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January 16 2013 Issue

Wednesday, January 16, 2013
Sandler, Travis & Rosenberg Trade Report

U.S. Announces Intent to Negotiate New Pact on Trade in Services

U.S. Trade Representative Ron Kirk notified Congress Jan. 15 that the Obama administration intends to enter formal negotiations for a new agreement aimed at promoting international trade in services. The talks should begin within 90 days and will initially include Australia, Canada, Chile, Colombia, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland, Taiwan and Turkey. This group represents nearly two-thirds of global trade in services and could expand as negotiations progress.

Kirk’s letter notes that every $1 billion in U.S. services exports supports an estimated 4,200 domestic jobs and that service industries employ approximately three out of every four U.S. workers nationwide. In 2011, U.S. exports of private services measured almost $600 billion and sales through foreign affiliates exceeded $1 trillion, together constituting about 11% of U.S. gross domestic product. However, a recent study estimates that tradable business services remain five times less likely to be exported than manufactured products and that services exports could increase by as much as $800 billion if those figures were equal.

The U.S. will pursue an ambitious, high-standard international services agreement to begin to realize this potential, Kirk said. Specifically, the U.S. will push for an agreement that:

- places a high priority on enabling service suppliers to compete on the basis of quality and competence rather than nationality;

- permits comprehensive coverage of all services, including those that have yet to be conceived;

- seeks to secure greater transparency and predictability from trading partners regarding regulatory policies that present barriers to trade in services;

- respects the role of regulatory authorities across all levels of government and protects their ability to introduce new regulatory policies over time in fulfillment of their responsibilities; and

- addresses new issues arising in the global marketplace (e.g., electronic commerce) and changes in the way trade is conducted.

“Big emerging countries like China, India, Brazil and Russia have shunned” the services talks, a Reuters article states, on the belief that “services negotiations should be part of a bigger discussion that also includes agriculture and manufacturing trade barriers.” 

ITA Proposal Would Allow More Requests for Extension of Time Limits in AD/CV Proceedings

The International Trade Administration is proposing to amend its regulations regarding the extension of time limits associated with antidumping and countervailing duty proceedings. The proposed rule would apply to any interested party requesting such an extension, which could include exporters and producers of merchandise subject to AD/CV proceedings and their affiliates, importers of such merchandise, domestic producers of like products, and foreign governments. Comments on this proposal are due no later than March 18.

Currently, 19 CFR 351.302(c) only allows parties to AD or CV proceedings to request an extension of a time limit associated with the submission of factual information. The ITA is proposing to expand this provision so that parties would be able to request an extension of any time limit established in the AD/CV regulations.

Further, the current regulation does not account for extension requests filed after the time limit. Asserting that in the vast majority of situations there should be no reason why a party cannot request an extension prior to the expiration of the applicable time limit, the ITA is proposing to specify that an untimely-filed extension request will not be considered unless the party demonstrates that extraordinary circumstances exist.

Finally, the ITA considers that untimely-filed extension requests encompass those that come in after the applicable time limit expires but is requesting comments on whether the term “untimely” should also include extension requests that are made very close to the applicable time limit (e.g., within 24-48 hours) such that the ITA does not have the opportunity to respond before the time limit expires. The ITA also requests comment on whether there should be a separate standard for extension requests for submissions that are due from multiple parties simultaneously, such as case and rebuttal briefs. 

Four Removed from List of Entities Restricted from Receiving Exports of Dual-Use Goods

The Bureau of Industry and Security has issued a final rule that, effective Jan. 16, removes four entities from the Entity List and modifies two existing entries to correct their scope. This action eliminates the existing license requirements in Supplement No. 4 to part 744 of the Export Administration Regulations for exports, reexports and transfers (in-country) to these four entities.

BIS is removing Laurence Mattiucci and Toulouse Air Spares SAS, both of France, after taking into account their cooperation with the U.S. government as well as their assurances of future compliance with the EAR. BIS is also implementing the results of the annual review of the Entity List for entities located in the United Arab Emirates by removing Abubakr Abuelazm and Advanced Technology General Trading Company a/k/a Advanced Technologies Emirates FZ-LLC. Entities located in Armenia, Cyprus, France and Iran were also reviewed but no additional changes are being made to those entries as a result of the annual review.

This rule also revises the entry for Olkebor Oy/Nurminen Oy of Finland and removes the entry for Bolshaya Semenovskaya of Russia.

Certain exports, reexports and transfers (in-country) of items subject to the EAR to entities identified on the Entity List require licenses from BIS but are usually subject to a policy of denial because BIS considers such entities to present significant risks of diversion to weapons of mass destruction programs, terrorism or other activities that are contrary to U.S. national security or foreign policy interests. In addition, license exceptions are unavailable for such transactions in most instances. 

Changes to Expedited Dual-Use Exports to Validated End Users

The Bureau of Industry and Security has issued a final rule that, effective Jan. 16, makes the following changes to the list of validated end-users that are approved to receive exports, reexports and transfers of certain items without a license under authorization VEU.

- updates two eligible destinations for Advanced Micro Devices China Inc. and adds a new eligible destination to the list of AMD’s eligible destinations in China

- updates the addresses of ten of Lam Research Corporation’s eligible destinations and reformats Lam’s existing eligible destinations into two groups, each with distinct lists of eligible items

- updates the addresses of SK Hynix Semiconductor (China) Ltd. and SK Hynix Semiconductor (Wuxi) Ltd. and removes ECCN 3B001.d from the list of eligible items for these entities

- amends Supplement No. 7 to part 748 of the Export Administration Regulations to include language reminding exporters that the language in this supplement does not supersede requirements elsewhere in the EAR

Authorization VEU is a mechanism to facilitate increased high-technology exports to companies in China and India that have a verifiable record of civilian end-uses for such items. End-users qualified as VEUs are eligible to receive a wide range of specified items on the Commerce Control List under this authorization instead of under individual transaction-specific export licenses. Eligible items may include commodities, software and technology, except those controlled for missile technology or crime control reasons.

BIS emphasizes that the amendments it is making are not the result of activities of concern but were prompted by factors arising from the companies’ normal course of business or are being done at the request of the companies. 

AD Notices: Silica Bricks, Tapered Roller Bearings

Agency: International Trade Commission.
Commodity: Silica bricks and shapes.
Country: China.
Nature of Notice: Preliminary affirmative antidumping injury determination.

Agency: International Trade Administration.
Commodity: Tapered roller bearings and parts thereof, finished and unfinished.
Country: China.
Nature of Notice: Final results of administrative review of antidumping duty order for the period June 1, 2010, through May 31, 2011.
Details: Weighted average dumping margins range from 15.28% to 92.84%. AD duties based on these rates 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 or withdrawn from warehouse for consumption on or after Jan. 16. 

IPR Enforcement Actions on Bark Control Collars, Microprocessors

New IPR Infringement Petition on Electronic Bark Control Collars. The International Trade Commission received Jan. 14 on behalf of Radio Systems Corporation a petition requesting that it institute a Section 337 investigation regarding certain electronic bark control collars. The proposed respondent is located in 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.

ITC Considers Import Restrictions on Microprocessors. The International Trade Commission is currently investigating whether the importation, sale for importation and sale within the U.S. after importation of certain microprocessors, components thereof and products containing same is infringing certain patents. The presiding administrative law judge in this investigation has recommended that if the ITC does find such a violation it should issue a limited exclusion order as to microprocessors manufactured by one respondent but delay implementation based on public interest considerations. The ALJ recommended against extending this exclusion order to cover downstream products produced by two other respondents. The ALJ also recommended that cease and desist orders be issued against all three respondents.

The ITC is now soliciting through Jan. 25 public comments on whether the issuance of a limited exclusion order and/or cease and desist orders in this investigation 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 Commission is interested in comments that:

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

- identify any public health, safety or welfare concerns in the U.S. relating to the recommended 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, its licensees and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the recommended exclusion order and/or cease and desist order within a commercially reasonable time; and

- explain how the limited exclusion order and cease and desist orders would impact consumers in the U.S. 

Ocean Transportation Intermediary License Revocations, Reinstatement, Applicants

OTI Licenses Revoked. The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been revoked. A revocation may occur after a license is surrendered voluntarily by the OTI or for failure to maintain a valid bond.

- license #013253N: Total Service Line Corporation d/b/a Total Shipping Line Corp., Artesia, Calif.
- license #017580N: E-Trans Logistic Services Inc., City of Industry, Calif.
- license #020933N: Surexpress Inc., Paramount, Calif.
- license #021296NF: ITW International Inc., Torrance, Calif.

OTI License Reinstated. The Federal Maritime Commission has rescinded its order revoking OTI license #003135F issued to N & N Safeway Shipping Company of Carson, Calif.

OTI License Applicants. The Federal Maritime Commission has provided notice that the following applicants have filed applications for licenses as non-vessel-operating common carrier and/or ocean freight forwarder ocean transportation intermediaries. Persons knowing of any reason why any of these applicants should not receive a license are requested to contact the FMC.

- Concepts in Freight Inc., Doral, Fla.
- Katoen Natie Tank Operations Inc., Houston, Texas
- Interglobal Shipping LLC, Houston, Texas
- MGK International Inc., Princeton, N.J.
- Oceans Consolidators Inc., Miami, Fla.
- Perimeter International d/b/a Perimeter Logistics, Irving, Texas 

Foreign Regulatory Changes Could Affect Exports of Foods, Medicine

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.

Albania – draft decision on marketing and certification requirements of vegetable seeds and of materials for the vegetative propagation of the vine (comments due by March 11)

Canada – proposed amendments to Food and Drug Regulations on prescription status of medicine ingredients for human and veterinary use (comments due by March 7) 

Ex-Im Bank Reviewing Application for Long Term Loan or Guarantee

The Export-Import Bank of the United States is requesting emergency approval of form EIB 95-10, Application for Long Term Loan or Guarantee, because the Export-Import Bank Reauthorization Act of 2012 has placed additional reporting requirements on the Bank. Comments on this request are due no later than March 18.

By neutralizing the effect of export credit insurance and guarantees offered by foreign governments and by absorbing credit risks that the private section will not accept, the Ex-Im Bank enables U.S. exporters to compete fairly in foreign markets on the basis of price and product. This application provides information needed to determine compliance and creditworthiness for transaction requests submitted to Ex-Im Bank under its long-term guarantee and direct loan programs. It is used to make a credit decision on approximately 85 export transactions per year in divisions dealing with aircraft, structured finance and trade finance. 

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 Jan. 28.

Common Ocean Carrier Platform Agreement – The amendment removes Safmarine Container Lines N.V. as a party and adds Safmarine MPV N.V. as a party to the agreement.

The Maritime Credit Agreement – The amendment removes Safmarine Container Lines N.V. as party to the agreement. 

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