Trump’s Trade Pick May Face Hurdle Over Past Lobbying for Brazil

  • Lighthizer represented Brazil in 1985 dispute over ethanol
  • Congress banned foreign lobbyists from serving as USTR in 1995

President Donald Trump’s nominee to become the top U.S. trade representative is facing a possible roadblock to his confirmation related to work he did for the Brazilian government more than 30 years ago.

Robert Lighthizer negotiated with the U.S. on behalf of Brazil in a trade dispute over ethanol in 1985, according to disclosures under the Foreign Agents Registration Act. A decade later, Congress banned anyone who had represented a foreign government in a trade dispute with the U.S. from serving as the nation’s top trade official.

Robert Lighthizer

Source: Skadden

The provision was part of the 1995 Lobbying Disclosure Act, which was passed in part as a reaction to criticism that former U.S. trade officials had left their posts to negotiate the North American Free Trade Agreement on behalf of foreign governments.

“The Lobbying Disclosure Act has long made it illegal for anyone to be appointed to be USTR if they have represented a foreign government in a trade enforcement matter or trade negotiation involving the United States,” said Senator Ron Wyden, the ranking Democrat on the Senate Finance Committee, the panel that will consider Lighthizer’s nomination. He said committee staff members are reviewing public documents related to Lighthizer’s prior work. A hearing hasn’t been scheduled.

President’s Confidence

Trump has “full confidence” in Lighthizer, said Sean Spicer, the White House press secretary. “Over 30 years ago, he briefly provided counsel to a Brazilian client in U.S. antidumping and countervailing duty proceedings -- in an effort to reach an amicable settlement with concerned U.S. producers. It would be absurd that such an action should prevent him from serving as USTR.”

A spokesman for Senator Orrin Hatch, the Republican who chairs the Finance Committee, said in an e-mail that the panel “has begun its bipartisan vetting process, which will include the examination of this issue among others, in earnest.”

Lighthizer, 69, has spent most of his career representing U.S. companies in disputes with foreign firms or governments over allegations of unfair competition. He has also been a frequent critic of China. In 2010, he testified to a congressional commission that monitors the impact of trade with China, saying the country’s political and economic systems were “fundamentally incompatible” with the World Trade Organization.

That has earned him rare support among Democrats, including Representative Richard Neal, the top Democrat on the House Ways and Means Committee, who said Lighthizer “rejected the rigid ideological mantra” of free trade.

‘Absolute Ban’

Even with bipartisan support, the Lobbying Disclosure Act could complicate the path for Lighthizer, who is now a partner at law firm Skadden, Arps, Meagher & Flom. According to the 1995 law, anyone who has “directly represented, aided, or advised a foreign entity” in a trade negotiation or dispute with the U.S. “may not be appointed as United States Trade Representative.” The provision can only be waived by a vote in both chambers of Congress.

“This is one of the few provisions that was an absolute ban,” said Meredith McGehee, who pushed for the law to be passed in 1995 and is now chief of policy, programs and strategy at Issue One, a group that seeks to limit the influence of money in politics. “There was a fair amount of anger from labor unions and some of the Republicans about lobbying for foreign governments after NAFTA.”

The Mexican government spent $25 million lobbying for the trade pact between 1989 and May 1993, hiring former trade representatives, other government officials and congressional staffers, according to a study by the Center for Public Integrity.

‘Difficult’ Application

Craig Engle, founder of Arent Fox’s political law practice, questioned whether the ban would apply since it was passed years after Lighthizer worked for Brazil. “It’s a little difficult to apply a statute from tomorrow to something you did today,” said Engle, a Republican. “I hardly think it was intended to reach a situation like this.”

McGehee disagreed, saying that the 1995 law changed the qualifications for the office -- meaning that those who had represented a foreign government, even before the ban was passed, would be ineligible.

The White House released a letter dated Jan. 24 by Ivan Schlager, a partner of Lighthizer’s at Skadden Arps who served as the Democratic chief counsel on the Senate Commerce Committee and worked to enact the ban back in 1995. According to Schlager, the ban was supposed to apply to those who represented foreign governments in bilateral and multilateral trade agreements, not trade disputes. “It would be a travesty to interpret the statute in a way that would apply to Bob Lighthizer,” he wrote.

Foreign Clients

Between 1985 and 1990, Lighthizer represented five foreign clients, which required him to register with the Justice Department and his firm to disclose his work agreements and duties.

Much of the work he did during that time didn’t involve trade negotiations or disputes with the U.S. But the Sugar and Alcohol Institute, part of the Brazilian Ministry of Commerce, hired Lighthizer and his firm to settle disputes between Brazil and the U.S. over ethanol trading. In December 1985, he represented Brazil at a meeting at the U.S. Department of Commerce on “the possible settlement of the Department’s pending investigations of imports of ethanol from Brazil,” according to the disclosures.

The contract for the work, which was signed by Lighthizer, said that his firm would work for the institute “in a broader effort to resolve disputes between Brazil and the United States involving ethanol trade.” The firm “will participate in the efforts to persuade the administration, particularly the Department of Commerce, the U.S. domestic ethanol producers, U.S. agriculture producers and the Congress of the desirability of Brazil and the United States resolving outstanding difficulties concerning ethanol on a friendly and equitable basis.”

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