October 16 2012 Issue
Semiannual Exchange Rate Policy Report Delayed Until After Election
The Treasury Department has again delayed the publication of its semiannual report to Congress on international economic and exchange rate policies. A press release said the report will not be issued until after Treasury has had an opportunity to assess progress following the G-20 finance ministers and central bank governors meeting in November.
Republican presidential candidate Mitt Romney has criticized President Obama for not using the Treasury report to designate China a currency manipulator, something the U.S. has not done in 18 years but that Romney has vowed to do on his first day in office if elected. That position is tied closely to the argument that the value of the yuan has a direct effect on the United States’ trade deficit with China and that the deficit in turn is a major contributor to U.S. job losses. However, many economists and trade policy analysts dispute this idea, pointing out that both the trade deficit and the unemployment rate have risen even as China’s currency has appreciated between 30% and 40% against the dollar since 2005.
In its most recent exchange rate report issued in May, Treasury concluded that the yuan remains “significantly undervalued and that further appreciation against the dollar and other major currencies is warranted.” At the same time, Treasury laid out several factors that weigh against naming China a currency manipulator, including the appreciation of the yuan, China’s decision to widen the daily trading band or the yuan, and a significant decline in China's current account surplus over the past four years that indicates that “China is gradually allowing necessary external adjustments to take place,” something the U.S. has consistently pressured Beijing on for a number of years.
Canada Eliminates Customs Duties on Various Products, Estimates $1.7 Million Annual Savings
Canada’s Department of Finance announced Oct. 11 the elimination of customs duties on certain products in the following categories (further details can be found here).
- palm oil flakes for use in the manufacture of food products
- trays designed to hold discs for use in the manufacture of CD or DVD cases
- fabric shells for use in the manufacture of bed linens such as duvets, comforters, featherbeds, cushions and pillows
- crossing pieces for guard rails
- certain chassis and motors for use in the manufacture of ambulances
A department press release states that this step builds on the government’s commitment to “make Canada a tariff-free zone for industrial manufacturers,” which has seen the elimination of duties on more than 1,800 tariff items since 2009.
Protest Form, Refinery Subzone Records Under Review
U.S. Customs and Border Protection is extending through Nov. 15 the period for public comments on the proposed extension without change of the following information collections.
Protest (Form 19): This form is used by an importer, filer or any party at interest to petition CBP or protest any action or charge made by the port director with respect to imported merchandise.
Petroleum Refineries in Foreign Trade Sub-zones: The Foreign Trade Zones Act permits refiners and CBP to assess the relative value of multiple products at the end of the manufacturing period during which these products were produced when the actual quantities resulting from the refining process can be measured with certainty. The Act also permits the products refined in a subzone during a manufacturing period to be attributed to a given crude introduced into production during the period, to the extent that such products were producible or could have been produced from the quantities removed from the subzone if Industry Standards of Potential Production on a Practical Operating Basis (known as producibility) are utilized. CBP regulations require the operator of the refinery subzone to retain all records relating to the above activities for five years after the merchandise is removed. Further, these records must be readily available for CBP review at the subzone.
Comments on these collections should address whether they 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 of the collections and ways to minimize that burden, and the annual costs to respondents or record keepers.
AD Notice: Orange Juice from Brazil
Agency: International Trade Administration.
Commodity: Orange juice.
Nature of Notice: Final results of administrative review of antidumping duty order for the period March 1, 2010, through Feb. 28, 2011.
Details: Weighted average dumping margins ranging from 2.63% to 20.34%. Importer-specific assessment rates based on these margins will be assessed on entries of subject merchandise made during the period of review, and AD cash deposits at these rates will be required for shipments of subject merchandise entered on or after Oct. 16.
New Production Authority Approved in Two FTZs, Three Other Requests Submitted
The Foreign-Trade Zones Board has recently taken the following actions.
- approved the production of ibuprofen pharmaceutical products in bulk mixture or dosage form under zone procedures at the Pfizer Pharmaceuticals LLC manufacturing facility in Guayama, P.R.
- approved production activity under zone procedures at the J.D. Neuhaus LP facility in Sparks, Md., which is used for the production of customized overhead lifting equipment
- received an application from the Puerto Rico Trade & Export Company, grantee of FTZ 61, requesting special-purpose subzone status for the Coamo Property & Investments LLC facility in Coamo (comments are due no later than Nov. 26)
- received from the Northeast Ohio Trade & Economic Consortium, grantee of FTZ 181, a notification of proposed production activity at the Cimbar Performance Minerals facility in Wellsville, Ohio, which is used for the grinding of raw barium sulfate into ground barium sulfate (comments are due no later than Nov. 26)
- received from Albany Molecular Research Inc., operator of subzone 121A, a notification of proposed production activity for its facility in Rensselaer, N.Y., with respect to the production of an active pharmaceutical ingredient, dexpramipexole dihydrochloride monohydrate, that AMRI plans to transfer to another FTZ facility for processing into a finished dosage pharmaceutical product
- accepted an amendment to an application filed by the Greater Miami Foreign-Trade Zone Inc., grantee of FTZ 32, to reorganize this zone under the alternative site framework to remove existing site 2 (Beacon Centre Development complex) from the zone