March 1 2012 issue
Legislation Allowing CV Duties on Non-Market Economies On a Fast Track
Lawmakers in both the House and Senate were expected to introduce Feb. 29 legislation that would explicitly permit the federal government to impose countervailing duties on goods imported from non-market economy countries, including China and Vietnam. This legislation would be retroactive to Nov. 20, 2006, and thus allow the U.S. to continue the 23 CV duty orders it has in place against Chinese goods (as well as one against Vietnam) as well as seven pending CV duty investigations.
A summary of the forthcoming bills indicates that they also respond to a March 2011 ruling by the World Trade Organization that the concurrent application of antidumping and countervailing duties on NME goods is inconsistent with WTO rules. “Specifically, if a foreign exporter in a dumping case were able to demonstrate that there was an increase to its export prices due to a countervailed domestic subsidy and the use of the surrogate value methodology, [the Department of] Commerce would determine whether it could make a reasonable estimate of the extent of the increase to the dumping margin, and if so, make a corresponding reduction to the dumping margin,” the summary states.
Press sources indicate that the CV duty legislation has bipartisan support and that both chambers are working to pass the same version, meaning no conference would be necessary and a final bill could be sent to the White House that much sooner. If action is taken quickly enough DOC could forego an appeal of the court decision disallowing CV duties on NME country goods that prompted the legislation. At the same time, however, the legislation itself could be challenged at the WTO.
President Formally Establishes Interagency Trade Enforcement Center
President Obama issued Feb. 28 an executive order formally establishing the Interagency Trade Enforcement Center, a step he pledged to take in his State of the Union address.
The executive order assigns the ITEC three objectives. One is to coordinate among the Office of the U.S. Trade Representative, the Office of the Director of National Intelligence, and the departments of State, Justice, Agriculture, Commerce, Homeland Security and the Treasury on enforcement of U.S. trade rights under international trade agreements and enforcement of domestic trade laws (e.g., safeguards, antidumping/countervailing duties, intellectual property rights). The second is to coordinate among USTR, other agencies with trade-related responsibilities and the U.S. intelligence community the exchange of information related to potential violations of international trade agreements by foreign trade partners. The third is to conduct outreach to U.S. workers, businesses and other interested persons to foster greater participation in the identification and reduction or elimination of foreign trade barriers and unfair foreign trade practices.
The ITEC director will be a full-time senior-level official of USTR and the deputy director will be a full-time senior-level official of DOC. There will also be an intelligence community liaison who will be a full-time senior-level federal official recommended by the DNI. USTR will direct the work of the ITEC in performing the functions assigned to it, and funding and administrative support will also come from USTR. The other agencies involved are encouraged to detail or assign their employees to the ITEC without reimbursement.
Click here for executive order
EU Sees Progress in Addressing Trade Barriers, Identifies New Priorities
The European Commission released recently its second annual report on foreign trade and investment barriers. This report focuses on strategic partners such as the U.S, China, India, Japan, Russia and the Mercosur bloc, although the Commission notes that it is also actively engaging with countries such as Vietnam, Indonesia, Ukraine and Turkey where European companies are “faced with a considerable number of barriers.” The report provides an account of the progress achieved on the 21 barriers identified in 2011 and also sets forth a number of new barriers that the Commission believes merit concerted action and political prioritization.
Progress Achieved. The report states that the most substantial progress came in India: the lifting of all remaining quantitative restrictions on raw cotton, and the modification of licensing requirements for telecommunication equipment that eliminated the strict security rules, including technology transfer requirements.
On other issues there was some progress but no final resolution. China made important concessions on its indigenous innovation policy, including de-linking government procurement from requirements on the origin of intellectual property and abolishing three related national policies. The EU also won a World Trade Organization case against China’s export restrictions on raw materials and will consider next steps following the publication of the Appellate Body’s report. India moved forward on aligning with international standards on bovine genetic materials and agri-food products, but further progress is needed to more fully open that market to EU exports. Japan clarified pre-market approval procedures for medical devices, made a small improvement in the conformity assessment process for certain categories of medical devices, and made a commitment that should keep its railway sector open to foreign operators. Russia has concluded its 18-year bid to join the WTO and will have to implement multilateral disciplines that should help solve several longstanding bilateral market access issues, including trade-related investment measures on motor vehicles and components, the arbitrary interpretation of customs legislation by Russian authorities, intellectual property rights enforcement, and the alignment of sanitary and phytosanitary measures with international standards. In the U.S., the Department of Homeland Security said it would seek a postponement of the 100% cargo container scanning requirement, which “is a first step hopefully leading to the repeal of this legislation by the U.S. Congress.”
No Progress. Despite efforts that in some cases included escalation to the highest political level, the EU achieved no progress on the following barriers in 2011, which will remain on the list of priorities for 2012.
- investment barriers in China, which were exacerbated by an April 2011 draft revision to China’s investment catalog that “did not meet expectations regarding further opening” in the areas of telecommunication, financial services, construction, retail, express delivery and some
manufacturing sectors such as cars (the EU notes that discussions are ongoing on the potential launch of negotiations on an EU-China investment agreement)
- Chinese policies in the information and communication technology security sector, where the timeline for the adoption of new regulations by the Office of State Cryptography Administration remains unclear
- restrictions on foreign investment in the legal services, accountancy, insurance, banking and financial services sectors in India
- restrictions on financial services in Japan
- restrictions on maritime transport and exports of raw materials in Argentina and Brazil
- the expanded use of non-automatic import licenses and the continued use of import/export compensation plans by Argentina (the EU notes that it is considering filing a WTO complaint in the latter case)
- access to government procurement in Brazil, which maintains a horizontal 25% preference margin in sectors such as health, communication and high-tech equipment
New Barriers. The report also identifies a number of market access barriers emerging in 2011 that will be included on the list of priorities for enforcement action for 2012. These include China’s adoption of a mechanism that could allow it to block foreign mergers and acquisitions on the grounds of national security considerations, which are defined broadly and could extend to economic policy considerations affecting sectors such as medical devices, mail, delivery, warehousing, and retail and wholesale services. The EU also intends to intensify action against China’s use of export credits and subsidies to “boost its national champions’ exports in capital-intensive, often high-tech sectors.”
In India, the EU is concerned about the introduction of a new national manufacturing policy, which includes measures aimed at developing indigenous manufacturing such as incentives for technology development and preferential purchases by government agencies of indigenously developed products and technologies. Moreover, the Indian government will consider the use of public procurement with a local value requirement in such areas as solar energy equipment, electronic hardware, fuel efficient transport equipment and IT-based security systems. Although this manufacturing policy has yet to be approved by the parliament, some of its provisions are already being transferred to sectoral plans.
The EU will also give priority to new measures in the Mercosur area. For example, Brazil has increased the tax on industrial products (IPI) for manufacturers of automotive vehicles and trucks that do not meet certain conditions of local production. Brazil has also imposed stricter customs controls on imported textiles and apparel, which are subject to physical inspection and may be subject to laboratory tests. In Argentina the regulatory framework for reinsurance was modified so that only national companies or locally-established branches of foreign companies may provide reinsurance services.
More generally, the EU is concerned about a shift in the nature of trade restrictions imposed in recent years. The report notes that many countries adopted policies that distorted trade in response to the global financial and economic crisis but that in most cases those measures were meant to be temporary. By contrast, “the recent wave of trade-restrictive measures, notably in emerging economies, is of a different nature.” These measures are not crisis-related but are embedded in national industrial plans that are “aimed at structurally changing the production pattern of national economies building on potential comparative advantages.” Individual trade-distortive measures such as local content requirements, standardization and conformity assessment requirements, and import and export restrictions are being adopted with the same objective.
Click here for EU report
Of Note: Services Trade Liberalization, AD Cases Declining, Merchandise Trade Down
Services trade liberalization as a foundation of global recovery
Lamy notes “significant decline” in anti-dumping investigations
Merchandise trade values fall in most major economies in fourth quarter of 2011
Export Privileges Suspended for Exports of Polymers and Oils to Iran
The Bureau of Industry and Security has suspended for 180 days the export privileges of two men and three companies for conspiring to illegally export U.S.-origin polymers and lubricating oils or oil additives (including aviation engine lubricating oils) to Iran through the United Arab Emirates. This suspension prohibits these entities’ direct or indirect participation in any way in any transaction involving any commodity, software or technology exported or to be exported from the U.S. that is subject to the Export Administration Regulations, or in any other activity subject to the EAR. The order does not prohibit any export, reexport or other transaction subject to the EAR where the only items involved that are subject to the EAR are the foreign-produced direct product of U.S.-origin technology.
According to BIS, the sanctioned entities have filed over the last year at least 17 shipper's export declarations that relate to the export of the items in question in quantities valued in the millions of dollars. These SEDs identify the two UAE companies involved as the ultimate consignee even though evidence indicates that they are not end-users of these items, especially in such large quantities. U.S. law enforcement and customs agents have been able to administratively detain several recent exports or attempted exports involving the identified entities, and BIS has issued redelivery orders for additional shipments that had left the U.S. but had not reached the UAE.
However, BIS states, these administrative measures contain limitations and provide an extremely short window in which to attempt to detect and then stop a shipment once an SED has been filed. Moreover, administrative detentions are not indefinite and redelivery orders rely on the cooperation of vessel owners or other carriers to turn shipments around and/or on foreign governments to timely intercept and detain shipments after they have arrived. BIS states that a temporary denial order represents a more comprehensive and effective approach to preventing imminent violations by giving notice to persons and companies in the U.S. and abroad that they should cease dealing with the respondents in export transactions involving items subject to the EAR.
Click here for temporary denial order
AD/CV Notices: Request Admin Reviews, Nails, Hangers, Carbon, Gift Boxes, Pipe
Nature of Notice: Opportunity to request administrative reviews of AD/CV duty orders for the period March 1, 2011, through Feb. 29, 2012.
- orange juice from Brazil (AD)
- iron construction castings from Canada (AD)
- brass sheet and strip from France, Germany and Italy (AD)
- sulfanilic acid from India (AD/CV)
- silicon metal from Russia (AD)
- stainless steel bar from Spain (AD)
- light-walled rectangular carbon steel pipe and tube from Taiwan (AD)
- polyvinyl alcohol from Taiwan (AD)
- circular welded carbon steel pipe and tube from Thailand (AD)
- circular welded austenitic stainless pressure pipe from China (AD/CV)
- chloropicrin from China (AD)
- drill pipe from China (AD/CV)
- glycine from China (AD)
- sodium hexametaphosphate from China (AD)
- tissue paper products from China (AD)
- in-shell pistachio nuts from Iran (CV)
- welded carbon steel pipe and tube from Turkey (CV)
Commodity: Steel nails.
Nature of Notice: Final results and final partial rescission of administrative review of AD duty order for the period Aug. 1, 2009, through July 31, 2010.
Details: Weighted average dumping margins ranging from 3.80% to 118.04% will be used to determine AD duties assessed on entries of subject merchandise during the period of review and AD duty deposit rates on entries on and after March 1. Review rescinded for 12 respondents that made no shipments of subject merchandise during the period of review.
Commodity: Steel wire garment hangers.
Nature of Notice: Final results and final partial rescission of administrative review of AD duty order for the period Oct. 1, 2009, through Sept. 30, 2010.
Details: Weighted average dumping margins ranging from 0.72% to 187.25% will be used to determine AD duties assessed on entries of subject merchandise during the period of review and AD duty deposit rates on entries on and after March 1. Review rescinded for eight respondents that made no shipments of subject merchandise during the period of review.
Commodity: Activated carbon.
Nature of Notice: Initiation of sunset reviews of AD duty order.
Nature of Notice: Sunset reviews of AD duty orders scheduled for initiation in April.
- folding gift boxes from China
- seamless pipe and pressure pipe from Germany
Import Restrictions Eased on Wooden Handicrafts from China
The Department of Agriculture’s Animal and Plant Health Inspection Service has issued a final rule that, effective May 1, will allow the importation of wooden decorative items and craft products (handicrafts) from China. The rule also amends the regulations pertaining to logs, lumber and other wood articles to define wooden handicrafts to include the following products where wood is present: carvings, baskets, boxes, bird houses, garden and lawn/patio furniture, potpourri, artificial trees (typically artificial ficus trees), trellis towers, garden fencing and edging, and other items composed of wood.
APHIS suspended imports of wooden handicrafts from China in 2005 after issuing more than 300 emergency action notices and conducting national recalls to remove infested Chinese-origin wooden handicrafts from the U.S. over the previous three years. Now, however, based on the evidence in a pest risk analysis, APHIS has determined that these articles can be safely imported from China provided certain conditions are met, including treatments, phytosanitary certificates, inspection and box identifications.
Click here for APHIS final rule
Ocean Transportation Intermediary License Revocations, Reissuances, Revocations
OTI Licenses Revoked. The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been revoked. A revocation may occur after a license is surrendered voluntarily by the OTI or for failure to maintain a valid bond. (click here for revocation notice http://www.ofr.gov/OFRUpload/OFRData/2012-04944_PI.pdf)
- license #004621F: Global Forwarding Inc. d/b/a Global Connection, Arcadia, Calif.
- license #016207N: Admiral Overseas Shipping Company Inc., Greensboro, N.C.
- license #018164N: Cibao Cargo Inc., Bronx, N.Y.
- license #1900F: U.S.A. Shipping Corporation, Miami, Fla.
- license #020275N: Global Tech Investments LLC d/b/a Global Freight Forwarding, Kent, Wash.
- license #020479F: Karon Jones d/b/a Keene Machinery and Export, Dublin, Texas
- license #020527NF: Fast Logistics Inc., Fort Lauderdale, Fla.
- license #021014N: Magic Transport Inc., Toa Baja, Puerto Rico
- license #021869F: Merco Air & Ocean Cargo Inc., Cooper City, Fla.
OTI Licenses Reissued. The FMC has given notice that the following ocean transportation intermediary licenses have been reissued. (click here for reissuance notice http://www.ofr.gov/OFRUpload/OFRData/2012-04945_PI.pdf)
- license #002178F: Leschaco Inc., Jersey City, N.J.
- license #003729F: Tratto International Forwarders Corporation, Miami, Fla.
- license #022436NF: RLE International Inc., Doral, Fla.
OTI License Applicants. The FMC has provided notice that the following applicants have filed applications for licenses as non-vessel-operating common carrier and/or ocean freight forwarder ocean transportation intermediaries. Persons knowing of any reason why any of these applicants should not receive a license are requested to contact the FMC. (click here for applicant notice http://www.ofr.gov/OFRUpload/OFRData/2012-04943_PI.pdf)
- ASL Global Logistics Inc., Humble, Texas
- ATI Container Services LLC, Miami, Fla.
- B2B Global Logistics Incorporated, Gardena, Calif.
- Cargo Distribution Export Inc., Miami, Fla.
- CDS Air Freight Inc., Dulles, Va.
- Everplus Logistics Inc., Old Tappan, N.J.
- Fastway Moving and Services Corp. d/b/a Fastway Cargo, Secaucus, N.J.
- Fastway Moving and Storage Inc. d/b/a Dream Cargo, Wilmington, Mass.
- Forward System Logistics Inc., Jamaica, N.Y.
- friendship logistics LLC, Springfield, Va.
- Global Container Line Inc. d/b/a Global Container Line, Seattle, Wash.
- Global Logistics New Jersey Limited Liability Company, Rutherford, N.J.
- Han C. Kim d/b/a Harvest Global International, Los Angeles, Calif.
- International Cargo Shipping LLC, North Hollywood, Calif.
- Knight Global Solutions Inc., Chesterfield TWP., Mich.
- LOA Inc., Inglewood, Calif.
- Nakamura Air Express (U.S.A.) Inc. d/b/a Nax (USA) Inc., Los Angeles, Calif.
- Talwin Transport Service LLC, Doral, Fla.
- Transport Logistic International Corp., Medley, Fla.
- Worldwide Integrated Logistics LLC d/b/a WIL Lines, Miami, Fla.
Shipping Coordinating Committee to Discuss Trade Facilitation, Recovery
The State Department’s Shipping Coordinating Committee will hold an open meeting March 27 in Washington, D.C., to discuss preparations for the 38th session of the International Maritime Organization’s Facilitation Committee in early 2013. Issues to be considered include the following.
- e-business possibilities for the facilitation of maritime traffic, including electronic means for the clearance of ships, cargo and passengers and electronic access to, or electronic versions of, certificates and documents required to be carried on ships
- ensuring security in and facilitating international trade, including developing voluntary guidelines for maritime trade recovery
- facilitation of shipments of dangerous cargoes
Click here for State Dept. notice
FMC Shuffles Staff, Proposes Update to Rules on Pleadings, Motions and Discovery
The Federal Maritime Commission announced Feb. 27 that six of its executives and managers have taken on new leadership responsibilities.
- Austin L. Schmitt is director, strategic planning and regulatory review
- Sandra L. Kusumoto is director, Bureau of Trade Analysis
- Vern W. Hill is director, Bureau of Certification and Licensing
- Jennifer M. Gartlan is deputy director, Office of Consumer Affairs and Dispute Resolution Services
- Jeremiah D. Hospital is director, Office of Transportation Intermediaries, Bureau of Certification and Licensing
- Ronald Podlaskowich is director, Office of Agreements, Bureau of Trade Analysis
Also on Feb. 27 the FMC approved a rule proposing to update its rules of practice and procedure for pleadings, motions and discovery in agency adjudications. The FMC states that the proposed changes are intended to add clarity, reduce burdens on parties and incorporate standards from the current Federal Rules of Civil Procedure. Comments on the proposed rule are due by April 30.
Click here for FMC proposed rule
Another Carrier Approved for Mexican Truck Pilot
The Department of Transportation’s Federal Motor Carrier Safety Administration is requesting no later than March 12 public comment on data and information concerning a pre-authorization safety audit conducted for one motor carrier that has applied to participate in the pilot program to test and demonstrate the ability of Mexico-domiciled motor carriers to operate safely in the U.S. beyond specified border zones. According to FMCSA, the named carrier successfully completed its PASA Nov. 15 and the results of this audit are available here (http://www.fmcsa.dot.gov/intl-programs/trucking/Trucking-Program.aspx). A list of the carrier’s vehicles approved by FMCSA for use in the pilot program is also available on this Web site.
While the law only requires the publication of data for carriers receiving operating authority, FMCSA will also publish this information to show motor carriers that failed to meet U.S. safety standards. To date, however, no carriers have failed the PASA.
Click here for FMCSA notice
Ex-Im Bank Approves $83 Million in Financing for Locomotive Exports to Canada
The Export-Import Bank of the U.S. announced Feb. 27 its approval of an $83.1 million loan guarantee to support the sale of six U.S.-made locomotives, railroad cars and mining equipment to an iron ore company in Canada, which will use them to expand its production. The Bank notes that 2011 was a record year in locomotive financing for the Bank, with more than $550 million supporting the sale of U.S.-made locomotives to hard-to-reach markets such as Kazakhstan and South Africa.
State Clarifies Eligibility of Haiti Coast Guard for Defense Exports
The State Department has issued a final rule that, effective Feb. 29, amends the International Traffic in Arms Regulations to clarify that U.S. policy on arms exports to the government of Haiti includes the Coast Guard as an eligible end-user. As a result, existing ITAR exceptions allow for such exports to the Coast Guard of Haiti.
Click here for State Dept. final rule