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April 11 2012 issue

Wednesday, April 11, 2012
Sandler, Travis & Rosenberg Trade Report

Moderate Advancements on Trade in U.S.-Brazil Leaders Meeting

U.S. President Barack Obama, Brazilian President Dilma Rousseff and various other senior officials met in Washington, D.C., April 9 to discuss the full range of bilateral issues. There appeared to be only moderate gains on trade and economic relations, a topic on which Brazilian officials have repeatedly chided the U.S. and other developed countries in recent months. Brazil believes economic recovery efforts in those countries have driven up the value of its currency, resulting in higher imports and lower exports and threatening damage to domestic industries.

According to a joint statement, Obama and Rousseff welcomed the growth of two-way trade in goods and services, which nearly tripled in the past decade to more than $100 billion in 2011, and “emphasized the importance of the mutual benefits of stimulating increased trade and investment.” They also reiterated their commitment to the multilateral trading system and to working together to “ensure that the World Trade Organization contributes to global economic growth and job creation,” advancing trade in services and manufactured goods, strengthening collaboration in agricultural policies, research, and science-based sanitary and phytosanitary measures, and striving in bilateral and multilateral fora toward the removal of barriers to trade in agricultural products.

However, no officials from either side mentioned any effort to develop a comprehensive economic partnership agreement, as advocated by U.S. Chamber of Commerce President Tom Donahue. Donahue said the Chamber believes “now is the time to begin discussions” on such an agreement, which “would address market access, trade rules, new issues of U.S. and Brazilian interest as well as cooperation with our neighbors in Latin America and Africa.” There was also no mention of any resolution of a complaint by the American Apparel and Footwear Association against Brazilian actions that “continually make it more difficult to import any footwear, apparel and textiles into the country,” including non-automatic import licenses, country of origin requirements, antidumping duty orders, new customs restrictions and fees, and the possible implementation of “ad rem” duties.

Other trade-related initiatives noted at the meeting include the following.

- Under the Agreement on Trade and Economic Cooperation concluded last year, the U.S.-Brazil Commission on Economic and Trade Relations has agreed to establish a dialogue on investment issues and explore greater cooperation on intellectual property rights, trade in services, and small and medium-sized enterprises.

- The President’s Export Council will visit Brazil this September and Brazil will organize high-level trade missions to the U.S. in areas such as foodservice, information technology, health and machinery.

- A new U.S.-Brazil Aviation Partnership was established to promote bilateral cooperation in infrastructure, air transportation and air traffic. Areas of engagement may include exchanges of best practices, research and development, innovation, new technologies, sustainability, training, logistics, supply chains and other topics.

- A “Green-Lane” pilot project on air cargo transportation, aimed at adopting a broad program of mutual recognition of authorized economic operators to facilitate trade in goods, is continuing to advance.

- Officials agreed to launch a process to provide distinctive product designations for Tennessee whiskey and bourbon whiskey from the U.S. and cachaça from Brazil. As part of this process the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau will propose regulations providing that cachaça is a type of rum that is a distinctive product of Brazil and prohibiting the sale of any product as cachaça unless it has been manufactured in Brazil in accordance with the applicable laws and regulations. Once a final rule to this effect has been published, Brazil will implement similar restrictions with respect to Tennessee whiskey and Bourbon whiskey.

U.S., EU Will Seek to Use New Investment Principles to Open Other Markets

The U.S. and the European Union announced April 10 that under the auspices of the Transatlantic Economic Council they have concluded a list of shared principles for international investment. The U.S. characterized this effort as a way to further create jobs and increase exports by reaffirming its commitment to open, transparent and non-discriminatory policies on foreign investment in the U.S. and establishing principles that can be used to foster open investment policies in other countries as well.

The principles encourage open and non-discriminatory investment climates, a level playing field between state-owned entities and private commercial enterprises, strong protections for investors and their investments, neutral and binding international dispute settlement, the highest levels of transparency and public participation in developing investment-related measures, responsible business conduct, and narrowly-tailored reviews of national security considerations. According to the EU, the principles confirm that governments can commit to a high level of investment protection and still maintain the right to regulate to pursue legitimate public policy objectives such as the environment, health, safety, labor and cultural diversity. The principles also encourage governments to not lower their standards (e.g., in relation to human rights or the environment) to attract foreign direct investment, the EU states.

Click here for investment principles
http://www.ustr.gov/webfm_send/3337

India Fights U.S. Work Visa Fees as High-Tech Procurement Rules Come Under Fire

India has filed its first complaint against the U.S. at the World Trade Organization, requesting consultations on a 2010 law that nearly doubled the cost of obtaining L1 and H-1B work visas to $4,500. According to an article in the Indian newspaper Business Standard, India alleges that the fee increase violates U.S. commitments under WTO rules on services trade with respect to Mode 3 (commercial presence) and Mode 4 (movement of natural persons) and unlawfully discriminates against Indian high-tech firms. The article notes that H-1B visas are for non-immigrant specialty workers while L-1 visas are for intra-company transferees, including L-1A for managers or executives and L-1B for information and communication technology specialists. Indian officials said that if the talks fail to resolve their concerns they will ask the WTO to establish a formal dispute settlement panel.

Separately, nearly three dozen companies wrote to Indian Prime Minister Manmohan Singh April 4 to register “serious concerns” about new preferential market access rules issued by the Indian Department of Information Technology that would provide procurement preference to domestically manufactured electronic goods. The groups said they are particularly worried that these rules could apply to private entities such as government licensees and managed service providers, which “would represent an unprecedented interference in the procurements of commercial entities and would be inconsistent with India’s WTO obligations.” The letter asserted that India’s information technology industry has “demonstrated its capacity to compete on a global scale” and does not need additional support. The letter also warned that the PMA rules could ultimately harm Indian exports by prompting trading partners to impose reciprocal restrictions. The groups therefore urged India to rescind the PMA rules entirely and to work with foreign and domestic stakeholders to develop a more effective approach that addresses “the issues that are fundamental to creating an environment that facilitates investment and economic growth, such as adequate infrastructure, simplified and limited taxes and a consistent and predictable rule of law.”

Trade Facilitation Improvements Subject of New ITC Probe

The International Trade Commission is seeking input no later than May 10 for a new investigation on trade facilitation that will focus on the East African Community but will also include a review of some broader issues. For purposes of this study, trade facilitation means the simplification of customs procedures affecting the movement of goods across borders as well as improvements to transport infrastructure.

The ITC expects to submit its final report to U.S. Trade Representative Ron Kirk by July 2. In addition to a description of the present conditions and recent developments relating to the movement of goods to and from the countries of the EAC, this report will address elements referenced in U.S. trade facilitation agreements (e.g., those with the Philippines and Uruguay) and the trade facilitation chapters in U.S. free trade agreements. The report will also summarize findings from the empirical literature on the benefits of overall trade facilitation improvements, such as effects on import and export volumes, export diversification and economic development.

In requesting this investigation Kirk noted that the U.S. and the EAC recently began preliminary discussions on a potential new trade and investment partnership and opined that one of the initial steps under this initiative that could have the most immediate benefit would be engagement with the EAC on customs clearance and other practices at the border. He indicated that progress in this area could help further promote the greater trade and investment between the U.S. and sub-Saharan Africa that has been the goal of the African Growth and Opportunity Act, individual and regional trade and investment framework agreements, bilateral investment treaties and trade capacity building assistance.

AD/CV Notices: Appliance Shelving, Orange Juice, Glycine, Polyester Fiber, Pipe

Agency: ITA.
Commodity: Kitchen appliance shelving and racks.
Country: China.
Nature of Notice: Final results of administrative review of AD duty order.
Details: Weighted average dumping margins range from zero to 95.99%. AD duties based on these rates will be assessed on entries of subject merchandise made during the period of review, and AD cash deposits at these rates will be required for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after April 11. In addition, the review was rescinded with respect to one respondent that had no shipments of subject merchandise to the U.S. during the period of review.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-08736_PI.pdf

Agency: ITA.
Commodity: Kitchen appliance shelving and racks.
Country: China.
Nature of Notice: Final results of administrative review of CV duty order for the period Jan. 7 through Dec. 31, 2009.
Details: Net subsidy rates range from 7.85% to 264.09%. See notice for instructions on assessment of CV duties for entries of subject merchandise made during the period of review. CV cash deposits at these rates will be required for entries of subject merchandise entered or withdrawn from warehouse on or after April 11.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-08727_PI.pdf

Agency: ITA.
Commodity: Orange juice.
Country: Brazil.
Nature of Notice: Preliminary results of administrative review of AD duty order for the period March 1, 2010, through Feb. 28, 2011.
Details: Weighted average dumping margins range from 2.81% to 22.03%. The ITA has also preliminarily determined that one exporter did not export subject merchandise to the U.S. during the period of review.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-08381_PI.pdf

Agency: ITA.
Commodity: Glycine.
Country: China.
Nature of Notice: Preliminary results of administrative review of AD duty order for the period March 1, 2010, through Feb. 28, 2011.
Details: Weighted average dumping margin of zero for sole reviewed company. This review is being rescinded with respect to 29 companies based on the withdrawal of the request for review by the petitioner.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-08732_PI.pdf

Agency: ITA.
Commodity: Polyester staple fiber.
Country: Taiwan.
Nature of Notice: Extension from April 25 to May 30 of time limit for preliminary results of administrative review of AD duty order for the period May 1, 2010, through April 30, 2011.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-08482_PI.pdf

Agency: ITA.
Commodity: Small diameter carbon and alloy seamless standard, line and pressure pipe.
Country: Romania.
Nature of Notice: Extension from May 2 to Aug. 15 of time limit for preliminary results of administrative review of AD duty order for the period Aug. 1, 2010, through July 31, 2011.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-08747_PI.pdf

Possible Changes to International Plant and Animal Trade Rules Subject of FWS Inquiry

The Fish and Wildlife Service is inviting comments through June 11 on amendments to the appendices of the Convention on International Trade in Endangered Species of Wild Fauna and Flora that the U.S. might submit for consideration at the 16th regular meeting of the Conference of the Parties to CITES, which is tentatively scheduled to be held in March 2013 in Thailand. CITES is an international treaty designed to control and regulate international trade in certain animal and plant species that are now or potentially may be threatened with extinction and are affected by trade. Appendix I includes species threatened with extinction in which trade is generally prohibited. Appendix II includes species not necessarily threatened with extinction but in which trade is strictly controlled to prevent them from becoming so. Appendix III contains species that are protected in at least one country that has asked CITES parties for assistance in controlling trade.

According to the FWS, the U.S. is likely to develop and submit proposals to remove the Laguna Beach dudleya and Santa Barbara dudleya from Appendix II and to amend the Appendix II annotation for American ginseng. In addition, the U.S. is still undecided on the following proposals pending additional information and consultations.

- Hawaiian sandalwoods – inclusion in Appendix II
- red and pink corals – inclusion in Appendix II
- longfin mako shark – inclusion in Appendix II
- shortfin mako shark – inclusion in Appendix II
- porbeagle shark – inclusion in Appendix II or Appendix I
- scalloped hammerhead shark, great hammerhead shark and smooth hammerhead shark – inclusion in Appendix II
- oceanic whitetip shark – inclusion in Appendix II or Appendix I
- bigeye thresher shark, common thresher shark and pelagic thresher shark – inclusion in Appendix II
- orange roughy – inclusion in Appendix II
- American eel and all other Anguilla species not previously included in the CITES appendices – inclusion in Appendix II
- tokay gecko – inclusion in Appendix II
- Burmese starred tortoise – transfer from Appendix II to Appendix I
- crowned river turtle – inclusion in Appendix II
- Burmese peacock softshell turtle – inclusion in Appendix II
- Roti Island snake-necked turtle – transfer from Appendix II to Appendix I
- yellow-margined box turtle – transfer from Appendix II to Appendix I
- McCord’s box turtle – transfer from Appendix II to Appendix I
- Chinese three-striped box turtle – transfer from Appendix II to Appendix I
- big-headed turtle – transfer from Appendix II to Appendix I
- painted terrapin – transfer from Appendix II to Appendix I
- Burmese roofed turtle – transfer from Appendix II to Appendix I
- map turtles – inclusion in Appendix II and three species in Appendix I
- Blanding’s turtle – inclusion in Appendix I or Appendix II
- spotted turtle – inclusion in Appendix I or Appendix II
- alligator snapping turtle – inclusion in Appendix II
- diamondback terrapin – inclusion in Appendix II
- gyrfalcon – transfer from Appendix I to Appendix II
- walrus – inclusion in Appendix II or Appendix I
- polar bear – transfer from Appendix II to Appendix I

There is also a long list of proposals for action on other plants and animals that the U.S. does not intend to submit for consideration unless it receives significant additional information.

The FWS expects to publish around June a notice announcing draft resolutions, draft decisions and agenda items that may be submitted by the U.S. and soliciting further information and comments on them. Around November the FWS will post on its Web site an announcement of the species proposals, draft resolutions, draft decisions and agenda items that have been submitted.

Click here for FWS notice
http://www.ofr.gov/OFRUpload/OFRData/2012-08665_PI.pdf

Oil and Gas Trade Mission to Israel Set for October

The Department of Commerce is organizing an oil and gas trade mission to Israel Oct. 27-31. This mission is intended to include representatives from leading U.S. companies that provide services to oil and gas facilities, from design and construction through to project implementation, maintenance of facilities and environmental protection.

A minimum of 10 and a maximum of 20 companies will be selected to participate in this mission. U.S. companies already doing business with Israel as well as those seeking to enter to the Israeli market for the first time may apply. All applicants must submit no later than Aug. 24 a completed and signed mission application and supplemental application materials, including adequate information on their products and/or services, primary market objectives and goals for participation. Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the U.S. or, if not, marketed under the name of a U.S. firm and have at least 51% U.S. content of the value of the finished product or service. Participants will be selected based on the suitability of their products or services to the market, their potential for business in the targeted industries in Israel, including the likelihood of exports resulting from the mission, and the consistency of their goals and objectives and business with the stated scope of the mission. The diversity of company size, sector or subsector, and location may also be considered.

Click here for DOC notice
http://www.ofr.gov/OFRUpload/OFRData/2012-08608_PI.pdf

New and Amended Maritime Agreements Filed

The Federal Maritime Commission has issued notice that the following new or amended agreements have been filed. Interested parties may submit comments by April 23.

International Council of Containership Operators – The amendment deletes MISC Berhad from the agreement.

Ocean Carrier Equipment Management Association Agreement – The amendment would add Crowley Latin America Services LLC, Crowley Caribbean Services LLC and Alianca Navegacao e Logistics Ltda. as parties to the agreement.

Zim/CSCL Slot Charter Agreement – The amendment would delete a service between the Far East and North Europe and replace it with a service between the Far East and the Mediterranean.

Consolidated Chassis Management Pool Agreement – The amendment would add Crowley Latin America Services LLC, Crowley Caribbean Services LLC and Alianca Navegacao e Logistics Ltda. as parties to the agreement.

EUKOR Car Carriers, Inc. /FOML Space Charter – The amendment adds Port Everett, Wash., to the geographic scope of the agreement.

MSC/CMA CGM U.S. East Coast – East Coast South America Service Space Charter Agreement – The agreement would authorize MSC to charter space to CMA CGM in the trade between the U.S. East Coast and the East Coast of South America and the Bahamas.

Click here for FMC notice
http://www.ofr.gov/OFRUpload/OFRData/2012-08767_PI.pdf

Commercial Lab/Gauger Approved

U.S. Customs and Border Protection has announced that effective July 22, 2011, Intertek USA Inc. of Sulphur, La., has been approved to gauge and accredited to test petroleum and petroleum products, organic chemicals and vegetable oils for customs purposes.

Click here for CBP notice
http://www.ofr.gov/OFRUpload/OFRData/2012-08655_PI.pdf

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