KT'S FIRST FULL WEEK: Shortly before midnight, USTR confirmed Tai "will begin virtual conversations with her international counterparts" this week, but provided no further details. She spent her first day on Friday meeting with USTR staff. That was a homecoming for Tai, who was the agency's chief China enforcement counsel before leaving in 2014 to become House Ways and Means Committee international trade counsel. U.K. on deck: Tai is widely expected to talk with U.K. Trade Secretary Liz Truss as early as today about the U.K.'s interest in finishing talks on a bilateral free trade agreement. What's less clear is what Tai will tell Truss, since time is running short for the two sides to reach a deal under the 2015 tranche of Trade Promotion Authority that expires at the end of June. In addition, the Biden administration has repeatedly said that it wants to invest in rebuilding the U.S. economy before pursuing any new trade agreements. However, British officials believe a deal could be quickly wrapped up and have signalled their willingness to accept provisions in the area of labor and the environment that reflect the Biden administration's goal for a "worker-centered" trade policy that also addresses climate change. Kenya calling: The Biden administration also must decide whether to pursue bilateral free trade talks with Kenya that were launched by the Trump administration. The two sides so far have held just two rounds of negotiations on the pact, which has been intended to become the model for other trade agreements with African countries. EU concerns: EU officials are also eager to make contact with Tai to discuss the fate of former President Donald Trump's national security tariffs on steel and aluminum, as well as newly invigorated efforts to resolve the long-running Boeing-Airbus dispute. No date yet for U.S.-China Trade Framework meeting: The acrimonious meeting in Alaska on Friday between top U.S. and Chinese diplomats provided further evidence that Trump's tariffs on more than $350 billion worth of Chinese are here to stay for a while, along with Beijing's retaliation on a proportional volume of U.S. exports. Still, under the U.S.-China phase one deal, a bilateral "Trade Framework Group" consisting of the U.S. trade representative and a designated Chinese vice premier is required to meet every six months to discuss implementation of the pact. The agreement also requires regular meetings between the U.S. Treasury Secretary and a designated Chinese vice premier. The last such meeting of the Trade Framework Group appears to have been a call between then-USTR Robert Lighthizer and Chinese Vice Premier Liu He on Aug. 24. That suggests the next one is already nearly one month overdue. EU OUTLINES HOPES FOR WTO MINISTERIAL: The rules-based international trading system could fall apart over the next few years unless WTO members make progress soon on a package of new agreements and reforms, a senior European Union official said on Friday. "If we do not succeed in reform of the WTO in the next three years, I think we risk having a very damaging fragmentation of the global trading system," Ignacio Garcia-Becerra said during a discussion hosted by the Peterson Institute for International Economics. Appellate Body: Garcia-Becerra said the EU hopes to reach an agreement with the United States and other members on reforming the WTO's dispute settlement system by the group's 12th ministerial conference, which will be held in Geneva the week of Nov. 29. The EU is willing to discuss the full scope of U.S. concerns about the Appellate Body, but any reform package must maintain the independence of the Appellate Body and continue to bar an individual member from blocking the adoption of a ruling, he said. Garcia-Becerra stressed the need for a final deal to reduce or eliminate harmful fishing subsidies by MC12, as well as a resolution of the Covid-19 vaccine waiver debate being driven by South Africa and Brazil. The EU is very interested in exploring "the third way" approach suggested by WTO Director General Ngozi Okonjo-Iweala to resolve the impasse, he said. Plurilaterals: The EU hopes to finish plurilateral negotiations on domestic services regulation by MC12 and to provide meaningful direction for other plurilateral negotiations on e-commerce and investment facilitation, he said. In an initiative aimed primarily at China, the EU wants to relaunch talks with the U.S. and Japan on forging new rules to govern the use of industrial subsidies and bring in enough other like-minded countries over the next year that Beijing will be required to engage, he said. Garcia-Becerra also cautioned that some badly needed reforms would take until MC13 to achieve. That ministerial will likely be held in late 2023. FISHING SUBSIDY TALKS STILL DEEP IN DISAGREEMENT: The chair of the fishing subsidy negotiations, Colombian Ambassador Santiago Wills, told fellow ambassadors on Friday that countries disagree over the key issue of whether and how to excuse certain prohibited subsidies — such as for fuel or construction of boats — if a member demonstrates that it is taking measures to maintain healthy fish stocks. Wills told the group some members believe the proposed text would make it difficult for developing countries to make use of the proposed exemption, while others say the same text is too permissive and creates a substantial loophole, a Geneva trade official said. However, Will also noted some bright spots in the negotiation, including a willingness to make new proposals to improve the overfishing provisions, the Geneva official said. RAIMONDO STEPS INTO 'PRIVACY SHIELD' TALKS: On the same day that Tai was sworn in, Commerce Secretary Gina Raimondo was digging into talks on transatlantic data flows for the first time with EU Justice Commissioner Didier Reynders. The former Rhode Island governor said the two sides remain committed "to restoring certainty and predictability to transatlantic data flows," following a European Court of Justice ruling last year that struck down the "Privacy Shield" data transfer arrangement. Reynders and Raimondo's predecessor, Wilbur Ross, began talks last year on a new pact to comply with the ruling. AND BONES UP ON THE SEMICONDUCTOR SHORTAGE: On Friday, Raimondo met with senior executives from the Semiconductor Industry Association to discuss steps that could be taken to address the current shortage of chips and to boost U.S. production over the long term. "Semiconductors are America's fourth largest export, and critical to our economic competitiveness and national security," she said in a statement after the meeting. "I believe we need to make strong investments in domestic manufacturing, research, and workforce, and help strengthen America's global leadership in semiconductor manufacturing and innovation." BRAZIL TRIMS TARIFFS ON CAPITAL GOODS AND TECH PRODUCTS: Brazil announced last week that it is cutting tariffs on nearly 1,500 capital goods and information technology and telecommunications products by 10 percent. An import previously taxed at 16 percent would face a new duty of 14.4 percent as a result of the change. Brazil's Special Secretary for Foreign Trade and International Affairs Roberto Fendt said the move would help reduce Brazilian production costs and is part of a broader trade opening agenda. Brazil and the three other members of Mercosur — Argentina, Paraguay and Uruguay — also are discussing changes to the common external tariff they impose on imports, former Brazil Foreign Trade Secretary Welber Barral told Weekly Trade. REPORT DIGS INTO TECH COMPANY LOBBYING AT USTR: A new report from a technology watchdog group details a number of trade concerns that Facebook, Google, Apple and Amazon raised with USTR during the final months of the Trump administration. Based on emails obtained under the Freedom of Information Act, the report from the Tech Transparency Project said Apple sought the help of USTR in dealing with multiple issues in South Korea, including proposed legislation to establish new app store rules and an antitrust investigation by regulators. The emails also showed Google asked USTR for assistance on another piece of South Korean legislation in October-November 2020. Earlier in the year, Facebook sought USTR's aid on a piece of privacy legislation in Japan that it feared could hamper its Messenger texting service, the report said. In another instance, USTR reached out to Amazon for advice on digital service taxes in India, Italy, Turkey and the U.K. in August-September 2020, the report said. Later, USTR formally determined that digital taxes in those countries "discriminate" against American companies. | 
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