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September 12 2012 Issue

Wednesday, September 12, 2012
Sandler, Travis & Rosenberg Trade Report

U.S. Prepares to Resume Trade Talks with Taiwan   

The U.S. took another step toward expanding its economic engagement with Asia this week by announcing plans to resume trade liberalization talks with Taiwan. The U.S. already has bilateral free trade agreements with Singapore, Australia and Korea and is negotiating the Trans-Pacific Partnership with several other regional partners. On Sept. 10 the de facto American Embassy in Taiwan indicated that the two sides will “begin exploratory work and prepare for future expert-level engagement under the umbrella of [their] Trade and Investment Framework Agreement.” 

Talks under the U.S.-Taiwan TIFA have been suspended since 2007 due largely to Taiwan’s restrictions on imports of beef containing a growth additive commonly used by U.S. producers. In July, however, Taiwanese lawmakers agreed to amend the country’s food safety law to allow imported beef to contain up to a yet-to-be-determined amount of that additive. While the regulatory changes necessary to implement this legislation have not yet been made, a senior State Department official is slated to visit Taiwan as soon as this month for talks on further broadening the bilateral economic relationship. Press sources quoted Taiwanese president Ma Ying-jeou as thanking the U.S. for “taking concrete steps in bolstering bilateral economic ties” and expressing hope that “this will extend to Taiwan’s participation in regional economic integration pacts such as the Trans-Pacific Partnership.” 

Trade Deficit Edges Up for First Time in Four Months   

Trade statistics released Sept. 11 by the Department of Commerce show that the monthly U.S. trade deficit in goods and services edged up $0.1 billion in July to $42.0 billion, barely halting a three-month decline and a much smaller gain than expected. Exports fell 1.0% to $183.3 billion amid continuing economic struggles around the world and imports dropped 0.8% to $225.3 billion, largely due to a decline in oil prices. Compared to a year earlier, the July trade deficit was down $3.6 billion as exports climbed $4.9 billion (2.8%) and imports rose $1.4 billion (0.6%). 

According to the DOC, the deficit in goods trade declined $0.2 billion in July to $57.3 billion after an 8.6% drop in June. Exports of goods fell $1.9 billion from the previous month to $130.8 billion while imports were down $2.1 billion to $188.1 billion. The services surplus fell another $0.3 billion to $15.3 billion as exports remained unchanged at $52.5 billion but imports moved ahead $0.3 billion to $37.2 billion. 

The bilateral trade deficit with China increased for the fifth month in a row, up 7.3% to a record $29.4 billion as imports continued to outpace exports. The U.S. also ran deficits with the European Union (up 42.9% to $12.0 billion as continuing recessions in the region slowed demand for U.S. exports), Japan (up 13.3% to $6.8 billion), Mexico (down 15.3% to $5.0 billion), Germany (up 19.5% to $4.9 billion), Ireland (unchanged at $2.6 billion), Canada (up 40% to $2.1 billion), Korea (up 72.7% to $1.9 billion), Taiwan (up 25% to $1.5 billion), Venezuela (up 40% to $1.4 billion) and Nigeria (down 42.9% to $0.8 billion). 

The U.S. continued to run surpluses with several trade partners in July, including Australia (up 10.5% to $2.1 billion), Hong Kong (down 30.8% to $1.8 billion), Singapore (down 41.7% to $0.7 billion) and Egypt (up 100% to $0.2 billion). 

Of Note: Mexican Demand for U.S. Goods, Canada-China Investment Pact   

Trade surging as Mexico consumers embrace 'Made in USA' 
Canada announces signing of new investment agreement with China

Textile and Apparel Imports Up 4.6%; Shipments from Korea and Turkey See Biggest Increase   

The Department of Commerce’s Office of Textiles and Apparel reported Sept. 11 that monthly U.S. textile and apparel imports rose 4.6% in July compared to a year earlier. Imports of cotton, wool, manmade fiber, silk blends and non-cotton vegetable fiber textile and apparel products totaled 5.04 billion square meter equivalents for the month, with textile imports climbing 5.3% to 2.74 billion SME and apparel imports rising 3.7% to 2.30 billion SME. 

For the year to date as of July 2012, compared to the same period in 2011, imports of textiles and apparel were up 0.4% to 31.1 billion SME. Textile imports saw a 3.0% gain to 17.8 billion SME while apparel imports fell 2.9% to 13.3 billion SME. For the 12-month period ending in July total imports were down 2.9% to $53.8 billion SME as textile imports were unchanged at 30.3 billion SME but apparel imports slumped 6.4% to 23.5 billion SME. 

With respect to specific sources, imports of textile and apparel products (except cotton and silk blend textiles) saw a year-on-year increase in July from China (4.5% to 2.51 billion SME), Vietnam (4.0% to 277.7 million SME), Taiwan (13.0% to 80.1 million SME), Korea (24.7% to131.8 million SME), ASEAN (3.9% to 634.0 million SME), South Asia (9.1% to 706.4 million SME) and Turkey (17.5% to 51.9 million SME). On the other hand, imports declined from Hong Kong (17.0% to 5.0 million SME), Canada (4.7% to 98.7 million SME), Mexico (0.3% to 208.6 million SME), DR-CAFTA (2.9% to 277.6 million SME), the Caribbean Basin (2.5% to 301.9 million SME), the EU 15 (5.9% to 108.9 million SME) and Israel (9.0% to 31.2 million SME). 

Conflict Mineral Regulations Published in Federal Register   

The Securities and Exchange Commission’s final rule requiring companies to publicly disclose their use of conflict minerals that originate in the Democratic Republic of the Congo or an adjoining country will be published in the Federal Register on Sept. 12. The new regulations will be effective as of Nov. 13, companies will have to comply with them for calendar year 2013 and the first conflict mineral reports will be due May 31, 2014. Click herefor more information. 

Trade, Arms Control Officials Nominated   

President Obama announced Sept. 10 his intent to nominate a member of the International Trade Commission and a new arms control official. 

F. Scott Kieff, a professor at The George Washington University Law School, will be nominated to join the ITC. Kieff is also a Ray and Louis Knowles Senior Fellow at Stanford University's Hoover Institution, where he directs the Project on Commercializing Innovation and serves on the Property Rights Task Force. From 2007 to 2010 he was a member of the Patent Public Advisory Committee of the United States Patent and Trademark Office, and from 2005 to 2007 he was a mediator in the appellate mediation program of the U.S. Circuit Court of Appeals for the Federal Circuit. 

Rose Gottemoeller is nominee for under secretary of State for arms control and international security. Gottemoeller is currently the acting under secretary as well as assistant secretary for verification and compliance. From 2000 to 2009 she was a senior associate with the Carnegie Endowment for International Peace, where she also served as the director of the Carnegie Moscow Center from 2006 to 2008. From 1997 to 2000 she worked at the Department of Energy as a senior official focusing in nonproliferation and national security. Earlier in her career she was the National Security Council director for Russia, Ukraine and Eurasia affairs. 

AD Notices: Fish, Citric Acid   

Agency: International Trade Administration. 
Commodity: Frozen fish fillets. 
Country: Vietnam. 
Nature of Notice: Preliminary results of administrative review and new shipper review of antidumping duty order for the period Aug. 1, 2010, through July 31, 2011. 
Details: Weighted average dumping margins of zero for specifically reviewed manufacturers and exporters and 2.11% for those included in the Vietnam-wide rate. Intent to revoke order with respect to subject merchandise from Vinh Hoan Corporation and QVD Food Company Ltd. Preliminary rescission of review with respect to numerous companies that made no entries of subject merchandise during the period of review. 

Agency: International Trade Administration. 
Commodity: Citric acid and certain citrate salts. 
Country: China. 
Nature of Notice: Rescission of administrative review of countervailing duty order for the period Jan. 1 through Dec. 31, 2011, with respect to Yixing-Union Biochemical Co. Ltd., which had no sales, shipments or exports of subject merchandise to the U.S. during the period of review. 

New IPR Infringement Petition on Nutraceutical Products   

The International Trade Commission received Sept. 10 a petition requesting that it institute a Section 337 investigation regarding certain reduced folate nutraceutical products and l-methylfolate raw ingredients used therein. The petition was filed on behalf of the South Alabama Medical Science Foundation, Merck & Cie, and Pamlab LLC. The proposed respondents are located in Italy, Switzerland and the U.S. 

Section 337 investigations primarily involve claims regarding intellectual property rights violations by imported goods, including the infringement of patents, trademarks and copyrights. Other forms of unfair competition involving imported products, such as misappropriation of trade secrets or trade dress and false advertising, may also be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the U.S. In addition, the ITC may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337, including selling infringing imported articles out of U.S. inventory.

Advisory Committee on Labor Provisions of U.S. FTAs to Meet Sept. 27    

The National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements will hold an open meeting Sept. 27 in Washington, D.C. Agenda items will include implementation of these provisions, technical cooperation programs in FTA countries, and a subcommittee report regarding the North American Agreement on Labor Cooperation. Written data, views or comments for consideration by the committee should be submitted no later than Sept. 20.

Another Carrier Approved for Mexican Truck Pilot    

The Department of Transportation’s Federal Motor Carrier Safety Administration is requesting comments no later than Sept. 24 on data and information concerning a pre-authorization safety audit conducted for Transportes Monteblanco SA de CV, a Mexican 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. FMCSA states that this carrier successfully completed its PASA and that the results of this audit, as well as a list of the carrier’s vehicles approved for use in the pilot program, areavailable here

While U.S. 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. 

Amended Maritime Agreements Filed    

The Federal Maritime Commission has issued notice that the following amended agreements have been filed. Interested parties may submit comments by Sept. 24. 

Westbound Transpacific Stabilization Agreement – The amendment reflects the withdrawal of Nippon Yusen Kaisha effective Sept. 21, 2012. 

U.S. Supplemental Agreement to HLC Agreement – The authorizes the parties to appoint other committees in addition to an executive committee, clarifies wording, and makes other administrative changes. 

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