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January 24 2013 Issue

Thursday, January 24, 2013
Sandler, Travis & Rosenberg Trade Report

Three Senior Trade Slots Open as Ron Kirk Steps Down as Trade Ambassador

U.S. Trade Representative Ron Kirk announced Jan. 22 that he intends to step down from that position in late February. Kirk’s departure will give President Obama three senior trade leadership positions to fill, along with Commerce secretary and U.S. Customs and Border Protection commissioner. With several significant trade initiatives on the horizon, the individuals nominated to fill those slots and the timing of their nominations could give an early indication of the importance the White House will attach to those efforts.

A USTR press release asserts that over the last four years Kirk has taken part in a number of trade-related advancements, including the congressional approval and implementation of free trade agreements with Korea, Colombia and Panama; the advancement of the Trans-Pacific Partnership negotiations; efforts to move the World Trade Organization past the stalled Doha Round by working toward a new International Services Agreement, an expanded Information Technology Agreement and a pact on trade facilitation; the full application of the WTO Agreement between new member Russia and the United States; the renewal of the Generalized System of Preferences and the Andean Trade Preferences Act; the “revitalization of American trade enforcement” and the creation of the Interagency Trade Enforcement Center; and the renewal and strengthening of the Trade Adjustment Assistance program. The last major achievement of his tenure could be an announcement of the United States’ intent to negotiate an FTA with the European Union, which could come in the next few weeks.

There is considerable speculation about who might replace Kirk as USTR. One name mentioned frequently is Michael Froman, currently the president’s deputy national security advisor on international economic affairs. Froman is noted for his understanding of the details of trade policy some sources said he might prefer to stay in his current position. Another potential candidate is Treasury Undersecretary for International Affairs Lael Brainard, whom Inside US Trade notes “worked extensively on trade issues as a senior fellow at the Brookings Institution from 2001 to 2009.” Other names that have come up include former Washington state governor Christine Gregoire, Export-Import Bank Chairman Fred Hochberg, Undersecretary of Commerce for International Trade Francisco Sanchez, and deputy USTRs Demetrios Marantis and Michael Punke. 

New International Services Agreement is Subject of USTR Inquiry

The Office of the U.S. Trade Representative is seeking public input on U.S. interests and priorities with respect to the International Services Agreement the U.S. intends to begin negotiating shortly with 20 trading partners. Written comments are due by noon on Feb. 26 and should focus on economic costs and benefits to U.S. service suppliers and consumers of eliminating barriers to services traded either on a cross-border basis or through a foreign commercial presence, existing barriers to trade in services that should be addressed, areas where existing international rules governing services trade (such as those found in the General Agreement on Trade in Services and U.S. free trade agreements) could be strengthened or enhanced, and relevant issues related to the supply of services through various modes of supply and technologies. USTR will also hold a hearing on this matter March 12 and is requiring notification of intent to testify orally at this hearing no later than Feb. 26.

The ISA negotiations should begin in early spring 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.

USTR has indicated that the U.S. intends to 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.

CBP Corrects Regulations on Collection of Agricultural User Fees

U.S. Customs and Border Protection has issued a final rule that, effective Jan. 24, makes the following amendments to its regulations on the collection of certain agricultural user fees. CBP notes that these changes will not result in any change to the amount of the actual user fees.

- clarifies that any applicable Animal and Plant Health Inspection Service user fee (i.e., an Agricultural Quarantine and Inspection user fee) for commercial trucks will be collected by CBP upon the truck’s arrival into the U.S. at the same time CBP collects its portion of this user fee

- clarifies that transponders have replaced decals for commercial truck user fee purposes, meaning that a user fee for the arrival of a commercial truck will not be collected every time the vehicle crosses the border if the specified prepayment of both the CBP fee and the AQI fee has been made and a transponder has been affixed to the vehicle’s windshield (CBP also notes that transponders do not have to be physically replaced upon renewal each year if they continue to function properly)

- indicates that the Internet portal through which the public obtains decals and transponders has been renamed the Decal and Transponder Online Procurement System

- states that the failure of an owner, agent or person in charge of a commercial truck to inform the DTOPS administrator of any change in the information provided on CBP Form 339C (Annual User Fee Decal Request – Commercial Vehicle) or the online application within 15 days of the change may result in the truck being stopped for secondary inspection, the assessment of liquidated damages or other sanctions

- updates the addresses to which applicable forms and payments are to be mailed as the result of a shift in the management of certain administrative aspects of the user fee decal program from a private bank to CBP

- clarifies that the prepayment of user fees may no longer be done at the port and instead is only available through the mail or on the Internet 

In the News: WTO Reforms Urged, AD Duties on Bioethanol

Report Urges Sweeping Reforms to World Trade Organization

European Commission proposes duties on imports of U.S. bioethanol 

AD/CV Notices: Residential Washers, Steel Pipe

Agency: International Trade Commission.
Commodity: Large residential washers.
Country: Korea and Mexico.
Nature of Notice: Final affirmative antidumping and countervailing injury determinations.
Details: The ITA will shortly issue AD duty orders on subject goods from Korea and Mexico and a CV duty order on subject goods from Korea.

Agency: International Trade Administration.
Commodity: Circular welded carbon quality steel pipe.
Country: China.
Nature of Notice: Rescission of administrative review of antidumping duty order for the period July 1, 2011, through June 30, 2012, due to withdrawal of petitioners’ requests for review.
Details: The ITA will instruct U.S. Customs and Border Protection to assess AD duties on all appropriate entries at rates equal to the cash deposit of estimated AD duties required at the time of entry or withdrawal from warehouse for consumption. 

Import Restrictions Imposed on LED Photographic Lighting Devices

In investigation 337-TA-804, the International Trade Commission has determined that the importation, sale for importation and sale within the U.S. after importation of certain LED photographic lighting devices and components thereof infringe certain patents owned by Litepanels Inc. and Litepanels Ltd. The ITC has therefore issued a general exclusion order prohibiting these infringing goods from entry into the U.S. A bond in the amount of 43% of the entered value will be required to permit the temporary importation of goods subject to this exclusion order during the 60-day period the president has to review the ITC’s determination.

The ITC has also terminated certain respondents from this investigation on the basis of a consent order stipulation. 

ITA Reviewing Requests for Oman FTA Textile Safeguards

The International Trade Administration is soliciting comments through March 25 on the proposed extension of information collections associated with requests for textile and apparel safeguard actions under the U.S.-Oman Free Trade Agreement.

This safeguard mechanism applies when, as a result of the elimination of a customs duty under the FTA, an Omani textile or apparel article is being imported into the U.S. in such increased quantities, in absolute terms or relative to the domestic market for that article, and under such conditions as to cause serious damage or actual threat thereof to a U.S. industry producing a like or directly competitive article. Requestors making such a claim must provide the following information: name and description of the imported article concerned, import data supporting the claim, U.S. domestic production of like or directly competitive articles, imports from Oman as a percentage of the domestic market of the like or directly competitive article, and all data available showing changes in productivity, utilization of capacity, inventories, exports, wages, employment, domestic prices, profits, investment and any other information supporting the claim.

If the ITA determines that a safeguard is warranted, the U.S. may increase duties on the imported article from Oman to a level that does not exceed the lesser of the prevailing U.S. normal trade relations/most favored nation duty rate for the article or the U.S. NTR/MFN duty rate in effect on the day before the FTA entered into force. The maximum period of import tariff relief is three years. If the U.S. provides such relief it must provide Oman mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result. Such concessions will be limited to textile and apparel products unless the two sides agree otherwise. If the U.S. and Oman are unable to agree on trade liberalizing compensation, Oman may increase customs duties equivalently on U.S. products. 

Foreign Regulatory Changes Could Affect Exports of Plants, Construction Products, Gas Containers

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 propagating and planting material other than seed (comments due by March 15)

Lithuania – draft order approving technical regulation on construction products

Mexico – official standard on specifications and test methods for non-portable liquefied petroleum gas containers (comments due by Feb. 14) 

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