TAI, ADEYEMO HEARINGS ON TAP THIS WEEK: Trade policy will take center stage at Senate Finance this week as lawmakers consider Biden's nominations for USTR and the No. 2 official at Treasury. Wally Adeyemo, the nominee for deputy Treasury secretary, is up first on Tuesday at 10 a.m., followed by USTR nominee Katherine Tai on Thursday at the same time. China a focus: How the Biden administration will handle Trump's trade war with China will be a key issue for both nominees. As the nation's top trade negotiator, Tai would be responsible for reviewing the tariffs Trump put in place on China and other nations, as well as the deal he struck to increase Chinese purchases of American farm products, which Beijing has yet to live up to. Adeyemo, meanwhile, is expected to help lead the administration's review of sanctions on Chinese leaders and firms put in place by Trump for Beijing's human rights abuses against Uighur Muslims and repression of democracy protests in Hong Kong. Balancing act: Both nominees will aim to take a tough rhetorical line on China's trade practices and abuses without making concrete promises that would limit future policy options. That will fall in line with Biden's promise to review Trump's tariffs on China and other nations before taking further action. Commerce secretary nominee Gina Raimondo showed how that strategy can go awry in her confirmation hearing last month, when she refused to commit to keeping Chinese firms like Huawei on her agency's business blacklist, hewing to the White House's line that the issue was under review. That statement earned her condemnation from China hawks in the Senate and a hold on her nomination from Ted Cruz (R-Texas). Her floor vote has yet to be scheduled. Wyden preview today: Finance Chairman Ron Wyden will preview the hearings and his committee's upcoming Covid-19 legislative agenda in a call with reporters today at 3 p.m. His office was tight lipped about details ahead of time. Confirmation likely: If the nominees can avoid rhetorical gaffes even worse than Raimondo, they are likely to be confirmed by the full Senate. Despite the TPP's enduring unpopularity with voters, Adeyemo is a well respected policy hand in Democratic circles, having served as deputy national security adviser for international economic affairs and deputy director of the NEC under Obama in 2015. And Tai's work on the U.S.-Mexico-Canada agreement as the head lawyer for House Ways and Means has earned her goodwill across the political spectrum. Though she'll be a newcomer to a White House role if confirmed, her backers say that won't stop her from having a leading role in Biden's trade policy. BIDEN WON'T BE A PUSHOVER ON APPELLATE BODY: The Trump administration infuriated the global community by effectively killing the WTO Appellate Body. But U.S. concerns about the court go way back and won't be easily resolved. So don't expect the new U.S. team to rush in with electrode paddles to revive the corpse. "These are long-standing, bipartisan concerns that we hope our trading partners will work with us to address," USTR spokesperson Adam Hodge told Morning Trade. Once Katherine Tai is confirmed as USTR, "we look forward to working with WTO Director General Okonjo-Iweala to tackle the problems with WTO dispute settlement, including the unresolved issues over Appellate Body overreach," Hodge said in an email. An aide to Wyden underscored Hodge's point about the bipartisan nature of U.S. concerns about the Appellate Body. "Chairman Wyden continues to believe the Appellate Body needs to be reformed," Wyden spokesperson Keith Chu told Morning Trade. "Such reforms require all WTO members to be committed to ensuring the appellate body works as it was originally intended, rather than following the body's decade-long history of going rogue and reaching far beyond its mandate." Unblocking the 'adjudicators': Last week, EU Trade Commissioner Valdis Dombrovskis urged the United States to show goodwill toward resolving the Appellate Body dispute by agreeing to restart the process of selecting judges, or as the U.S. calls them, "adjudicators." That issue will come up again today during a meeting of the WTO's Dispute Settlement Body. Hodge did not reply to a question on that topic, but trade observers were skeptical the Biden administration would agree to restart the selection process before it has reached agreement with other members on Appellate Body reforms. U.S. has filed most appeals: Over the past 25 years, countries have filed 600 cases at the WTO . Some are fought to the bitter end. In others, a solution is negotiated or the case is just dropped. A total of 265 lower-level panel rulings had been issued by the end of 2020. Those decisions were appealed in 174 of the disputes, or approximately 66 percent. In some cases, both parties appealed different aspects of the decision, which usually involve several points of WTO law. Despite its complaints about the Appellate Body, the United States has filed more appeals than any other WTO member. Records show the United States has appealed 71 decisions, compared to 59 appeals filed by the EU, 25 by China, 22 by Canada, 21 by Brazil, 11 by India and 8 by Australia. G-7 NATIONS STRIKE HARMONIOUS NOTE ON CHINA, DST: Leaders from the Group of 7 nations said they would work together to combat China, reform the WTO and reach an international agreement on digital taxation this year following a meeting of the group Friday. The leaders released a statement promising to cooperate to form a "modernised, freer and fairer rules-based multilateral trading system" that will have a "reformed World Trade Organisation at its centre." The nations — the U.S., Germany, Japan, France, Italy, the UK and Canada — also said they would "strive" for a "consensus-based solution on international taxation" by mid-2021 in the "framework of the OECD." China a focus of Biden speech: And the members pledged to cooperate on "non-market oriented policies and practices," a thinly veiled reference toward China. Cooperation among developed nations against China is at the core of Biden's pitch to allies, which he reiterated Friday in a speech to the Munich Security Conference. "We have to push back against the Chinese government's economic abuses and coercion that undercut the foundations of the international economic system," Biden said during virtual remarks. "Everyone, everyone must play by the same rules." Reality check: Key U.S. allies have already warned they won't be in lock step with Biden. French President Emmanuel Macron said recently he doesn't want developed nations to gang up on China, and the EU signed a major investment deal with China during the presidential transition despite pleas from Biden's incoming team to delay the pact. The view from China: Communist Party outlets quickly spun Biden's speech as a failure to unite the world against Beijing, keying off Europe's apprehension toward the White House's strategy of ganging up on China. The state-run Global Times noted that the G-7 statement "noticeably only mentioned China once — in favorable terms," keying off the statement's promise to engage countries "including large economies such as China." But it did admit that "some foreign media outlets" noted that the statement nations promised to work against non-market economies, "claimed to be a reference to China." FISHERIES TALKS BOB BACK INTO ACTION: Incoming WTO Director General Ngozi Okonjo-Iweala has set her sights on reaching a deal by the end of this year to curb subsidies that contribute to the depletion of ocean fishing stocks. That won't be easy, as the former Nigerian finance minister acknowledged shortly after she was officially selected as the new WTO chief last week. Negotiators were supposed to reach a deal last year as part of the U.N. Sustainable Development Goals set in 2015. Instead, the talks became another example of the WTO failing to deliver results. "A robust agreement would be a win-win for trade and sustainability," Okonjo-Iweala said. "It will signal to the world that the WTO is back, that it is capable of concluding a multilateral agreement vital for current and future generations." High seas fishing: Among the many issues involved in the talks, members have to decide which parts of the world's oceans would be covered by various overfishing and overcapacity provisions of the agreement, and which legal tests would trigger subsidy prohibitions. That led last week to an argument over how to tackle subsidies that encourage fishing in foreign jurisdictions. One member said the pact should prohibit fuel subsidies and fuel tax exemptions for fishing fleets, according to a Geneva trade official. But another member said such a ban would be ineffective since many vessels refuel overseas. CANTWELL NAMES NEW COMMERCE SUBCOMMITTEE CHAIRS: Senate Commerce Chair Maria Cantwell (D-Wash.) on Friday announced new subcommittee leaders for the new Congress. Moderate Kyrsten Sinema (D-Ariz.) will head the aviation subcommittee, overseeing NASA and the FAA. Texas' Ted Cruz is the ranking member. Michigan's Gary Peters (D) will lead the transportation and maritime panel, which oversees ports and freight, with Deb Fischer (R-Neb.) leading the GOP side. The panel on oceans and fisheries will be led by Wisconsin's Tammy Baldwin (D), with Dan Sullivan (R-Alaska) as ranking member. Richard Blumenthal (D-Conn.) will lead the consumer protection panel across from Marsha Blackburn (R-Tenn.). Ben Ray Luján (D-N.M.) will head the panel on communications and media, with minority whip John Thune (R-S.D.) as the ranking member. Freshmen senators will head the Space and Science panel — John Hickenlooper (D-Colo.) and Cynthia Lummis (R-Wyo.). And the tourism panel will be led by lawmakers from two popular destinations: Jacky Rosen (D-Nev.) and Rick Scott (R-Fla.). | 
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