSIBLE IN EARLY DECEMBER: The United States and Vietnam are working to schedule virtual negotiations in early December to discuss two Section 301 investigations launched by USTR into allegations that the country manipulates it currency for an unfair trade advantages manipulation and uses lumber harvested in illegal logging operations to make wood products that it exports, Morning Trade has been told. USTR's public comment period in the two probes closed on Nov. 12, and the trade agency has not responded to questions about its next steps. USTR can take up to a year to complete a Section 301 investigation, but many in the U.S.-Vietnam business community fear the Trump administration will impose duties on Vietnamese goods before leaving on Jan. 20. Treasury's role: The investigations follow the Treasury Department's decision in May 2019 to place Vietnam on a congressionally-mandated monitoring list of major trading partners whose currency practices and macroeconomic policies merit close attention. Treasury kept Vietnam on the list when it released its next report in January 2020, several months late. Treasury officials also recently told the Commerce Department that Hanoi undervalued its currency, the dong, by 4.7 percent. That was part of an investigation into whether tire imports from Vietnam benefit from unfair subsidies, including currency undervaluation. Current Treasury report late: However, Treasury still has not released the semi-annual currency reports that were due in April and October of this year. Publication of the report could either bolster USTR investigation, or undercut it, depending on what it says. Treasury's January 2020 report also put China, Japan, South Korea, Germany, Italy, Ireland, Switzerland, Mexico, Vietnam and Singapore on the monitoring list. USTR has not announced currency investigations against any of them. In fact, China, Japan, South Korea, Germany and Switzerland have appeared on the monitoring list for all six of the reports issued during the Trump administration, while Vietnam has only been listed in the two most recent publications. Mixed U.S. message: Meanwhile, White House national security adviser Robert O'Brien and U.S. Export-Import Bank chief Kimberly Reed on Sunday wrapped up a trip to Vietnam "to advance economic growth and reaffirm the United States support for a strong, prosperous, and independent Vietnam," Ex-Im said in a statement. "We respect your patriotism, your vision, your determination and your passion for an independent and truly sovereign nation that is not subservient to another," O'Brien added in a speech in Vietnam that did not mention the USTR probes. "We are deeply invested in a strong and prosperous Vietnam at the center of a free and open Indo-Pacific. We look forward to accomplishing great things with you in the future." U.K. LOOKS TO FINISH TRADE TALKS WITH BIDEN: The United Kingdom now hopes to wrap up talks with the United States on a free trade agreement in the early months of Biden's administration, a U.K. official said on Friday. The acknowledgement reflects the difficulty of finishing the talks before Trump leaves office on Jan. 20 and the likelihood that the incoming Biden team will want to review and modify any pact before submitting it to Congress for a vote. ANOTHER CRUCIAL WEEK FOR U.K.-EU TALKS: The U.K. and EU will be back at the virtual negotiating table this week, instead of continuing in-person talks, because one of the EU negotiators tested positive for coronavirus last week. There is still hope that negotiations can be finalized quickly once "London makes up its mind," an EU official told our Morning Trade colleagues in Brussels. Watching the clock: EU countries are concerned that the process is taking too long to ensure a deal is ratified before the end of the year, so it can enter force on January 1. EU ambassadors were briefed on Friday about the timeline and the remaining options for ratification. That could entail entering the deal into force provisionally, with the European Parliament ratifying later. Turf battle in Brussels: However, the European Parliament has fought hard to get assurances from the European Commission and European Council not to pass trade deals without its consent. Even though everyone acknowledges that the deal on the future relationship with the U.K. is a unique sort of trade agreement, this could trigger a precedent that members of the European Parliament would rather avoid. And among member states: Making the deal go live provisionally is only possible if it is an EU-only agreement that does not need ratification by national or regional parliaments. Ceding member countries' powers to vote on a deal that touches "mixed" competences that they share with Brussels could create a precedent for future trade deals. Two EU officials confirmed that EU countries still have to formally agree whether the deal will be labeled as EU-only or mixed, and that this will be a very sensitive discussion U.K., CANADA COMMIT TO POST-BREXIT DEAL: Britain and Canada resolved on Saturday to negotiate a new bilateral trade deal in 2021, rolling over the terms of the EU's current trade agreement with Canada. Prime ministers Boris Johnson and Justin Trudeau sealed the rollover pact in a video call, along with their top trade officials. The deal will ensure that about $26.6 billion in annual trade between the countries keeps flowing after Britain leaves the EU on January 1. British businesses export $15.1 billion worth of goods and services to Canada each year. Sectors that stand to prosper from continued trade in the U.K. include carmakers and the food and drink industries. | 
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