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September 24 2012 Issue

Monday, September 24, 2012
Sandler, Travis & Rosenberg Trade Report

U.S. Protests Brazil Plan to Hike Import Duties      

In a Sept. 19 letter to Brazilian Foreign Relations Minister Antonio Patriota, U.S. Trade Representative Ron Kirk sharply criticized Brazil for its plan to increase import tariffs on hundreds of products to as high as 25%. The first set of tariff hikes on 100 goods (click here for list) is apparently scheduled to take effect on or about Sept. 25 and a second round could be imposed in October. Kirk noted that these increases follow others that have been implemented during the past year and that “the overall effect is that an ever broader range of industrial goods faces deteriorating market access conditions” in Brazil. 

Kirk said Brazil’s tariff increases “clearly represent protectionist measures” that will “significantly hit U.S. exports to Brazil in key areas of export interest” and harm Brazil’s trading partners “in the region and around the world.” Although Brazil “may currently envision these tariff increases to be time-limited,” Kirk said, that “does not mitigate their harmful impact … [n]or are we reassured by the fact that these are increases in applied tariffs within bound rates.” Noting that Brazil’s higher duties are “increasingly U.S.-focused,” he warned that historically such actions have “often led to trading partners responding in kind, which would amplify [their] negative impact.” He reinforced that idea by pointing out that industrial goods trade between the U.S. and Brazil “is growing in importance and is key to Brazil's own trade interests.” 

According to press reports, Brazil responded by defending the planned tariff hikes. A Reuters article cited Patriota as saying they are needed to deal with “a flood of imported goods at artificially low prices” that he blamed in part on the currency effects of U.S. economic stimulus efforts. “It would be fairer,” he said,” if the significant gains in U.S. exports to Brazil in recent years “took place in an environment not distorted by exchange rate misalignments and blatant government support.” MercoPress quoted Foreign Ministry spokesman Tovar Nunes as calling the U.S. letter “not consistent with the relationship we have with the United States” and the criticisms it contains “baseless.” 

New Advisory Committee on Supply Chain Competitiveness to Meet Oct. 19      

The Department of Commerce’s Advisory Committee on Supply Chain Competitiveness will hold its inaugural meeting Oct. 19 at DOC headquarters in Washington, D.C. At this meeting, which is open to the public, the committee will discuss organizational and administrative issues, including ethics and privacy requirements, and select a chairperson. Members will also consider current issues affecting the U.S. supply chain, including legislative updates, transportation issues, trade negotiations and logistics data, and develop a calendar for future work. 

The Office of Service Industries will post a detailed agenda here prior to the meeting. Written comments for consideration by the committee at this meeting should be submitted no later than Oct. 12. 

The ACSCC is tasked with providing detailed policy and technical advice, information and recommendations on the following issues. 

• national, state or local factors that inhibit the efficient domestic and international movement of goods from point of origin to destination and the competitiveness of domestic and international supply chains 

• infrastructure capacity, intermodal and cross-modal connectivity, investment, regulatory and intra- or inter-governmental coordination factors that affect supply chain competitiveness, goods movement, and sustainability 

• emerging trends in goods movement that do or could affect supply chain competitiveness 

• metrics that can be used to quantify supply chain performance 

$500 Million Criminal Fine for Participation in LCD Price Fixing Conspiracy      

The Department of Justice announced Sept. 20 that a Taiwan-based liquid crystal display producer has been sentenced to pay a $500 million criminal fine for its participation in a five-year conspiracy to fix the prices of thin-film transistor LCD panels sold worldwide. According to the DOJ, this fine matches the largest ever imposed against a company for violating U.S. antitrust laws. 

The Taiwanese company was also sentenced to print advertisements in three major trade publications in the U.S. and Taiwan acknowledging its convictions and punishments and the remedial steps it has taken as a result. In addition, the company and its U.S. subsidiary were placed on probation for three years and required to adopt an antitrust compliance program and appoint an independent corporate compliance monitor. Further, the company’s president and former executive vice president were each sentenced to serve three years in prison and pay a $200,000 criminal fine. 

A DOJ press release notes that eight companies have now been convicted of charges arising out of the department's ongoing investigation and been sentenced to criminal fines totaling $1.39 billion. In addition, 22 executives have been charged, with 12 convicted and sentenced to serve a combined total of 4,871 days in prison. 

U.S. to Provide Trade Data to Australia to Combat Fraud, Counterfeits, Etc.      

Australia’s Customs and Border Protection Service and U.S. Immigration and Customs Enforcement will share trade data with each other under an agreement announced Sept. 20. Under this agreement CBPS will have access to ICE’s Data Analysis and Research for Trade Transparency System, which contains domestic and foreign trade data and allows users to see both sides of a trade transaction. CBPS will use this information to help identify international trade anomalies and financial irregularities indicative of trade-based money laundering, customs fraud, movement of counterfeit goods and other import/export crimes. An ICE official noted that this partnership will be the first for DARTTS in the region and “will better enable both agencies to successfully carry out their missions.”

New EPA Initiative Could Curtail Exports of Used Electronics      

The Environmental Protection Agency launched Sept. 20 its Sustainable Materials Management Electronics Challenge, an initiative to make protective electronics refurbishing and recycling practices the industry standard. An EPA press release states that by participating in this initiative companies in the electronics industry are committing to increase the amount of used electronics they collect and to send 100% of the used electronics that they collect to third-party certified refurbishers and recyclers. To be certified, recyclers must demonstrate to an accredited, independent auditor that they meet specific standards to safely recycle and manage used electronics. 

The Electronics Challenge is being characterized as, among other things, a way to increase domestic employment. Specifically, the EPA states, this program supports the National Strategy for Electronics Stewardshipreleased in July 2011 to address the problems associated with exports of electronic waste, which include the loss of electronics recycling jobs to overseas competitors as well as negative effects on public health and the environment. EPA Administrator Lisa Jackson said that with the U.S. already generating almost 2.5 million tons of electronic waste every year, the Electronics Challenge will help “to build a robust market for electronics recycling in the United States.” 

Senate Committee Approves Bill Seeking to Expand Exports to Africa      

The Senate Foreign Relations Committee approved Sept. 19 an amended version of legislation that aims to increase U.S. exports to Africa by 200% within ten years. Noting that the U.S. is competing with developed as well as emerging economies for a share of the rapidly growing African market, the Increasing American Jobs Through Greater Exports to Africa Act of 2012 (S. 2215) directs the president to establish within 180 days a comprehensive strategy for public and private investment, trade and development in Africa. Among other things, this strategy would focus on the following. 

- promoting the alignment of U.S. commercial interests with development priorities in Africa 

- developing relationships between African governments and U.S. businesses that have an expertise in such issues as infrastructure development, technology, telecommunications, energy and agriculture 

- improving the competitiveness of U.S. businesses in Africa, including the role the African diaspora can play in enhancing such competitiveness 

- exploring ways that African diaspora remittances can help communities in Africa tackle economic, development and infrastructure financing needs 

- promoting economic integration in Africa through working with the subregional economic communities, supporting efforts for deeper integration through the development of customs unions within western and central Africa and within eastern and southern Africa, eliminating time-consuming border formalities into and within these areas, and supporting regionally based infrastructure projects 

- encouraging a greater understanding among the U.S. business and financial communities of the opportunities Africa holds for U.S. exports 

- monitoring the policies of other countries with respect to export financing for investment in Africa that are predatory or distort markets 

Three years after the bill’s enactment the president would have to submit to Congress a report evaluating the success of this strategy. 

The bill would also require the appointment of a special Africa strategy coordinator, encourage the Department of Commerce to lead a joint trade mission to Africa within a year, direct the president to standardize the training of U.S. economic officers on export financing, and mandate that the Export-Import Bank increase the percentage of its financing that is used for projects in Africa. 

Foreign Regulatory Changes Could Affect Exports of Cosmetics, Juice, Pots, Milk      

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. 

Brazil – draft technical requirements for registration of personal care items, cosmetics and perfumes for children (comments due by Nov. 5) 

Brazil – draft technical regulations on orange juice and grape juice 

Taiwan – draft minimum energy efficiency requirements for electric pots (comments due by Nov. 18) 

Thailand – draft revised notification on cow’s milk 

Thailand – draft notification on low-acid food and acidified food in sealed containers (comments due by Nov. 18) 

CBP Proposes Closing Jamieson Line Border Crossing in New York      

U.S. Customs and Border Protection is proposing to close the Jamieson Line, N.Y., border crossing as part of a continuing effort to more efficiently utilize its personnel, facilities and resources and provide better service to carriers, importers and the general public. Comments on this proposed rule, including its potential economic or environmental effects, are due no later than Nov. 23. 

CBP states that the Jamieson Line crossing is one of its least trafficked border crossings, with an average of 63 trucks a year from 2008 through 2011. CBP has also determined that this facility, which has not undergone renovation since 1962, does not have the infrastructure to meet modern operational, safety and technological demands for border crossings and that major renovations would be required if it were to continue operations. Furthermore, the Canada Border Services Agency closed its Jamieson’s Line port of entry in Quebec on April 1, 2011.

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