Tension between the United States and Russia remains heightened, particularly after recent reports of close military encounters in the Baltic Sea.  The ceasefire agreements appear to be tenuous in both Ukraine and Syria, with intensified fighting reported in both countries.

While in Washington for the World Bank and the International Monetary Fund (IMF) annual Spring Meeting, an Iranian official alleged the United States is not adhering to the comprehensive nuclear agreement implemented earlier this year.  The U.S. Department of Commerce and Office of the U.S. Trade Representative (USTR) held a two-day hearing last week to examine the global steel crisis, where they heard from representatives of the U.S. steel sector and some lawmakers.

Both chambers of Congress were in session last week and will be in session again this week.  House Ways & Means Committee Chairman Kevin Brady (R-Texas) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) introduced companion Miscellaneous Tariff Bill (MTB) reform measures last week and there appears to be bipartisan, bicameral support to advance the measure.  This week, House Armed Services Committee (HASC) Subcommittees will mark-up the Fiscal Year (FY) 2017 National Defense Authorization Act (NDAA) on Wednesday and Thursday.  The full HASC markup is scheduled for the following week.

Syrian Crisis – Fighting Resurges

A recent surge in fighting between government forces and rebels indicates the U.S.-Russia brokered ceasefire may be near collapse.  Secretary of State John Kerry called Russian Foreign Minister Sergey Lavrov last Friday to press Moscow to urge the Assad regime to stop its violations of the ceasefire agreement.

The State Department is reportedly looking to increase the number of Syrian refugees allowed into the United States for resettlement  in order to meet President Barack Obama’s target of 10,000 refugees by September.  Speaker of the House Paul Ryan (R-Wisconsin) said last Thursday, after a recent trip to the region:

“It’s clear that ISIS wants to, has planned on attempting to infiltrate refugee populations. This is a problem. If one person gets through who is planning a terrorist attack in our country, that’s a problem.”

Ukraine Crisis – Fighting Intensifies

The Organization for Security and Cooperation in Europe (OSCE) monitoring mission in Ukraine reported last week that fighting has intensified between pro-Russian separatist groups and the Ukrainian military.

Russia – Close Military Encounters

U.S. tension with Russia remains elevated, particularly after the Pentagon reported this weekend that a U.S. Air Force reconnaissance plane was barrel-rolled by a Russian jet over the Baltic Sea during a routine flight in international airspace.  This alleged activity comes just after reports that Russian fighter jets came within close proximity to a U.S. Navy destroyer that was operating in international waters in the Baltic Sea. U.S. European Command said last week:  “We have deep concerns about the unsafe and unprofessional Russian flight maneuvers.”  Secretary Kerry described Russia’s action as “reckless and provocative.”

Iran Sanctions – Iran Questions U.S. Commitment to JCPOA

Iranian officials are suggesting the United States and EU have not honored commitments made in the Joint Comprehensive Plan of Action (JCPOA), saying that “almost nothing” has been done to make the JCPOA functional. Valiollah Seif, Head of Iran’s Central Bank, was in town last week for the World Bank/IMF Spring Meeting.  Speaking at the Council of Foreign Relations, Mr. Seif said, “In general, we are not able to use our frozen funds abroad.”  In response, White House Press Secretary Josh Earnest said on Friday:

“The agreement that’s included in the JCPOA does not include giving Iran access to the U.S. financial system or to allow the execution of so-called U-turn transactions.”

MTB Momentum

House Ways & Means Trade Subcommittee Chairman Dave Reichert (R-Washington) held a hearing on 14 April examining the House MTB reform bill released the day before.  Senate Finance Committee Chairman Hatch, Ranking Member Wyden and six other Senators introduced a companion MTB reform measure (S. 2794) a day after the House.

The bill, the American Manufacturing Competitiveness Act of 2016, would revise the process for selecting duty suspensions for inclusion in the MTB package by giving the U.S. International Trade Commission (ITC), rather than Congress, the responsibility for compiling proposed waivers. The measure also would require Congress to consider an MTB package within 90 days of a final report from the ITC.

Ways & Means Committee Chairman Brady reportedly told the media last week that his Committee will mark-up the new MTB reform bill this Tuesday, 19 April.  Some have speculated the Ways & Means Committee markup will be quickly followed by a House floor vote as early as the last week of April.

Global Steel Crisis Examined

U.S. Trade Representative Michael Froman and Commerce Secretary Penny Pritzker co-chaired a two-day hearing last week on the global steel crisis, where U.S. lawmakers called for a better way to prevent foreign suppliers from flooding the U.S. market with subsidized steel.  While chairing the first day, Ambassador Froman stated that the Obama Administration is pursuing options to help the U.S. steel sector, including a possible multilateral agreement to rein in global production.  USTR released a fact sheet on excess steel capacity, available here.  Secretary Pritzker opened the second day of the hearing by noting:

“The U.S. steel industry has suffered from a debilitating influx of low-priced imports, much of it dumped or unfairly subsidized by foreign governments.  Some governments have systematically provided unfair subsidies and implemented other policies that disrupt and distort the operation of market forces both in their own economies and the global marketplace. Such interventions allow and result in non-market based decisions by industry.”

In a letter led by Senate Finance Committee Chairman Hatch and Ranking Member Ron Wyden (D-Oregon), a group of Senators highlighted the challenges global steel overcapacity poses to the U.S. economy and pressed the Obama Administration to enforce U.S. trade laws, including bipartisan customs legislation (H.R. 644) enacted into law earlier this year.  U.S. steel companies alleged at the hearing that China is depressing global steel prices through overcapacity, contributing to more than 12,000 layoffs in the United States last year.  Lawmakers and steel company executives also argued against China being granted market economy status later this year.

TPP Developments – Slow Going

Ways & Means Committee Chairman Brady spoke on the Trans-Pacific Partnership (TPP) deal last week, saying: “I would like to see this taken up this year, but it won’t be taken up until those issues are resolved.”  Some of the biggest outstanding issues include biologics, financial services, and tobacco.  While Chairman Brady acknowledged that USTR is taking the outstanding issues seriously, he added “None of these are easy fixes necessarily.”  Representative Richard Neal (Massachusetts), a senior Democrat on the Ways & Means Committee, said on Thursday that TPP is “going to be a very tough sell” and suggested, like others have, the deal is unlikely to move forward until the post-election, lame-duck congressional session later this year.

TTIP Developments – New York Round Ahead

The next round of Transatlantic Trade and Investment Partnership (TTIP) negotiations will be held next week in New York City.  The Obama Administration is reportedly close to unveiling a proposal addressing concerns that financial services were not included in the TPP deal; fifteen House Republicans sent a letter to President Obama last week calling on the Administration to include financial services in the free trade agreement negotiations with the EU.

Looking Ahead

Washington is expected to focus on the following upcoming events:

  • Week of 25 April: TTIP negotiations in New York City
  • 25-29 April: President Obama attends the Hannover Messe in Germany, after stops in Saudi Arabia and the United Kingdom
  • 13 May: President Obama hosts the U.S.-Nordic Leaders Summit
  • 18 May: Due date for release of the USITC report on the TPP deal
  • [TBA] May: President Obama travels to Vietnam and Laos
  • 26-27 May: G-7 Summit in Ise-Shima, Japan
  • 8-9 July: NATO Summit in Warsaw, Poland

Congressional Hearings This Week

  • On Tuesday, 19 April, the Senate Foreign Relations Committee is scheduled to hold a hearing titled, “Central America and the Alliance for Prosperity: Identifying U.S. Priorities and Assessing Progress.”
  • On Tuesday, 19 April, the Tom Lantos Human Rights Commission is scheduled to hold a hearing titled, “Human Rights in Ethiopia – An Update.”
  • On Tuesday, 19 April, the House Foreign Affairs Subcommittee on Terrorism is scheduled to hold a hearing titled, “Israel Imperiled: Threats to the Jewish State.”
  • On Tuesday, 19 April, the House Foreign Affairs Subcommittee on Asia and the Pacific is scheduled to hold a hearing titled, “FY 2017 Budget Priorities for East Asia: Engagement, Integration, and Democracy.”
  • On Tuesday, 19 April, the Senate Armed Services Subcommittee on Emerging Threats and Capabilities is scheduled to hold a closed hearing titled, “Cybersecurity and United States Cyber Command.”
  • On Wednesday, 20 April, the House Foreign Affairs Committee is scheduled to hold a markup on the following bills: (1) H.R. 1150, Frank R. Wolf International Religious Freedom Act of 2015; (2) H.R. 3694, Strategy to Oppose Predatory Organ Trafficking Act; (3) S. 284, Global Magnitsky Human Rights Accountability Act; and (4) S. 2143, a bill to provide for the authority for the successors and assigns of the Starr-Camargo Bridge Company to maintain and operate a toll bridge across the Rio Grande near Rio Grande City, Texas, and for other purposes.
  • On Wednesday, 20 April, the Senate Appropriations Subcommittee on Department of Defense is scheduled to hold a hearing to examine proposed budget estimates and justification for FY 2017 for Defense innovation and research.
  • On Wednesday, 20 April, House Armed Services Subcommittees on Military Personnel, on Tactical Air and Land Forces, and on Seapower and Projection Forces are scheduled to separately hold their subcommittee markup of H.R. 4909, National Defense Authorization Act for FY 2017.
  • On Wednesday, 20 April, the Senate Armed Services Subcommittee on Seapower is scheduled to hold a hearing titled, “Navy and Marine Corps Aviation Programs.”
  • On Wednesday, 20 April, the Senate Armed Services Subcommittee on Personnel is scheduled to hold a hearing titled, “Current State of Research, Diagnosis, and Treatment for Post-traumatic Stress Disorder and Traumatic Brain Injury.”
  • On Wednesday, 20 April, the Senate Foreign Relations Committee is scheduled to receive a closed update from the Administration on the Mosul Dam in Iraq.
  • On Thursday, 21 April, House Armed Services Subcommittees on Readiness, on Emerging Threats and Capabilities, and on Strategic Forces are scheduled to separately hold their subcommittee markup of H.R. 4909, National Defense Authorization Act for FY 2017.
  • On Thursday, 21 April, the Senate Finance Committee Chairman is scheduled to hold a hearing to examine the Administration’s implementation of the Trade Facilitation and Trade Enforcement Act (H.R. 644), which President Obama signed in February.