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CLIPPING INTERNACIONAL NEGINT Brasília, 18 de maio de 2018

Índice I. OMC _______________________________________________ 2 WTO detects signs of tensions sapping global trade growth _______________ 2 Trump's bonfire of the treaties sweeps towards the WTO _________________ 3 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 6 Upgraded EU-Mexico Trade Pact Can Enlighten China’s Free Trade Push _____ 6 Trump Trade Chief Says ‘Nowhere Near’ a Deal on Nafta _________________ 8 It will be challenging for US and China to reach an agreement at trade talks, says strategist __________________________________________________ 9 III. OUTROS ___________________________________________ 11 Canciller brasileño: "Mercosur busca mayor integración económica con Asia" 11 Mercosur y Europa acercan posiciones para aceitar el comercio automotor __ 13 Brazil's Petrobras says talks over 'transfer of rights' progress ____________ 13

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I. OMC WTO detects signs of tensions sapping global trade growth Reuters (Reino Unido) Trade tensions may be starting to hold back global merchandise trade, the World Trade Organization said on Friday, as it published an outlook indicator showing growth was above trend this quarter but slowing down. The World Trade Outlook Indicator (WTOI), a composite published since the third quarter of 2016, showed a reading of 101.8 compared to 102.3 in February. “The recent dip in the WTOI reflects declines in component indices for export orders in particular but also for air freight, which may be linked to rising economic uncertainty due to increased trade tensions,” the WTO said in a statement. The WTO forecast in April that goods trade would grow by 4.4 percent this year after a decade averaging 3.0 percent, but it warned growth could be undermined if governments resorted to restrictive policies and a tit-for-tat battle. “Risks to the trade forecast posed by rising trade tensions remain present,” the WTO said on Friday. The WTOI includes seven components that serve as leading indicators of trade. One of them, export orders, slumped from a reading of 102.8 in February to a below-trend 98.1 in the latest indicator. The reading for air freight also lost momentum in recent months, while container port throughput showed signs of plateauing and automobile sales and agricultural raw materials were both dragging down the overall reading, at 97.9 and 95.9 respectively, the WTO said. But the index for electronic components rebounded to 104.2, from 94.1 in February.

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Trump's bonfire of the treaties sweeps towards the WTO Reuters (Reino Unido) President Donald Trump has the World Trade Organization in a chokehold, and the United States has made clear what he wants: no more judicial rulings that interpret WTO rules to Washington’s disadvantage. Trump has effectively engineered a crisis in the WTO’s system of settling global disputes by vetoing all appointments of judges to its appeals chamber. True to the president’s style, his ambassador to the Geneva-fbased body, Dennis Shea, is unapologetic about shrinking the supreme court of world trade to a size where it will struggle to function. “The United States is not content to be complacent about this institution,” Shea told fellow WTO ambassadors this month. “And the leadership that the United States will bring to the WTO in the coming months and years will consequently involve a good deal of straight talk and a willingness to be disruptive, where necessary, in the interest of contributing to a stronger, more effective, and more politically sustainable organization.” Trump has proved willing to risk a global trade war in combating any treaties and practices he regards as unfairly disadvantaging U.S. companies and workers, imposing tariffs on steel and aluminum imports globally because of overproduction blamed on China. Since its creation in 1995, governments have gone to the WTO for adjudication on international trade disputes. Although rulings can be appealed, decisions made judges sitting on its Appellate Body are final, and ultimately sanctions can be used against transgressors. The rules are far from perfect or complete, and the failure to update them after decades of negotiating stalemate has obliged WTO judges to interpret them for a changing world. This has incurred Trump’s wrath. “We lose the cases, we don’t have the judges,” he said in February, describing the WTO as “a catastrophe”.

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Trade experts dispute this, saying all countries that go to the WTO have a broadly similar rate of winning and losing. While one U.S. judge sits on the Appellate Body, most of the WTO’s 164 members have no representative there, the experts note. Trump’s veto is reducing what is supposed to be the seven-strong Appellate Body as members’ terms expire. By September four seats will be vacant, leaving three judges, the number required to hear each appeal. If one judge needs to recuse themselves for any legal reason, the system will break down. Since 1995, the WTO has handled more than 500 disputes and its membership has expanded to cover around 95 percent of world trade, which has more than tripled to around $18 trillion per year in goods alone. NO TIME-WARP The Trump administration sees a need to rein in unaccountable judges who overstep their authority. Others, however, see a systemic threat and a desire to return to preWTO days when countries settled disputes by negotiation - with the more powerful party usually winning, regardless of the merits of the case - rather than under internationallyagreed rules. This year Trump has caused an international outcry with the metals tariffs and a $150 billion tariff threat against China for allegedly stealing U.S. intellectual property. Both moves risk legal entanglement at the WTO. But disabling the Appellate Body would not simply mean a “time-warp” to an era without judges, according to chief judge Ujal Singh Bhatia. Instead, disputes would go into limbo if the losing side appealed. And with little prospect of enforcing the rules, there would be little point in negotiating new ones. “The paralysis of the Appellate Body would cast a long and deep shadow on the continued operation of the multilateral trading system as a whole,” Singh Bhatia said. Eight appeals had been filed since the start of 2017 and more are expected, he said, including a dispute over Australian tobacco control rules which is widely seen as a test case for global health policy.

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Shea acknowledged the WTO’s rule book had “substantial value” and had generally contributed to global economic stability. “But something has gone terribly wrong,” he said. “The Appellate Body not only has rewritten our agreements to impose new substantive rules we members never negotiated or agreed, but has also been ignoring or rewriting the rules governing the dispute settlement system, expanding its own capacity to write and impose new rules.” A rift opened up when the WTO faulted U.S. methodology for assessing “dumping”, or unfairly priced goods. The consequences for the U.S. ability to tackle what Trump has called China “robbing us blind” were huge. CLUB FOR THE POWERFUL? The United States itself also stands accused of rewriting the rules in a dispute brought by Beijing over Washington’s refusal to treat China as a “market economy”. “Is the WTO really a rules-based organization, or just a club where powerful traditional members can bend the rules?” China asked in a dispute hearing this week. Although Trump has a pattern of withdrawing from deals he dislikes - such as on curbing climate change and Iran - many WTO diplomats say they remain optimistic that Shea will make proposals to keep the dispute system intact. Sixty-six WTO members have backed a petition calling for the United States to drop its appointments veto, but there is no agreement on how to avoid the collapse of dispute settlement. Some countries are discussing using alternative arbitration methods, or having a dispute system which excludes the United States, lawyers and diplomats say. But U.S. ally Japan is unwilling to join the petition. Ambassador Junichi Ihara said WTO members should refrain from disputes which are “essentially political”. Japan rejects a dispute system without the United States. “In my view there should not be plan B,” Ihara said. “We have only plan A and we need more collective efforts to find a solution.”

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II. NEGOCIAÇÕES REGIONAIS E BILATERAIS Upgraded EU-Mexico Trade Pact Can Enlighten China’s Free Trade Push Sputnik News (Rússia) The

revised

deal

covers

more

services

sectors

such

as

finance,

postal,

telecommunications, transport, e-commerce and the environment. It also allows for the mutual recognition of accreditation in the professions of accounting, architecture, engineering and law. Especially worth noting is that Mexico is pushing through sweeping reforms to its services sectors, for the first time opening its energy, telecommunications and financial services markets to foreign investors. The upgraded deal also includes provisions cracking down on corruption in the public and private sectors, a rarity among the free trade agreements the EU has signed with non-EU countries. In addition, the new deal pays attention to sustainable development and highlights both sides' commitment to protecting the environment and respecting human rights. Concerning trade openness, the revised pact retains zero tariff rates for industrial products while substantially simplifying customs clearance, which is set to make trade in automobiles, vehicle parts and healthcare equipment much easier. The EU and Mexico also agreed to scrap all import tariffs on food items within seven years of the effective date of the new pact, which will ease trade in alcoholic beverages. With regard to government procurement, Mexico has for the first time opened its public procurement market to non-Mexican companies at the state level and allowed EU businesses to participate in the bidding for Mexico's public-private partnership contracts. As for dispute resolution, the pact replaces the traditional investor-state dispute settlement mechanism with a new investment court system. This mechanism is considered fairer, more independent and transparent. On top of that, the two sides developed more substantial cooperation in areas including intellectual property, ecommerce, small and medium-sized enterprises and competition policy. The revision has multiple implications for China's efforts to forge free trade deals. First, on the basis of open and fair trade principles, there could be attempts to add anticorruption regulations and provisions on sustainable development such as environmental

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protection and labor policies to China's free trade agreements. This could elevate free trade pacts involving China to new levels, facilitating China's efforts to reshape global trade rules. Such attempts could also be applied to the implementation of the China-proposed Belt and Road initiative, as corruption prevention and sustainable development bring security to the country's economic cooperation with countries and regions along the route of the initiative. Second, China is now actively pushing to join the WTO's Government Procurement Agreement (GPA), but the bilateral and regional free trade pacts that the nation has signed have barely touched on government procurements. Therefore, it's necessary for China to consider including the issue with government procurements in bilateral trade negotiations it's working on, as finalizing multilateral pacts is more complex than concluding bilateral deals. This will be of great advantage to China's entry into the GPA under the WTO's framework. Third, China has already approved the launch of more than 10 free trade zones across the country, conspicuously showcasing innovation in a variety of areas such as trade, investment, finance, and government services and supervision. Whether there will be deepening openness in certain services sectors will matter a lot to China's push for further reform and opening-up. Also noteworthy is that the upgrade in the EU-Mexico trade deal means Mexico will open its market and sectors wider to the EU while exporting more products to the EU, effectively reducing its dependence on trade with the US. Although it remains a big challenge for Mexico to pledge more openness while resolving its huge trade deficit with the EU, the upgraded deal is still considered timely for the country, whose efforts to renegotiate the North American Free Trade Agreement with the US and Canada have yet to conclude. On the part of the EU, the upgrading lays a solid foundation for its ties with Mexico and shows the bloc's resolve to continue safeguarding global free trade and its confidence about reshaping global trade rules. The upgraded deal, which follows the EU's free trade agreements with Canada and Japan, is a good attempt against the US' unilateral push for trade protectionism.

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Trump Trade Chief Says ‘Nowhere Near’ a Deal on Nafta The Wall Street Journal (Estados Unidos) President Donald Trump’s trade chief said Thursday the U.S. is “nowhere near” a deal on the North American Free Trade Agreement, effectively brushing aside an offer from House Speaker Paul Ryan for more time to conclude a deal that could be considered in Congress this year. “The Nafta countries are nowhere near close to a deal,” U.S. trade representative Robert Lighthizer said in a statement, citing “gaping differences” on intellectual property, agricultural trade, duty-free levels for shipments, labor rules, and other areas. “We of course will continue to engage in negotiations,” Mr. Lighthizer said. “And I look forward to working with my counterparts to secure the best possible deal for American farmers, ranchers, workers, and businesses.” All three Nafta countries—Mexico, Canada and the U.S.—had sought to wrap up a deal before the height of the U.S. midterm season and before Mexico’s presidential election on July 1. Mr. Ryan (R., Wis.), who had originally set Thursday, May 17 as a deadline, sought to offer Mr. Lighthizer and his Canadian and Mexican counterparts more time to reach a deal this spring that could still get a vote before a new Congress takes office in January. “My guess is there’s probably some wiggle room,” said Mr. Ryan, suggesting that the original cutoff of this Thursday was based on estimates of key procedural steps, including how long it will take the U.S. International Trade Commission to complete a required economic study. And yet, Mr. Lighthizer’s pessimistic assessment of the current state of Nafta negotiations came after Canadian Prime Minister Justin Trudeau told a New York audience that there is currently a “good deal on the table” on Nafta. “It’s right down to sort of the last conversations, and we know that those last conversations in any deal are extremely important,” Mr. Trudeau said at the Economic Club of New York. The Trump administration has long criticized Canadian officials for failing to engage in discussions and compromises on several proposals that U.S. officials hope will someday 8

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“rebalance” trade in North America. Canadian officials say the Trump administration’s “America first” proposals are unpopular among U.S. and Canadian businesses. The process for passing a trade agreement—including a revised Nafta—through Congress without amendments or procedural delays is complicated and long, and the steps have helped dictate the calendar of the recent talks. Under the 2015 fast-track trade law that Mr. Ryan helped pass as a House committee chairman, the International Trade Commission has 105 days to complete an economic report on a trade agreement that is eligible for expedited consideration in Congress without amendments or procedural delays. When the ITC might complete its work on any agreement depends on several factors. It could take less than the maximum amount of time allotted to study the deal. Or it could begin its work when the text of an agreement is first published, rather than after it is signed, which cannot occur until at least 60 days after publication, trade experts say. Other required steps under the fast-track law, also known as trade promotion authority, include notifying Congress 90 days before an agreement is signed. The administration also has a deadline, within 60 days of signing the agreement, for submitting to Congress the changes to U.S. law that any agreement would require. The Trump administration has been trying to conclude a deal quickly, before elections this fall could shift control of the House to the Democratic Party, but Mr. Lighthizer says many thorny issues remain unresolved, suggesting any deal likely to be submitted for a vote in 2019 at the earliest.

It will be challenging for US and China to reach an agreement at trade talks, says strategist CNBC (Estados Unidos) It will be very challenging for the U.S. and China to come to an agreement about trade this week, in part because the Trump administration has been "unclear in what it really wants," a strategist said on Friday. 9

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"On the one hand, the President remains very focused on the size of the bilateral trade deficit, and reportedly the Chinese has come to Washington with a package of about $200 billion worth of purchases that would certainly remedy a large portion of that deficit," said Amy Celico, principal at the Albright Stonebridge Group, a global strategy and business advisory firm. But on the other hand, the U.S. administration and Congress want China to change some of its behavior on unfair trade practices, and seek to put an end to subsidies for advanced technology industries and forced technology transfers. However, those would be challenging for China to make concessions on as it deems them to be "core interests" that it will not give up for a quick trade deal with Washington, Celico told CNBC's "The Rundown." Celico's comments follow President Donald Trump's meeting with the leader of the Chinese trade delegation, Vice Premier Liu He on Thursday, as the two economic powerhouses kick off a second round of negotiations. The White House described the meetings as part of "ongoing trade discussions" and said: "The United States officials conveyed the President's clear goal for a fair trading relationship with China." Earlier on Thursday, Trump criticized China and other trading partners as being "very spoiled" on trade with the U.S., but said he was aiming for an overall deal with Beijing. Speaking to reporters at the White House, Trump said China had "ripped off" the United States for too long and that he told Chinese President Xi Jinping that "we just can't do that anymore." Trump was "trying to act a bit tougher after he seemed to be making quite a significant concession to the Chinese in renegotiating the remedy for ZTE's non-compliance with the package that was put in place after it was found to have broken American sanctions laws," said Celico, on the president's comments.

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III. OUTROS Canciller brasileño: "Mercosur busca mayor integración económica con Asia" La Vanguardia (Espanha) El Mercosur "busca una mayor integración económica" con Asia impulsando acuerdos de libre comercio con Japón, Corea del Sur y Singapur, dijo hoy a Efe el ministro brasileño de Asuntos Exteriores, Aloysio Nunes Ferreira, durante su viaje a Tokio. Entre los países latinoamericanos que conforman el Mercado Común del Sur "hay un interés creciente" para ampliar sus alianzas comerciales y "movimientos recientes" en esta dirección, explicó Nunes durante su visita a Japón, una etapa clave de su amplio tour por el continente asiático centrado en la cooperación económica. Esta gira ha servido para abrir un "diálogo exploratorio" con Singapur sobre un acuerdo comercial y para "preparar el terreno" de cara a unas futuras conversaciones con Tokio, según dijo Nunes, que además de estos dos países ha visitado también Tailandia, Indonesia y Vietnam. Japón supone "un mercado importantísimo" para el Mercosur, además de ser "un gran socio comercial y económico" de Brasil gracias una sólida relación bilateral fundada sobre los amplios flujos migratorios entre ambos países y sobre la significativa presencia de empresas niponas en su territorio, destacó Nunes. El archipiélago nipón es el sexto mayor socio comercial de Brasil, donde además hay instaladas más de 700 empresas japonesas y cerca de 2 millones de japoneses o descendientes de nipones. Durante su visita a Japón, Nunes se reunió con miembros del Gabinete del primer ministro Shinzo Abe y representantes de Keidanren, la principal patronal nipona, para "explicar la situación de la economía brasileña" y dar garantías sobre "su recuperación tras la crisis y las reformas aplicadas". El canciller afirmó que el "entendimiento es total" entre el sector privado japonés y brasileño de cara a un futuro acuerdo comercial, que ofrecería a las dos partes "complementariedad y ventajas recíprocas".

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Por ello, aseguró que las conversaciones con la tercera economía mundial "están muy bien encaminadas" para iniciar unas conversaciones formales con el Mercosur, y señaló que la cumbre del G20 que se celebrará a finales de noviembre en Buenos Aires "serían el momento idóneo" para comenzar esos contactos. Nunes viajará asimismo a Corea del Sur la semana que viene con el objetivo de iniciar las negociaciones formales con la cuarta economía de Asia, que podría convertirse así en la primera del continente en sellar un acuerdo comercial con el Mercosur. Estas alianzas se sumarían a la de la UE, con la que el Mercosur está "cerca" de concluir sus negociaciones, y a la de Canadá, país que ya negocia formalmente un pacto con el bloque regional actualmente integrado por Argentina, Brasil, Paraguay y Uruguay. El canciller brasileño también trató durante sus encuentros con miembros del Ejecutivo nipón otros temas referentes a las relaciones internacionales, entre los que destaca el proceso de diálogo abierto con Corea del Norte con vistas a lograr la desnuclearización del régimen. Brasil "está totalmente alineado" con la posición de Naciones Unidas y por tanto es "partidario de mantener las sanciones sobre Corea del Norte en la cantidad e intensidad decididas por el Consejo de Seguridad", destacó Nunes. "Creemos que estas presiones internacionales tienen que continuar hasta que este proceso concluya de manera positiva para la paz en la región", señaló el canciller, quien se mostró así en sintonía con la postura de Japón, partidario de mantener las medidas punitivas sobre el régimen hasta que dé pasos concretos hacia el abandono de sus armas nucleares. Nunes también admitió la "sorpresa" que le produce el cruce de declaraciones entre Washington y Pyongyang a menos de un mes para la histórica cumbre entre sus respectivos líderes, Donald Trump y Kim Jong-un, aunque expresó su confianza en que la reunión que celebrarán el 12 de junio en Singapur se salde con resultados positivos. El viaje a Japón del canciller brasileño se produce en el marco del 110 aniversario del inicio de la inmigración de japoneses a Brasil, una efeméride que se conmemora con una serie de actos y visitas como la prevista de la princesa nipona Mako a Brasil a mediados de julio.

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Mercosur y Europa acercan posiciones para aceitar el comercio automotor Bloomberg (Estados Unidos) Mientras Macri se reunía en Córdoba con la mesa de la producción automotriz, técnicos del Mercosur y de la Unión Europea discutían en Bruselas las trabas al capítulo automotor del acuerdo de asociación estratégica entre regiones, para hacer caer aranceles y aumentar el comercio de vehículos y autopartes. El Gobierno, al igual que rige en la unión aduanera, pretende que Europa acepte un tope del 40% de componentes importados máximos "extrazona", algo que permitiría a futuro reforzar la provisión de insumos sudamericanos al viejo continente y apalancar el plan "1 Millón de Autos", una aspiración aún lejana.

Brazil's Petrobras says talks over 'transfer of rights' progress Reuters (Reino Unido) Petroleo Brasileiro SA said Thursday that talks with Brazil’s government were making progress in resolving a dispute over offshore oil blocks, but no conclusion has been reached so far. Brazil’s government and the company are negotiating revised terms for the 2010 “transfer of rights” contract, through which the government exchanged exploratory rights over some subsalt oil exploration areas oil in exchange for Petrobras equity. The company and the government are continuing talks to reach an agreement on the matter, Petrobras said in a statement on Thursday. Earlier on Thursday, presidential chief of staff Eliseu Padilha said a deal to close the dispute was likely to be forged next week. But later in the day, the Brazilian Finance Ministry said in a separate statement that whatever agreement is reached would be subject to consultation with Brazil’s audit court and its ministries of planning and mines and energy, factors that could further delay a final agreement. 13

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Preferred shares in Petrobras fell 5.3 percent on Thursday to 25.95 reais and common shares lost 4.5 percent, closing at 30.21 reais on Brazilian stock exchange.

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