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Feb 15 2012 issue

Wednesday, February 15, 2012
Sandler, Travis & Rosenberg Trade Report

Legislative Update: 2012 Trade Agenda Firms Up

The congressional trade agenda for 2012 is beginning to take shape and a number of longstanding issues are on the radar screen. As always, prospects for these measures will depend on a variety of factors, not the least of which is this fall’s presidential and congressional elections.

Countervailing Duties. Observers believe the trade legislation most likely to advance, at least in the near term, is a bill to explicitly allow the federal government to impose countervailing duties on goods imported from non-market economy countries like China. Such a bill, which has yet to be introduced, would effectively reverse a recent court ruling against this practice and allow the U.S. to continue the 24 CV duty orders it currently has in place against Chinese goods. The Obama administration and key lawmakers oppose that ruling and are working to overturn it legislatively as well as through the courts. Click here for more information (wti/wti.asp?pub=0&story=39062&date=&company=).

China. As has often been the case in recent election years, lawmakers will make noise about passing legislation to address the alleged undervaluation of China’s currency (wti/wti.asp?pub=0&story=38069&date=&company=). There is always a possibility that such a measure could make it through to the White House, given that one or another version has been approved by the House and/or Senate at different times in recent years, that the U.S. economy continues to struggle and that “unfair foreign competition” from China is frequently cited as a direct cause, and that the annual U.S. trade deficit with China hit an all-time high in 2011. However, any such action would have a significant symbolic effect that goes beyond any actual economic impact and thus it remains an unlikely scenario.

Russia. A topic that is anticipated to be taken up this year is extending permanent normal trade relations status to products imported from Russia. Russian goods already have NTR status, meaning they are subject to normal tariffs when imported into the U.S., but that status must be approved each year through a waiver of the so-called Jackson-Vanik Amendment. Permanent NTR must be granted to allow U.S. companies to fully take advantage of the trade liberalization measures Russia will implement as part of its accession to the World Trade Organization, which is expected to take effect in the next few months. Lawmakers do not have an interest in disadvantaging domestic businesses seeking improved access to the Russian market, but the expected debate over PNTR will involve politically sensitive topics such as rule of law and human rights.

Customs Reauthorization. Sources indicate that Senate staff have finished a draft of a long-delayed customs reauthorization bill and are working to finalize a few details. Similar legislation is still being crafted in the House. Topics likely to be addressed in these bills are listed in this article (wti/wti.asp?pub=0&story=36992&date=&company=).

Other. Other trade-related legislation, such a miscellaneous trade bill to suspend or reduce duties on imported manufacturing inputs and other goods or a measure to provide limited relief from the Lacey Act Amendments of 2008, are only likely to advance to the extent that they can engender bipartisan support.

Recent Legislation. Finally, below is a list of trade-related bills that have been introduced recently. The texts of these bills are or will be shortly available on the Library of Congress’ Web site (

S. 2091 – to reform the international tax system of the United States

H.R. 4005 – to direct the Secretary of Homeland Security to conduct a study and report to Congress on gaps in U.S. port security and a plan to address them

H.R. 3976 – to provide exporting assistance to small business concerns

H.R. 3979 – to amend the Harmonized Tariff Schedule of the United States to extend to 2025 the production certificate program that allows refunds of duties on certain articles produced in U.S. insular possessions

H.R. 3984 – to limit the quantity of arsenic and lead in beverages containing fruit juice pursuant to tolerances under section 406 of the Federal Food, Drug and Cosmetic Act

H.R. 3914 – to amend the Export Apple Act to permit the export of apples to Canada in bulk bins without certification by the Department of Agriculture

S. 2063 – to prohibit the transfer of technology developed using funding provided by the United States government to entities of certain countries

S. 2067 – to amend the Federal Food, Drug and Cosmetic Act with respect to medical device regulation

H.R. 3880 – to require the imposition of sanctions on foreign financial institutions that are members of an entity that provides services relating to secure communications, electronic funds transfers or cable transfers to the Central Bank of Iran or sanctioned financial institutions

H.R. 3889 – to amend title 35, United States Code, to provide for an exception from infringement for certain component parts of motor vehicles

President’s 2013 Budget Proposal Has More Money for Trade Enforcement, Promotion

President Obama released this week his budget proposal for fiscal year 2013, which begins Oct. 1, 2012. Among the trade-related items of note in the proposal are the following.

Trade Enforcement. The president wants to add $26 million to fund the Interagency Trade Enforcement Center he announced in his Jan. 24 State of the Union address. This figure includes $24 million for the International Trade Administration and $2 million for the Office of the U.S. Trade Representative, the only budget increase proposed for that agency. The ITEC will “represent a new whole-of-government approach to addressing unfair trade practices and will serve as the primary forum within the federal government for executive departments and agencies to coordinate their enforcement of international and domestic trade rules,” said Acting Deputy Commerce Secretary Rebecca Blank. More details about the ITEC, which is ultimately expected to comprise 50-60 staff members, are anticipated in the coming weeks.

The Bureau of Industry and Security would see its budget rise from $101 million to $102.3 million, with $6 million specifically set aside for activities under the Export Control Reform Initiative, including an anticipated increase in processing license applications resulting from the transfer of items from the U.S. Munitions List to the Commerce Control List.

Trade Promotion. About $30 million would go to the U.S. and Foreign Commercial Service to place officers and local staff in high-growth markets such as China, India and Brazil, where they would assist U.S. exporters. Another $12.2 million would support implementation of the SelectUSA program, which promotes foreign direct investment in the United States.

The International Trade Administration would also get $18.1 million to develop the next generation of, which will integrate into a single Web platform all export-related content and contacts across the 20 federal Trade Promotion Coordinating Committee agencies.

Three Foreign-Trade Zones Request Reorganization Under Alternative Site Framework

The Foreign-Trade Zones Board has received the following applications requesting to reorganize the FTZs indicated under the alternative site framework. Comments are due no later than April 16.

- FTZ 202 in Los Angeles, Calif., with a proposed service area encompassing all of Orange County and portions of Los Angeles and San Bernardino counties, within and adjacent to the Los Angeles-Long Beach U. S. Customs and Border Protection port of entry (click here for FTZB notice -

- FTZ 107 in Polk County, Iowa, with a proposed service area of Adair, Adams, Audubon, Boone, Calhoun, Carroll, Cass, Clarke, Dallas, Decatur, Greene, Guthrie, Hamilton, Hardin, Jasper, Lucas, Madison, Mahaska, Marion, Marshall, Monroe, Polk, Poweshiek, Ringgold, Story, Union, Warren, Wayne and Webster counties, within and adjacent to the Des Moines CBP port of entry (click here for FTZB notice -

- FTZ 183 in Austin, Texas, with a proposed service area of Bastrop, Caldwell, Hays, Travis and Williamson counties, within and adjacent to the Austin CBP port of entry (click here for FTZB notice -

IPR Enforcement Actions on Cable Connectors, Starter Motors, Birth Control Devices, Consumer Electronics

The International Trade Commission has recently announced the following actions in the Section 337 patent infringement investigations indicated.

Coaxial Cable Connectors. In investigation 337-TA-650 of certain coaxial cable connectors and components thereof and products containing same, the ITC has issued an advisory opinion declaring that a non-respondent’s coaxial cable connectors utilizing an axial but not radial compression for deformation are outside of the scope of the ITC’s March 31, 2010, general exclusion order. (click here for ITC notice -

Starter Motors. In investigation 337-TA-755 of certain starter motors and alternators, the ITC has terminated the investigation as to one respondent and requested written submissions by March 9 concerning a remedy against a defaulted respondent. This remedy could take the form of an order excluding the subject articles from entry into the U.S. or an order requiring the respondent to cease and desist from engaging in unfair acts in the importation and sale of such articles. (click here for ITC notice -

Birth Control Devices. The ITC has terminated investigation 337-TA-768 of certain vaginal ring birth control devices as to all respondents, including those previously found in default, based on the withdrawal of the complaint. (click here for ITC notice -

Consumer Electronics. The ITC is requesting comments no later than Feb. 23 on any public interest issues raised by an amended Section 337 intellectual property rights infringement complaint against certain consumer electronics and display devices and products containing same. Comments should address whether the issuance of exclusion orders and/or cease and desist orders pursuant to this complaint would negatively affect the public health and welfare in the U.S., competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. (click here for ITC notice -

More Time to Comment on Need for Table Saw Safety Standard

The Consumer Product Safety Commission has reopened until March 16 the period for public comment on whether a new performance safety standard is needed to address an unreasonable risk of injury associated with table saws. In October 2011 the CPSC issued an advance notice of proposed rulemaking (wti/wti.asp?pub=0&story=38188&date=&company=) seeking input on the risk of injury associated with table saw blade contact, the regulatory alternatives or other possible means to address this risk (a voluntary standard, a mandatory rule establishing performance requirements, or a rule requiring specified warnings and instructions on labels), and the economic impacts of the various alternatives. The ANPR also invited comment on 25 specific topics or issues, which are listed in the attached notice.

Click here for CPSC notice

Export Meetings to Focus on Policy, Materials, Transportation Equipment

The Bureau of Industry and Security has announced the following export-related meetings that will be held in the next few weeks.

The President's Export Council Subcommittee on Export Administration will meet March 1-2 in Los Angeles, Calif., for a field hearing on export control reform. The meeting will also include a discussion on the status of the 2012 work plan as well as subcommittee breakout sessions. A limited number of seats will be available at the public sessions on both days but reservations are not accepted. (click here for meeting notice -

The Materials Processing Equipment Technical Advisory Committee, which advises BIS on technical questions that affect the level of export controls applicable to materials processing equipment and related technology, will hold a partially open meeting March 20 in Washington, D.C. The open session will include a discussion on the results from the last, and proposals for the next, Wassenaar meeting, as well as a report on proposed and recently issued changes to the Export Administration Regulations. The open session will be accessible via teleconference to 20 participants on a first come, first served basis, and requests to participate in this manner are due no later than March 13. In addition, a limited number of seats will be available at the public session, but reservations are not accepted. (click here for meeting notice -

The Transportation and Related Equipment Technical Advisory Committee, which advises BIS on technical questions that affect the level of export controls applicable to transportation and related equipment or technology, will hold a partially open meeting March 1 in Washington, D.C. The open session of this meeting will include status reports by working group chairs and proposals from the public. This session will be accessible via teleconference to 20 participants on a first come, first served basis, and requests to participate in this manner are due no later than Feb. 23. In addition, a limited number of seats will be available at the public session, but reservations are not accepted. (click here for meeting notice -

AD Notices: Steel Nails, Steel Pipe

Agency: ITA.
Commodity: Steel nails.
Country: China.
Nature of Notice: Extension from Feb. 9 to Feb. 23 of time limit for final results of administrative review of AD duty order for the period Aug. 1, 2009, through July 31, 2010.

Agency: ITA.
Commodity: Circular welded non-alloy steel pipe.
Country: Korea.
Nature of Notice: Extension from April 5 to June 4 of time limit for final results of administrative review of AD duty order for the period Nov. 1, 2009, through Oct. 31, 2010.

DOT Receives Applications for New and Modified Special Hazmat Permits

The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has issued a list of applications for special permits for exceptions from the Hazardous Material Regulations, including for motor vehicles, rail freight, cargo vessels, cargo aircraft and passenger-carrying aircraft. Comments on these applications are due no later than March 16. (click here for PHMSA notice -

Separately, PHMSA has published a list of applications to modify previously issued special permits (e.g., to provide for additional hazardous materials, packaging design changes, additional mode of transportation, etc.). Comments on these applications are due no later than March 1. (click here for PHMSA notice -

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