| | | | |  | | By Ari Hawkins | | Presented by |  | | | With help from Doug Palmer, Camille Gijs and Caroline Hug
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Dockworkers are expected to go on strike Tuesday all along the country’s East Coast and Gulf Coast ports. | Brandon Bell/Getty Images | | | | — Tens of thousands of dockworkers could walk off the job as soon as Tuesday in a blow to commercial shipping. That’s teeing up a new test for the Biden administration's much vaunted supply chain initiatives. — The EU Deforestation Regulation is facing scrutiny from the United States and other agricultural exporters over whether it could violate international trade rules. — India's ambassador to the U.N. defended the country, which has been perceived as the villain of the World Trade Organization. It’s Monday, Sept. 30. Welcome to Morning Trade. Thoroughly enjoyed SNL's debut this week — although to me, Kate McKinnon as Kellyanne Conway remains the cream of the crop. Want to chat? Got tips or suggestions? Let us know at ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can also follow us on X: @_AriHawkins, @GavinBade and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
| | | | A message from Climate Leadership Council: A strategy that puts American families, workers, and manufacturers first is the key to climate success. By focusing on U.S. competitiveness, economic growth, resource security, and geopolitical influence, we can strengthen our standing while supporting global decarbonization. This strategy taps into America’s unique strengths––low-carbon manufacturing, dynamic capital markets, an influential consumer base, and powerful alliances––while helping us outcompete rivals. Learn more. | | | | | SUPPLY CHAIN PRESSURES MOUNT: A dockworkers strike that threatens to shut down East Coast ports and snarl the national economy could kick off tomorrow. That’s raising fears of shortages and delays for a range of critical goods — from automobiles to bananas and even Christmas decorations — which in turn could trigger price spikes. But the looming strike could also function as the next test for the Biden administration's vaunted supply chain efforts, which has included the formation of various councils and dialogues and has faced mixed reception from leaders in the private sector. Context needed: The administration is facing complaints that its sheer number of disparate initiatives across various federal agencies and departments have no clear point person or unifying objective. It’s left business leaders scratching their heads about where to turn in an emergency, potentially slowing coordination and widening the economic fallout of the next crisis. In fact, Katie Sweeney, executive vice president and chief operating officer for the National Mining Association, said in comments to the administration that it has fielded a "barrage of requests" for information from an “alphabet soup of government departments and agencies,” in response to Commerce’s June Federal Register notice. “What we’re missing is someone, anyone, tying all these efforts together,” Sweeney told your host. Tom Madrecki, vice president of campaigns and special projects at the Consumer Brands Association, agreed more coordination is needed. “Ensuring inter-agency coordination and advancing integrated strategies to strengthen supply chain resilience is critical to achieving real progress, reducing confusion about related efforts and securing further private sector support,” he said in CBA’s filed comments. The Information Technology Industry Council said in its remarks that the high number of supply chain dialogues in recent years has made it challenging for industry to track and monitor opportunities for improvement. The defining issue: While private sector leaders credit Biden for some initial strides to centralize oversight of supply chains, they suggest the focus has waned after the Covid-19 pandemic. The initiatives, they add, have fallen short of White House promises to “re-normalize the flow of goods” and “lower inflation.” “Earlier in the administration, there was a centralized task force structure to address defined vulnerabilities and failures. Now, a more decentralized approach is being used where individual agencies are addressing their specific areas of concern,” said John Pickel, senior director of international supply chain policy at the National Foreign Trade Council. Your host has more here.
| | ANXIETY OVER EU DEFORESTATION RULE: The United States and other agricultural exporters continue to raise concerns about the disruptive effect that the EU Deforestation Regulation could have on trade when it takes effect on Dec. 30. At a meeting last week of the WTO’s agriculture committee, the EU confirmed there would be no delay in implementing the EUDR, despite the outcry from members including Brazil, India, Indonesia and the U.S., a Geneva trade official told Morning Trade. Instead, the EU delegate told members at the meeting Brussels is focused on ensuring that all the elements necessary for the implementation, including the required guidance and the IT systems, will be ready on time, according to the official, who was granted anonymity because they were not authorized to speak on the record. What it does: The regulation aims to combat climate change and biodiversity loss by discouraging the conversion of forests into agricultural land for the production of commodities like cattle, wood, cocoa, soy, palm oil, coffee, rubber and some of their derived products, such as leather, chocolate, tires or furniture. It requires any companies that trade these commodities within the EU to prove that the products do not originate from recently deforested land or have contributed to forest degradation. WTO violation?: The EU argues the regulation is fully in line with WTO rules. However, a new policy brief from Bruno Capuzzi at the European Center for International Political Economy argues certain provisions of the EUDR may not be. “The regulation risks having ‘unjustifiable extraterritoriality’ or being ‘more restrictive than necessary’ for not adequately considering different conditions in third countries,” Capuzzi writes, adding that adjustments to make the new rules more flexible and reflective of the local realities would improve their WTO compatibility. U.S. sees “inadequate” preparation: “[W]e urge the European Commission to delay the implementation of the regulation and subsequent enforcement of penalties until these substantial challenges have been addressed,” a spokesperson from the Office of the U.S. Trade Representative told Morning Trade.
| | | | A message from Climate Leadership Council:   | | | | | WTO’S FAVORITE VILLAIN: India has long been cast as the villain of the World Trade Organization, but its ambassador to the U.N. body sees things differently. The line: “Members must appreciate and try to understand as to why any other member is taking a certain position,” Senthil Pandian told Morning Trade. Where’s this coming from? With the WTO long operating on the principle of consensus, India’s been the member behind many failed attempts to reach agreement on issues including extending the E-Commerce Moratorium, fisheries subsidies and agricultural trade. Derailed: “India has played a very hard diplomatic game” in talks on taxing cross-border digital trade, said the British Chambers of Commerce’s William Bain. Even when smaller groups attempt to make side deals, India frequently stands in their way, leading one diplomat in Geneva to say, “If we can’t allow those that are ready to go forward, everything is going to die on the hill, and we’re never going to do anything here.” Choose your fighter: Pandian sees it differently. He argues that India isn’t a blocker — it’s standing up for smaller members that risk being steamrolled by the larger players. Crowded out: Another Geneva-based diplomat was unsympathetic to Pandian’s view, however. “I do find it very condescending that people take views that developing countries don’t know what they’re negotiating,” they said. “In terms of the JSI on E-Commerce, for example, the majority of members negotiating the text are developing countries.”
| | | | — Three new lobbyists for Chinese drone-maker DJI previously criticized Chinese business and trade practices, per POLITICO Influence. — Financial policy battles loom for lame duck Congress, POLITICO Pro reports. — EU betting on India and Vietnam for chips, per POLITICO Europe. — Smartphones need tobacco-like controls, says leading WHO expert, per POLITICO Pro. — China works to keep the peace in East Africa as security issues threaten investments, per South China Morning Post. THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade.
| | | | A message from Climate Leadership Council: A pro-U.S. climate strategy will help Americans thrive and support a lower carbon trajectory in the global economy. Too often, climate progress is seen as independent from other national priorities, overlooking the fact that the U.S. boasts the world’s largest economy, the most dynamic capital markets, and unmatched global influence. Advancing our national interests will lower global emissions. New research from the Climate Leadership Council proposes a comprehensive approach that addresses global climate change by promoting U.S. interests in four critical areas: American competitiveness, economic growth, resource security, and geopolitical influence. Read more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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