14.05.2018

CLIPPING INTERNACIONAL NEGINT Brasília, 14 de maio de 2018

Índice I. OMC _______________________________________________ 2 WTO smackdown: Canada, U.S. spar over future of global trading regime ___ 2 Seoul takes tariff dispute to WTO ___________________________________ 4 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 5 Here’s Why Trump Is Looking to Seal a New Nafta Deal Soon _____________ 5 Trump seeks to save Chinese jobs at ZTE ahead of trade talks ____________ 7 III. OUTROS ____________________________________________ 8 Brasil prevé baja de exportaciones de autos por la crisis argentina _________ 8 Investors Way Too Stressed Out About Brazil _________________________ 10 Bye-Bye, Outsiders! Brazil Election Field Set to Shrink Further ___________ 11

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I. OMC WTO smackdown: Canada, U.S. spar over future of global trading regime The Globe and Mail (Canadá) Foreign Affairs Minister Chrystia Freeland was in Washington last week in a last-ditch effort to find common ground with the United States in North American free-trade agreement talks. Meanwhile at the World Trade Organization in Geneva, Canada was taking veiled shots at the United States for undermining the global trading system. The juxtaposition of co-operation on NAFTA and talking tough at the WTO demonstrates Ottawa’s increasingly uneasy relationship with its largest trading partner. On the one hand, the Trudeau government needs to make nice to get a NAFTA deal. But it’s also alarmed by the Trump administration’s increasingly militant trade posture. The May 8 statement, signed by Canada and 40 other WTO members, admonishes countries for ratcheting up global trade tensions and engaging in protectionism. The United States isn’t named in the statement. But the message is clearly aimed at the Trump administration, which has taken an end-run around the WTO by imposing unilateral steel and aluminum tariffs on dozens of countries, and threatening more against China. The signatories urge WTO members to stop “taking protectionist measures.” The statement also stresses the need to fill “all current and future vacancies” on the WTO dispute-settlement body – an apparent reference to the United States, which has been systematically blocking the naming of new judges to the organization’s seven-member appeals tribunal in recent months. “We underline the necessity of members to contribute to keeping the WTO effective, relevant and responsive,” according to the statement, signed by a disparate collection of developed and developing countries.

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The words themselves are “relatively anodyne,” but they point to growing angst among many countries about the future of the WTO, says trade lawyer Matthew Kronby, a former Canadian trade negotiator. “It reflects broad concerns among the membership as to the WTO’s capacity to address major substantive and institutional challenges and remain relevant,” says Mr. Kronby, a partner at Bennett Jones in Toronto. “It wouldn’t be hyperbole to call these concerns existential.” The Trump administration has been waging a war of words, and actions, against the WTO. Earlier this month, U.S. Commerce Secretary Wilbur Ross slammed the WTO as a keeper of an “obsolete set of rules,” which he says are designed to benefit exporting countries such as China “to the detriment of importing countries.” U.S. President Donald Trump has similarly accused the WTO of being unfair to the United States, while giving China unfair “perks and advantages.” Last week’s joint statement is one manifestation of a growing pushback from countries worried the United States and others are undermining the rules-based global trading system, and the WTO. Mr. Ross is partly right that the WTO hasn’t kept up with the times. But that is mainly due to the failure of the Doha round of global trade talks – an effort to modernize WTO rules that stalled over disagreements between rich and poor countries. Even WTO director-general Roberto Azevedo has acknowledged that the organization’s rules need an upgrade. Nor is the United States alone in its frustration that the WTO has not been more effective in getting China and its powerful state-run enterprises to play by the same rules as the rest of the world. Unfortunately, the Trump administration’s aggressive trade posture has pushed many countries to side with China in its showdown with the United States. The European Union, for example, has joined India and Russia in backing China’s case at the WTO seeking compensation due to the tariffs on steel and aluminum.

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The WTO statement is similarly making strange bedfellows. Canada signed the letter along with Hong Kong, a special administrative region of China. “It has been an unfortunate accomplishment of U.S. trade policy in recent months to cause most of the world to rally to China’s side because of our disregard for the WTO and the global system,” former U.S. treasury secretary Lawrence Summers argued in a recent op-ed in The Washington Post. “Not only does having many others on its side make it easier for China to resist the United States, but it also undercuts the effectiveness of our sanctions.” The WTO’s future was already uncertain before Donald Trump. The organization doesn’t stand a chance if the world’s largest economy treats it as a pinata, rather than using U.S. influence to push for reform.

Seoul takes tariff dispute to WTO The Japan News (Japão) South Korea said on Monday that it has taken a dispute to the World Trade Organization (WTO) against the United States for imposing tariffs on washing machines and solar panels as the measure was deemed to be in violation of the WTO agreement. South Korea’s Ministry of Trade, Industry and Energy said in a statement that it has delivered its request for bilateral consultation to the U.S. side to start a dispute settlement process. The move is a set of measures that the South Korean government had taken after U.S. President Donald Trump slapped a steep tariff on imported washing machines and solar panels in February to protect American manufacturers.

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In April, South Korea said it notified its plan to suspend tariff concessions on imported U.S. goods worth $480 million following U.S. tariff measures against South Korean imports.

II. NEGOCIAÇÕES REGIONAIS E BILATERAIS Here’s Why Trump Is Looking to Seal a New Nafta Deal Soon Bloomberg (Estados Unidos) Trade negotiators meet their target dates about as often as meteorologists accurately predict the weather. But the Trump administration will soon bump against a deadline that will determine the fate of its Nafta plans.

When he started negotiations on a new North American Free Trade Agreement last year, President Donald Trump invoked a legislative process called trade-promotion authority, a measure to ease the passage of trade deals by Congress. It allows him to seek a simple yes-or-no vote by lawmakers on an updated pact with Mexico and Canada. In exchange, the administration must clear a series of steps designed to build support among politicians.

It’s a complicated process that could easily take six months. But with mid-term elections on Nov. 6, the administration doesn’t have much time if it wants to get a revised Nafta approved under this Congress, when Trump’s Republican party controls both the Senate and the House. Democrats have a good chance of winning the House in November, a shift that would change the political dynamics for a Nafta vote.

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House Speaker Paul Ryan has said he needs the administration to give notice of its plans for a deal by May 17 if it wants the current Congress to vote on the agreement. Trade experts and insiders say the administration might have until as long as June. But there’s no question the clock is ticking. Here are some steps that must be taken for Congress to approve a trade deal under fasttrack authority: 

The administration must give Congress 90 days’ notification that it plans to sign a deal

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Once the deal is signed, the U.S. International Trade Commission has 105 days to produce a report on the economic impact

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The Senate Finance and House Ways and Means committees will likely hold hearings and suggest tweaks, known as “markups”

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After an implementing bill is introduced in the Senate and House, both chambers can take up to 90 days to debate it

Talk of putting a new Nafta to a vote in Congress assumes the three countries can even reach an agreement, which is by no means a given. In recent weeks, the three sides have been aiming for a “deal-in-principle.” None of the countries have clarified what that means, but trade experts speculate it would entail a consensus on the most contentious issues, such as rules for how to count the origin of car parts that qualify for duty-free treatment. Such a deal would be a long way from a formal text that lawmakers can vote on. The wild card is Trump’s threat to withdraw from the original Nafta. Under the pact, any of the three countries can pull out on six-months’ notice. If the president wants to light a fire under Congress, he could sign a withdrawal notice after negotiating an update he likes. That would give legislators a hard six-moth deadline to agree to the updated trade pact. In other words, lawmakers would have to accept Trump’s Nafta, or none at all.

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Trump seeks to save Chinese jobs at ZTE ahead of trade talks BBC (Reino Unido) China has welcomed a pledge from Donald Trump to help save ZTE, one of China's biggest telecoms companies. The firm has suspended operations after the US last month banned American companies from selling it components. ZTE had admitted to making illegal shipments to Iran and North Korea. But Mr Trump has now tweeted he will work with President Xi to help ZTE get "back into business fast", saying too many jobs in China were at risk. China's called the comments "positive". "We greatly appreciate the positive position of the US on the ZTE issue and are in close communication with the US on the details of the issue," foreign ministry spokesman Lu Kang said. US commentators say the tone of the tweet is a dramatic shift for Mr Trump, who has consistently accused China of stealing US jobs. The concession to Beijing comes ahead of high-level trade talks later this week in Washington aimed at resolving an escalating trade dispute between the world's two largest economies. Beijing has made resolving the situation with ZTE, which employs about 80,000 people, one of its demands for striking a broader trade agreement with with US. What did ZTE do wrong? In March 2017, ZTE admitted to violating US sanctions by illegally shipping American technology to Iran and North Korea and was fined $1.1bn (£800m). The current export ban - which lasts seven years - was imposed last month after the company allegedly failed to comply with its agreement. It was accused of lying about the punishment of employees involved in skirting the sanctions. 7

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US companies provide at least a quarter of the components used in ZTE's equipment, which includes smartphones and telecommunications network equipment. ZTE spent more than $2.3bn on imports from about 200 US companies last year. Douglas Jacobson, a lawyer in Washington DC who represents some of ZTE's suppliers, said: "This is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one. "There's no legal mechanism for this. How this will play out remains to be seen. They are not simply going to be able to resume business as usual."

III. OUTROS Brasil prevé baja de exportaciones de autos por la crisis argentina El Cronista (Argentina) La crisis en Argentina puede llevar a una reducción de exportaciones brasileñas de automóviles y repuestos para el país vecino, según la evaluación de especialistas. Actualmente, la participación de Argentina en las exportaciones brasileñas es de cerca del 8% y la mayor parte es del sector de vehículos. De enero a abril, las exportaciones totalizaron u$s 74.290 millones. De ese total, u$s 6060 millones son referidos a Argentina. De los productos exportados al país vecino, cerca del 33% son automóviles. La Asociación Nacional de los Fabricantes de Vehículos Automotores (Anfavea) informó que aún no tiene una previsión de cuánto pueden caer las exportaciones con la crisis.

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La asociación sólo dice que un 76% de las exportaciones del sector van para la Argentina. Le siguen México (7%), Chile (5%), Uruguay (4%), Colombia (3%) y Perú (2%). En la crisis económica, Argentina decidió recurrir al Fondo Monetario Internacional (FMI) para equilibrar la situación financiera del país. La decisión fue tomada después de la disparada del dólar. El gobierno quiere obtener respaldo financiero para calmar los ánimos de los inversores y frenar la salida de capitales del país, cuya economía, según el presidente argentino, Mauricio Macri, es una de las más dependientes de recursos extranjeros. El ex secretario de Comercio Exterior Welber Barral recuerda que Argentina es el principal importador de productos manufacturados en Brasil. "Los principales productos son automóviles y repuestos de autos. Evidentemente, una crisis en Argentina afecta a esos sectores", dijo. Para Barral, si Argentina consigue el préstamo en el FMI, el nivel de especulación cambiaria disminuirá, lo que hará que el país no disminuya mucho las importaciones. Entretanto, Barral dijo que el efecto de la crisis argentina en Brasil debe quedar restringida a ese segmento, sin contagiar a toda la economía brasileña. "Brasil tiene reservas internacionales altas, la inflación relativamente bajo control. Entonces, Brasil no está en la misma situación de Argentina. Pero en términos de exportación, sí. Brasil puede ser afectado por la caída de las exportaciones", observó. Según Barral, la competitividad del sector automovilístico brasileño es mayor en la Argentina a causa del Mercado Común del Sur (Mercosur). "Los productos brasileños no pagan impuesto de importación en la Argentina", explicó. Más allá de eso, dijo que el mercado argentino es mayor que el de otros países. "En tanto Argentina tiene un mercado de 42 millones de personas, Uruguay, por ejemplo, son tres millones", añadió. La investigadora del Instituto Brasileño de Economía (Ibre) de la Fundación Getulio Vargas (FGV), Lia Baker Valls Pereira, también considera que el efecto de la crisis argentina en Brasil se restringirá a la balanza comercial.

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"En Brasil, la exportación no es el principal elemento del PBI (Producto Bruto Interno). La Argentina es la tercera importadora de Brasil. Es muy localizado, afectaría más a la exportación del automóvil", opinó la investigadora. El pasado miércoles, el ministro de Hacienda, Eduardo Guardia, afirmó que no hay posibilidad de "contagio" de la crisis argentina en Brasil. "Nosotros tenemos una situación externa extremadamente confortable, un déficit pequeño de la cuenta corriente, que es financiado por inversiones extranjeras directas. Tenemos reservas extremadamente elevadas, de u$s 383 billones. No veo ningún impacto. La situación (de Brasil) es completamente diferente de la Argentina"

Investors Way Too Stressed Out About Brazil Forbes (Estados Unidos) On balance, investors are much more pessimistic about Brazil due to pending elections this October than they are optimistic. The scales have clearly tipped in favor of a negative outcome, with a non-reformer taking the presidency. Over the last three months, Brazil's stock market has been getting beat by the benchmark emerging markets index. And by Mexico, a country facing its own election on July 1. U.S. investors are almost always overly negative about Brazil's elections. The currency heads to four to one (it's now R$3.60 to a dollar); the stock market declines. Then the new president picks his cabinet, and even if the cabinet members are not guys like former banker Henrique Meirelles, the current Finance Minister and ex-Central Bank chief, the market always comes back. The Brazilian real will be back to R$3 (or stronger) in less than a year, barring a complete blowout in the global economy. In other words, foreign investors are pessimistic about Brazil, and that's expected. They always overreact on this. Pessimism makes Brazil cheap, and that means it is becoming fertile ground for bargain hunters. Brazil should be a buy. 10

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Last week, Richard Turnill, chief investment strategist of BlackRock, said Brazil was one of three countries best positioned to weather a global trade war. Inflation is holding steady to falling. Interest rates are in decline. The domestic economy is finally rebounding, albeit slowly. Brazilians are still consumers. They are going to buy beer and gasoline and go grocery shopping at Pao de Acucar regardless of Xi Jinping and Donald Trump trade spats. What's currently priced in? Local debt and currency markets are pricing in a 75% pessimistic and a 25% optimistic scenario, says Nomura's Latin America Strategist, Mario Castro. "The initial reaction would be stronger in the event of a positive development, but we expect the market to continue trading weakly until there is a meaningful increase in the likelihood of a reformist winning the election." Who is going to win? Nobody knows.

Bye-Bye, Outsiders! Brazil Election Field Set to Shrink Further Bloomberg (Estados Unidos) Brazil’s presidential election race is quickly thinning and will ironically leave only seasoned politicians able to win a race marked by deep-seated, anti-establishment sentiment.Over the last three months, Brazil's stock market has been getting beat by the benchmark emerging markets index. And by Mexico, a country facing its own election on July 1. Last week two hopefuls dropped out -- a plastic surgeon and a former Supreme Court justice who had 10 percent support in polls without even campaigning. In February a TV celebrity dropped out and last month former President Luiz Inacio Lula da Silva was jailed, effectively removing the front-runner from the race. More departures are expected, particularly among centrist parties, according to half a dozen senior lawmakers and government officials. 11

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The trend benefits the remaining middle-of-the-road candidates -- former Sao Paulo Governor Geraldo Alckmin and former Environment Minister Marina Silva -- by eliminating their most immediate competitors, says Marco Antonio Teixeira, professor of political science at the Getulio Vargas Foundation, a business school and think tank. Chances of a newcomer in the Oct. 7 election have now evaporated, he argues, not least because only candidates already in a political party may run. “Bye-bye, outsiders,” Teixeira said by phone from Sao Paulo. “The candidacies that benefit are, respectively, those of Marina and Alckmin, who are trying to place themselves between the extremists." Center Consolidation On the center-left is former Ceara governor Ciro Gomes and on the far right is former Army captain Jair Bolsonaro, a long-time legislator whose politically incorrect blasts and tough stance on crime have propelled him to the front of the polls. The center should become even less crowded soon. President Michel Temer has already signaled he’s likely to ditch his bid, while lower house speaker Rodrigo Maia and former Finance Minister Henrique Meirelles will likely be forced out as well, according to three leaders in their respective parties. All three are stuck at the bottom of the polls. “Maia, Temer, and Meirelles all put their names forward but they don’t enjoy real support from their parties,” said veteran lawmaker Miro Teixeira. “The only centrist candidate who has the backing of his party is Alckmin.” Maia said by e-mail that there is no discussion of his dropping out. Meirelles said by phone that the majority of his party supported him and that his poll numbers would rise once he started campaigning. The total number of presidential candidates should fall to 10, about half the initial figure, by the time parties hold their conventions in July, according to Nilson Leitao, leader of Alckmin’s PSDB party in the lower house. In addition to the ban on independent candidates, the prohibition of corporate donations has made it even more difficult for outsiders to enter the race. No Money

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"Parties have limited resources, they choose between a shot at winning the presidency of the Republic or maintaining control over important states," Supreme Court Justice Gilmar Mendes told Bloomberg News. "It’s not easy being an outsider in this system." While there may be fewer centrist names, the remaining candidates have yet to prove that they can rally markets and voters alike. Alckmin, popular on financial markets, has stagnated in the polls; Marina Silva polls better but has little investor support. “There hasn’t been any centrist candidate with enough votes, we need someone able to excite the electorate,” said Fabio Ramalho, deputy leader of Temer’s MDB party in the lower house. “The center needs a candidate with an anti-corruption message, those who keep talking about markets won’t win over voters.”

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