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December 3 2012 Issue

Monday, December 03, 2012
Sandler, Travis & Rosenberg Trade Report

Key Lawmakers Say Progress Needed on Longstanding Trade Irritants with China

The chairmen and ranking members of the House Ways and Means and Senate Finance committees wrote to U.S. Trade Representative Ron Kirk and Acting Commerce Secretary Rebecca Blank Nov. 30 to urge progress on the following issues at the next meeting of the U.S.-China Joint Commission on Commerce and Trade, which is expected to be held in Washington, D.C., later this month.

- China fails to effectively enforce intellectual property rights and has not put in place proper institutional arrangements to show a serious commitment to protecting IPR.

- China’s regulatory system remains opaque, burdensome and discriminatory and is too often used to provide advantages to favored companies (typically Chinese state-owned enterprises) and block access to foreign companies and products.

- China’s investment restrictions continue to unduly discriminate against U.S. companies and protect Chinese SOEs.

- China still has not made a serious offer in its long-overdue accession to the World Trade Organization Government Procurement Agreement.

- China’s systematic currency misalignment continues to impair its economic rebalancing.

- There are an increasing number of complaints about China’s WTO-inconsistent retaliation against U.S. companies, which “undermines the rules-based trading system and cannot be tolerated.”

- China continues to maintain sanitary and phytosanitary standards that are not supported by science and severely limit, and in some cases prohibit, exports of U.S. agricultural products.

The lawmakers expressed concern that “China continues to move away from market-based reforms and is more deeply embracing an economic model dominated by state-owned enterprises, World Trade Organization-inconsistent subsidies, and economic protectionism.” They noted that the issues set forth above are “troublingly similar” to those raised in previous years and that “in far too many instances” China has failed to follow through on the commitments it has made in these areas. They asserted that progress at the JCCT is needed to “show the American people that the U.S.-China economic relationship is headed in the right direction and that U.S. companies, farmers, ranchers and workers have a fair opportunity to sell their goods and services in China.”

Finally, the letter called on the White House to develop meaningful metrics to measure progress. Noting a decision to use software sales to help determine whether China has implemented its commitments, the letter said the Obama administration should build on this and develop metrics for other areas to “ensure that progress is measured not only in the number of laws repealed but in new market opportunities for U.S. companies and products.” 

U.S. Official Indicates No Decision Yet on Trade Agreement with Europe

Speaking to legislators from the U.S. and the European Union Nov. 30, Deputy U.S. Trade Representative Miriam Sapiro indicated that the Obama administration has not yet reached a decision on whether to launch talks on a comprehensive trade agreement with the EU. In a preliminary report issued in June the joint High Level Working Group on Jobs and Growth determined that a comprehensive bilateral agreement that addresses a broad range of bilateral trade and investment policies would provide the most significant benefits of the various options it has considered. Some news reports have said officials from both sides have confirmed a decision to proceed, but Sapiro’s remarks suggest that with just weeks left before the Working Group issues its final report the U.S. is continuing to debate its course of action.

"So far, we have agreed that a genuinely comprehensive U.S.-EU trade agreement would, in principle, bring substantial benefits to both economies,” Sapiro said. “What remains is to increase the confidence that together we can indeed achieve such a goal within a reasonable amount of time.” Toward that end “we are exploring with the European Commission areas that we know will be challenging in any negotiation – areas where core goals of one side run up against domestic sensitivities on the other side.” Administration officials are also engaging in “an intensive process of consultation” with federal agencies, private sector representatives and Congress. “With a bit more work,” she said, “I hope we will be able to recommend to our leadership” the idea of an ambitious, comprehensive trade agreement.

Sapiro also reiterated the goals the U.S. would have “if we decide to launch negotiations.” These include removing virtually all tariffs on goods trade, exploring “possibilities for removing barriers to transatlantic flows of services and investment” and finding ways to “reduce and prevent the non-tariff barriers that now constitute the most significant barriers to transatlantic trade.” In addition, she said, “finding new ways to tackle sanitary and phytosanitary barriers, technical barriers to trade, and other non-tariff barriers would be a vital breakthrough.” 

In the News: U.S. Port Strike, Trade Facilitation

Talks to end L.A., Long Beach port strike heat up

Bangladesh, Bhutan, Nepal to ease customs procedure for intraregional trade

AD Duty Order on Steel Threaded Rod from China Being Circumvented, ITA Finds

The International Trade Administration has preliminarily determined that the antidumping duty order on certain steel threaded rod from China is being circumvented. Specifically, the ITA has found that imports from China of certain steel threaded rod products produced by Gem-Year Industrial Co. Ltd. that contain 1.25% or more chromium, by weight, and otherwise meeting the description of merchandise subject to this order are within the class or kind of merchandise subject to the order.

As a result of this preliminary determination, the ITA is directing U.S. Customs and Border Protection to suspend liquidation of entries of such merchandise entered or withdrawn from warehouse for consumption on or after Jan. 5, 2012, the date of the initiation of this inquiry. The ITA will also instruct CBP to require a cash deposit of estimated duties at the applicable rates for each unliquidated entry of such merchandise entered or withdrawn from warehouse for consumption on or after Jan. 5, 2012. 

Textile Exports on Agenda for Ex-Im Bank Meeting

The Advisory Committee of the Export-Import Bank of the United States will hold an open meeting Dec. 14 in Washington, D.C. Agenda items include a briefing for new 2013 committee members regarding bank programs, including those that support textile exports, as well as a competitiveness and ethics overview. 

USDA Reviewing Information Collections on Country of Origin Labeling, Mangoes

The Department of Agriculture is soliciting comments through Feb. 4, 2013, on the proposed extension of the following information collections.

Country of Origin Labeling – The following products are subject to mandatory country of origin labeling: muscle cuts and ground beef (including veal), lamb, pork, chicken and goat; wild and farm-raised fish and shellfish; perishable agricultural commodities; peanuts, pecans and macadamia nuts; and ginseng. Individuals who supply covered commodities, whether directly to retailers or indirectly through other participants in the marketing chain, are required to establish and maintain country of origin and, if applicable, method of production information for the covered commodities and to supply this information to retailers.

Mangoes from India – USDA allows the importation of mangoes from India into the continental United States under certain conditions that involve the use of information collection activities, one of which is a phytosanitary certificate. As a condition of entry, the mangoes must undergo irradiation treatment and be accompanied by a phytosanitary certificate with additional declaration statements providing specific information regarding the treatment and inspection of the mangoes and the orchards in which they are grown. The additional information collection activities that are required include a preclearance work plan, trust fund agreement, compliance agreement, monitoring and certification of inspections and treatments, and recordkeeping.

Comments are invited on whether these information collections are necessary for the proper performance of the USDA’s functions, including whether the information collected has practical utility; ways to enhance the quality, utility and clarity of the information collected; and the accuracy of the estimate of the burden of the collections and ways to minimize that burden, including the use of appropriate automated, electronic, mechanical or other technological collection techniques or other forms of information technology. 

Foreign Regulatory Changes Could Affect Exports of Appliances, Dairy

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 resolution restricting imports of household refrigerators, freezers and refrigerator/freezer combinations (comments due by Feb. 14, 2013) 

Honduras – technical regulations on dairy terms and pasteurized milk (comments due by Jan. 26, 2013) 

Infrastructure Trade Mission to Colombia and Panama Set for May 2013

The International Trade Administration is organizing a trade mission to Colombia and Panama May 13-16, 2013, that will focus on helping U.S. companies launch or increase their export business in the transportation infrastructure markets of these two countries. This mission will focus on export-ready U.S. firms in the following sectors: building products, construction equipment, electrical power systems, safety and security equipment, airport supplies, logistics and distribution solutions providers, port equipment, and intelligent transportation systems.

A minimum of 15 and a maximum of 17 U.S. companies and/or trade associations will be selected to participate in this mission. Those already doing business with Colombia and Panama, as well as those seeking to enter these countries for the first time, may apply. All applicants must submit no later than Feb. 15, 2013, a completed and signed mission application and supplemental application materials, including adequate information on their products and/or services, primary market objectives and goals for participation. Applicants must also certify that the products and services they seek to export through the mission are either produced in the U.S. or, if not, marketed under the name of a U.S. firm and have at least 51% U.S. content. 

Asia Trade Mission to Include Participation in Business Forum

The International Trade Administration is organizing a trade mission to Asia that will include the Trade Winds – Asia business forum in Korea in May 2013. This mission will include stops in the Philippines and/or Hong Kong, Korea, and Japan and/or Taiwan. Participation is open to U.S. companies and trade associations from a cross section of industries with growth potential in these countries, including aerospace and aviation, automotive electronics, computer services and software, consumer goods, defense industry equipment, food processing systems, education, electrical power systems, electronic components, energy (both new and renewable), entertainment and media, environmental technologies and services, financial services, franchising, healthcare and medical, hotel/restaurant equipment, housing products, industrial chemical, information and communication technology, information security services, logistics development, machine tools and equipment, medical equipment and pharmaceuticals, outbound travel and tourism, pet products, pleasure boats and accessories, pollution control equipment, port construction, retail, safety and security equipment, semiconductors, specialty chemicals, telecommunications equipment, transportation infrastructure, and travel and tourism services.

A minimum of 65 companies and/or trade associations will be selected to participate in this mission, and each stop (Japan, Taiwan, Hong Kong, the Philippines) is designed for a maximum of 30 participants. All applicants must submit no later than March 30, 2013, a completed and signed mission application and supplemental application materials, including adequate information on their products and/or services, primary market objectives, and goals for participation. Applicants must also certify that the products and services they seek to export through the mission are either produced in the U.S. or, if not, marketed under the name of a U.S. firm and have at least 51 % U.S. content of the value of the finished product or service. 

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