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Kate McNulty

Kate McNulty is an associate in the Washington office who helps clients navigate complex international arbitrations and international trade matters. She has represented corporate clients in both commercial and investment treaty arbitrations, including under ICSID, ICC, UNCITRAL, and ICDR rules. She also provides legal and strategic advice to clients on global policy and international trade issues relating to the negotiation, implementation and enforcement of bilateral and multilateral trade agreements, including in the areas of intellectual property, market access, regulatory trade barriers, government procurement, and investment.

Kate joined the firm after serving as a Foreign Affairs Officer in the Office of Multilateral Trade Affairs at the U.S. Department of State, where she managed trade enforcement and trade policy issues, and participated in the negotiation of international trade agreements on behalf of the U.S. Government.

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  • Mexico’s new political configuration gives current president Andrés Manuel López Obrador, president-elect Claudia Sheinbaum, and their party (Morena) ample margin to advance legislation (including constitutional reforms) starting in September when the new Congress is in place.
  • Sheinbaum will take office in October, leaving López Obrador a one-month window to use Morena’s new margin in Congress to implement policies he was previously unable to enact, including important constitutional reforms, such as a full overhaul of the Judiciary.
  • So far, Sheinbaum has voiced broad support for her predecessor’s policies. Markets (the dollar-peso exchange rate and interest rates) have thus far reacted negatively, reflecting a perception of increased political and regulatory risk, as well as a potential deterioration of the overall business environment.
  • Companies with business interests in Mexico, including those seeking to nearshore operations in response to U.S. trade measures, should closely monitor political developments in the country, and assess if their investments are adequately protected by an effective investment treaty.

The recent election resulted in an unambiguous win for president López Obrador and his Morena party. As his designated successor, Scheinbaum received 60 percent of the vote, allowing her to become Mexico’s first woman head of state. In addition, Morena also secured seven of the nine contested governorships, a qualified (two thirds) majority in the Chamber of Deputies (365/500 seats), and is just two seats shy of holding a majority in the Senate (83/128 seats). Morena also will hold a majority in 27 of the 32 state legislatures.Continue Reading Mexico’s Election Business Environment Implications

On September 8 and 9, top trade officials of the United States and the other Indo-Pacific Economic Framework (“IPEF” or “Framework”) partner countries—Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam—launched formal negotiations in Los Angeles.

This marked the first in-person ministerial-level meeting since the IPEF launched on May 23, 2022 and follows three informal meetings since May 2022, the latest event being the virtual ministerial on July 26-27, discussed in detail in our previous post.

The Los Angeles ministerial involved intensive discussions on what to include in the scope of the Framework. Ultimately, the IPEF partners reached consensus on ministerial statements for each of the four IPEF framework pillars: Trade, Supply Chain, Clean Economy, and Fair Economy. All 14 IPEF partners have joined three of the pillars, and 13 joined the fourth—with just India opting out of the Trade pillar. While this near unanimous support for the four pillars is certainly a positive sign, the real work begins now.

This blog post summarizes how the ministerial statements characterize the four pillars and outlines next steps for the Framework and key remaining questions.

Takeaways from the Ministerial Statements

The ministerial statements confirmed the four pillars of negotiation and provided added clarity on the scope and content of each pillar. While the statements add little to the substance, they indicate a political commitment among the partners to the Framework.Continue Reading IPEF Partners Adopt Ministerial Statement and Negotiation Objectives

On July 26-27, 2022, the Biden Administration hosted a two-day virtual meeting with top trade officials from the 13 other partners of the Indo-Pacific Economic Framework for Prosperity (“IPEF” or “Framework”)—Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. This was the first ministerial meeting since the 13 initial participants[1] agreed on May 23, 2022 to launch “collective discussions towards future negotiations” on the Framework. The IPEF currently focuses on four “pillars”: (1) Trade; (2) Supply Chains; (3) Clean Energy, Decarbonization, and Infrastructure; and (4) Tax and Anti-Corruption. Touted as a “21st century economic arrangement designed to tackle 21st century economic challenges,” the IPEF is said to offer what Commerce Secretary Gina Raimondo calls a “innovative and flexible approach,” and is “internationally designed not to be a ‘same old, same old’ traditional free trade agreement.”

The Framework’s novel approach, however, has raised a flurry of unanswered questions. Key U.S. stakeholders, for instance, have questioned the Biden Administration’s decision not to discuss tariff reductions or market access as part of the IPEF negotiations. Concerns have been raised about the enforceability of any agreements concluded among Framework partners. Potential agreements within each pillar remain largely unknown or undisclosed, even though the Framework partners have spent months engaged in a “scoping exercise” to define the components of each pillar.

This latest ministerial meeting added little clarity. No joint statement was released at the end of the meeting, suggesting that more remains to be done before formal, text-based negotiations begin. But as negotiators approach the one-year anniversary of President Biden’s announcement of the initiative at the October 2021 East Asia Summit meeting, there is growing expectation of more concrete outcomes. The dates for the next ministerial meeting have not been formally announced, though informal reports speculate that the Framework partners may hold the next meeting in September 2022, possibly as the first in-person ministerial.

This alert outlines the scope and objectives of the IPEF’s four pillars, the progress to date and next steps, key remaining questions, and stakeholder reactions thus far.Continue Reading Biden Administration Hosts the First Indo-Pacific Economic Framework Ministerial: Updates, Outlook, and Remaining Questions

Background

As we previously reported, President Biden and Congress took steps in March 2022 to revoke Russia’s most-favored-nation (or “MFN”) trade status, known as Permanent Normal Trade Relations (“PNTR”) status under U.S. law.  As a result of these actions, the Suspending Normal Trade Relations with Russia and Belarus Act (“Suspending NTR Act”) entered into force on April 8, 2022, formally revoking PNTR status for Russia and Belarus.  Under the terms of the Act, imports into the United States of products from Russia and Belarus became subject to tariff rates set out in column 2 of the U.S. tariff schedule, rather than the column 1 rates that had previously applied.  Column 2 tariff rates are often higher—sometimes much higher—than MFN tariff rates in column 1, and as a result of this change, tariffs on U.S. imports from Russia increased from an average of approximately three percent to 32 percent.  In addition to implementing this immediate change in applicable tariff rates, the Suspending NTR Act also temporarily authorized the President, through the end of 2023, to increase even further tariffs applicable to imports from Russia and Belarus.

On June 27, pursuant to the authority granted under the Suspending NTR Act, President Biden issued Presidential Proclamation 10420, announcing that the United States would further increase tariffs applicable to certain categories of imports from Russia, worth approximately $2.3 billion annually.  U.S. Customs and Border Protection (“CBP”) recently issued guidance on these tariff increases, which will apply effective July 27, 2022.  This alert provides additional information on the forthcoming tariff increases, and discusses potential implications for importers of Russian goods.

Overview of July 27 Tariff Rate Increase on Certain U.S. Imports from Russia

Since revocation of PNTR status in April, products imported into the United States from Russia and Belarus have been subject to tariff rates set forth in column 2 of the U.S. tariff schedule.  Under the terms of Presidential Proclamation 10420, however, duty rates of 35 percent ad valorem will apply to 570 categories of Russian products in lieu of column 2 rates, beginning July 27, 2022.  These product categories have an estimated value of approximately $2.3 billion annually.  The Proclamation does not impact imports from Belarus, which will remain subject to column 2 tariff rates.Continue Reading Increased Tariffs on Certain U.S. Imports from Russia Effective July 27, 2022: What Companies Need to Know

EXECUTIVE SUMMARY

Since entry into force of the U.S.-Mexico-Canada Agreement (“USMCA”) in July 2020, the United States has brought two known complaints against Mexico under the Agreement’s Facility-Specific Rapid Response Labor Mechanism (“RRM”), concerning allegations that workers at two different factories in Mexico were being denied their fundamental right to…
Continue Reading USMCA Labor-related provisions: An assessment after 20 months

On March 11, 2022, President Biden announced that the United States, acting in coordination with the European Union (“EU”) and leaders of major economies belonging to the Group of Seven (“G7”), would begin taking steps to revoke most-favored-nation (or “MFN”) trade status for Russia. MFN trade status—known as Permanent Normal Trade Relations (“PNTR”) status in the United States—is a term used to describe the nondiscriminatory treatment granted among most of the world’s trading partners. Days after the President’s address, on March 16, the House passed to formally revoke PNTR for Russia, and also stripping Belarus of MFN treatment. The bill now moves to the Senate, where timing for its consideration is uncertain.

MFN status is a fundamental principle in the international trading system established under the World Trade Organization (“WTO”), and as a general rule, WTO Members are required to accord MFN status to all other WTO Members. Having acceded to the WTO in 2012, Russia is generally entitled to MFN treatment by other WTO Members. In response to Russia’s invasion of Ukraine, however, several other WTO Members have joined the United States, the EU, and the G7 in stating an intent to revoke MFN treatment for Russia, invoking an “essential security” exception that permits WTO-inconsistent measures where a Member considers such measures to be “necessary for the protection of its essential security interests.” Statements issued by the White House and G7 Leaders emphasized the coordinated nature of the initiative across economies, and the intent to continue to pursue additional collective action to deny Russia the benefits of WTO membership.

While certain G7 countries, such as Canada, have already withdrawn Russia’s trade benefits by means of executive action, revocation of Russia’s PNTR status in the United States will require congressional action. While the House has passed a bill to do so, specific timing for consideration of that legislation in the Senate is still unknown. A revocation of Russia’s MFN status will increase tariff rates applicable to certain U.S. imports from Russia, and may also provoke Russia to take responsive, retaliatory actions against international firms. This alert provides background on Russia’s current trade status, analyzes congressional action to date on the issue, and describes the potential international trade implications for U.S. firms of a change in Russia’s trade status.

Background on Russia’s Trade Status

Under the principle of MFN treatment, WTO Members are required to treat imports of goods and services from any WTO Member as favorably as they treat the imports of like goods and services from any other WTO Member. In practice, this means that MFN treatment is the basic “non-discriminatory” treatment to which all WTO Members are generally entitled. Russia has been accorded MFN treatment by most major economies since it became a WTO Member in August 2012.
Continue Reading Revocation of Russia’s Most-Favored-Nation Trade Status: What Companies Need to Know

The African Growth and Opportunity Act (AGOA) has served as the cornerstone of the U.S.-Africa commercial relationship for more than two decades but it is set to expire on September 30, 2025. While the legislation’s unilateral trade preferences have provided economic benefits for countries across sub-Saharan Africa, AGOA as a

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Continue Reading How the Biden Administration can Make AGOA More Effective

  •  On September 30, 2021, President Andrés Manuel López Obrador presented to Congress a constitutional reform of the electricity sector which modifies three articles of the Mexican Constitution (25, 27 and 28), reversing key parts of the 2014 energy reform that opened the sector to private investment. The congressional debate and

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Continue Reading CURRENT STATUS AND PERSPECTIVES ON MEXICO’S CONSTITUTIONAL REFORM IN THE ELECTRICITY SECTOR

On October 4, 2021, U.S. Trade Representative Katherine Tai announced during a speech at the Center for Strategic and International Studies in Washington, D.C., that the United States would be launching a new trade strategy toward China.  Tai’s announcement comes on the heels of a months-long, comprehensive review of the…
Continue Reading U.S. Trade Representative Previews New China Strategy

Because labor-related obligations in existing U.S. trade agreements are general and largely hortatory, few enforcement actions have been taken with regard to these obligations. The labor obligations in the Agreement between the United States of America, the United Mexican States and Canada (“USMCA” or “Agreement”), however, are specific and…
Continue Reading Companies Should Understand USMCA’s Labor Obligations as They Are Significant and Likely to Be Enforced