— The head of the biggest U.S. manufacturing group is in Geneva today to urge the World Trade Organization not to waive intellectual property rights protections for Covid-19 therapeutic treatments and diagnostic materials.

— A trans-Atlantic consumer organization is trying to thwart an effort by American business groups and senators to persuade the Biden administration to challenge certain EU digital regulations.

— Import traffic at the busiest U.S. container port fell more than 40 percent in February from the level set one year ago, as retailers cut back on new orders because of lackluster consumer demand.

It’s Monday, March 20. Welcome to Morning Trade. It’s a good day to check your lawn and garden tools, according to my 1974 Popular Science Homeowners Almanac. If you’re a homeowner, that means giving your lawnmower some TLC, especially if you put it away last fall without cleaning it up. And don’t forget to sharpen your spades, shovels, hoes and other edged gardening tools. Plus, scour off any rust and oil the metal surfaces!

After that, take a break and send us your trade news: [email protected], [email protected] and [email protected]. You can also follow us on Twitter: @gavinbade, @tradereporter and @stevenoverly.

Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.

NAM CHIEF PRESSES COVID IP PROTECTION AGENDA AT WTO: The visit comes just a few days after WTO members remained divided on the issue at the first meeting of the WTO TRIPS Council so far this year, a Geneva-based trade official said.

South Africa, India and a number of other developing countries pressed last week for a quick decision, after the group failed to meet a December deadline for resolving the matter. However, it seems more likely that the issue will be left for ministers to decide at the February 2024 ministerial conference in the United Arab Emirates.

Jay Timmons, president and CEO of the National Association of Manufacturers, told Morning Trade before his stop in Geneva today the proposed waiver “truly undermines and threatens shared democratic values and innovation and competitiveness and technology leadership, not only in America, but in free market economies around the world.”

“Weak or strong, it is moving in a direction that simply is not helpful to advancing more cures” because companies would be less willing to invest in the development of new drugs without strong IP protections, Timmons said, summarizing the message he will carry to meetings with WTO Director General Ngozi Okonjo-Iweala, Deputy DG Angela Ellard and U.S. Ambassador to the WTO Maria Pagan.

History lesson: WTO members last June approved a waiver of certain requirements under the Agreement on Trade-Related Aspects of Intellectual Property Rights to make it easier for countries to issue compulsory licenses for generic manufacturers to produce Covid-19 vaccines.

They also agreed to decide within six months whether to issue a similar waiver for diagnostic and therapeutics, but missed that deadline. The developing country coalition led by India and South Africa wants the waiver for at least five years. But other countries, such as Switzerland, argue there is no evidence the waiver is needed.

Opponents of strong intellectual property protections on life-saving drugs have criticized the WTO’s vaccine waiver as far too weak to make any difference. But Timmons said it set a bad precedent that shouldn’t be extended to therapeutics and diagnostics, which are easier for generic manufacturers to copy than the vaccines themselves.

U.S. to hold hearing: The Biden administration, which came out early in support of a waiver for Covid-19 vaccines, has been more cautious about one for therapeutics and diagnostics, despite strong pressure from activist groups like Public Citizen, Oxfam and Human Rights Watch.

U.S. Trade Representative Katherine Tai in December asked the U.S. International Trade Commission to look into the pros and cons and come back with a public report by Oct. 17, making it unlikely the issue will be resolved before then. The ITC will hold a public hearing March 29 (and 30, if needed) as part of its investigation.

TAI ON THE HILL: Speaking of Tai, she will testify on the Biden administration’s trade agenda Thursday before Senate Finance and Friday before House Ways and Means. Expect a slew of questions on every trade topic under the sun, including the recently launched talks between the U.S. and EU on a critical minerals agreement, other bilateral initiatives with Taiwan and Kenya and the proposed Indo-Pacific Economic Framework agreement.

Smith in charge: The Ways and Means hearing will be the first time that new chair Jason Smith (R-Mo.) has led an annual trade hearing, providing the opportunity for him to lay out his priorities for the year and to interact publicly with Tai.

Smith recently wrapped up a three-country tour of Latin America, with stops in Mexico, Ecuador — and most surprisingly — Guyana, a country whose name does not often come up in trade policy discussions. However, the northern South American country has vast, newly-tapped offshore oil reserves that have attracted attention from both China and the United States.

“Our delegation’s meetings have shown how U.S. bilateral relationships in the region benefit American workers and provide a much-needed alternative to countries that might otherwise orient their economies toward China,” Smith said in a statement following his trip with seven other Ways and Means members.

NAM URGES ACTION ON WTO DISPUTE SETTLEMENT: NAM still is a strong supporter of the WTO, despite last year’s vaccine IP waiver decision and the dearth of new market-opening agreements for manufacturers over the group’s 28-year history, Timmons said.

“I think it’s vital,” Timmons said. But “you need a fully functional and effective arbitration body, if you will, that can help resolve disputes that exist,” he added.

The WTO dispute settlement system has not been fully operational since 2019, when the United States effectively killed the group’s Appellate Body by blocking the appointment of new members. Pagan, the U.S. ambassador to the WTO, has recently engaged with other members on how to reform the dispute settlement system.

Now, many members would like the United States to propose a solution to its concerns. However, Timmons stopped short of calling for the Biden administration to take that step.

“The United States is obviously one voice in this,” Timmons acknowledged. But “we have to work with our allies to ensure that all parties are coming together and figuring out what the best system is moving forward.”

Prodding the Biden administration: Last week, Timmons wrote to President Joe Biden, urging him to drop the administration’s self-imposed moratorium on negotiating new bilateral and regional free trade agreements.

Timmons told Morning Trade he remained hopeful Biden would eventually take that advice, calling it a “chapter” of the administration that has “yet to be written.”

“What we would like to see written in that chapter is that America has shown that we are willing to exhibit our leadership around the world through robust trade agreements that have been negotiated and signed during the Biden administration,” he said.

Assessing Tai: Asked whether he viewed Tai as an ally in that effort, Timmons chose his words carefully:

“I’ve had great conversations with Ambassador Tai. I think she’s incredibly knowledgeable and understands the importance of a system of free trade around the world. So my hope is that we’re going to be able to work very closely with her to engage in these discussions about potential free trade agreements in the future.”

IPEF NEGOTIATORS DIVE INTO DIGITAL TRADE: Negotiators working on the Indo-Pacific Economic Framework discussed U.S. text covering the closely-watched digital trade provisions of the agreement for the first time last week.

Countries also discussed U.S. text for the labor, environment and technical assistance provisions for the first time, USTR and the Commerce Department said in a joint readout of the March 13-19 negotiating round in Bali, Indonesia.

The U.S.-based Coalition of Services Industries has called for a digital chapter that builds on what was included in the USMCA, including a provision similar to one in U.S. law that protects internet companies from legal liability for third-party content.

But many progressive Democrats oppose including that provision and want the Biden administration to coordinate more closely with Congress as it negotiates the pact.

Bill Reinsch, who co-hosts “The Trade Guys” podcast for the Center for Strategic and International Studies, said on their latest episode he heard the U.S. digital trade text described as “USMCA minus,” meaning it does not go as far as the earlier pact. USTR did not reply Sunday night to a request for more information about the U.S. negotiating proposal.

USTR WINS 301 TARIFF LEGAL CHALLENGE: The U.S. Court of International Trade ruled Friday in favor of former President Donald Trump’s decision to impose tariffs on hundreds of billions of dollars worth of Chinese goods, sparing the Biden administration from having to issue refunds to thousands of companies that challenged the action.

Lawyers for the companies said they expect to file an appeal, so Friday’s ruling may not be the last word on the matter, which has already been in litigation for more than two years.

USTR did not respond to a request for comment on the decision, which came as the agency is conducting a statutory review of the tariffs that still could lead to some of them being removed.

CONSUMER GROUPS RALLY TO PROTECT EU DIGITAL RULEMAKING: The Transatlantic Consumer Dialogue, a 25-year-old forum composed of consumer advocacy groups from both sides of the ocean, “calls on you to stop threatening each other with trade retaliation or trade disputes whenever there are concerns over domestic regulations,” the U.S. and EU co-chairs said in a letter being sent today to U.S. Trade Representative Katherine Tai and her EU counterpart, Valdis Dombrovskis.

“This means that the U.S. government must not ask the EU to weaken the implementation of the DSA and the DMA, because this would mean that consumers would lose protection for the sake of business profits,” the TACD co-chairs continued.

It follows a letter sent by Senate Finance Chair Ron Wyden (D-Ore.) and ranking member Mike Crapo (R-Idaho) urging the Biden administration to raise complaints about the EU’s Digital Services Act and Digital Markets Act. The lawmakers say the legislation unfairly discriminated against American firms, “without appropriately regulating European, Chinese, and Russian entities that engage in the same activities.”

A coalition of Washington business groups also recently urged national security adviser Jake Sullivan and National Economic Council director Lael Brainard to demand that the European Union walk back regulations for internet commerce, data and cybersecurity.

The business groups in particular complained the Biden administration has been too quiet about the EU’s new digital initiatives in contrast to the EU’s loud complaints about certain provisions of the U.S.’ Inflation Reduction Act.

L.A. PORT TRAFFIC PLUMMETED IN FEBRUARY: The large drop was more reminiscent of the fall in trade at the start of the pandemic than the huge spike in traffic that occurred after consumers adjusted and went on an extended shopping spree that continued into early 2022.

“We may not be at the height of the pandemic but there are more container vessels sitting idle around the world today than at any time since it began,” Gene Seroka, executive director at the Port of the Los Angeles, told reporters Friday. “Spot container rates have declined to nearly three-year lows … [and] U.S. warehouses remain largely full.”

“Retailers must clear inventory levels before the next wave of imports arrive,” Seroka continued. “But with the economy on everyone’s mind, and consumers continuing to feel the pinch of inflation, older inventories are simply not moving fast enough.”

The Lunar New Year celebrated in China and many other parts of Asia also contributed to the decline because many factories were closed longer than usual, Seroka said.

Exports moving through the L.A. port were down 14 percent in February from year-ago levels, but that was about one-third of the drop in import volume.

“Over the next several months, we’ll continue to see lighter volume, particularly compared to all the records we set in the first half of last year,” Seroka said.

Looking ahead, most participants at the recent Trans-Pacific Maritime Conference expect a rebound in trade during the second half of this year, although “no one predicts a huge spike,” Seroka said. “We’ll start to see a pickup in cargo around the mid-year point as we move into a more traditional peak shipping season.”

— A new Peterson Institute report shows China is reducing key exports from the United States despite record two-way trade between the two countries last year.

— TikTok thinks Europe won’t impose a full ban on its app, POLITICO reports.

— A deal allowing Ukrainian grain exports to pass through the blockaded Black Sea has been extended for 120 days, POLITICO reports.

— Russia woos Global South through fertilizer exports, POLITICO reports.

— Australia did not vow to help U.S. defend Taiwan in submarine deal, Reuters reports.

— New EU trade policies unnerve Korean firms, The Korea Times reports.

— Germany, Japan pledge to boost cooperation on economic security, POLITICO reports.

— China’s dispute with Japan over tiny Japanese-controlled islands in the East China Sea is heating up again, The Associated Press reports.

— South Korea-Japan rapprochement creates opportunities in the Indo-Pacific, a Brookings Institute analyst concludes.

— There are increasing signs across the world that the smooth flow of Russian petroleum is starting to get snarled, Bloomberg reports.