Schuchat International Law Firm, LLC
Frank Schuchat Phone: 303-523-3150 [email protected]
To: Clients and Friends
Date: February 1, 2017
Re: International Trade and Business
As the new year unfolds there are well-known and unsettled policy decisions on the agenda that will challenge all businesses and entrepreneurs engaged in trade and investment across borders. In this memorandum, I aim to briefly highlight information relevant to international trade law but also draw from insights and interactions in my role as Belgium’s Honorary Consul and as a standup comedian, including during a visit to Brussels, Amsterdam and The Hague in December.
1. The President’s decision last Friday afternoon to bar temporarily the entry into the United States of any visitor who is a national of one seven countries (Iran, Iraq, Syria, Sudan, Libya, Somalia and Yemen)1 triggered public protest and dissent among career civil servants, but many followers of the President are delighted.
a. It is worth noting that (i) nationals of all of these seven countries already were required to go through a background examination and consular interview process to obtain a U.S. immigrant or non-immigrant visa, regardless of whether they have another passport and dual-citizenship and (ii) as of 2016, as a result of the Visa Waiver Program Improvement and Terrorist Travel Prevention Act of 2015, any person otherwise qualified for the Visa Waiver Program, e.g., a citizen of France, U.K., The Netherlands and Belgium, or 34 other trusted countries, may not use the Visa Waiver Program if they have traveled to or been present in Iran, Iraq, Syria, Sudan, Libya, Somalia and Yemen after March 1, 2011.2 This measure was intended to screen against people who may be a threat and presumably has been effective, or at least no particular significant gaps have been identified.
b. There have been recent reports in the press that some officials of Visa Waiver Program countries, for example from the U.K. and Australia, have assurances that the Trump Administration will not in fact apply the bar to citizens of its countries who are also dual nationals of the banned countries or for persons who are green-card holders.
c. Notwithstanding possible mitigation of the scope of the executive action, a consequence of this situation is that some business meetings or academic conferences including participants who may be potentially subject to the ban will be rescheduled or relocated to a destination outside the U.S. (for example, Brussels) to avoid the risk that participants will be denied entry or to register protest against the U.S. action.
1 Exec. Order 13,769, 82 FR 8977, (Jan. 27, 2017); 18 U.S.C. § 1187(a)(12) (2012). 2 Prior to travelling to the U.S., the Department of Homeland Security requires all non-U.S. citizen travelers to submit biographical information via the Electronic System for Travel Authorization (ESTA), an automated system which determines eligibility of visitors to travel to the U.S. under the Visa waiver Program.
Schuchat International Law Firm, LLC
2. President Trump has long expressed interest in improving U.S. relations with Russia and it is no secret that Putin assigns a high priority to removal of the U.S. and E.U. sanctions imposed in response to the annexation of Crimea, moves against the legitimate authorities in Ukraine and cyber-interference in the U.S. election. The sanctions now in effect against Russia restrict access to long-term financial investment in Russia and prohibit foreign support, including technology in support of exploration or production for deepwater, Artic offshore or shale projects in Russia.3 Influential Republican members of Congress have been firm in public statements that they will oppose relaxing any of these sanctions unless Russia addresses the reasons for the sanctions. The Russia/Ukraine/Crimea sanctions are of great concern for much of the political leadership in the European Union who are very disturbed about Russia’s goals and influence.4 However, the U.S. position will be the most important in deciding when and under what conditions restrictions against Russia will be relaxed. President Trump will probably need to obtain some “Art of the Deal” victory in negotiations with Russia that can be presented as more than just a renewed commitment by Russia to fight the common enemy ISIS. And of course, further actions by Russia in the field in eastern Ukraine will have an impact on the fate of the sanctions.
3. During my visit to Brussels and Amsterdam in December, the fate of the Iran nuclear weapons agreement5 reached between Iran and the United States, U.K., France, China, Russia and Germany was not being questioned. Although the agreement was a significant target for Trump while he was running for President, it is very unlikely that any other governments party to the agreement have an interest in rejecting or reopening the agreement at the behest of the United States. This is consistent across much of Europe. The common interest is reflecting in the participation in the Iran negotiations by the EU’s High Representative of the Union for Foreign Affairs. (In Belgium and The Netherlands, the only question asked by the business community was why their government-led trade missions to Iran took place so many months later than German and French delegations.) The most reasonable assessment at this time is that the Iran agreement will not be challenged by the Trump Administration directly but enforcement of its terms probably will be interpreted by the U.S. in such a way as to make a breakdown more likely (although intentionally disruptive behaviors by Iran’s hard-liners in the revolutionary government might achieve the same effect).
4. President Trump has initiated a course of action which has unquestionably and deliberately disturbed relations with the people of Mexico. In addition, the new U.S. President has expressed limited interest in relations with the European Union or its stability at a time when some incumbent governments and traditional political parties there are challenged by “populist” movements not unlike the Trump rhetoric. However, the challenges for leaders in Mexico and in Europe have to be balanced against the size, scale and breadth of their trade and investment patterns with the United States. The momentum of these economic relationships and personal interactions between Americans, Mexicans and Europeans are largely the result of private actions and decisions by thousands of companies and millions of individual consumers. These actions can be altered at the margin but the foundation will remain in place unless the United States decides to adopt an entirely different economic system.
5. With respect to Asia and U.S. trade, the swift and formal rejection of the Trans-Pacific Partnership inevitably diminishes some opportunities and market access commitments that were negotiated in that process. Asian countries concerned about China’s rise and their historic reliance with the United States are intent to find a path to engage positively with the Trump Administration. This is especially apparent for the Prime Minister of Japan. And in the other three Asian countries with which the U.S. has security guarantees, Thailand, South Korea and Philippines, their domestic politics is especially disturbed at this time. However, while U.S. trade and investment in parts of Asia will be more of a challenge than in the past, Asia remains a global and important market in which American industry needs to participate vigorously.6
6. The President’s nominee for Commerce Secretary, Wilbur Ross, went before the Senate Committee on Commerce for a hearing on January 18, and his nomination was approved by the full Committee on January 24. Ross accumulated a fortune of about three billion dollars in his lengthy career in finance and business, which included ownership of legacy companies in steel and textiles businesses which he acquired at distressed values and which had to realign to address global competition. Ross has the enthusiastic support of the United Steelworkers, not a standard reference for a financier or a Republican nominee. (Ross doesn’t fit any mold. I have to commend his and his wife’s large collection of paintings by Belgian Surrealist Rene Magritte.7 If he is truly amused by surrealistic images, he will do fine in Washington.) The confirmation hearing did address import challenges and strategies but Ross was none of the Senators asked him any questions on export controls and the Bureau of Industry and Security during the hearing. That is probably because the last group of political appointees at the Department of Commerce accomplished an unprecedented export control reform initiative and these are not a lot of pressing operational problems to fix.8 Last comment on Secretarydesignate Ross: in the televised hearing lasting three hours and fifty minutes9, Mr. Ross showed an impressive command of the broad sweep of the work of the Department of Commerce and an unusual ability for focus, recall of facts, sharp intellect and stamina well beyond any normal man of 79 years. Question: why isn’t Wilbur Ross nominated for Secretary of Health and Human Services?
7. Observations about Belgium and The Netherlands. Both nations have many of the same challenges, including assimilation of recent immigrants and refugees, security concerns, economic growth and the future of the European Union. But both nations have recently crowned new, younger kings. In November last year, at the same time I was in Brussels (unrelated to the royal visit), Belgian King Philippe and Queen Mathilde traveled to The Netherlands for a royal visit with their counterparts, King Willem-Alexander and Queen Maxima. During the visit, in addition to pomp and circumstances Belgium and The Netherlands implemented the exchange of a sliver of territory on their borders. Hailed by some commentators as the model for how modern nations can settle border adjustments, I submit this was a unique situation and not likely to apply in some other more contentious regions of Europe. But there is always hope. And because hope often needs some help, I mention here that at the end of 2016, UNESCO10 honored Belgium by designating Belgian beer culture on the Representative List of Intangible Cultural Heritage of Humanity.11
8. Finally, during my December visit, I had a chance to do a set at The ComedyCafe in Amsterdam (http://comedycafe.nl/). One joke I’ve been using for a year got the same good laughs there as in America: that, after he is President for a year or two, Donald Trump will “leave us for a younger, better looking country.” But I realize that simply cannot happen. For a couple hundred years America has always been the “younger, better looking country” for all kinds of people from all over the world. And at the end of any term, it will still be that.