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March 5 2013 Issue

Tuesday, March 05, 2013
Sandler, Travis & Rosenberg Trade Report

President’s 2013 Trade Policy Agenda Focuses on TPP, Europe, High-Tech, Services

The Obama administration delivered to Congress March 1 its 2013 Trade Policy Agenda and 2012 Annual Report. This document continues the administration’s focus on policies that will increase U.S. exports, such as seeking to “create and defend open markets” and “challenging unfair trade practices and enforcing U.S. trade rights under our agreements.” Priority issues for 2013 will include the Trans-Pacific Partnership agreement, a Transatlantic Trade and Investment Partnership with the European Union, and efforts within the World Trade Organization on trade facilitation, information technology and services. The administration also plans to “work with Congress on trade promotion authority” to facilitate the conclusion, approval and implementation of “market-opening negotiating efforts.”

The report highlights plans to continue or initiate numerous efforts, including the following.

National Export Initiative. The agenda asserts that overall U.S. exports of goods and services have increased by more than 39% from 2009, supporting one million additional domestic jobs. This is behind the pace needed to meet the NEI’s original goal of doubling U.S. exports by the end of 2014 “in support of up to two million additional U.S. jobs.” In 2013 efforts to advance the NEI will include the Export Promotion Cabinet coordinating through the Trade Promotion Coordinating Committee the launch of initiatives including a national marketing campaign targeting small and medium-sized exporters, an expanded Export University Program, the “Global Business Solutions” trade financing packaging that will work with community banks to expand the U.S. financial infrastructure offering trade-related products, commercial statecraft training for foreign service officers, and public-private partnerships that will deliver commercial services for U.S. businesses overseas.

TPP. The U.S. seeks “an ambitious conclusion” to the TPP negotiations and along with its partners is “working diligently” to try to complete the talks in 2013.

TTIP. The report notes the president’s intent to launch TTIP negotiations with the EU but gives no further details on when they might begin or how long they might last.

WTO. The U.S. “will continue to lead efforts to advance a multilateral trade facilitation agreement” and “explore opportunities for agreement in areas such as development issues.” The U.S. will also join with 20 trading partners (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) to launch negotiations toward an international services trade agreement and “continue to play a leading role in negotiations to expand the scope of products covered by the WTO Information Technology Agreement.”

GSP. The administration will work with Congress to renew authorization of the Generalized System of Preferences, which is scheduled to expire July 31, taking into account both the needs of the world’s poorest countries and the growing competitiveness of many emerging market GSP beneficiaries as well as the impact of the program on U.S. businesses and consumers.

Trade Barriers. The administration’s task force on localization barriers to trade (i.e., measures designed to protect, favor or stimulate domestic industries, service providers and/or intellectual property at the expense of those from other countries) will intensify its efforts and coordinate an administration-wide, “all-hands-on-deck approach” in bilateral, regional and multilateral forums and through trade agreements, enforcement and policy advocacy.

Investment. Building on the comprehensive review of the United States’ model bilateral investment agreement that concluded in 2012, the administration will seek to secure high-standard BITs with trading partners such as China, India and Mauritius and will continue exploratory BIT discussions with Russia, Cambodia, Ghana, Gabon and the East African Community.

Enforcement. The agenda states that the Interagency Trade Enforcement Center “will play an increasingly critical role” in trade enforcement efforts but provides no further details.

Labor. The U.S. “will use every means available to ensure that the government of Guatemala addresses its apparent failure” to enforce the country’s labor laws effectively. The U.S. will also “actively work” with Bahrain, Jordan, the Dominican Republic, Honduras and others to address labor issues under its trade agreements with those countries and continue worker rights reviews of Bangladesh, the Philippines, Swaziland and others under preference programs.

Bilateral/Regional Initiatives. To enhance regional trade and economic integration in every part of the world the administration will pursue the following efforts.

Middle East – continue developing the Middle East and North Africa Trade and Investment Partnership, including by building on agreements reached with Morocco in 2012 regarding trade facilitation, foreign investment principles, and information and communication technology services trade principles and seeking to make progress on similar initiatives with Jordan, Egypt, Tunisia and others

Africa – continue to pursue a regional trade facilitation agreement with the East African Community (Burundi, Kenya, Rwanda, Tanzania and Uganda) and implement the Trade Africa initiative, a comprehensive White House-led strategy with a preliminary focus on East Africa that includes support for implementation of the EAC Customs Union, increased EAC export readiness and increased two-way trade and investment; also intensify discussions on defining and achieving a seamless renewal of the African Growth and Opportunity Act beyond 2015, which may include issues such as eligibility criteria and product coverage

Southeast Asia – intensify work to enhance regional trade and investment with partners in the Association of Southeast Asian Nations through the new Expanded Economic Engagement (E3), with initial priorities focusing on facilitating and expanding trade and investment, promoting digital technology and supporting small businesses (USTR notes that joint work on E3 initiatives may also help establish the groundwork for ASEAN countries to prepare to join high-standard trade agreements such as the TPP); also explore potential opportunities for increased trade with Burma in the future

Latin America – explore the possible acceleration of tariff elimination under the U.S.-Colombia Trade Promotion Agreement, work with Congress to find a mutually agreeable solution to the Brazil cotton dispute in the next farm bill, and seek to conclude a revised TIFA with the Caribbean Community

Russia – seek to establish new opportunities for dialogue to explore additional trade-expanding policy initiatives such as a potential TIFA 

FDA Advances Process for Improved Food Product Tracing

The Food and Drug Administration is accepting written comments and information through April 4 on a report on pilot projects recently conducted on improving product tracing along the food supply system. These projects were the first of several steps required under the Food Safety Modernization Act and were designed to explore and demonstrate methods for rapid and effective tracking and tracing of food, including types of data that are useful for tracing, ways to connect the various points in the supply chain and how quickly data can be made available to the FDA.

Report Recommendations. The report recommends that the FDA take the following actions.

- establish a uniform set of recordkeeping requirements for all FDA-regulated foods and not permit exemptions to recordkeeping requirements based on risk classification

- require firms that manufacture, process, pack, transport, distribute, receive, hold or import food to identify and maintain records of critical tracking events and key data elements, as determined by the FDA

- develop standardized electronic mechanisms for the reporting and acquiring of CTEs and KDEs during product tracing investigations

- accept summarized CTE and KDE data submitted through standardized reporting mechanisms and initiate investigations based on such data

- require each member of the food supply chain to develop, document and exercise a product tracing plan

- encourage current industry-led initiatives and issue an advance notice of proposed rulemaking or use similar mechanisms to seek stakeholder input

- clearly and more consistently articulate and communicate to industry the information needed to conduct product tracing investigations

- request more than one level of tracing data if available

- consider adopting a technology platform that would allow efficient aggregation and analysis of data submitted in response to a request from regulatory officials and would be accessible to other regulatory entities

- coordinate traceback investigations and develop response protocols between state and local health and regulatory agencies using existing commissioning and credentialing processes

- formalize the use of industry subject matter experts in product tracing investigations

Comments Sought. The FDA will consider the above recommendations as well as comments on the following issues as it prepares its own recommendations, which will be incorporated in a forthcoming report to Congress.

- how the recommendations regarding CTEs and KDEs might work for individual industry segments, how to achieve most expeditiously the development of standardized electronic mechanisms for reporting and acquiring CTEs and KDEs during product tracing investigations, and what additional information and data sources could be used to determine cost and benefits associated with implementing these recommendations

- whether the FDA should pursue some or all of the report’s recommendations with respect to all foods, not just high-risk foods as required by FSMA, and if so how that might be done

- whether it is feasible to add a traceback to existing recall (traceforward) procedures and exercises conducted by the industry in accordance with the report’s recommendation for each member of the food supply chain to be required to develop, document and exercise a product tracing plan

- how the FDA might more clearly and consistently articulate the information it needs to conduct product tracing investigations (e.g., posting on its Web site information on how it typically conducts a traceback or traceforward)

Next Steps. Section 204 of FSMA provides that after the FDA submits its report to Congress it must take the following additional steps.

- assess the costs and benefits associated with the adoption and use of several product tracing technologies and the feasibility of such technologies for different sectors of the food industry (including small businesses), and as part of this process (a) evaluate domestic and international product tracing practices, (b) consider international efforts and compatibility with global tracing systems, and (c) consult with a diverse and broad range of experts and stakeholders

- establish within the FDA, as appropriate, a product tracing system to receive information that improves the agency’s capacity to effectively and rapidly track and trace food

- publish a proposed rule to establish additional recordkeeping requirements for high-risk foods

- designate high-risk foods for which the additional recordkeeping requirements are appropriate and necessary to protect the public health

- issue a small entity compliance guide within six months after a final rule is issued

FDA Solutions Group LLC, a consulting company affiliated with Sandler, Travis & Rosenberg, assists foreign and domestic clients with the full range of FSMA issues affecting FDA-regulated industry. To learn more about these services, please visit our Web site or send us an e-mail

CBP Takes Over Background Checks of Bonded Facility Employees

U.S. Customs and Border Protection announced March 1 that it has taken over responsibility for conducting background investigations of bonded facility employees from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations directorate. CBP will utilize the Trusted Worker Module in the Global Enrollment System to facilitate this vetting, which will provide for a more streamlined process and allow CBP to make a more informed decision in approving applications.

CBP officers will require background information to be submitted from facility officers, principals and those individuals with access to facility recordkeeping (i.e., book keepers). This information will be submitted on a one-time only basis and fingerprints will be submitted on an as-needed basis. CBP officers may request that applicants submit background information on CBP Form 3078 (Application for Identification Card) to allow for the gathering of the most up-to-date information. 

In the News: CPSC Head to Step Down, EU-Morocco FTA

CPSC Chairman Inez Tenenbaum announces intent to not seek renomination

EU Starts Free Trade Talks with Morocco

AD/CV Notices: Off-Road Tires, Gift Boxes, Steel Sheet and Strip

Agency: International Trade Administration.
Commodity: New pneumatic off-the-road tires.
Country: China.
Nature of Notice: Preliminary results of new shipper review of antidumping duty order for the period Sept. 1, 2011, through Feb. 29, 2012.
Details: Trelleborg Wheel Systems China did not make a sale of subject merchandise at less than normal value.

Agency: International Trade Administration.
Commodity: Folding gift boxes.
Country: China.
Nature of Notice: Continuation of antidumping duty order for five years following sunset review determination that revocation of this order would be likely to lead to a continuation or recurrence of dumping and material injury to an industry in the U.S.

Agency: International Trade Administration.
Commodity: Stainless steel sheet and strip in coils.
Country: Mexico.
Nature of Notice: Settlement of five separate NAFTA binational dispute settlement panels challenging various aspects of five administrative reviews of this antidumping duty order.
Details: For any entries of subject merchandise produced and exported by ThyssenKrupp Mexinox S.A. de C.V. and Mexinox USA Inc. that were entered or withdrawn from warehouse for consumption from July 1, 2004, through June 30, 2005, the ITA will instruct U.S. Customs and Border Protection to liquidate the entries without regard to AD duties. For any entries of subject merchandise produced and exported by Mexinox that were entered or withdrawn from warehouse for consumption from July 1, 2005, through June 30, 2009, the ITA will instruct CBP to assess AD duties at the cash deposit rate in effect at the time of entry. 

USDA Reviewing Information Collections on Poultry Meat, Country of Origin Labeling

The Department of Agriculture’s Animal and Plant Health Inspection Service is inviting written comments through April 4 on the proposed extension of four information collections concerning poultry meat that originates in the U.S., is shipped for processing purposes to a region where exotic Newcastle disease exists and is then returned to the U.S. These collections include a certificate of origin that must be issued (including serial numbers that must be recorded), records that must be maintained, cooperative service agreements that must be signed and certificates for shipment back to the U.S.

USDA’s Agricultural Marketing Service has also set an April 4 deadline for comments on information collections concerning the mandatory country of origin labeling of 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 these 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 supply this information to retailers. 

Foreign Regulatory Changes Could Affect Exports of Feeding Chairs, Foods, Cement, Drugs

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.

Brazil – Feb. 6, 2013, publication of requirements to assess the conformity program for children’s feeding chairs

Israel – amended mandatory standards on gas oil for heating, disposable fire extinguishers, and low-voltage switchgear and control gear assemblies (comments due by May 1)

Jamaica – quality requirements for bag drinks and blended hydraulic cement (comments due by May 1)

Japan – amended requirements for vaccines and blood products (comments due by April 1)

Japan – designation of additional substances as narcotics (comments due by March 31)

Korea – draft safety standard on solvent volatile organic compounds (comments due by May 1)

Taiwan – draft amended regulations on inspection of imported foods and related products (comments due by April 1)

Uganda – final draft standards on slabs and cut-to-size stone products, fortified wheat flour and fortified milled maize products (comments due by May 1) 

Imports of Archaeological Material from Belize Restricted

U.S. Customs and Border Protection has issued a final rule that, effective March 5, amends the agency’s regulations to reflect the imposition of import restrictions on certain archaeological material from Belize. This rule also contains the designated list that describes the types of archaeological material to which the restrictions (which are found in 19 USC 2606 and 19 CFR 12.104c) apply. These materials originated in Belize from the Archaic, Pre-Classic, Classic, Post-Classic and early and late Colonial periods and include objects comprised of ceramic, stone, metal, shell, bone, glass and wood.

Duty Exemption Allocations for Virgin Islands Watch Producers

The International Trade Administration and the Department of the Interior have issued a notice allocating the calendar year 2013 duty exemptions for watch assembly producers located in the U.S. Virgin Islands. The total quantity of duty-free insular watches and watch movements allocated for 2013 is 1,866,000 units, the same as in 2012. Currently there is only one USVI producer (Belair Quartz Inc.) receiving an allocation of 500,000 units and there are no program producers in Guam, American Samoa or the Northern Mariana Islands. The remainder of the USVI exemption allocation is available for new entrants into the program or Belair if it requests a supplemental allocation. However, in 2012 USVI program producers shipped only 53,347 watches and watch movements to the U.S., compared to 53,744 in 2012.

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