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August 6 2012 Issue

Monday, August 06, 2012
Sandler, Travis & Rosenberg Trade Report

Boosting Exports, Domestic Manufacturing is Aim of Bipartisan Senate Effort  

A bipartisan group of senators announced Aug. 1 a legislative package that seeks to increase U.S. manufacturing, competiveness and exports. The “Building a Stronger America Act” initiative includes some of the same provisions as the “Make It In America” plan unveiled by House Democrats in July but could stand a better chance of congressional approval with backing by both Republicans and Democrats. 

The Senate package includes the following measures. 

- Enforcing Orders and Reducing Customs Evasion Act, S.1133, which requires U.S. Customs and Border Protection to establish procedures for investigating claims of evasion of antidumping and countervailing duty orders 

- Global Investment in American Jobs Act, S.3274, which (a) requires the Department of Commerce to lead an interagency review of U.S. laws and policies on foreign direct investment and make recommendations to make the U.S. more competitive and (b) expresses the sense of the Senate that it is a good idea for the U.S. to attract inbound investment by removing unnecessary barriers and promoting good polices 

- Export Promotion Act, S.2171, which updates the duties of the Trade Promotion Coordinating Committee to improve the coordination of export promotion activities within the U.S. in order to target and develop new export markets for U.S. products 

- Small Business Export Growth Act, S.3218, which revises membership of the TPCC to include one member that represents state agencies with responsibility for export promotion and export financing and also requires a report on the development of a single Web site for complying with and disseminating information about U.S. export control laws and regulations 

- Strengthening Employment Clusters to Organize Regional Success (SECTORS) Act, S.665, which directs the DOC to award three-year competitive industry or manufacturing sector grants to encourage industry growth and competitiveness and improved training, retention and advancement in targeted industry clusters 

- WIN Jobs Act, S.1948, which directs the DOC to establish the Innovation in Investment pilot program to make competitive grants to business and higher education consortia that would expand workforce training in high-tech manufacturing and developing industries through public-private partnerships 

- America Recruits Act, S.1247, which establishes a grant program to states to encourage the in-sourcing of new manufacturing facilities and directs the DOC to ensure that industry-approved certification assessments and standards are established and available to providers of education and training programs in manufacturing and information technology 

EU Sees Increase in Detentions of IPR Infringing Goods  

European Union detentions of imports for infringing intellectual property rights are continuing to rise, a recent report from the European Commission finds. There were 91,254 customs interceptions of infringing goods in 2011, up 15% from 2010 and more than 1,000% over the past decade. Authorities detained 114.8 million articles, up from 103.31 million in 2010, and the value of the goods detained increased to €1.27 billion from €1.11 billion. 

According to the report, China continued to be the main source country of goods suspected of IPR infringement, with 73% of the total articles detained, followed by Hong Kong (7.7%), Greece (4.8), India (3.3%) and the United Arab Emirates (2.8%). The report also identifies the primary sources of infringing goods in particular categories, including China for body care items, textiles and apparel, shoes, sunglasses, bags, jewelry, toys and games, cigarettes, tools, office stationery and lighters; Turkey for foodstuffs; Panama for alcoholic beverages; Thailand for non-alcoholic beverages; Hong Kong for mobile phones and accessories and computer equipment; and Syria for recorded CDs and DVDs. 

The top categories in terms of number of articles detained were medicines (24% l), packaging materials (21%), cigarettes (18%), clothing (4%), mobile phone accessories (3%), and labels, tags and stickers (2%). In terms of value the top categories were watches (22.7%), clothing (9.7%), bags, wallets and purses (7.8%) and non-sport shoes (6.9%). Products for daily use and products that would be potentially dangerous to the health and safety of consumers (i.e., suspected trademark infringements concerning food and beverages, body care articles, medicines, electrical household goods and toys) accounted for 28.6% of the total amount of detained articles (compared to 14.5% in 2010) due to the increase in medicines. The rise in the number of cases involving small consignments related to postal traffic and principally concerned shoes, electrical goods, clothing and personal accessories like bags, wallets, etc. 

The report states that in 90% of the cases of customs detention the goods were either destroyed after the holder of the goods and the right-holder agreed on destruction or the right-holder initiated a court case to establish IPR infringement. Goods were released in 7.5% of the cases, either because they appeared to be non-infringing original goods (3%) or the right-holder did not react to the notification by customs (4.5%).  

New Legislation on Duty Suspensions, Government Purchasing, Etc.  

Following is a list of trade-related legislation that has been introduced recently in the U.S. Congress. The texts of these bills are or will shortly be available on the Library of Congress Web site

S. 3444 – to require that textile and apparel articles acquired for use by executive agencies be manufactured from articles, materials or supplies entirely grown, produced or manufactured in the United States (introduced July 26 by Sen. Brown, referred to the Senate Committee on Homeland Security and Governmental Affairs) 

S. 3449 – to prohibit purchases by the federal government of Chinese goods and services until China becomes a party to the Agreement on Government Procurement (introduced July 26 by Sen. Stabenow, referred to the Senate Committee on Homeland Security and Governmental Affairs) 

H.R. 6253 – to authorize the Maritime Administrator to make grants to states or port authorities to cover the cost of repair and construction activities relating to certain commercial strategic seaports (introduced Aug. 1 by Rep. Richardson, referred to the House committees on Armed Services and Transportation and Infrastructure) 

H.R. 6265 – to renew and modify the temporary duty suspensions on certain cotton shirting fabrics (introduced Aug. 1 by Rep. Rangel, referred to the House Committee on Ways and Means) 

S. 3507 – to renew the temporary suspension of duty on ceiling fans for permanent installation (introduced Aug. 2 by Sen. Hagan, referred to the Senate Committee on Finance) 

S. 3518 – to make it a principal negotiating objective of the United States in trade negotiations to eliminate government fisheries subsidies (introduced Aug. 2 by Sen. Wyden, referred to the Senate Committee on Finance) 

H.R. 6277 – to prohibit the Secretary of Defense and the Secretary of Homeland Security from purchasing equipment or military aircraft containing electronic components that are not manufactured in the United States (introduced Aug. 2 by Rep. Slaughter, referred to the House committees on Armed Services, Transportation and Infrastructure, and Homeland Security) 

H.R. 6307 – to make certain luggage and travel articles eligible for duty-free treatment under the Generalized System of Preferences (introduced Aug. 2 by Rep. Crenshaw, referred to the House Committee on Ways and Means) 

H.R. 6342 – to allow the importation, distribution and sale of investigational drugs and devices intended for use by terminally ill patients who execute an informed consent document (introduced Aug. 2 by Rep. Paul, referred to the House Committee on Energy and Commerce) 

WTO Complaint Against Chinese Automobile Duties Subject of USTR Comment Request  

The Office of the U.S. Trade Representative is accepting comments through Aug. 31 on the issues raised in a World Trade Organization complaint the U.S. filed in July against China’s imposition of antidumping and countervailing duties on U.S.-produced automobiles. The U.S. has alleged that China initiated its AD and CV investigations without sufficient evidence, failed to objectively examine the evidence, made unsupported findings of injury to its domestic industry, failed to disclose “essential facts” underlying its conclusions, failed to provide an adequate explanation of its conclusions, improperly used investigative procedures, and failed to provide non-confidential summaries of Chinese company submissions.

Japan Amends Byrd Amendment Retaliation on U.S. Exports  

Effective Sept. 1, the Japanese government will revise the sanctions it imposes on imports from the U.S. in retaliation for the continued distribution of antidumping and countervailing duty revenues to affected U.S. producers under the Continued Dumping and Subsidization Offset Act, or Byrd Amendment. These sanctions are dependent on the amount of AD/CV duty revenues distributed in the previous year, which declined further in 2011. As a result, for the period Sept, 1, 2012, through Aug. 31, 2013, Japan will eliminate its additional import tariffs on U.S. ball bearings (HTS 8482.10) and will increase its additional duty on tapered roller bearings (HTS 8482.20) from the U.S. from 1.7% to 4%.  

Export Privileges Suspended for Illegal Arms Shipments  

The Bureau of Industry and Security has issued two orders suspending the export privileges of a North Carolina man and a Florida company each convicted for illegal arms exports. The man exported firearms on the U.S. Munitions List to England and the company attempted to export military aircraft engine blades on the USML to Singapore, both without the required State Department export license or authorization. 

As a result, until Jan. 10, 2022 (for the man), and Aug. 19, 2014 (for the company), neither these entities nor anyone on their behalf may directly or indirectly participate 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. However, these orders do 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. 

The BIS is also revoking all licenses issued pursuant to the Export Administration Act or the EAR in which either of these entities had an interest at the time of their conviction. 

AD/CV Notices: Pipes, Pasta, Honey, PET Film, Nails, Washers, Vanadium  

Agency: International Trade Administration. 
Commodity: Circular welded carbon steel pipes and tubes. 
Country: Turkey. 
Nature of Notice: Final results of administrative review of countervailing duty order for the period Jan. 1 through Dec. 31, 2010. 
Details: Net subsidy rates of 0.22% for one respondent and 0.35% for another. As both of these rates are de minimis, no CV duties will be assessed on entries of subject merchandise during the period of review and CV cash deposit requirements will be suspended for shipments entered or withdrawn from warehouse on or after Aug. 6. 

Agency: International Trade Administration. 
Commodity: Pasta. 
Country: Turkey. 
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period July 1, 2010, through June 30, 2011. 
Details: Weighted average dumping margin of zero for all reviewed manufacturer/exporters. 

Agency: International Trade Administration. 
Commodity: Honey. 
Country: China. 
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Dec. 1, 2010, through Nov. 30, 2011. 
Details: Dumping margin of $2.63/kg determined on the basis of adverse facts available because the respondent failed to cooperate to the best of its ability. 

Agency: International Trade Administration. 
Commodity: Polyethylene terephthalate film, sheet and strip. 
Country: India and Taiwan. 
Nature of Notice: Preliminary results of administrative reviews of antidumping duty orders for the period July 1, 2010, through June 30, 2011.
Details: Weighted average dumping margins of zero for all three reviewed manufacturer/exporters from India and one producer/exporter from Taiwan and 5.2% for one other producer/exporter from Taiwan. 

Agency: International Trade Administration. 
Commodity: Steel nails. 
Country: China. 
Nature of Notice: Amended final ruling on scope of antidumping duty order pursuant to court decision. 
Details: The scope of this order includes steel nails found within toolkits. 

Agency: International Trade Administration. 
Commodity: Large residential washers. 
Country: Korea. 
Nature of Notice: Amended scope of countervailing duty investigation. 
Details: Top-load washing machines with a vertical rotational axis and a rated capacity of less than 3.70 cubic feet are excluded. 

Agency: International Trade Administration. 
Commodity: Ferrovanadium and nitrided vanadium. 
Country: Russia. 
Nature of Notice: Negative final determination of circumvention of antidumping duty order. 
Details: Importation of vanadium pentoxide from Russia that is then toll-converted into ferrovanadium in the U.S. prior to sale to unaffiliated customers does not constitute circumvention.

Ex-Im Bank Approves Financing for Export of U.S. Wind Blades to Brazil  

The Export-Import Bank of the United States has authorized a $32.1 million loan guarantee to a Brazilian company for the purchase of U.S-made wind turbine blades. These blades will be used to complete a 180-megawatt wind farm in the Brazilian state of Bahia and another 211-megawatt farm in the state of Ceara. An agency press release states that this financing will support approximately 250 permanent U.S. jobs and “facilitate the export of American-made products to one of our nine key markets at a critical time.”

Chemical Export Reporting Requirement Under Review  

The Bureau of Industry and Security is accepting comments through Sept. 5 on an information collection associated with the Chemical Weapons Convention provisions of the Export Administration Regulations. The CWC prohibits the use, development, production, acquisition, stockpiling, retention and direct or indirect transfer of chemical weapons. This information collection implements the following provisions of the treaty. 

- Schedule 1 notification and report: The U.S. is required to notify the Organization for the Prohibition of Chemical Weapons at least 30 days before any transfer (export/import) of Schedule 1 chemicals to another country that is party to the convention. The U.S. is also required to submit annual reports to the OPCW on all transfers of Schedule 1 chemicals. 

- End-Use Certificates: The U.S. is required to obtain end-use certificates for transfers of Schedule 3 chemicals to countries not party to the CWC to ensure that those chemicals are only used for purposes not prohibited under the convention.

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