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August 27 2012 Issue

Monday, August 27, 2012
Sandler, Travis & Rosenberg Trade Report

Labor Dept. Still Reviewing Allegations of FTA Violations in DR, Bahrain  

The Department of Labor has extended for an undisclosed period of time its review of a petition alleging that the government of the Dominican Republic has violated the labor chapter of the DR-CAFTA. The department has also advised that it anticipates issuing in the near future a report on allegations that the government of Bahrain has violated the labor chapter of the U.S.-Bahrain Free Trade Agreement. 

With respect to the DR, the petitioner charged that the government’s actions or lack thereof have denied workers their rights under national laws relating to freedom of association, the right to organize, child labor, forced labor, the right to bargain collectively and acceptable conditions of work. Among other things, the petition discussed a number of issues in the sugar sector that the petitioner believes are in violation of DR labor laws. The DOL is extending its review of this petition to permit adequate consideration of public comments submitted in response to a June 19 Federal Registernotice as well as information collected during a July 2012 visit to the DR. The department states that it will “continue to give this matter the highest priority in order to complete the review as expeditiously as possible.” 

With respect to Bahrain, the AFL-CIO requested that the U.S. withdraw from its FTA with that country over allegations that it failed to fulfill its obligations and commitments under the International Labor Organization Declaration on Fundamental Principles and Rights at Work by committing human rights abuses during a 2011 crackdown on protesters. In a recent letter to the union Labor Secretary Hilda Solis said the department “has had the difficult task of attempting to focus on the labor component of an evolving set of events that occurred as part of the ‘Arab Spring’ in Bahrain” and that the delay in issuing the report “can be solely attributed to the desire to incorporate all relevant information and ensure that the report is comprehensive, accurate, and credible.” Solis added that the report has been drafted and sent to the Office of the U.S. Trade Representative and the State Department for review and will be issued after that process is complete.

Report Claims 2.7 Million Jobs Lost to U.S. Trade Deficit with China  

The Economic Policy Institute has issued a report alleging that between 2001 and 2011 the U.S. trade deficit with China eliminated or displaced more than 2.7 million jobs, including 2.1 million in the manufacturing sector. In addition, the report asserts, competition with “low-wage workers from less-developed countries such as China” has yielded a $1,400 annual loss of earnings for “a typical full-time median-wage earner” and “reduced the wages and bargaining power of similar, non-college-educated workers throughout the economy,” who comprise “roughly 70 percent of the workforce.” The EPI claims that China is “the most important source of downward wage pressure from trade with less-developed countries because it pays very low wages and because its products make up such a large portion of U.S. imports.” 

Within manufacturing, the report states, rapidly growing imports of computer and electronic products (including computers, parts, semiconductors and audio-video equipment) accounted for 54.9% of the $217.5 billion increase in the U.S. trade deficit with China between 2001 and 2011, which contributed to the elimination of 1.06 million U.S. jobs in this sector. While global trade in advanced technology products is often discussed as a source of comparative advantage for the United States, the report adds, in 2011 the U.S. had a $109.4 billion deficit in such products with China (36.3% of the total deficit) compared to a $9.7 billion surplus with the rest of the world. Other industrial sectors that the report says have lost significant numbers of jobs due to growing trade deficits with China include apparel and accessories (211,200), textiles and textile products (106,200), fabricated metal products (120,600), furniture and fixtures (80,700), plastics and rubber products (57,600), motor vehicles and parts (19,800), and miscellaneous manufactured goods (111,800). 

The U.S. Chamber of Commerce responded with a press release stating that the EPI report is “based on deficient analysis that distracts from the real challenges facing the US economy and the trade relationship with China.” Vice President Erin Ennis said the report relies on the premise that products not made in China would be made in the U.S., a “faulty” assumption that “ignores the realities of global supply chains and modern manufacturing techniques.” Ennis also said the report over-emphasizes the link between appreciation of the value of China’s currency, the U.S. trade deficit with China and U.S. jobs, noting that since 2005 the yuan has appreciated over 30% against the dollar but there has been no significant corresponding decrease in the trade deficit.

CBP Invites Comments on Information Collections on Transfer of Goods, User Fees  

U.S. Customs and Border Protection is extending through Sept. 26 the period for public comments on the proposed extension of the following information collections. Comments should address whether these collections are necessary for the proper performance of CBP’s functions, ways to enhance the quality, utility and clarity of the information collected, the accuracy of CBP’s estimate of the burden associated with these collections and ways to minimize that burden. 

Application and Approval to Manipulate, Examine, Sample or Transfer Goods (CBP Form 3499) – This form is used as an application to perform various operations on merchandise located at a CBP-approved bonded facility. It is filed by importers, consignees, transferees or owners of merchandise and is subject to approval by the port director. The data requested on the form identifies the merchandise for which action is being sought and specifies in detail what operation is to be performed. The form may also be approved as a blanket application to manipulate for a period of up to one year for continuous or repetitive manipulation. 

User Fees – CBP’s collection of user fees requires the submission of information from the party remitting the fees. This information is submitted on three forms including CBP Form 339A for aircraft, CBP Form 339C for commercial vehicles and CBP Form 339V for vessels. In addition, CBP requires express consignment courier facilities to file lists of couriers using the facility as well as quarterly reports.

Maritime Security Meeting to Discuss Marine Highway System, Port Security Grants  

The National Maritime Security Advisory Committee will hold an open meeting Sept. 11-12 in Arlington, Va. Members of the public wishing to attend the open sessions should register no later than Sept. 7. This meeting will also be broadcast via a Web-enabled interactive online format and teleconference line. 

The upcoming meeting will include discussion of the following topics. 

- results of efforts to poll the maritime industry on what gaps remain in information sharing between the industry and the federal government and recommendations on how to improve the information sharing efforts of the Coast Guard and the Department of Homeland Security 

- parameters of a new tasking from the Coast Guard to provide guidance and recommendations on cybersecurity initiatives within the maritime sector 

- efforts by the Maritime Administration to reduce the risk of hazardous cargo in metropolitan areas by utilizing the marine highway system 

- implementation of NMSAC recommendations on Coast Guard and U.S. Customs and Border Protection field guidance pertaining to requirements for vessels to post or contract for guards while in U.S. ports 

- U.S. and Canadian governments’ efforts to harmonize security regulations across the northern border and NMSAC recommendations on these efforts 

- integration of facility security plans and systems 

- port security grant program priorities, including NMSAC recommendations

- DHS efforts related to radiation portal monitors

FMC Updates List of Controlled Ocean Carriers by Adding One, Removing Four  

The Federal Maritime Commission has published an updated list of controlled carriers, which are subject to special regulatory oversight by the FMC. Since the last publication of this list in May 2005 the FMC has added one carrier (Hainan P O Shipping Co. Ltd.) and removed four (Ceylon Shipping Corporation, which is inactive; Compagnie Nationale Algerienne de Navigation, which no longer operates as an ocean common carrier; Sinotrans Container Lines Co. Ltd., which no longer operates as an ocean common carrier in the U.S.-foreign trades, though a related company operates as a non-vessel-operating common carrier in those trades; and The Shipping Corporation of India Ltd., which no longer does business in the U.S.-foreign trades). The other three carriers currently on the controlled carrier list are American President Lines Ltd. and APL Co. Pte., COSCO Container Lines Company Limited, and China Shipping Container Lines Co. Ltd and China Shipping Container Lines (Hong Kong) Co. Limited. 

A controlled carrier is one that is, or whose operating assets are, directly or indirectly owned or controlled by a government, meaning that (a) a majority of the interest in the carrier is owned or controlled in any manner by that government, an agency of that government or a public or private person controlled by that government or (b) that government has the right to appoint or disapprove the appointment of a majority of the directors, the chief operating officer or the chief executive officer of the carrier. The FMC may prohibit the publication or use of a rate, charge, classification, rule or regulation that a controlled carrier has failed to demonstrate is just and reasonable. Congress enacted these protections to ensure that controlled carriers, whose marketplace decision-making can be influenced by foreign governmental priorities or by their access to non-market sources of capital, do not engage in unreasonable below-market pricing practices that could disrupt trade or harm privately-owned shipping companies.

AD Notices: Wooden Bedroom Furniture, Ferrovanadium  

Agency: International Trade Administration. 
Commodity: Wooden bedroom furniture. 
Country: China. 
Nature of Notice: Final results of administrative review of antidumping duty order for the period Jan. 1 through Dec. 31, 2010. 
Details: Weighted average dumping margin of 216.01% for the China-wide entity. AD duties based on this rate will be assessed on entries of subject merchandise during the period of review, and AD cash deposits at this rate will be required for subject merchandise entered or withdrawn from warehouse for consumption on or after Aug. 27. 

Agency: International Trade Commission. 
Commodity: Ferrovanadium and nitrided vanadium. 
Country: Russia. 
Nature of Notice: Sunset review determination that revocation of this antidumping duty order would not be likely to lead to continuation or recurrence of material injury to an industry in the U.S. within a reasonably foreseeable time. As a result, this AD duty order will shortly be revoked.

Foreign Regulatory Changes Could Affect Exports of Fuels, Reflective Tape, Traffic Lights  

According to the National Institute of Standards and Technology, the World Trade Organization has been notified of regulatory changes that may affect exports of specific products to the following countries. For information on how these restrictions may affect your business, contact ST&R. 

Colombia – draft amended resolution on clean fuels (comments due by Nov. 8) 

Colombia – draft technical regulation on retro-reflective tape for use on motor vehicles and trailers (comments due by Nov. 8) 

Ecuador – July 12 publication of technical regulation on traffic lights

No IPR-Related Import Restrictions on Drill Bits  

The International Trade Commission has terminated patent infringement investigation 337-TA-844 of certain drill bits and products containing same after upholding a determination of no importation. The ITC notes that complainants Boart Longyear Company and Longyear TM Inc. may refile their complaint if they can make an allegation of importation into the U.S., sale for importation or sale within the U.S. after importation of accused products after issuance of the asserted patents.

Medical Trade Mission to Brazil Slated for May 2013  

The International Trade Administration is organizing a medical trade mission to Brazil for May 21-24, 2013, in conjunction with Hospitalar 2013, a major healthcare trade show that attracts a high number of visitors from around the world. This mission is intended to include representatives from a variety of U.S. medical/healthcare industry manufacturers (equipment/devices, laboratory equipment, emergency equipment, diagnostic, physiotherapy and orthopedic, healthcare information technology, and other allied sectors), service providers and trade associations. 

A minimum of eight and a maximum of 12 companies will be selected to participate in the mission. U.S. companies already doing business in Brazil as well as those seeking to enter the Brazilian market for the first time may apply. Applicants must submit no later than March 8, 2013, a completed and signed mission application and supplemental application materials, including adequate information on their products and/or services (or in the case of a trade association or trade organization, information on the products and/or services of the companies to be represented on the trade mission), 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 United States or, if not, marketed under the name of a U.S. firm and have at least 51% U.S. content.

USDA Establishes Minimum Quality Regulation for Imported Pistachios  

The Department of Agriculture’s Agricultural Marketing Service has issued a final rule that, effective Sept. 26, will establish maximum aflatoxin tolerance levels and mandatory testing and certification requirements for pistachios imported or offered for importation into the United States. Specifically, aflatoxin levels in imported pistachios may not exceed 15 parts per billion, and importers will be responsible for arranging for the required transportation, storage, sampling, testing and certification of such pistachios prior to importation. Pistachios failing to meet the aflatoxin requirements on initial analysis may be reworked and retested, exported to another destination with a higher aflatoxin tolerance, or disposed of in authorized outlets under the supervision of U.S. Customs and Border Protection. Imported pistachios that fail aflatoxin testing may be diverted to certain non-human consumption outlets. 

APHIS states that the import quality and reporting and recordkeeping requirements established for imported pistachios in this rule are the same as or comparable to those in effect for pistachios grown in California, Arizona and New Mexico (which account for over 99% of domestic production) and that this rule is intended to assure consumers that all pistachios offered for sale in the U.S. meet the same aflatoxin standards. The final rule also revises a regulatory provision specifying safeguard procedures for the importation of walnuts and dates that are exempt from § 8e regulations to add safeguard procedures for the importation of pistachios intended for exempted purposes.

USDA Announces Dairy Import License Fee for 2013, Adjusts 2012 Licenses  

The Department of Agriculture’s Foreign Agricultural Service has announced that it will charge a $170 fee for the 2013 tariff-rate quota year for each license it issues to a person or firm authorizing the importation of certain dairy articles that are subject to TRQs set forth in the Harmonized Tariff Schedule of the United States. Under USDA regulations these articles (which include butter, dried milk and various cheeses) may only be entered into the U.S. at the in-quota TRQ tariff rates by or for the account of a person or firm to whom such licenses have been issued and only in accordance with the terms and conditions of the regulation. Licenses are issued on a calendar year basis and each license authorizes the license holder to import a specified quantity and type of dairy article from a specified country of origin. 

Separately, the USDA has issued a final rule that sets forth the revised appendices to the dairy TRQ licensing regulation for the 2012 quota year reflecting the cumulative annual transfers for certain dairy product import licenses permanently surrendered by licensees or revoked by the licensing authority. Whenever a historical license (Appendix 1) is not issued to an applicant or is permanently surrendered or revoked the amount of that license must be transferred to the list of non-historical licenses in Appendix 2.

Quarterly Update on Foreign Cheese Subsidies  

The International Trade Administration has issued its quarterly update to the list of foreign government subsidies on articles of cheese subject to an in-quota rate of duty. This list includes subsidy programs implemented by the governments of Canada, Norway, Switzerland and the 27 member countries of the European Union but indicates that during the period April 1 through June 30, 2012, the only program actually in effect was a $0.35/lb. subsidy offered by Canada for export assistance for certain types of cheese.

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