Trump eyes trade-deal critic for Commerce secretary – Politico

With help from Doug Palmer and Megan Cassella

TRUMP EYES TRADE-DEAL CRITIC FOR COMMERCE SECRETARY: Billionaire investor Wilbur Ross is the leading pick for Commerce secretary in Donald Trump's Cabinet, multiple sources told POLITICO. Ross, who has criticized trade deals including the North American Free Trade Agreement, is the founder of the private equity firm WL Ross & Co., which has restructured failing companies in the steel, coal and textile sectors.

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"I think there's a big difference between the impact of trade agreements on corporate America and the impact on Mr. and Mrs. America," Ross told CNBC in an interview earlier this year. "Corporate America has adjusted to them by investing lots of capital offshore. … What we're doing is we're exporting jobs and importing products, instead of exporting products and keeping jobs."

With Ross' experience with the plight of distressed U.S. sectors, industry sources told Morning Trade that his pick would be well supported by steel companies waging war against China and other countries through a multitude of trade cases filed through the Commerce Department.

The pick would not be surprising, given what Trump has said about wanting to get tough with China and bring back jobs to the United States, one analyst said.

"[Ross] has both of the requisite characteristics: he's a successful businessman and he's a mercantilist who wants to open foreign markets and close U.S. markets," said Dan Ikenson, director of trade policy studies at the free-market Cato Institute. "Through his discretion, he could make the U.S. antidumping and countervailing duty laws more accessible to U.S. petitioners, which is bad news for consumers and consuming industries. Other than that, he can't cause too much mischief as Commerce secretary."

IT'S WEDNESDAY, NOV. 16! Welcome to Morning Trade, where we're hoping President-elect Trump gets the hang of this press corps tradition we have in this country. Got any news to share? Let me know: abehsudi@politico.com or @abehsudi.

WHAT NOW FOR USTR? Trump's pick for chief trade negotiator appears to be narrowing down to just a few names. With the incoming president's focus on trade, it's a position that will undoubtedly be the subject of close scrutiny from both trade skeptics and trade proponents.

— Dan DiMicco: The former CEO of one of the country's largest steel manufacturers, Charlotte-based Nucor Corp., already seems to be on the fast track to taking over the office in the second-floor corner office in the Winder Building. DiMicco is heading up transition efforts pertaining to the agency. According to one source closely following the issue, the position is his if he wants it.

— Peter Thiel: Multiple sources tell Morning Trade the billionaire tech investor is being more seriously considered for the position. The co-founder and former CEO of PayPal is already a member of the executive committee of Trump's transition team and is aligned with Trump on trade issues. In a speech last month, Thiel railed against the trade deficit: "The most developed country in the world should be exporting capital to less developed countries; instead, the United States is importing more than $ 500 billion every year. That money flows into financial assets; it distorts our economy in favor of more banking and more financialization; and it gives the well-connected people who benefit a reason to defend the status quo. But not everyone benefits, and Trump voters know it."

— Rep. Charles Boustany: The Louisiana Republican has long been a trade advocate in Congress and sits on the House Ways and Means Committee. The former heart surgeon won't be returning to his House seat next year — he put his energy toward trying to win the Senate seat up for grabs this year but narrowly lost in a contest to be one of two candidates for a December runoff election. Boustany was a supporter of trade promotion authority legislation and had been a strong backer of the TPP, but in the heat of the campaign backed off his support for the deal, saying it had become "abundantly clear the administration failed to meet key congressional objectives" laid out in the fast track bill. The lawmaker has had a keen interest in the issue, especially as it relates to the oil and gas interests of his south Louisiana district. A push to ease current restrictions on energy exports is just one trade issue on which Boustany and Trump are aligned.

THE GOP'S DEEP TRADE BENCH: Meanwhile, if Trump wanted to expand his trade search, there's plenty of Republican talent around town, including former deputy U.S. trade representatives Karan Bhatia and John Veroneau and former Commerce undersecretaries for international trade Grant Aldonas and Chris Padilla, who all served in the Bush administration.

There's also Angela Ellard, chief trade counsel for House Ways and Means, and Everett Eissenstat, chief international trade counsel for Senate Finance.

MUSIC TO TRUMP'S EARS: Congress should take a tougher stance on trade and investment relations with China, a congressional watchdog panel recommended today in an annual report that mirrors Trump's dark view of the world's second-largest economy.

"Our findings reveal a trading and investment relationship that is unbalanced and often harmful to U.S. interests," Carolyn Bartholomew, vice chairman of the U.S.-China Economic and Security Review Commission, told reporters. "One troubling trend is our persistent trade deficit with China, which reached $ 365.7 billion in 2015, the highest on record."

The panel's report did not comment on the election or discuss Trump's proposals for dealing with China. However, it contained a number of recommendations that, if enacted, would make it harder for China's state-owned companies to do business in the United States. Those include changing U.S. law to bar a Chinese state-owned or state-controlled enterprises from acquiring or gaining effective control of a U.S. company. Look out for the full story later this morning.

SENATORS TO OBAMA: GET SERIOUS ON BIOTECH AT JCCT: In other China news, a group of 37 senators urged the president to prioritize addressing Beijing's reluctance to approve imports of U.S. genetically modified crops. China has pledged to make its approval process more transparent and expedient, but the lawmakers argued the commitments have fallen short.

"As your administration prepares for the upcoming dialogue between the U.S. and China, the Joint Commission on Commerce and Trade, we ask that you continue to prioritize biotechnology approvals with the Chinese government. We encourage you to continue building on the progress that has been made over the last few years and urge China to move forward in deregulating products awaiting final approval, as well as to eliminate trade barriers due to regulatory systems that don't operate based on scientific assessments," Senate Agriculture Committee Chairman Pat Roberts (R-Kan.), ranking member Debbie Stabenow (D-Mich.) and other lawmakers wrote in the letter.

LIBERAL DEMS TO TRUMP: YOU'LL NEED OUR TRADE VOTES: Liberal Democrats and the labor and environmental groups they have for years worked with to oppose the TPP are celebrating this week over congressional leaders' decision not to bring the pact for a vote before the end of the year. At a press event Tuesday that Rep. Lloyd Doggett referred to as a "burial ceremony," he and other leaders of the anti-TPP opposition in the House pledged to keep their movement together and put pressure on Trump not to implement any new trade policies without consulting them for input on aspects like labor and environmental standards, food safety regulations and the dispute settlement system.

They're hoping that their demands, under a Trump presidency, will carry more weight than they have in the past: If he intends to pursue the type of protectionist, anti-free trade agenda he promoted during his campaign, they say, he'll need to court some Democratic votes to pass it through Congress.

“I think if his campaign words have meaning — and I’m not sure yet, I have to be convinced they do — then he would want to have some Democratic votes because he could not pass it entirely with Republican votes,” Doggett told Morning Trade on the sidelines of the press event, voicing guarded optimism about the prospect of a Democratic say on trade despite his party’s stunning defeat last week.

Doggett added that Trump will face two important tests in trying to win over the anti-TPP coalition. First, he said, they will want to see who gets appointed to USTR and whether that person is motivated to "clean house" at the trade office. Secondly, he added, they want to see a big increase in transparency surrounding trade policy negotiations. Read the full story here.

U.S., PERU TIMBER TALKS TURN A PAGE: The United States and Peru announced progress on actions to combat illegal logging and strengthen environmental protections under a free-trade agreement between the two countries, USTR announced Tuesday. A meeting last week of officials under the auspices of the Environmental Affairs Council established by the trade deal was the first under the new administration of President Pablo Kuczynski.

The U.S., though, said it is still looking for more progress on the issue. Earlier this year, the administration requested that Peru verify the legality of a timber shipment to the U.S. The final report found that significant portions of the shipment came from illegally harvested timber, sparking a review of several areas of improvement.

STATE AG OFFICIALS MAKE THE CASE FOR TRADE: With TPP in hibernation at best, state agriculture officials represented by the National Association of State Departments of Agriculture stressed the importance of trade to farmers and ranchers during a meeting at the White House on Tuesday with Agriculture Secretary Tom Vilsack, U.S. Trade Representative Michael Froman, and USTR Chief Agricultural Negotiator Darci Vetter.

"Multilateral trade agreements, such as the Trans-Pacific Partnership, are critical to secure new market access for U.S. products and eliminate trade barriers," said NASDA President and Louisiana Commissioner of Agriculture and Forestry Mike Strain. "NASDA appreciates Secretary Vilsack and Ambassador Froman's leadership in recent years to advance U.S. agriculture in the international marketplace. We also look forward to working with the incoming Trump administration to determine a path forward on trade policies in order to enact agreements that ensure U.S. producers' leadership and competitiveness in the global economy."

INTERNATIONAL OVERNIGHT

— New Zealand Prime Minister John Key said he told Trump that he wants to further discuss trade and TPP with the incoming U.S. president, Radio NZ reports.

— Malaysia rethinks its trade strategy after TPP hopes fade, CCTV reports.

— Ford Motor Co. CEO Mark Fields says the company is moving ahead with moving small car production to Mexico despite Trump's tariff threats, Bloomberg reports.

— New Zealand's parliament passed a bill that will allow the government to ratify the TPP, Newshub reports.

— China's ZTE Corp. hires a compliance officer ahead of a November sanctions deadline, Reuters reports.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: abehsudi@politico.com and @ABehsudi; mcassella@politico.com and @mmcassella; dpalmer@politico.com and @tradereporter; mkorade@politico.com and @mjkorade; and jhuffman@politico.com and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.