Will President Trump Clash with India’s Prime Minister on Trade?

June 26, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

Today, President Donald Trump will meet with India Prime Minister Narendra Modi. Leading up to the meeting, U.S. lawmakers on either side of the aisle have urged the President to press Modi on the removal of barriers to U.S. trade and investment in India (The New York Times). According to these lawmakers, despite the high-level engagement with India, the country has not eliminated major barriers to trade and investment and has not been prevented from imposing new barriers. These barriers include high tariffs, poor protection of intellectual property rights, and inconsistent and non-transparent licensing and regulatory practices.

In a letter to the President, lawmakers claimed that a wide range of sectors from India’s economy remain “highly and unjustifiably” protected, making India a very difficult place for U.S. companies to do business (Reuters). their opinion, the bilateral economic relationship does not perform efficiently due to India’s hesitance in enacting vital market-based reforms.

Major sectors affected are solar and information technology products, telecommunications equipment and biotech products. Further, there are limitations on foreign participation professional services, in addition to numerous restrictive foreign equity caps. The lawmakers’ list of grievances is long and growing.

Currently, Prime Minister Modi is running a “Make in India” campaign as an attempt to boost domestic manufacturing and create jobs (Bloomberg). This may make it difficult for he and the President to reach an agreement, as President Trump’s “America First” agenda creates a clash of economic nationalisms. However, President Trump has called Modi a “true friend” on Twitter, and Modi has expressed excitement in anticipation of the meeting.

For updates on the meeting and information on other relevant trade issues, follow Mercatura Global on Twitter.

U.S. and Mexico Reach Agreement on Sugar Dispute

June 5, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

U.S. and Mexico have reached an agreement in the dispute over sugar trade today, according to sources (Reuters). The agreement will prevent a trade war in which the U.S. would have imposed steep tariffs on Mexican sugar imports and Mexico would have responded with equal tariffs on U.S. high-fructose corn syrup.

Details of the agreement are not yet public, but sources indicate the deal was made to benefit both countries. According to the Juan Cortina Gallardo, the president of Mexico’s sugar chamber, the managing of the sugar agreement will set a precedent for how further negotiations will play out (The New York Times). Since NAFTA was first negotiated in the early 1990s, the sugar industry has been the most contentious issue in U.S.-Mexico trade relations.

The current agreement will modify a 2014 agreement in which quotas and a price floor on Mexican sugar acted as an alternative solution to antidumping and antisubsidy duties. U.S. sugar companies had argued that the agreement was not doing enough to counter “unfairly subsidized” Mexican sugar companies, who could sell sugar in the U.S. at a price domestic companies could not compete with.

Stay up to date with the details of the agreement and other international trade news by following Mercatura Global on Twitter.

Commerce Secretary Ross Wants NAFTA Renegotiation by January

June 1, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

U.S. Secretary of Commerce Wilbur Ross indicated Wednesday that the best time period to complete the North American Free Trade Agreement’s negotiation is by early January. By setting this window, the Trump Administration hopes to have the renegotiation done before both Mexico’s general elections and the 2018 U.S. Congressional elections (Reuters).

According to Ross, Mexico’s elections will make the approval of NAFTA more complicated because it needs Mexican congressional approval. Mexican Economy Minister Ildefonso Guajardo also urged for a final deal by the end of this year (Bloomberg). In the U.S., presidential powers to negotiate trade deals that can accepted or rejected by Congress without amendments expires in July 2018, justifying the urgency of the Trump Administration

Ross also said Wednesday that the Commerce Department would impose anti-dumping and anti-subsidy duties on Mexican sugar and Canadian softwood lumber as part of the renegotiations if settlements over the disputes are not achieved. The Mexican government subsidies sugar companies and Canadian lumber producers utilize government-owned land to produce, making it difficult for U.S. competitors to compete in both industries. Ross hopes to resolve both of these issues before the official modernization of NAFTA.

NAFTA negotiations will formally begin around August 16, following a 90-day period of domestic consultations with U.S. lawmakers, industry, and the public.

Stay up to date with all trade news, including updates on NAFTA, by following Mercatura Global on Twitter. As an advocate of free trade, Mercatura Global can counsel your company on how best to enter international markets and increase your export revenue. To develop your market entry strategy and identify strategic partners, contact Mercatura Global today.

2017 World Trade Week Kicks Off With President’s “E” Awards Ceremony

May 22, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

President Trump has proclaimed May 21-May 27 2017 as World Trade Week. In the proclamation, the President highlights the importance of trade expansion to the U.S.’s economic growth. Further, he declares commitment to breaking down trade barriers and opening up new markets for American exports.

He mentions that “robust trade” is critical to the economic strength of the U.S., and urges the recognition and celebration of the power of fair international commerce to bring benefits to our country). He focuses on the promotion of trade for U.S. manufacturers and small businesses, who he believes to be most affected by unfair trade practices.

Over this World Trade Week, the President urges Americans to celebrate the benefits of trade for the U.S. through trade shows, events, and educational programs.

The week kicked off today at the 2017 President’s “E” Awards ceremony, where U.S. Secretary of Commerce Wilbur Ross honored 32 U.S. companies that export goods and services This year, honorees included 26 small and medium-sized businesses as well as 11 manufacturers.

The “E” Award is the greatest recognition a U.S. entity can be awarded for making significant contributions to the expansion of U.S. exports. Today’s honorees were responsible for exporting about $2.2 trillion worth of goods and services in 2016 and supporting 11.5 U.S. jobs. For more information on the “E” award ceremony and the companies honored during the event, check out the Department of Commerce’s website.

Mercatura Global is an advocate of the expansion of U.S. exports. As a global trade consulting firm, we can assist your company in engaging in international trade and reaching a broader consumer base. If you are interested in tapping into global markets, contact Mercatura Global today to identify your export readiness and develop an expansion strategy.

Robert Lighthizer to be Sworn in as U.S. Trade Representative Today

May 15, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

Robert Lighthizer will be sworn in at U.S. Trade Representative at 3pm today. The occasion comes after a months-long confirmation process, in which he was finally confirmed by an 82-14 Senate vote last Thursday.

Despite the overwhelming consensus, two notable Republicans, John McCain of Arizona and Ben Sasse of Nebraska, voted against his confirmation due to Lighthizer’s stance on the North American Free Trade Agreement (NAFTA). According to the GOP Senators, they do not believe Lighthizer understands “the North American Free Trade Agreement’s positive economic benefits to our respective states and the nation as a whole” (U.S. News & World Report). They claimed to fear Lighthizer did not appreciate the jobs created by NAFTA and worried he would not be a champion of U.S. agriculture.

The delay on Lighthizer’s confirmation has hindered President Trump’s trade agenda, especially in regard to his goal of renegotiating NAFTA. Before this formal process begins, the Trump administration must send a declaration letter to Congress detailing its intention to initiate negotiations in 90 days (Reuters). Renegotiations would likely focus on Mexico, as the U.S. trade deficit with Mexico has ballooned since the establishment of NAFTA in 1994 and has been largely criticized by the President.

In addition to renegotiating NAFTA, Lighthizer is expected to tackle other trade issues detailed by the Trump administration. This includes establishing bilateral trade deals with allies like the United Kingdom and Japan, and take a tougher stance on China (Politico). Future trade policy will have an “America First” focus, with the goal of bringing back manufacturing and other industrial jobs back to the U.S.

After Lighthizer is sworn in today, the Trump administration will be able to begin acting on measures outlined in President’s campaign. This could mean a lot of changes for trade. To stay up to date with all things related to trade, follow Mercatura Global on Twitter.

SBA’s 2017 Exporter of the Year Rose Morris and the Safety Sleeper

May 4, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

Rose Morris, inventor of The Safety Sleeper, was the winner of the Small Business Administration’s (SBA) 2017 Exporter of the Year Award. SafetySleeper was created in 2009 as sleeping solution for Morris’s son, Abram, who is on the Autism spectrum.

Safety Sleeper is a cocoon-like enclosure that goes over beds to reduce stimulation, provide a calming effect, and prevent night wanderings. The product is durable, portable, and lightweight and has now evolved to include features like a safety zipper system, enclosed mattress to protect against entrapment, fire retardant material, stabilizing straps to prevent tipping, and frame pads (Safety Sleeper).

Upon creating the Safety Sleeper, Morris also used the company as an opportunity to start a non-profit charity. Fund it Forward is an organization devoted to purchasing equipment for families of special needs children when insurance does not cover the costs.

At the beginning stages of Safety Sleeper, Morris and her husband were making the products at their home, which allowed them to make adjustments to the product. After receiving assistance from resources like the Women’s Business Center, Duquesne University Small Business Development Center, SCORE at Chatham University, and University of Pittsburgh’s Swanson School of Engineering, Morris gained accounting, exporting, engineering, and design skills to help grow her company.

Now, she has sold over 1,000 units in the U.S. and throughout the world. Her sales recently hit to $1 million mark and she currently exports to 12 different countries (Small Business Administration). Morris’s story is not unique, and over 98% of all U.S. exporters are small businesses. These exports help drive economic growth, and they are integral for personal business development and revenue growth.

If you are a small business owner interested in achieving your own success through exporting, Mercatura Global can help create a market entry strategy to meet your goals. Through services such as partner identification and global sourcing, we facilitate your company’s expansion into global markets and provide support throughout the export process. To learn more, contact Mercatura Global today.

Happy National Small Business Week!

May 1, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

Happy National Small Business Week! Since 1963, this week is dedicated to recognizing the crucial contributions of small business owners and entrepreneurs. During National Small Business Week, the U.S. Small Businesses Administration highlights the success of small business owners and their impact on driving innovation, creating jobs, and increasing American competitiveness. Over 50% of Americans either work for or own a small business. Further, small businesses are responsible for creating two of every three new U.S. jobs (Small Business Administration).

Small and medium-sized enterprises are both drivers of growth and active exporters. According to the International Trade Administration, the majority of U.S. companies that engaged in trade in 2015 were SMEs. The data indicates that SMEs accounted for 98% of goods exporters and 97% of goods importers. However, their share of trade is smaller than that of larger corporations, and they accounted for only a third of U.S. goods trade.

In 2015, SME exports increased in a handful of top 25 U.S. markets, including Belgium, Switzerland, India, and Chile. However, the ITA strongly believes that many small and medium-sized companies have untapped potential and would benefit from expanding their export sales to additional markets. At Mercatura Global, we help facilitate the export process for SMEs by providing market entry strategy development, overseas partner identification, and international business incubation services. Grow your sales through exporting by contacting Mercatura Global today.

Will New Tariffs on Canadian Softwood Lumber Cause U.S.-Canada Trade War?

April 26, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

On Monday, U.S. President Donald Trump announced an increase in tariffs from 3% to 24% on softwood lumber imports from Canada. Most lumber companies in Canada are state-owned and subsidized by the Canadian government, and the U.S.-Canada dispute over softwood lumber is decades old (The New York Times). American mills recently filed a complaint, and the U.S. Commerce department responded by imposing a tariff equivalent to the subsidy amount (24%) on five Canadian companies. For all other Canadian lumber companies, the tariff rate was set at 20%.

According to the Wall Street Journal, Commerce Secretary Wilbur Ross claimed it had been a “bad week for U.S.-Canada trade relations.” This statement also reflects President Trump’s complaints about Canada’s system of protections on its dairy industry, leading to unfair treatment of American dairy farm workers.

Both softwood lumber and the dairy industry were left out of the initial North American Free Trade Agreement in 1994, so it is easy for the U.S. to bring up the issues without formal negotiations (Reuters).

In Canada, the country is considering some sort of aid package to the companies that will be hit by the tariff (Bloomberg). In Quebec, 60,000 people work in the forest-products industry, and the province is putting in place a program of loan and loan guarantees that is expected to be worth 300 million Canadian dollars.

In the past, disputes around the softwood lumber industry were always won be Canada. However, if it becomes a legal fight, it is likely that the process will take a few years to be settled. Stay up to date with current U.S.-Canada trade relations by following Mercatura Global on Twitter.

Vice President Pence Visits Japan for Inaugural Economic Dialogue

April 17, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

U.S. Vice President Mike Pence and Deputy Prime Minister Taro Aso are meeting in Japan this Tuesday. It will be the first high-level economic dialogue between the two nations since President Trump’s inauguration in January.

According to White House officials, the primary goal of Pence’s trip to the Asia-Pacific is to reinforce regional security alliances and stress the U.S.’s commitment to economic engagement within the region. To that extent, Pence is expected to communicate that U.S. withdrawal from the Trans-Pacific trade partnership “shouldn’t be seen as a retreat from the region” (CNN).

In Tokyo, Vice President Pence will participate in a listening session followed by remarks to the U.S. and Japanese business community as part of the inaugural U.S.-Japan Economic Dialogue. However, these discussions likely establish a framework for future discussion rather than negotiating a bilateral trade agreement.

U.S. Commerce Secretary Wilbur Ross is expected to join Pence in Tokyo, and according to Bloomberg, Japanese officials are worried he may bring up disputed topics such as a weaker yen, trade imbalance and automobiles. Japan currently has the second-largest goods surplus with the U.S., causing the country to be vulnerable to the Trump administration’s potential trade policies.

Stay updated on the talks between Vice President Pence and Deputy Prime Minister Taro Aso by following Mercatura Global on Twitter!

IMF Director Defends Trade as Driver of International Growth

April 10, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

As part of the joint report ‘Making Trade an Engine of Growth for All,’ the International Monetary Fund, World Trade Organization, and World Bank emphasized the role of trade as a driver of global growth (Reuters). During the unveiling of the report in Berlin, all three organizations claimed the current trend toward protectionism since the early 2000s posed a threat to international economic growth.

Christine Lagarde, the director of the IMF, made a statement asserting that “trade integration is a powerful tool to raise growth and improve living standards.” She continued to assert it is an engine for global growth and prosperity.

According to the Financial Times, the joint report is a response to President Trump’s protectionist rhetoric and criticism toward multilateralism. He has also been critical of the role of the WTO, and the reports calls for governments to defend the WTO, its dispute settlement system, and its ability to prevent trade wars.  The report comes a little over a week before finance ministers and central bankers from around the world gather in Washington D.C. for the first biennial meetings of the IMF and World Bank since the U.S. election.

As the U.S. is the biggest shareholder of both institutions, it is likely that the upcoming meetings will be centered on President Trump’s plans for them.

Mercatura Global is a supporter of free trade and its ability to make international trade accessible for everyone. We help facilitate the export process to assure your company maximizes its returns and develops the most profitable export strategy. If you are interested in learning more about expanding your business globally, contact us today.

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