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July 6 2012 Issue

Friday, July 06, 2012
Sandler, Travis & Rosenberg Trade Report

Changes to Duty-Free Treatment Under Generalized System of Preferences

As a result of its 2011 review of the Generalized System of Preferences the Obama administration has announced the following actions concerning the products and countries eligible for duty-free treatment when imported into the U.S. under GSP. 

 - Seven cotton fiber products classified in HTSUS 5201.00.22, 5201.00.24, 5201.00.34, 5202.91.00, 5203.00.05, 5203.00.10 and 5203.00.50 have been added to the list of those eligible for duty-free treatment under GSP when imported from least-developed beneficiary developing countries. 

 - A decision on adding certain plastic sacks and bags from Thailand to the list of GSP-eligible goods has been deferred. 
 
 - The competitive need limitations have been waived, thus continuing GSP eligibility, for over 100 products from 12 countries. 
 
 - CNL waivers have been revoked, and GSP eligibility thus terminated, for rubber bus and truck tires from Thailand, hand-hooked carpets from India, and certain silver jewelry from Thailand. 
 
 - GSP eligibility has been terminated for the following products for exceeding the CNLs in 2011: undenatured ethyl alcohol from Brazil, refined borax from Turkey, certain flavoring compounds from Indonesia, lysine from Brazil, upholstery leather from Brazil, aluminum from Venezuela, aluminum alloy from Indonesia, and certain auto parts from India. 
 
 - Kola nuts from Cote d’Ivoire, which previously had exceeded the CNLs, have been redesignated as eligible for GSP. Petitions for such redesignation for dozens of other products were denied. 
 
 [all the above changes were effective as of July 1] 
 
 - Effective for articles entered or withdrawn from warehouse for consumption on or after Jan. 1, 2014, the eligibility of Gibraltar and Turks and Caicos for GSP treatment will be terminated because they have become “high income” countries as defined by World Bank statistics.

 - Effective 60 days after the presidential proclamation is published in the Federal Register, Senegal will be designated as a least-developed beneficiary developing country under GSP.

 - The short form name of East Timor is being changed to Timor-Leste. 

 - Technical corrections to the Harmonized Tariff Schedule of the U.S. are being made to reflect the proper tariff treatment of goods covered by the World Trade Organization’s Information Technology Agreement. 

 - The Office of the U.S. Trade Representative has accepted for formal review petitions to withdraw or suspend GSP eligibility for Fiji and Iraq for potential violation of the statutory criteria regarding worker rights and for Indonesia and Ukraine for potential violation of the statutory criteria regarding intellectual property rights. A decision on a petition concerning expropriation in Russia has been deferred.

 - USTR has decided to close its GSP country practice review of worker rights in Sri Lanka without any change to that country’s GSP trade benefits.

 - Several other country practice petitions accepted in previous years remain under review: Lebanon, Russia and Uzbekistan regarding IPR protection and Bangladesh, Georgia, Niger, the Philippines and Uzbekistan regarding worker rights. 

Click here for more details.

WTO Members Announce New Phase in Services Trade Liberalization Talks

A number of World Trade Organization members have announced week that in September they plan to “intensify” work toward a new multilateral agreement to liberalize trade in services. Any such agreement would build on the achievements of the WTO General Agreement on Trade in Services and “would aim to capture a substantial part of the liberalization achieved in other negotiations on trade in services.” The outcomes of a final agreement “could then be brought into the multilateral system.”

A joint statement issued July 5 states that while the GATS “provides a strong foundation … there have been considerable developments in advancing the liberalization of trade in services in the sixteen years since its conclusion.” In addition, “a significant number of members have made great advances in opening up their [services] markets, both autonomously as well as through more than 100 services trade agreements notified to the WTO,” many of which have “broken new ground both in terms of market access and in the development of improved services trade rules.”

The participants said they plan to move what have until now been exploratory discussions to “a new phase aimed at clearly defining the contours of an ambitious agreement on trade in services.” According to the statement, any such agreement should (1) be comprehensive in scope, including substantial sectoral coverage with no a priori exclusion of any sector or mode of supply, (2) include market access commitments that correspond as closely as possible to actual practice and provide opportunities for improved market access, and (3) contain new and enhanced rules developed through negotiations.

Finally, the statement encourages other WTO members who “share a high level of ambition for the liberalization of trade in services, including these objectives, to take part in this effort.” Existing participants are especially considering how to further broaden the involvement of developing countries and how to take into account the interests of least-developed countries.

Current participants in this initiative are Australia, Canada, Colombia, Costa Rica, the European Union, Hong Kong, Israel, Japan, Mexico, New Zealand, Norway, Pakistan, Peru, South Korea, Switzerland, Taiwan, Turkey and the United States.

FDA Proposes Unique Identification System for Medical Devices

The Food and Drug Administration is proposing to require most medical devices distributed in the U.S. to carry a unique device identifier. FDA believes a UDI system has the potential to improve the quality of information in medical device adverse events reports, which will help the agency identify product problems more quickly, better target recalls and improve patient safety.

According to an FDA press release, a UDI is a unique code that acts as a key to certain basic identifying information about a device, such as the name of the manufacturer and the type of device, and may represent certain other information about the device, such as its expiration date and batch or lot number. Under this proposed rule a UDI would include a device identifier, which is a unique numeric or alphanumeric code specific to a device model, and a production identifier, which includes the current production information for a device. This information would be contained in a publicly available UDI database. 

The FDA is proposing a risk-based, phased-in approach to implementation, focusing on the highest-risk medical devices first and exempting low-risk devices from some or all of the requirements. The FDA is also proposing to exempt over-the-counter devices sold at retail, which generally have UPC codes in place. 

The FDA is accepting comments on this proposed rule through Nov. 8.

Click here for more information

Dates and Deadlines in the Week Ahead

Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.

July 9 – comments on FDA information collections on medical device reporting

July 9 – comments on proposed merger of FTZs 129, 130 and 131 in Washington state

July 9 – comments on FMC’s development of container freight indices for U.S. agricultural exports

July 11 – effective date of final rule easing the customs broker recordkeeping requirements

July 12 – effective date of USDA final rule allow imports of tomatoes from West Africa

July 12 – comments on proposed increase in assessments on imported cotton

July 12 – comments on proposed changes to restrictions on bird imports

AD Notices: Power Transformers, Polyester Staple Fiber

Agency: International Trade Administration. 
Commodity: Large power transformers.
Country: Korea.
Nature of Notice: Affirmative final dumping determination.
Details: Weighted average dumping margins range from 14.95% to 29.04%. U.S. Customs and Border Protection will be instructed to collect AD cash deposits or bonds at these rates. The International Trade Commission’s final AD injury determination is due no later than Aug. 16.

Agency: International Trade Administration.
Commodity: Polyester staple fiber.
Country: China.
Nature of Notice: Preliminary results of administrative review of antidumping duty order.
Details: Weighted average dumping margins of 0.21% for one manufacturer/exporter and 44.30% for another.

IPR Enforcement Actions on Gaming Systems, Communication Devices

Patent Infringement Found by Gaming Consoles. In investigation 337-TA-745 the International Trade Commission will review the final initial determination issued by the presiding administrative law judge finding that the importation, sale for importation and sale within the U.S. after importation of certain gaming and entertainment consoles, related software and components thereof is violating certain patents owned by complainant Motorola Mobility Inc. The ITC is remanding this investigation to the ALJ for further proceedings.

Formal Enforcement Proceeding on Communication Devices. The International Trade Commission has instituted a formal enforcement proceeding related to its December 2011 limited exclusion order on imports of certain personal data and mobile communications devices and related software that infringe specified patents owned by complainant Apple Inc. However, the ITC has denied the complainant’s request for temporary emergency action.

Portable Communication Device Investigation Terminated. The International Trade Commission has terminated patent infringement investigation 337-TA-827 of certain portable communication devices with respect to all respondents on the basis of settlement agreements.

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