In an earlier article, I reviewed how the United States could use the opportunity for comprehensive immigration reform to help job growth here at home by reserving any increase in temporary work visas to countries or customs territories that become members of the International Services Agreement (“ISA”) talks the U.S. and twenty other WTO members (including the EU as one) are pursuing to obtain significant services liberalization among the willing.
In a whirlwind process that had candidates shuttling around the world visiting as many as 100 countries in the last five months, the WTO Membership is reported to have selected the next Director-General in accordance with procedures adopted in 2002, following three rounds of consultations in which the number of candidates has gone from nine to five to two and now one around whom consensus is viewed as possible.
The two finalists for the World Trade Organization’s Director-General position have emerged: Ambassador Roberto Azevêdo of Brazil and Mr. Herminio Blanco of Mexico.
In Geneva, this past week marked an important step in the effort to find a consensus candidate to become the next Director-General of the World Trade Organization (“WTO”) Secretariat when the term of the current Director-General, Pascal Lamy, expires at the end of August 2013.
On April 12, 2013, the U.S. and Japan exchanged letters that confirmed U.S. support for Japan’s entry in the Trans-Pacific Partnership (“TPP”) talks. Japan can now join the talks if all ten other TPP trading partners agree to its participation.
In an earlier Trade Flow from January 8th, I reviewed the start of the selection process for the new Director-General of the World Trade Organization (“WTO”). It has been a busy first quarter of 2013 for the nine candidates to take over the top Secretariat position for the current Director-General Pascal Lamy.
Immigration reform is one of the few legislative initiatives that appears to be moving forward in Washington. This is particularly true with support for legal immigration reform. To bring stronger growth to the U.S. economy, proponents of legal immigration reform are proposing that it be easier for skilled foreign workers to obtain authorization to work in the United States.
On February 18, 2013, a World Trade Organization (“WTO”) panel began its first substantive meeting on disputes initiated by Canada and Norway against the European Commission’s seal products ban. The disputes, now consolidated as European Communities – Measures Prohibiting the Importation and Marketing of Seal Products (DS400 & DS401) (“EC – Seal Products II”), raise important questions concerning the appropriate balance between trade liberalization and animal welfare. Individuals and organizations interested in the dispute will have opportunities to submit information and argument as the dispute proceeds over the next several months.
Before the conclusion of the Uruguay Round of trade negotiations in 1993 and the creation of the World Trade Organization (“WTO”), which came into existence at the beginning of 1995, many trading nations had undertaken relatively limited tariff bindings within the General Agreement on Tariffs and Trade (“GATT”).
At the February 27, 2013 meeting of the WTO’s Dispute Settlement Body (“DSB”), the United States and Antigua and Barbuda traded accusations regarding the on-going dispute over Antigua’s right to suspend intellectual property protections for U.S. rights holders.
Summary of Remarks by Alan M. Dunn at Global Business Dialogue Event at National Press Club, Thursday, March 7, 2013
In the President’s 2013 Trade Policy Agenda released on March 1, 2013, the approach the Administration intends to take on the renewal of the Generalized System of Preferences was laid out (pages 18-19): The United States has an obligation – and the Obama Administration has the intent – to partner where possible with the poorest countries to lift people out of poverty and foster opportunity for more of our fellow men and women around the world.
On February 13, 2013, the United States and the European Union (U.S. and EU) formally launched a Transatlantic Trade and Investment Partnership (TTIP) negotiation. This negotiation will be comprehensive covering market access; regulatory issues and non-tariff barriers; and rules, principles and architecture for the overall agreement. Since the U.S. and the EU are the two largest economies in the world with similar high standards, these negotiations could yield comprehensive agreements that would set the gold standard for the world of free trade, investment and standards agreements.
When the last round of multilateral trade negotiations concluded in late 1993 with the Uruguay Round agreements, including the creation of the General Agreement on Trade in Services (“GATS”), the international trading system had taken a giant step forward by establishing a set of rules for trade in services.
When China joined the World Trade Organization in late 2001, many were hopeful that the myriad of trade restricting practices China used to favor domestic industry, grow exports and restrict imports would be ending. Certainly having China in the WTO has resulted in strong growth in bilateral trade for many nations and in reduced Chinese tariffs largely in keeping with WTO obligations. However, those who hoped that China would dismantle many of its trade distorting practices have been largely disappointed.
For many businesses, what happens at the World Trade Organization is little understood and the major institutional changes that occur typically not followed. With the challenges the WTO has faced in areas outside of dispute settlement and the seemingly limited ability to move forward on an agenda supported by major trading nations, the lack of awareness or interest may be understandable. Moreover, the WTO is a “member-driven” organization, meaning that the WTO staff, including the Director-General, have limited powers if the major members are not able in fact to bridge their differences on the future of the trading system.
President Obama has a bipartisan opportunity to develop a new consensus on trade policy in 2013. As a Democratic president who understands the importance of both enhancing exports and providing incentives for middle-class opportunities at home, he is well-situated to achieve significant progress on trade in his second term. Clearly this is a tricky exercise given the 20-year battle between Democrats and Republicans, labor unions and business on trade policy.
The U.S. Department of Energy has at least 15 applications pending seeking approval to export liquefied natural gas (LNG) but so far has licensed LNG exports by one company, Cheniere Energy Inc. from its Sabine Pass LNG terminal.
Earlier today, the U.S. Senate passed H.R. 6156, a bill granting Permanent Normal Trade Relations (“PNTR”) to Russia, by a vote of 92 to 4. The President is expected to sign the measure shortly. This bill repeals application of Section 402 of the Trade Act of 1974 (the “Jackson-Vanik” amendment) to Russia and allows for the President to grant Russia PNTR.
At the end of this month, two key events in the continuing effort to discipline subsidized export financing by the Government of China will occur. First, the U.S. will, for the first time, impose countervailing duties on imports from China to offset export credit subsidies provided by the China Export-Import Bank (“China Ex-Im”). The export credit program will account for the majority of countervailing duties imposed on imports of solar panels from China, due to the Chinese government’s refusal to share China Ex-Im data with the U.S. during its investigation. Second, also at the end of this month, the Treasury Department will report to Congress on progress in negotiations with China and other countries to limit export credit subsidies. This will be the first such report since the U.S. and China announced new negotiations on export financing earlier this year, with the goal of reaching an agreement by 2014.
On October 24, 2012, Terence P. Stewart, Managing Partner of the Law Offices of Stewart and Stewart, addressed the annual global conference of the fluorspar industry in Vancouver, British Colombia. Stewart spoke to the group about China’s export restraints on fluorspar, providing an analysis of the successful case that the U.S., EU, and Mexico brought against these export restraints at the World Trade Organization and the likely market impacts of the case. The presentation provided timely insight as China faces a December 31, 2012 deadline to eliminate the export restrictions that were found to violate its WTO obligations.
Yesterday, the European Union (“EU”) requested the establishment of a World Trade Organization (“WTO”) panel to assess the United States’ compliance with recommendations to end subsidies to Boeing that the WTO adopted on March 23, 2012.
Last month, U.S. Customs & Border Protection (“CBP”) implemented new informal procedures that clarify when importers may obtain refunds for overpayments of customs duties and fees versus offsets of underpayments of customs duties and fees with overpayments of customs duties and fees. These procedures explain how processes that importers have long used to claim refunds for overpayments or to correct customs errors, such as protests and Post-Entry Amendments/Post-Summary Corrections, intersect with a final rule that CBP issued in late 2011 that allows offsets of underpayments of customs duties and fees with overpayments of customs duties and fees for certain entries in the context of prior disclosures.
In this difficult economic environment, the U.S. government has targeted non-profits for the continued distribution of funds through a number of continually-evolving mechanisms, some of which we have discovered do not involve “traditional” competitive grant requests. As explained below, at least one $230 million health care program we’ve found is formula-based -- meaning eligible applicants who submit a properly completed application will be funded.
As part of the President’s National Export Initiative, the Commerce Department announced its intention of strengthening U.S. Trade Laws on August 26, 2010. It identified fourteen different changes that it intended to make in its administrative practices.
A year ago this month, Congress and the Obama Administration agreed to a short-term increase in the debt ceiling in return for the establishment of a “Super Committee,” which was to present a plan for long-term deficit reduction. Under the Budget Control Act of 2011 (BCA), enacted on August 2, 2011, the Super Committee was to develop recommendations to reduce the federal deficit by 1.2 to 1.5 trillion dollars over 10 years.
On July 11, 2012, the Obama Administration announced the easing of sanctions on Burma as they pertain to new investment and the provision of financial services by U.S. persons in that country. The announcement was accompanied by a new Executive Order (E.O. #13619) and the issuance of two new general licenses by the Treasury Department’s Office of Foreign Assets control (OFAC).
On July 18th Russia’s upper house of Parliament, the Russian Federation Council, voted to ratify Russia’s accession to the World Trade Organization (“WTO”). Of the 166 members of the Federation Council, 144 members voted in favor of accession and only three opposed accession. This follows the close vote on July 10th in the Duma, Russia’s lower house of Parliament, where 238 out of 450 members voted for accession, only 12 votes above the necessary 226 votes.
The European Union filed a request for consultations at the World Trade Organization (“WTO”) on May 25, 2012, formally initiating a dispute with respect to various import policies that have been imposed by the Argentine government.
As part of the President’s National Export Initiative, the Commerce Department announced its intention of strengthening U.S. Trade Laws on August 26, 2010. It identified fourteen different changes that it intended to make in its administrative practices. These are meant to improve the accuracy and efficacy of its administration of the trade laws.
Government procurement is subject to a plurilateral agreement within the WTO as well as various bilateral deals. Agreements concluded by the EU that include market access commitments in the field of government procurement are listed below. The EU has sought an expansion of the plurilateral Agreement on Government Procurement amongst the WTO members to the Agreement (including the U.S. and Japan) and has also sought to have China become a member of the WTO (along with the U.S. and Japan and others).
At a Global Business Dialogue event in Washington, D.C., held on March 29, 2012 on the WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum, Terence Stewart, the managing partner of the Law Offices of Stewart and Stewart, presented an overview of the WTO case reviewing the concerns expressed by President Obama, Ambassador Kirk and their counterparts in the EU and Japan about the myriad policies undertaken by China on a wide range of products that distort the price of various inputs outside of China while depressing the prices within China, drawing investment in user industries into China to gain access to more affordable inputs.
The United States has lost millions of manufacturing jobs in recent years. While these job losses flow in part from the most severe recession since the Great Depression, a host of trade-related problems, both internal to the U.S. and external in terms of trade actions by our trading partners, have contributed significantly to the weakening of our manufacturing base.
Korea is an important trading partner for the United States, supplying the United States with $56 billion in product in 2011 and taking U.S. exports valued at $41.3 billion last year, for combined two-way trade of nearly $100 billion.
March 13, 2012 marked the launch of a joint effort by the United States, the European Union, and Japan to obtain a broad-based resolution to a series of highly trade-distortive export restraints China imposes on a wide array of raw materials important to global commerce.
On March 13, 2012, the President signed H.R. 4105, authorizing the United States to continue to impose countervailing duties on subsidies from non-market economies (“NMEs”) The law was passed by both the House of Representatives and the Senate the prior week (in the House by a vote of 390 – 37; in the Senate by unanimous consent).
The Foreign-Trade Zones Board of the International Trade Administration, U.S. Department of Commerce (“the Board”), has published a comprehensive revision to the Foreign Trade Zone regulations (15 CFR Part 400) that will govern its administration of U.S. foreign-trade zone activities. Foreign-Trade Zones in the United States, 77 Fed. Reg. 12112 (Feb. 28, 2012). The Board had proposed revisions to its existing regulations (codified at 15 C.F.R. part 400) on December 30, 2010 (75 Fed. Reg. 82340). It considered comments received on its proposals and developed the revised set of regulations that have just been published.
U.S. Customs and Border Protection (“Customs”) is proposing changes to the Customs Regulations governing in-bond shipments of goods. According to the General Accountability Office, these shipments represent 30 to 60 percent of all imports that move through U.S. ports. Therefore, the proposed changes are bound to impact a broad array of U.S. importers. Briefly, the proposals are designed to tighten procedures and to reduce instances of importers abusing the privileges that bonded transportation affords. Customs invites the public to comment by April 23, 2012. A full description of the proposals is published in the Federal Register at “Changes to the In-Bond Process,” 77 Fed. Reg. 10622 (February 22, 2012).
On February 1, 2012, a new trade measure went into effect in Argentina that requires importers to electronically file a sworn statement, which must provide information on the goods they wish to import, with the Administración Federal (“AFIP”) and await government approval prior to importation. Once received, the AFIP has three days to review the statement and determine whether to approve it, with the ability to take an additional fifteen days if another agency wishes to review the statement as well. AFIP General Resolution No. 3252/2012, issued January 5, 2012, available here.
The Obama Administration’s announcement that it has reached agreement with the European Union (EU) and Japan to end the use of “zeroing” in antidumping reviews, coupled with actions implementing the agreements (publication of the February 14, 2012 Commerce Department change in practice) and the work that will be undertaken on specific orders for specific companies to revise cash deposit rates based on the change, will result in the significant weakening of a major U.S. trade remedy for many domestic industries and their workers suffering from injurious international price discrimination.
China’s state-owned enterprises (SOEs) play an increasingly important role in the Chinese market and in economies around the world. SOEs are key players in sectors ranging from energy to automobiles and chemicals to information technology. Many SOEs are also present in the seven “Strategic and Emerging Industries” in which China aims to become a world leader by 2030, in part through the investment of $1.5 trillion in government resources over five years.
China is now the world’s largest exporter and one of the major beneficiaries of the global trading system. Yet China’s construction of its rights and obligations as a WTO member is often at odds with the plain language of the WTO agreements and of China’s Protocol of Accession and incorporated provisions from the Working Party Report. This can lead to disputes that are fundamental to China’s existing policy choices.
In its 12th Five-Year Plan, adopted in March of last year, China designates “new-energy” automobiles and their components as one of the seven “strategic and emerging industries” targeted for massive increases in government support. The Chinese government will invest $1.5 trillion in these seven industries over the next five years. China will dedicate more than $18 billion in the new-energy automotive sector through 2020, and it aims to become the world’s leading producer of electric and hybrid vehicles and their key components by 2030.
U.S. imports of wind energy components such as generating sets and towers grew rapidly in 2011, outpacing the growth in megawatts of wind power capacity installed. Up until now, it has been more difficult to track imports of other equipment used in the wind energy industry.
On November 10, 2011, the Working Party on the Accession of the Russian Federation to the World Trade Organization (WTO) approved Russia’s accession package, including the accession protocol, working party report, and market access schedules for goods and services.
On October 21, 2011, President Obama signed into law three bills that implement three bilateral trade promotion or “free trade” agreements with Colombia, Panama, and South Korea that were initially negotiated and signed in 2006 (Colombia) and 2007 (Panama and Korea).
U.S. Customs and Border Protection (Customs) just published new regulations dealing with audits and prior disclosures. The new rules become effective December 27, 2011. The rules authorize sampling techniques in customs audits and in prior disclosures. They also allow, in certain circumstances, in the context of an audit and sometimes in a prior disclosure, the offsetting of duty overpayments against underpaid amounts, even when liquidations of entries are final.
In February 2011, world food prices reached an all-time high, exceeding even the prices seen during the 2007-2008 food price crisis. The speed with which food prices increased from July 2010 to February 2011, as well as the fact that the world experienced a food price crisis just three years ago, raises questions about extended periods of extraordinarily high food prices and the negative implications that they have for moving people out of poverty and reducing social turmoil.
U.S. businesses need to be aware of the changing landscape of U.S. export controls and must exercise care in complying with these shifting legal regimes. The U.S. government currently is engaged in an effort to overhaul the U.S. export control system, and is implementing some changes in a piecemeal fashion as it makes progress on the reforms.
The September 5th World Trade Organization Appellate Body report in US – Tyres (China), WT/DS399, affirmed the right of the United States faced with market disruption from surging imports from China to make use of a special transitional safeguard China accepted as part of its accession protocol to the WTO in 2001. For the industries and their workers who have sought relief under the U.S. law implementing this right (Section 421 of the Trade Act of 1974, as amended (19 U.S.C. § 2451)), it was a vindication of the correctness of their cause.
On August 31, 2011, Solyndra, Inc., a U.S. solar company that had received hundreds of millions in government-backed loan guarantees and employed more than a thousand American workers, announced it was entering bankruptcy and closing its doors. Solyndra was the third solar company to declare bankruptcy last month, following close on the heels of Evergreen Solar, Inc. and SpectraWatt Inc. While some news reports and commentators suggest the bankruptcies call into question the wisdom of U.S. government support for the solar industry, others rightly note that competition with more aggressively subsidized Chinese manufacturers has played a major role in the industry’s plight.
The contentious debate over lifting the deficit ceiling has made it clear that Americans will face drastically lower government spending levels and potentially dramatically different priorities by the end of 2011. Corporate leaders and key industries likely to be affected by potential budget cuts should be sure they communicate quickly with Congress and participate in the government’s deliberations to the greatest extent possible. The newly-selected Congressional Super Committee, appointed to cut $1.5 trillion in 10 years, will accept recommendations from committees of relevant jurisdiction by October 14, 2011. Time is short for meaningful participation from key national constituencies.
In response to government violence and human rights abuses arising out of the “Arab Spring” in Syria and Libya, the United States and the European Union have issued a series of sanctions over the last several months directed at the Libyan and Syrian governments and members of the governing regimes.
On March 14, 2011, the Eleventh National People’s Congress of the People’s Republic of China approved The 12th Five-Year Plan for National Economic and Social Development. The plan intensifies the nation’s focus on its high-technology sector as an engine for growth and industrial transformation, and it outlines goals to help the country develop science and technology as important driving forces for China’s economic and social development over the next five years.
China produces 97 percent of the world’s supply of rare earth elements, minerals which are crucial to a wide range of vital industries, including advanced technology, renewable energy, electronics, and defense. Industries and workers in the U.S., Europe, and Japan have become increasingly alarmed at China’s tightening restrictions on the exportation of these minerals to the rest of the world, which have caused supply shortages and skyrocketing prices for the manufacturers that rely on these essential elements.
Every five years for the past six decades, the Government of China has adopted a master plan for its economic and social development. The fundamental blueprint of China’s socio-economic development for the next five years – China’s 12th Five-Year Plan for National Economic and Social Development (the “Plan”) – was ratified by China’s National People’s Congress on March 14, 2011.
On March 14, 2011, the Eleventh National People’s Congress of the People’s Republic of China approved the nation’s 12th Five-Year Plan for National Economic and Social Development (“12th Five-Year Plan”). The plan contains a wide array of goals for the nation for the five years from 2011 through 2016, including goals in the country’s agricultural sector.
In a recent trade flow, I asked the question whether a smaller deal or walking away from the talks made the most sense in light of the dramatic impasse in the ongoing Doha multilateral trade negotiations that was highlighted by the United States at the March 29 meeting of the Trade Negotiation Committee (“TNC”) and that has been subsequently confirmed by many delegations and by the Director-General of the WTO, Pascal Lamy.
The current round of multilateral negotiations in the WTO (the so-called Doha Development Agenda) are approaching the tenth anniversary of their launch in November 2001. While WTO Members have engaged in significant discussions over the last decade, the process has been stuck for years on a mismatch in expectations and levels of ambitions by the major players. While one can identify a range of possible explanations for why the impasse has occurred, what is quite clear is that closing the gaps seems as far away today as it did three years ago.
A recent Brookings Institute paper entitled Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015 highlights the unprecedented reduction of global poverty that has occurred since the early 1980s. The paper attributes the reduction to economic growth in developing countries. In the countries with the most significant poverty reductions (China and India), economic growth has been led by dramatically expanded exports. The global trading regime has allowed these countries to radically increase their exports to the world and, coupled with some economic reforms at home, has been a principal enabler of this growth with resultant reduction in extreme poverty.
On March 11, 2011, the Appellate Body of the World Trade Organization (“WTO”) issued its decision in a challenge brought by the Government of China to several antidumping (“AD”) and countervailing duty (“CVD”) investigations conducted by the United States. The decision reversed a couple key aspects of an earlier WTO panel decision that had largely upheld the manner in which U.S. trade remedy laws had been applied to China. The United States now has several options before it in light of the Appellate Body’s ruling.
In an effort to lessen the violence in the Democratic Republic of the Congo, the SEC has proposed a new rule that has the potential to affect thousands of companies involved in the production of items containing metals such as tin, tungsten, tantalum, and gold.
In 2009, China accounted for 79% of all Customs seizures of IPR-infringing goods in the U.S. - creating deep concerns within our companies about lost sales, depressed prices and profitability, and new competitors selling these illegal items
Trade data released this week reveal a surge in China’s exports and trade surplus in May, while American exports fell and the gaping U.S. trade deficit widened. The increasing imbalance in U.S.-China trade was the backdrop for a June 9 hearing at the U.S. – China Economic and Security Review Commission entitled, “Evaluating China’s Past and Future Role in the World Trade Organization.”
The World Trade Organization (“WTO”) is an intergovernmental organization that came into existence in 1995. Its predecessor, the General Agreement on Tariffs and Trade (“GATT”), had received relatively little notice and operated largely out of public view. However, the growing importance globally of trade, the expansion of rules to areas traditionally viewed as domestic in nature, and a dispute settlement system that was more binding on participants all increased the pressure on the WTO to improve its transparency to the public.
Secretary Gates recently announced a massive reorganization plan for the United States’ export control regime. At its heart, the proposed reform calls for streamlining the existing system by combining what are currently separate lists of restricted technologies as well as enforcement agencies for: (1) defense items (such as weapons and related technology); and (2) for dual-use items (goods, technology and software that may have both commercial and military applications).
With extraordinarily high levels of unemployment and pressing challenges to the stability of our economy, Congress and the Obama Administration need to stay focused on these major trade challenges both at home and abroad.
The recently concluded U.S.-Canada Agreement on Government Procurement is a reflection of the power of reciprocity in obtaining expanded market opportunities for U.S. companies. The agreement is a win-win for both governments and their companies and workers. The main impetus for the agreement was the 2009 U.S. stimulus package and Canada’s ineligibility for access to infrastructure spending at the state level because of the lack of Canadian commitments for their provincial governments. But let’s start with a little background.
It is easy to lose sight of the importance that access to raw materials can have for the development or maintenance of a national economy or participation in growth sectors. While most Americans would think about our dependence on foreign oil for our current energy needs as an area where access to raw materials is vital, few would appreciate the sensitivities we face as a nation to access to other raw materials, including a group of products derived from so-called rare earth minerals.
On April 7, 2010, the Law Offices of Stewart and Stewart submitted an analysis to the House Ways and Means Committee identifying options for addressing the trade-distorting effects of China’s exchange rate policies.While recent news stories suggest China may eventually alter some of its currency practices on its own, the United States should have all options on the table to eliminate unfair currency undervaluation.
China’s Actions on Rare Earth Minerals; Mr. Chairman and Members of the Subcommittee, good afternoon. China’s policy on rare earth minerals is similar to that nation’s actions on a large number of other raw materials.The general goals seem to be: reducing availability of supply for global customers as well as making foreign purchases more expensive through the imposition of export duties, export licenses, and other trade impeding measures. China’s policy encourages foreign investors to move production and investment to China and ensures low priced supplies for targeted, rapid growth sectors within China.
While analyses in the media suggest that many countries are rethinking free trade, a group of developing countries recently took unprecedented steps to liberalize trade with each other. It will be worth watching how these countries build on the framework worked out on December 2, 2009, in Geneva.
It was welcome news when the United States prevailed in a World Trade Organization Appellate Body ruling December 21 in a case involving China’s de facto market barriers to U.S. movies, DVDs and a wide range of media. Unfortunately, however, the dispute illustrates China’s apparent obstinacy when it comes to complying with its WTO obligations.
While some commentators have suggested that the inclusion of a “border adjustment” provision in the climate legislation that passed the U.S. House of Representatives earlier this year was another source of tension that would bog down negotiators on climate change talks in Copenhagen, it appears the opposite is more likely the case as talks wrapped up just hours ago.
The Treaty of Lisbon goes into effect today. This momentous event in the evolution of European governing has been taking shape for some weeks with the selection of a person portrayed as the first “president of Europe” as well as a new trade commissioner. Additionally, the enhanced role of the European Parliament provided for under the Treaty is bound to affect the formulation of trade policy in Europe.
With OFAC’s issuance of its final enforcement guidelines, U.S. importers and exporters now have clearer guidance on how OFAC will determine penalties in enforcement actions when their business activities run afoul of U.S. trade sanctions imposed on certain foreign countries, individuals, and organizations.
Sufficient political forces may have aligned to overcome the hurdles to an overhaul of the U.S. export control system. Many see current export controls on dual-use items as no longer serving U.S. national security and harming U.S. economic interests. The challenge is in striking a balance so that American innovators can tap new export markets while ensuring that sensitive technologies and equipment do not get into the hands of America’s enemies.
On September 11, 2009, President Obama granted relief under the China-specific safeguard created in 2000 as part of China’s accession to the World Trade Organization. Though seven cases have been pursued under Section 421, and the independent, bipartisan International Trade Commission (“ITC”) recommended that import relief be imposed in five of those cases, the tires case is the first in which the President has agreed to apply a remedy.
In a case with potentially major implications for the global trading system, the United States and Europe have decided to challenge a growing problem of China’s use of various export restraints on raw materials vital to core manufacturing industries like steel, aluminum and chemicals.
On Friday, June 26, 2009, the U.S. House of Representatives passed H.R. 2454, The American Clean Energy and Security Act of 2009, historic legislation aimed at capping U.S. greenhouse gas emissions and averting the worst effects of climate change. The bill contains a number of measures to address the threat of carbon “leakage.” This Trade Flow provides an explanation of this issue as the legislation moves through Congress.
There have been a number of stories in the media recently about how the “Buy American” provision in the economic stimulus and recovery law enacted earlier this year is leading to job-destroying retaliation by other countries. The most recent one, the lead editorial in the June 3 New York Times, “The Peril of Buy American,” like other reports, offers an incomplete analysis. The “Buy American” provision does not cost American jobs. It helps preserve and create them.
White House and senior Congressional leaders have indicated their support for various relaxations of the long-standing U.S. embargo on Cuba but lifting the embargo will require significant legislation by Congress. None of the bills currently under consideration would lift the embargo or even relax current restrictions except in a few product sectors.
In the face of economic contraction in many countries and the collapse of trade financing, it is not surprising that international trade is also contracting at a very high rate. In response, countries must stabilize their economies, address the financial system meltdown and get themselves back on the path to growth. Restoration of global trade flows depends on restoring overall economic health and not focusing on whether countries use trade remedies authorized by the World Trade Organization.
The fact that there is a debate about the legality of “buy American” provisions in the economic stimulus legislation before Congress is perplexing. International trade rules allow such discretion in national procurement policies. Period.
The U.S. Customs and Border Protection (CBP) published its much-anticipated Interim Final Rule on Importer Security Filing and Additional Carrier Requirements (also know as 10+2) on November 25, 2008. The purpose of 10 + 2 is to allow CBP to identify high risk shipments and ensure cargo security. The Final Rule, which takes effect on January 26, 2009, will require importers to electronically submit ten pieces of information (data elements) to CBP and carriers to submit another two (hence the name “10+2”).
The White House Office of Management and Budget has given U.S. Customs and Border Protection (CBP) the authority to move forward with Customs' 10+2 proposal, the Journal of Commerce reported on November 7, 2008.
In a move sure to cheer worried importers and manufacturers, the Consumer Product Safety Commission (CPSC) released information Friday stating that it intends to allow electronic filing of General Conformity Certificates. The clarification comes less than three weeks before the November 12 implementation date for the new certification requirement under section 102 of the Consumer Product Safety Improvement Act (CPSIA).
Could a paper price tag on a shirt force an importer to account for what tree was cut down to make the paper? A provision in the 2008 Farm Bill (P.L. No. 110-246) designed to combat illegal logging has sent importers of a wide range of products scrambling to assess how their business will be affected.
With modified reporting requirements for the so-called 10+2 proposal likely coming from U.S. Customs and Border Patrol (CPB) by the end of the year, importers need to review implications for their compliance programs and take a number of steps in the coming months to avoid penalties equal to the value of their shipment.
The ongoing tragedy of Chinese infants getting sick and dying after consuming tainted baby formula highlights the importance of strong food safety measures throughout global supply chains. The apparent adulteration of milk at collecting centers in China caught international corporations off guard and escaped attention of government regulators for close to a year. Chinese authorities, importing countries, and corporations must now assess how to ensure food safety in the future.
On September 18, 2008, the Court of Appeals for the Federal Circuit issued its decision in Mittal Steel Point Lisas Limited v. United States, Court No. 2007-1552. This decision provides important clarification regarding an earlier CAFC decision, Bratsk Alumnum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006), which had proved highly controversial in the trade bar and was interpreted as imposing a host of data collection burdens on parties and the U.S. International Trade Commission in anti-dumping cases.
On August 25, 2008, U.S. Customs and Border Patrol (CBP) announced new reporting requirements related to what is known as the First Sale Rule, effectively nullifying an earlier proposal that would have stopped importers from using it.
The hearing was about the future of U.S. trade policy. The witnesses were four former U.S. trade representatives. But it was education that emerged as the dominant subject.
On July 25, 2008, CBP proposed applying special country of origin rules that now apply only to Mexico and Canada to all imports entering the United States, unless otherwise specified. (See 73 FR 43,385.)
The United States and a few of its trading partners scored a victory at the WTO recently when a panel found that Chinese measures affecting the importation of auto parts were inconsistent with China’s obligations under the WTO Agreement because they gave imported auto parts less favorable treatment than domestic auto parts. China – Measures Affecting Imports of Automobile Parts, WT/DS339, 340, 342/R.
Exporters and other U.S. persons involved in international transactions now face significantly higher civil and criminal penalties if they ship goods to countries subject to U.S. trade restrictions, such as Iran. Tough new penalties for companies or individuals who run afoul of OFAC economic sanctions (as well as other export control or anti-boycott restrictions) were formally implemented in June 2008 and emanate from legislation Congress approved last fall.
The Office of the United States Trade Representatives (USTR) is seeking assistance identifying “significant barriers” to U.S. exports to and foreign direct investment in China. USTR is also seeking written comment and/or oral testimony on China’s compliance with its obligations as a WTO member. This is a valuable opportunity for companies facing unfair trade barriers or trading practices to inform USTR of their concerns.
As U.S. Trade Representative Susan C. Schwab said on July 29, trade ministers were “so close” in forging a new WTO agreement on trade liberalization. Director General Pascal Lamy viewed some 90% of issues needed to be resolved for the modalities package to be achieved as having achieved convergence or being close to convergence. The stumbling block turned out to be an issue involving the rights of developing countries to have a special safeguard mechanism to protect their farmers from surges in imports. In fact, all WTO members already have access to one safeguard tool for all products, including for agricultural products. A second tool is available to some countries from the Agreement on Agriculture from the Uruguay Round.
Rather than “withering away,” as Marx envisioned, the state seems to be growing more robust in Russia. Last month, President Vladimir Putin of Russia signed into law, legislation that limits foreign investment in forty-two industrial sectors considered by the Russian government as “strategic”.
The Commerce Department is revoking an eleven-year-old regulation that was supposed to clarify analysis in dumping cases in which manufactured products were subcontracted to another company. Commerce determined that the regulation ended up impeding its discretion and making it harder for domestic industries to get relief when goods are “sold at less than fair market value” (or “dumped”) in the U.S. market.
Thousands of chemical producers and importers around the world are gearing up for the next step in the implementation of EC REACH, Europe’s new public health and safety regulation for chemical substances.
In another possible sign of more transparency and public input on policy in China, (see April 3 Trade Flow), the Standing Committee of the National People’s Congress (NPCSC) in late April adopted what it called the “open door legislature policy,” promising public notice and participation in the national legislative process.
Like a hurricane, the perfect storm that has spurred the global food crisis continues to draw strength from the open ocean of factors that generated it. Unlike a hurricane, there is no great land mass on the horizon that will cause it to break up and disappear. There is, however, an opportunity for global trading and economic institutions to respond to the current situation and prevent future catastrophes.
A new film began airing recently on PBS entitled Illicit: The Dark Trade. This movie is based on a best-selling book by Dr. Moises Naim and it explores the international networks facilitating the growing trade in illicit items, such as counterfeit products, weapons and even human beings. The movie highlights the global nature of this problem and illustrates some of the serious consequences that result from trading these illegal and dangerous goods.
As we noted ten days ago, April 7, 2008 saw the People’s Republic of China and New Zealand sign a free trade agreement to expand the trade of goods and services, promote investment and achieve other objectives. The agreement is the first by China with a developed country. An initial analysis points to a fairly comprehensive agreement with some particularly notable items in the services areas related to immigration.
Even before the breakdown of cooperation between the Legislative and Executive branches on the Free Trade Agreement with Colombia last week, free trade enthusiasts have been struggling to understand why public support for trade seems to be eroding.
An overwhelming 411 of 450 members of the Verkhovna Rada (Ukraine’s Parliament) voted for the law on ratification of the protocol of WTO accession for Ukraine.
Europe has still not been able to devise a banana import regime that works for many Latin American countries. On April 7, 2008, the WTO panel examining Ecuador’s complaint against the EC’s current import regime found the regime violates a number of obligations the EC has under the WTO. Ecuador’s dispute with Europe is just the most recent iteration of a longstanding concern about preferential access provided to certain developing countries (the African, Caribbean, and Pacific or ACP countries) that significant banana exporting countries in Latin America have had over time.
The trans-Atlantic tussle that started a dozen years ago over Europe’s concern about the safety of U.S. and Canadian beef treated with certain hormones continued March 31 with WTO rulings that, if nothing else, clarified the rules.
The U.S. Customs and Border Protection (CBP) announced on Thursday, April 2, that it was elevating the collection of antidumping (“AD”) and countervailing (“CVD”) duties to a “priority trade issue.” Antidumping duties are imposed on imports that have been sold in the U.S. at less than fair value, i.e., for less than they are sold in their country of production or at prices below cost. Countervailing duties are imposed on imports that have been subsidized by the government in their country of production.
In what could be a trend toward more transparency in its rule making process, China’s State Council Legislative Affairs Office is seeking public comments on its proposed merger regulation. The proposed regulation related to China’s new anti-monopoly law has been posted on the Office’s website since March 27. Comments can be submitted online or by mail by April 12.
President Gives the Nod for Full WTO Treatment for Ukraine and the U.S. and EU move towards mutual recognition on supply chain security programs.
WTO Doha Negotiations – conclusion in 2008 or 2010 or later? China and New Zealand FTA Breaks New Ground European Move on Internet Gambling Case Raises Intriguing Questions Uncertainty Over Effects of Customs’ Proposed Modification on Certain Valuations