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Feb 2 2012 issue

Friday, February 03, 2012
Sandler, Travis & Rosenberg Trade Report

Economic Harmonization Initiative with Japan Has Yielded Progress, USTR Says

A bilateral Economic Harmonization Initiative launched in 2010 has yielded progress on a range of trade and regulatory issues with Japan as well as new areas of joint cooperation, the Office of the U.S. Trade Representative announced Jan. 27. According to information provided by USTR, achievements under this initiative have included the following.

High-Tech. The two sides reached agreement on a set of non-binding trade principles for information and communication technology services. The principles cover topics such as regulatory transparency, open access to networks and applications, free flow of information across borders, non-discriminatory treatment of digital products, foreign investment in ICT services and efficiency in spectrum allocation. The U.S. and Japan will promote the adoption of these principles by other countries to support the global development of ICT services, including Internet and other network-based applications that are critical to innovative e-commerce, Internet search and advertising, cloud computing and other services.

Advanced Automobiles. Japan has improved transparency and predictability for the import of automobiles that incorporate new, advanced technologies and features not covered by existing regulation.

Spectrum Auctions. Japan will introduce within three years a system enabling commercial spectrum to be assigned by auction. Spectrum auctions will increase competitive opportunities for new entrants and new wireless technologies by improving objectivity, transparency and accountability in the spectrum assignment process.

Internet-enabled Video. Japan has affirmed that U.S. companies do not face foreign equity restrictions specific to offering Internet-enabled (over-the-top) video services.

Intellectual Property Protection. Japan introduced new legal protections that enhance the ability of intellectual property right holders to defend their products and services from unauthorized use through technological measures such as copy and access controls.

Drugs and Medical Devices. Japan is continuing to improve patients’ access to pharmaceuticals and medical devices by shortening by several months the lag between the time regulatory approval is sought and the time a final decision is made for a range of products.

Vaccine Cooperation. Japan expanded access to three vaccines for its citizens and strengthened cooperation with the U.S. government to bolster its vaccination programs.

Cosmetics. Japan has revised rules to enable new efficacy claims in advertising and labeling for cosmetics as well as further streamlined the import process for cosmetics and medicated cosmetics.

Merger Reviews. Japan amended its rules to increase the speed, transparency and predictability of anti-monopoly merger reviews.

CBP Commercial Operations Committee to Meet Feb. 21

The Advisory Committee on Commercial Operations of U.S. Customs and Border Protection (COAC) will hold a public meeting Feb. 21 in Washington, D.C. Interested parties may attend in person or observe via a live webcast.

COAC will hear from the following subcommittees on the topics listed and will then review, deliberate and formulate recommendations on how to proceed.

- Global Supply Chain Security Air Cargo Subcommittee: Air Cargo Advance Screening (ACAS) strategic plan for public release

- One U.S. Government at the Border Subcommittee: 2012 subcommittee work plan

- Intellectual Property Rights Enforcement Subcommittee: IPR distribution chain management concept

COAC will also receive an update on and discuss the following initiatives and subcommittee topics that were raised at its Dec. 7, 2011, meeting.

- National Supply Chain Security Strategy
- C-TPAT and the Beyond the Border initiative
- automation of ocean and rail manifest, cargo release and other ACE automation pilots
- centralization of single transaction bonds and coordination of bond issues that apply to other subcommittees
- evaluation plan regarding the centers of expertise and simplified entry pilots
- feedback on previously submitted recommendations on trade remedies and the role of customs brokers

President Raises Prospect of Negotiating FTA with Georgia

Following a meeting with Georgian President Mikheil Saakashvili in the White House Jan. 30, President Obama raised the possibility of negotiating a bilateral free trade agreement with the former Soviet republic. Obama administration officials have generally avoided mention of any potential FTA partners other than those currently engaged in negotiating the Trans-Pacific Partnership agreement, and given that trade liberalization is a politically sensitive issue it is noteworthy that the president would bring it up as his re-election campaign gets underway.

The president said Georgia has “made strides in creating an effective free market system” but that “more progress needs to be made.” To help with that effort, the U.S. has agreed to a high-level dialogue to discuss ways the two countries can continue to strengthen bilateral trade relations, “including the possibility of a free trade agreement.” The president acknowledged that “there’s a lot of work to be done” and that “there are going to be a lot of options that are going to be explored,” but he also emphasized that “it’s a win-win … for us to be able to sell Georgia our goods and services, and Georgia to be able to sell theirs as well.” President Saakashvili added that an FTA would “attract lots of additional activity” to Georgia and assist in its “nation-building process.”

DOC to Remove Outdated Regulations on Cotton Fabric TRQs, Short Supply of Steel

The Department of Commerce is proposing to withdraw regulations pertaining to imports of cotton woven fabric and short supply of steel products, both of which the department states are obsolete. DOC explains that the regulatory provisions titled “Imports of Cotton Woven Fabric,” codified at 15 CFR 336.1–336.5, provide for the administration of allocations of tariff-rate quotas for cotton woven fabric that expired as of Dec. 31, 2009. In addition, the regulations titled “Short Supply Procedures,” codified at 19 CFR 357.101–111, pertain to voluntary restraints on certain steel imports that expired March 31, 1992. Comments on this proposed rule are due no later than April 3.

Export Regs Amended to Include Reference to Iran Sanctions Act

The Bureau of Industry and Security has issued a final rule that, effective Feb. 3, amends the amends the Export Administration Regulations to add a reference to the Iran Sanctions Act of 1996. This amendment clarifies that BIS will apply a policy of denial when reviewing export or reexport license applications in which a person sanctioned by the State Department under the ISA is a party to the transaction (i.e., the applicant, other party authorized to receive a license, purchaser, intermediate consignee, ultimate consignee or end-user).

The ISA requires State (having been delegated this responsibility from the president) to sanction persons determined to have engaged in certain actions that help Iran develop petroleum resources, produce refined petroleum resources or acquire refined petroleum products. Sanctions must also be imposed on persons determined to have taken certain actions to help Iran acquire or develop certain weapons of mass destruction, missiles or advanced conventional weapons. There are several possible sanctions that may be imposed, including a BIS prohibition on the issuance of a specific license or other specific permission or authority to export goods or technology to a sanctioned person under the Export Administration Act of 1979, as amended.

AD Notices: Activated Carbon, Stainless Steel Bar

Following are summaries of current antidumping actions taken by the International Trade Administration.

Commodity: Activated carbon.
Country: China.
Nature of Notice: Advance notice of sunset review of AD duty order to be initiated in March.

Commodity: Stainless steel bar.
Country: India.
Nature of Notice: Extension from Jan. 30 to Feb. 28 of time limit for preliminary results of administrative review of AD duty order.
Details: The ITA needs additional time to issue a supplemental questionnaire regarding the reporting period for sales and to analyze the response.

Patent Infringement Probe of Muzzle-Loading Firearms Terminated

The International Trade Commission has terminated patent infringement investigation 337-TA-777 of certain muzzle-loading firearms and components thereof based on a settlement agreement between the complainants and respondents.

USDA Meetings to Prepare for Codex Sessions on Food Contaminants, Additives

The Department of Agriculture’s Food Safety and Inspection Service has announced two separate public meetings that will be held to prepare for upcoming sessions of the Codex Alimentarius Commission committees on food contaminants and food additives. Interested parties can participate in these meetings in person or via conference call.

Food Contaminants. FSIS will hold a meeting Feb. 23 ahead of the 6th session of the Codex Committee on Contaminants in Food, which will be held in The Netherlands March 26–30. The following items on the agenda for the CCCF session will be discussed during the public meeting.

- revision of the risk analysis principles applied by the Codex Committee on Food Additives and the CCCF as to their separation from the CCFA and their applicability to feed

- draft maximum levels for melamine in food (liquid infant formula)

- proposed draft maximum levels for arsenic in rice

- proposed draft maximum levels for deoxynivalenol and its acetylated derivatives in cereals and cereal-based products

- proposed draft maximum levels for total aflatoxins in dried figs, including sampling plans

- discussion papers on maximum levels for lead in various foods, mycotoxins in sorghum, ochratoxin A in cocoa, and risk management options in light of different risk assessment options

- priority list of contaminants and naturally occurring toxicants proposed for evaluation by the JECFA

Food Additives. FSIS will meet Feb. 13 to prepare for the 44th session of the Codex Committee on Food Additives, which will be held in China March 12–16. The following items will be discussed.

- endorsement or revision of maximum levels for food additives and processing aids in Codex standards

- discussion paper on the alignment of the food additive provisions of the standards for meat products and relevant provisions of the General Standard for Food Additives

- pending draft and proposed draft food additives provisions and related matters

- comments and information on several food additives

- provisions for aluminum-containing food additives in the GSFA

- draft revision of the Standard for Food Grade Salt

- proposals for changes or additions to the International Numbering System for Food Additives

- specifications for the identity and purity of food additives

USDA Info Collections on Milk and Egg Imports Under Review

The Department of Agriculture’s Animal and Plant Health Inspection Service is requesting comments no later than April 3 on the proposed three-year extension of an information collection associated with regulations for the importation of animal and poultry products (milk and eggs) into the United States. This collection includes applications for approval/report of inspection of establishments to handle restricted animal byproducts or controlled materials; agreements for handling restricted imports of animal byproducts and controlled materials; certifications for eggs (other than hatching eggs); applications for the importation of eggs (other than hatching eggs) in specific cases; applications for the importation of small amounts of milk/milk products for analysis, testing or examination; certificates of origin for milk and milk products from regions free of foot-and-mouth disease and rinderpest; and marking requirements for eggs from regions with exotic Newcastle disease.

These activities are currently approved under Office of Management and Budget control number 0579-0015, which also covers information collection activities for a variety of other animal and poultry products imported into the United States. APHIS is proposing to separate these commodities into individual collections to better reflect the commodities’ specific collection activities and account for the information APHIS collects.

Of Note: Brazil Tariffs on Mexican Cars, EU Preferences for Pakistan, Plastic Bag Safeguards

Links to other headlines of interest to the trade community.

Report says Brazil to break deal with Mexico, resume duties on imported cars

WTO approves two-year trade waiver for Pakistan

Dominican Republic’s import tariffs on bags ruled illegal by WTO

Newly Introduced Legislation

H.R. 3875 – to amend the Securities Exchange Act of 1934 to require the disclosure of the total number of a company’s domestic and foreign employees (introduced Feb. 1 by Rep. Peters, referred to House Committee on Financial Services)

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