THE RENOWNED journalist Alistair Cooke famously wrote and broadcast ‘Letter from America’ from the US for a period of 58 years.
It was a concise and learned spoken piece, around 15 minutes in length, in which Cooke delivered observations on developments in the US over the preceding week to a BBC audience in a manner intended to educate the listener and remove some of the confusion often associated with the US. The ‘letters’ were subsequently broadcast to a much wider audience through the BBC World Service (including to Australia) and also formed the basis of a television series.
Such was his fame that he was even included in a Monty Python sketch in which he was ‘attacked by a duck’ while delivering one of his letters. It was certainly silly but just being the subject of a sketch reflected his status in society and the media
Having listened to many of the letters as a younger man, it occurred to me that this article could draw from the ‘letter from America’ history but focus on observations on trade matters from my current trip to New York City, Washington DC and Chicago, the homes to much of American politics and industry.
During the visit I was fortunate to spend some time with people very close to the centre of the issues we are facing today.
- The uncertainty is very real and shared by all. I spent time with lawyers who have moved to the equivalent of ‘DEFCON 3’ and haven’t rested much since early April as they log the threatened moves and counter-moves to try and navigate the (trade and political) agenda.
- Many of those in the US were keen to get my take on what is happening and what might happen. They seem to have little idea themselves, with most of what they hear coming from the US president via Twitter. This means conventional mechanisms are not providing the usual information, with much of the action taken at the ‘Executive’ level without reference to a wider Cabinet, let alone Congress.
- Though we may have focused on dumping and possible retaliatory actions, we can’t ignore the area of sanctions on certain countries. This is creating significant impediments to trade and delaying investment decisions. In addition, many are concerned that relaxed sanctions on Iran may yet be reversed by the US. The direct and indirect impact of US trade sanctions cannot be underestimated even if Australian sanctions are cleared, because of what the US might do.
- There also is a concern that the experience of the US Trade representative Robert Lightzier has largely been confined to trade remedies against China, which might mean his proposed responses to other trade problems are limited to ‘what he already knows’ rather than investigating other options.
- The ongoing spiral of unilateral action by the US and retaliation by US trading partners merely contribute to everyone’s uncertainty. Measures are announced and then adjusted even before they are imposed (such as the additional tariffs on steel and aluminium being exported to the US).
- The ongoing ‘war’ on steel and aluminium overcapacity in Asian and other markets will be a major battleground, with Australia and the US sharing information on ‘circumvention measures’ and ‘measures to stop circumvention’. We can expect additional actions soon.
- The Federal Maritime Commission investigation into detention and demurrage and related unfair practices (see for example at https://www.logisticsmgmt.com/article/fmc_launches_investigation_on_detention_demurrage_and_per_diem_charges) is a serious attempt to review these practices and is likely to flow into other jurisdictions. I was lucky enough to speak to lawyers closely involved in the investigation representing companies paying these charges and a lot of work is focused on what is seen as a massive and unreasonable cost to industry.
- The debate on the impact of ‘modern slavery’ has taken on significant impact, with studies showing that much of the supply chain producing seafood in South East Asia is operating in conditions that could be described as modern slavery. The textiles and footwear industries may also be guilty of similar offences. Even though the provisions only directly affect large companies, those companies will pass down the obligations and expectations to smaller parties who supply to them.
- After a brief (three-day) ‘dalliance’ with the idea of re – joining the CPTPP, the Trump administration now seems set on not joining that alliance and is pressing its NAFTA partners on renegotiation of that deal. NAFTA seems the most pressing of issues, consistent with the promises made during the election campaign.
Ultimately the sense is that we should continue to press our own interests and complete as many other deals as possible as the US looks to have vacated its leadership role and is continuing to follow an increasingly insular agenda. So, even though we cannot ignore US actions and its responses, we have little real ability to impact those actions and we should continue to progress our own agenda with trade partners from whom we can receive a higher level of certainty. In the US, interests are looking with some envy on proposals to develop FTAs with the EU and the UK.
Oh – and if pain persists, consult your friendly neighbourhood trade lawyer as well as considering a ‘trade psychic hotline.