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November 8 2012 Issue

Thursday, November 08, 2012
Sandler, Travis & Rosenberg Trade Report

House Ways and Means, Senate Finance Committees to See New Faces in 2013

Due to retirements and results from this week’s elections, the membership of the House Ways and Means and Senate Finance committees will see some changes when the 113th Congress gets underway in January 2013. However, Republicans will continue as the majority on the Ways and Means Committee and Democrats will maintain control of Senate Finance, and neither has lost any significant leadership.

In the House, Rep. Pete Stark, D-Calif., was defeated in his bid for re-election. Reps. Shelley Berkley, D-Nev., and Rick Berg, R-N.D., each ran for a seat in the Senate but appear to have lost. Rep. Wally Herger, R-Calif., retired and Rep. Geoff Davis, R-Ky., resigned. Committee Chairman Dave Camp, R-Mich., and Ranking Member Sander Levin, D-Mich., and Trade Subcommittee Chairman Kevin Brady, R-Texas, and Ranking Member Jim McDermott, D-Wash., as well as all other committee members, were re-elected.

In the Senate, Sens. Jeff Bingaman, D-N.M., Kent Conrad, D-N.D., Jon Kyl, R-Ariz., and Olympia Snowe, R-Maine, retired. Committee Chairman Max Baucus, D-Mont., was not up for re-election and Ranking Member Orrin Hatch, R-Utah, retained his seat. Committee members Debbie Stabenow, D-Mich., Maria Cantwell, D-Wash., Bill Nelson, D-Fla., Robert Menendez, D-N.J., Tom Carper, D-Del., and Ben Cardin, D-Md., all won their bids for re-election.

Assignments to fill empty committee seats are expected to be made within the first few weeks of the new Congress being seated. 

Expansion of Information Technology Agreement Subject of ITC Report

The International Trade Commission has released its first report on the proposed expansion of the Information Technology Agreement, one of two reports on this issue to be delivered to the Office of the U.S. Trade Representative. The report contains a draft list of information and communications technology products (130 product codes, 439 product descriptions) that could be considered for duty-free treatment under the ITA and provides information concerning both the ICT and non-ICT purposes for which each of the products is used. The report also identifies the following products that U.S. industry and other interested parties view to be import sensitive.

- printing ink, black (HS 3215.11)
- printing ink (black) packaged in the ink jet cartridge (HS 3215.11)
- printing ink, other than black (HS 3215.19)
- inks, other than printing ink (HS 3215.90)
- other chemical preparation for photographic uses (other than varnishes, glues, adhesives and similar preparations); unmixed products for photographic uses, put up in measured portions or put up for retail sale in a form ready for use (HS 3707.90)
- ceramic wares of a kind used for the production or processing of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits, or flat panel displays (HS 6909.11)
- copper foil of refined copper not backed of thickness not exceeding 0.15 mm designed for printed circuits (HS 7410.11)
- copper clad laminates backed with paper, paperboard, plastics, or similar backing materials of a thickness (excluding any backing) not exceeding 0.15 mm (HS 7410.21)
- optical fibers, optical fiber bundles and cables (HS 9001.10)

A second report, slated to be delivered in February 2013, will identify tariffs in major markets, the major producing countries, the leading U.S. export markets, and the leading sources of U.S. imports for each of the products on the list. The second report will also examine benefits to the U.S. industry of ITA expansion, including increased market access and export opportunities in selected key subsectors. 

Safety Standard for Infant Swings Finalized

The Consumer Product Safety Commission has issued a final rule establishing a safety standard for infant swings in response to a mandate under the Consumer Product Safety Improvement Act of 2008 for it to issue such standards for durable infant or toddler products. According to the CPSC, the new standard is based on the voluntary standard developed by ASTM International, ASTM F 2088-12a, “Standard Consumer Safety Specification for Infant Swings,” with the addition of a labeling modification and a revised test method concerning toy mobiles attached to the swing.

Under the new standard an infant swing is defined as a stationary unit with a frame and powered mechanism that enables an infant to swing in a seated position. It is intended for use with infants from birth until a child is able to sit up unassisted. The standard also addresses cradle swings, which are defined as an infant swing intended for use by a child lying flat, and travel swings, which are defined as a low profile, compact swing having a distance of six inches or less between the underside of the seat bottom and the support surface (floor) at any point in the seat’s range of motion.

The new safety standard will be effective May 7, 2013, and will apply to products manufactured on or after that date. Once this standard is in effect it will be unlawful for anyone to manufacture, distribute or import an infant swing into the U.S. that is not in conformity with that standard. 

Import Restrictions Recommended on Computer Forensic Devices

The International Trade Commission is requesting comments no later than Nov. 30 on any public interest issues raised by a recommendation to impose import restrictions on imports of certain computer forensic devices and products containing the same. The presiding administrative law judge in investigation 337-TA-799 has determined that the appropriate remedy is the issuance of a limited exclusion order with respect to subject goods from four respondents. The ITC is now seeking input on whether this remedy would affect the public health and welfare in the U.S., competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. In particular, the ITC is interested in comments that:

- explain how the articles potentially subject to the orders are used in the U.S.;

- identify any public health, safety or welfare concerns in the U.S. relating to the potential orders;

- identify like or directly competitive articles that the complainant, its licensees or third parties make in the U.S. that could replace the subject articles if they were to be excluded;

- indicate whether the complainant, the complainant’s licensees and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the requested orders within a commercially reasonable time; and

- explain how the requested orders would impact U.S. consumers. 

AD/CV Notices: Solar Cells, Steel Wire Rod, Garment Hangers, Silicomanganese

Agency: International Trade Commission.
Commodity: Crystalline silicon photovoltaic cells and modules.
Country: China.
Nature of Notice: Final affirmative antidumping and countervailing injury determinations. Details: The International Trade Administration will soon issue AD and CV duty orders on this merchandise. Because the ITC made negative critical circumstances determinations, the AD/CV duty orders will not apply retroactively.
Link: http://www.usitc.gov/press_room/news_release/2012/er1107kk1.htm

Agency: International Trade Administration.
Commodity: Carbon and certain alloy steel wire rod.
Country: Mexico.
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Oct. 1, 2010, through Sept. 30, 2011.
Details: Weighted average dumping margin of 12.31% for Deacero S.A. de V.C. and Deacero USA Inc.

Agency: International Trade Administration.
Commodity: Steel wire garment hangers.
Country: China.
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Oct. 1, 2010, through Sept. 30, 2011.
Details: Weighted average dumping margins of zero for Shanghai Wells Group and 187.25% for the China-wide entity.

Agency: International Trade Administration.
Commodity: Silicomanganese.
Country: China.
Nature of Notice: Continuation of antidumping duty order for five years, effective Nov. 8.
Details: Silicomanganese is a ferroalloy composed principally of manganese, silicon and iron and normally contains much smaller proportions of minor elements such as carbon, phosphorus and sulfur. Silicomanganese generally contains by weight not less than 4% iron, more than 30% manganese, more than 8% silicon and not more than 3% phosphorous. All compositions, forms and sizes of silicomanganese are included within the scope of this order, including silicomanganese slag, fines and briquettes. Silicomanganese is currently classifiable under HTSUS 7202.30.0000. 

Iranian Financial Sanctions Regulations Updated to Reflect Recent Law

The Treasury Department’s Office of Foreign Assets Control has issued a final rule that, effective Nov. 8, amends the Iranian Financial Sanctions Regulations to implement sections 214 through 216 of the Iran Threat Reduction and Syria Human Rights Act of 2012.

Sections 214 and 215 expand the categories of sanctionable activities concerning foreign financial institutions that are set forth in section 104(c)(2) of the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010. Under this provision Treasury may prohibit or impose strict conditions on the opening or maintaining in the U.S. of a correspondent account or a payable-through account by a foreign financial institution if it finds that the institution knowingly facilitates the activities of a person subject to financial sanctions pursuant to a United Nations Security Council resolution that imposes sanctions with respect to Iran. Section 214 of the TRA expands this sanctionable category to include facilitating the activities of “a person acting on behalf of or at the direction of, or owned or controlled by,” a person sanctioned under such UNSC resolutions.

Section 215 of the TRA amends section 104(c)(2)(E) of CISADA to authorize the imposition of CISADA sanctions on a foreign financial institution that knowingly facilitates significant transactions or provides significant financial services for a person (formerly a financial institution) whose property and interests in property are blocked pursuant to the International Emergency Economic Powers Act in connection with Iran’s proliferation of weapons of mass destruction or delivery systems for WMD or Iran’s support for international terrorism.

Section 216 of the TRA adds a new section requiring Treasury to revise the regulations prescribed under CISADA section 104(c) to apply, to the same extent that they apply to a foreign financial institution found to knowingly engage in an activity described in CISADA section 104(c)(2), to a foreign financial institution that Treasury finds (1) knowingly facilitates, or participates or assists in, an activity described in section 104(c)(2) of CISADA; (2) attempts or conspires to facilitate or participate in such an activity; or (3) is owned or controlled by a foreign financial institution that Treasury finds knowingly engages in such an activity. 

Monthly Surface Trade with Canada and Mexico Up 9.0% in August

U.S. monthly surface transportation trade in goods with NAFTA partners Canada and Mexico increased 9.0% in August following an 8.4% decline in July, according to statistics released by the Department of Transportation. The August total of $82.5 billion was also up 2.6% from a year before. Over the last ten years total surface transportation trade with Canada and Mexico has risen 76.5%, including a 94.2% gain for exports and a 63.2% increase for imports.

Surface transportation includes freight movements by truck, rail, pipeline, mail, foreign-trade zones and other modes and in August accounted for 87.2% of U.S. trade by value with Canada and Mexico. Surface trade between the U.S. and Canada totaled $47.0 billion, up 9.4% from July but down 1.0% from the year before. Exports rose 9.2% for the month and were up 0.2% from the previous August, while imports saw a 9.7% monthly increase but a 2.2% decline year-on-year. U.S.-Mexico surface transportation trade totaled $35.5 billion, up 8.4% from July and 7.8% from the previous year. Exports gained 9.0% and imports increased 7.8% for the month and both categories saw increases from August 2011 as well (6.9% and 8.6%, respectively). 

Two Foreign-Trade Zones Seek to Reorganize Under Alternative Site Framework

The Foreign-Trade Zones Board is accepting comments no later than Jan. 7, 2013, on applications it has received for authority to reorganize the following FTZs under the alternative site framework.

- FTZ 147, with a proposed service area of Berks, Cumberland, Dauphin, Franklin, Lancaster and York counties in Pennsylvania, within and adjacent to the Harrisburg U.S. Customs and Border Protection port of entry

- FTZ 185, with a proposed service area of Albemarle, Augusta, Bath, Caroline, Culpeper, Fluvanna, Greene, Highland, King George, Louisa, Madison, Nelson, Orange, Page, Rappahannock, Rockbridge, Rockingham, Shenandoah, Spotsylvania, Stafford and Warren counties in Virginia, within and adjacent to the Front Royal CBP port of entry 

Foreign Regulatory Changes Could Affect Exports of Foods, Drugs, Organic Products

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.

Dominican Republic – standards on pasteurized, sterilized and ultra-pasteurized milk, sausage labeling, cold meats, plastic packaging for food and hydraulic cements (comments due by Dec. 3)

Hong Kong – code or marketing and quality of formula milk and related products and food products for infants and young children (comments due by Dec. 31)

Indonesia – revised regulation on drug registration (comments due by Jan. 1, 2013)

Switzerland – draft amended ordinance on organic products (comments due by Dec. 23)

Amended Maritime Agreement Filed

The Federal Maritime Commission has issued notice that the following amended agreement has been filed. Interested parties may submit comments by Nov. 19.

USMX-ILA Master Contract between United States Maritime Alliance Ltd. and International Longshoremen’s Association – The amendment extends the terms and conditions of USMX-ILA Master Contract to Sept. 30, 2012, and revises the tonnage assessments under the contract. 

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