Fashion Intel & Analysis
The U.S. and Kenya wrapped up the inaugural meeting of the U.S.-Kenya Trade and Investment Working Group on Monday in Washington, DC. The meetings, which began on April 3, were led by U.S. Trade Representative Robert Lighthizer and Peter Munya, Kenyan Cabinet Secretary for Trade and Industry. Under the framework of the working group, the U.S. and Kenya agreed to work together on maximizing the remaining years of the African Growth and Opportunity Act (AGOA), pursue exploratory talks on future bilateral trade and investment framework, strengthen commercial cooperation, and develop short-term solutions to reduce barriers to trade and investment.
The working group was established by President Trump and Kenyan President Uhuru Kenyatta to explore ways to deepen the trade and investment ties between the two countries. The next working group meeting will be in Nairobi in June.
After a flurry of excitement that we are close to a trade deal with China, yesterday, President Trump said he expects to know within the next four weeks whether a trade agreement can be reached. “We’re getting very close to making a deal,” he told reporters after a White House meeting with Chinese Vice Premier Liu He. “That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer.” President Trump did not announce the timing for a summit with Chinese President Xi. “If we have a deal, then we’ll have a summit,” Trump stated.
Trump discussed the complexity of the deal and states the final agreement will be very comprehensive. “It’s a very complex deal. It’s a very big deal. It’s one of the biggest deals ever made. Maybe the biggest deal ever made. It will be a great deal for our farmers. Technology, intellectual property theft – everything is covered. There’s not a thing that’s not covered,” Trump told reporters. On the positive side, there are some press reports from Asian media that the Japanese are preparing to host the summit in late June when both Presidents will be attending the G20 Summit. We continue to watch the progression of the negotiations and, if a deal is reached, what the deal will mean and how it will be enforced.
A new report released by the Uzbek-German Forum for Human Rights (UGF) documents that forced labor persisted during Uzbekistan’s 2018 cotton harvest despite the efforts made by the Uzbek government. The report is based on 70 in-depth interviews, 300 field visits, and the monitoring of more than 100 farms. It highlights the progress made by the Uzbek government, as well as the ongoing forced labor in the cotton sector. “UGF documented evidence that systemic forced labor persists because the structural causes remain in place. The top-down quota system in particular led officials to send people to pick cotton,” Umida Niyazova, Director of UGF said. “We urge the government to accelerate reforms to build on its successes to finally bring an end to these practices,” he continues. The full report is available here.
Watch for more updates about the situation in Uzbekistan. In the upcoming weeks, the Cotton Campaign will release a roadmap for reforms in Uzbekistan that will focus on three main areas: ending systemic forced labor; advancing structural reforms to address root causes; and enabling civil society.
Tweeting on Friday morning before leaving for California and a border visit, President Trump confirmed that he will not take action right away to close the border with Mexico. But the threat that he could decide to close the border in the future remains a concern. Expanding on yesterday's statement that he would wait one year before closing the border, now the timing of potential action is less clear. In today's tweet, the President says that if Mexico does not block immigration from Central America, then the U.S. could impose 25% duties on automobile imports from Mexico. And if that does not work, the U.S. would again threaten to completely close the border. This latest statement is raising new concerns about the impact of the immigration issue on Congressional approval for the U.S.-Mexico-Canada Agreement (USMCA). Both Congress and industry groups are criticizing the Administration view that shutting down the border would "supersede" the trading commitments in the USMCA. We will be watching for more updates.
Today, President Trump retreated from his threats to immediately close the southern border and issued a one-year warning to the Mexican government that they must reduce the flow of drugs and migrants traveling through the border. “If the drugs don’t stop, or largely stop, we’re going to put tariffs on Mexico and products, in particular cars. The whole ballgame is cars. And if that doesn’t stop the drugs, we close the border,” Trump told reporters this afternoon.
Even with the border remaining open, U.S. Customs and Border Protection (CBP) says that cargo wait times will significantly increase for the foreseeable future. In the scheduled trade call this afternoon, Bradley Hayes, Executive Director at the Office of Trade Relations at CBP, announced CBP has redeployed 545 officers to date from the southwest border ports of entry to assist the Border Patrol for an initial 30 days. If there is a need to extend beyond the 545 officers, the next group of officers will be pulled from U.S. airports.
The redeployment of officers has resulted in increased wait times along the southwest border consistently at every major crossing. The hardest hit areas are in South Texas and the Rio Grande Valley, West Texas and El Paso, and Yuma, Arizona. He noted that yesterday for cargo operations in El Paso, the peak wait time was seven hours for trucks to cross the border. At the end of the day when cargo hours shut down there were trucks waiting in the queue that could not be processed during the day and sat overnight, meaning at the start of the next morning CBP was already behind in cargo waiting to be processed.
Hayes said there is the option to redirect cargo to other ports, but explained they are seeing extended wait times across the southwest border at every major crossing. He noted the situation will continue as long as CBP needs to assist Border Patrol. CBP is well aware of the potential economic impact this has on many industries and communities, but because of the security crisis CBP must respond.