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February 1, 2018

HEADLINES
On the EU side: Theresa May held the first of three cabinet meetings on Brexit just yesterday, ahead of EU trade negotiations.
Read more about the cabinet’s mixed feelings on EU trade here. The EU and Mexico reportedly made progress last week during the latest round of negotiations. Further work on a number of issues is still required, related both to market access and rules, including geographical indications, and investment protection.
On the US side: The House voted on the Miscellaneous Tariff Bill (MTB) and effectively passed it on to the Senate. The bill is said to eliminate import tariffs, save U.S. manufacturers billions of US dollars while also making them more competitive. Meanwhile, President Trump warned of a possible “fine”  on China, as a potential US-China trade war looms large. 
Upcoming: This year’s Davos meeting will be taking place next week, which the NAFTA negotiation team, including the US Trade Representative, Canadian Foreign Minister and Mexican Economy Minister are all scheduled to attend. On that note, the next round of much-anticipated NAFTA negotiations will be taking place January 28 in Montreal.

SPOTLIGHT
Compromise and Concession Key to NAFTA Renegotiations: A Lesson From The Past

All parties must recognize what is at stake and why they must get this deal right. A failed renegotiation sends the wrong message to the rest of the world” – Diego M. Bitar, Atlantic Council 

In a recent New Atlanticist blog post, Diego Bitar describes the main roadblocks in NAFTA negotiations and suggests possible solutions. All parties agree that the agreement needs to be updated. Officials point to successful updates regarding certain issues such as environmental standards and food safety. However, many issues lie in limbo as they await the outcomes of the Mexican presidential election and US midterm elections.

Main sticking points are rules of origin, dispute settlement mechanisms, and the Sunset Clause. Assuming all parties—the United States, Canada, and Mexico—continue to agree to meet and discuss the terms of the twenty-three-year-old deal throughout 2018, an unsuccessful renegotiation would not only hurt millions of US workers whose livelihoods depend on the success of the trade deal, but it would also cause significant harm to US interests beyond North America. For more information on the upcoming negotiations and what a compromise could look like, click here.  

TRADE
News: House Passes Tariff-Relief Bill, Vicki Needham, The Hill
Opinion: Why America’s Manufacturers Need the Miscellaneous Tariff Bill, Committee on Ways and Means
Opinion: Seven Predictions for Trade Policy in 2018, Shawn Donnan, The Financial Times
Opinion: Donald Trump’s Difficult Decision on Steel Imports, The Economist
Graphic: How the Tax Law Will Affect U.S. Firms Bringing Overseas Money Home, The Wall Street Journal
News: Trump, Lighthizer Discuss China, NAFTA Trade Talks: White House, Steve Holland, Reuters
News: NAFTA Trio to Gather in Davos as Negotiations Resume in Canada, Josh Wingrove, Bloomberg
News: Canada Welcomes Trump Talk of Possible NAFTA Deadline Extension, David Ljunggren, Andrea Hopkins, Reuters
Opinion: Trump Agenda: Does the President Have America’s Back on Trade, Shawn Donnan, Financial Times
News: Exclusive: Trump Considers Big 'Fine' over China Intellectual Property Theft, Jeff Mason, Reuters
News: China Reports Biggest-Ever Annual Trade Surplus With U.S., Lingling Wei, The Wall Street Journal
News: Chinese Trade With North Korea Plunged by 50% Last Month, Bloomberg
News: China is Working on a New Index to Put a Different Spin on Trade Gap with US, Frank Tang, South China Morning Post
News: The EU and Mexico Make Progress in Bridging Remaining Gaps in Latest Trade Talks, European Commission
Trade: EU Demands Delays to End of Free Movement Post Brexit, Jacopo Barigazzi, David Herszenhorn, & Charlie Cooper, Politico
Interview: America Last? EU Says Trump is Losing on Trade, Philip Blenkinsop, Noah Barkin, Reuters
Opinion: Europe's Global Trade Leadership Stops at the Digital Economy, Evangelos Razis, The Hill
Analysis: Of Transition and Trade Deals, Sam Lowe, Centre for European Reform
News: Pound Hits Highest Level Since Brexit Vote, Chris Johnston, BBC News
News: Majority of Businesses Want Regulatory Alignment After Brexit, Sarah Gordon, The Financial Times
Analysis: There’s Still Hope for U.K. Financial Services in Brexit Deal, Stephanie Bodoni and Ian Wishart, Bloomberg
News: Japan Announces Three-Way Pact with Baltic Countries as Abe Tours Eastern Europe, JiJi Kyodo, The Japan Times
News: Australia Takes Canada to WTO Over Rules on Selling Wine, Tom Miles, Reuters
News: Israel's Netanyahu in India to Seal Trade and Defense Deals, Chase Winter, Deutsche Welle


TWEET/FACTOID OF THE WEEK


Did you know...
that global production of plastics has increased twenty- fold since the 1960s? Currently, the EU recycles less than 30% of the 25 million tonnes they produce. Proposed solutions in the new EU strategy include making recycling more profitable for business, driving investment and innovation, and curbing plastic waste.


GLOBALIZATION
Video: How Would Open Borders Affect the World? The Economist
Report: What the Future of Work Will Mean for Jobs, Skills, and Wages, James Manyika, Susan Lund, Michael Chui, Jacques Bughin, Jonathan Woetzel, Parul Batra, Ryan Ko, and Saurabh Sanghvi, McKinsey & Company 
Opinion: The West has Ushered in a World Order it Does Not Like, Dr. Michael Ivanovitch, CNBC 
Analysis: The Euro in Decline?, Kathleen R. McNamara, Foreign Affairs 
Opinion: Letting Light Through the Great Firewall of ChinaFinancial Times
Analysis: The Rise of Digital Protectionism, Corinne Vadcar, Paris Innovation Review
Blog Post: The Global Economy’s Output Gap Has Closed, Josh Zumbrun, The Wall Street Journal
Opinion: 5 Ways GDP Gets it Totally Wrong as a Measure of our Success, David Pilling, We Forum

WHAT WE ARE READING

Opinion: 2018: The Year of Fake Economic Data, Chris Giles, Financial Times
ReportEnergy: Driving Force Behind Increasing Female Participation in the Gulf,  Bina Hussein, Atlantic Council 
ReportShaping Iraq’s Oil and Gas Future, Ellen Scholl, Atlantic Council 
Analysis: Reconciling Risk Sharing with Market Discipline: A Constructive Approach to Euro Area Reform and How to Reconcile Risk Sharing and Market Discipline in the Euro Area, Agnès Bénassy-Quéré, et al., VoxEU
News: EU Toughens Stance for Brexit Transition Talks, Alex Barker, Financial Times
Opinion: Brexit and Agriculture: British Farmers to Plough New Course, Alan Beattie, Financial Times
Briefing: Home Truths for Hardline Brexiters, Philip Stephens, Financial Times
Analysis: Britain’s Transatlantic Bridge Looks Shaky, Tony Barber, Financial Times
Analysis: The Cappuccino Index, Ryan Heath and Hanne Cokelaere, Politico
Opinion: What Went So Right With Volkswagen Restructuring, Patrick McGee, Financial Times
Opinion: A Dangerous New Normal, Robin Niblett, Berlin Policy Journal

UPCOMING EVENTS
January 19: Iran Looks East, Atlantic Council
January 24: Clashing over Commerce: A History of U.S. Trade Policy, Cato Institute 
January 26: What’s next for Trump’s regulatory agenda: A conversation with OIRA Administrator Neomi Rao, Brookings 
January 29: Modernizing trade rules: The TPP and beyond, Brookings 
January 30: Trust and Estate Update, European American Chamber of Commerce New York 
January 30: The View on Trade: From Federal to State LevelsCouncil on Foreign Relations
February 2: Can an Internationally Competitive Tax System Protect Its Tax BaseIIEL Georgetown 


Your Newsletter Team:
Marie Kasperek, Associate Director, Global Business & Economics, Atlantic Council
Alexatrini Tsiknia, Intern, Global Business & Economics, Atlantic Council 
Zachary Coles, Intern, Global Business & Economics, Atlantic Council

Please send us suggested news stories, opinion pieces, publications, and upcoming events that you would like us to highlight! Email This email address is being protected from spambots. You need JavaScript enabled to view it. with your ideas and suggestions.

The views expressed in this newsletter and linked external articles and content do not necessarily reflect the opinions of the Atlantic Council, its staff, or its sponsors.

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