MODEST MINISTERIAL ON TAP: As member economies heat up preparations for the 13th Ministerial Conference later this month, the co-conveners of e-commerce talks at the WTO unveiled the most likely agreements by consensus among the disparate coalition of nations. Small gains: The 28-page document reflects several issues already hammered out in December negotiations, touting progress on agreements over electronic signatures and contracts, as well as online consumer and personal data protection, cybersecurity and open government data, while skirting other major areas of contention. Catch up: The co-conveners, which include Australia, Japan and Singapore, brought their draft chair’s text in mid-January in preparation for recent meetings. Industry corner: The document took up an issue closely watched by business groups: a moratorium on customs duties for electronic transmissions via a permanent commitment. “No Party shall impose customs duties on electronic transmissions between a person of one Party and a person of another Party,” per the text. That issue was not settled in the JSI on e-commerce as of December, which has more than 80 members including the United States, the European Union and China. Keep in mind: Some developing countries have opposed the extension as they look for ways to increase tariff revenues and encourage the development of their own industries. And because the WTO operates by consensus, just one member could theoretically kill it. South Africa, for instance, has gone so far as to propose ending the moratorium at the upcoming conference. Still outstanding: Over the issues of regulating information and communications technologies that use cryptography, electronic payments, and development, the co-conveners acknowledged that an agreement requires “further small group work.” Notably omitted: The text also lacks proposals over data flows, data localization, source code and non-discrimination. The United States withdrew its support for related digital trade proposals last year following pushback from progressive lawmakers and interest groups. SHRINKING CHINESE IMPORTS HELP PUSH U.S. TRADE GAP LOWER: Final U.S. trade figures for 2023 that will be released Wednesday are expected to show a slight drop in the overall goods and services deficit to about $780 billion. That would be down about 18 percent from about $951 billion in 2022, which was the highest on record. One factor behind the lower trade gap is declining imports from China. Wednesday’s report is expected to show the United States imported about $430 billion worth of Chinese goods last year, down more than 20 percent from 2022. The sharp drop seems to be the result of consumers cutting back on goods purchases after a Covid-19 spending spree and companies diversifying some of their supply chains out of China because of increasing risk. Already-released trade data for January through November 2023 showed imports from China fell in 86 of the 99 broad categories traced by the Census Bureau on its USATrade Online website. That included machinery, electronics, toys, sporting equipment, tools, railway equipment, aluminum, steel, ceramics, glass and glassware, clothing, footwear, headgear, books, plastics, chemicals, rubber, wood, cosmetics, chemicals and seafood. Wednesday’s report is expected to show U.S. exports to China were down about 1 or 2 percent in 2023 to around $150 billion. That slight demand coincided with improved Chinese economic growth after the government lifted Covid restrictions. Looking ahead, the World Bank has forecast Chinese growth to slow in 2024 to 4.5 percent, from 5.2 percent last year, which could take another bite out of U.S. exports to China. PROGRESSIVES BACK UP DIGITAL WTO PIVOT: More than 40 civil society and interest groups are applauding the Biden administration’s decision to withdraw support for "extreme" digital trade proposals that they argue benefit large technology companies. Progressive groups like Rethink Trade and Public Citizen said in a letter Friday that the move marked “an important first step to ensuring that Big Tech interests cannot commandeer trade negotiations" that undermine progressive policies. A spokesperson from the U.S. Chamber of Commerce slammed the remarks in a statement to Morning Trade which said “digital trade supports 2 million American jobs in all 50 states, and listening to these fringe views will only put them at risk.” The comments come after Commerce said recently obtained documentation indicates progressive groups share a “privileged relationship” with USTR.
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