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January 15 2013 Issue

Tuesday, January 15, 2013
Sandler, Travis & Rosenberg Trade Report

Legislative Update: 2013 Could See Action on Duty Breaks, Customs Reauthorization

The 113th Congress got underway this month amid an uncertain outlook for trade and customs issues. Businesses want quick action on a miscellaneous trade bill and are hoping lawmakers will finally advance a customs reauthorization bill. Progress is likely to be slow initially, however, with many new legislators taking their seats and leaders focused on higher priority issues.

MTB. Hundreds of tariff suspensions and reductions on imports of manufacturing inputs and finished products provided under the previous miscellaneous trade bill expired Dec. 31. Bipartisan legislation to renew these duty breaks and grant others through 2015 was introduced in the House Jan. 1 as the 112th Congress ended, meaning it will have to be reintroduced in the 113th Congress, which began Jan. 3. The bill is expected to move forward but could meet resistance in the Senate unless there is also action to reform the process of constructing the MTB, which some see as akin to earmarks.

Customs Reauthorization. In late December House Republicans and Democrats each released their own versions of a customs reauthorization bill, setting markers for a debate that could begin in earnest this year. With this month’s seating of a new Congress these bills will have to be reintroduced, though as of yet that step has not been taken. Further, the Senate has given no indication on what its priorities on the issue might be since originating a customs reauthorization bill in the 111th Congress. Any such measure introduced in the Senate this year is likely to be similar to that previous bill but with certain modifications to reflect changes in CBP’s practices since that time.

Satellite Export Controls. President Obama signed into law Jan. 2 the National Defense Authorization Act, which includes a provision that will return to the Commerce Department the discretion to transfer certain less-sensitive satellites and satellite components from the more restrictive U.S. Munitions List to the Commerce Control List.

New Committee Members. Four new Republicans will join the House Ways and Means Committee: Tim Griffin (Ark.), Mike Kelly (Pa.), Tim Scott (S.C.) and Todd Young (Ind.). On the Democratic side, Reps. Allyson Schwartz (Pa.), Danny Davis (Ill.) and Linda Sanchez (Calif.) will be rejoining the committee.

In the Senate, Democrats Sherrod Brown (Ohio) and Michael Bennet (Colo.) will be joining the Finance Committee, along with Republicans Johnny Isakson (Ga.), Rob Portman (Ohio) and Pat Toomey (Pa.). Also in the Senate Bruce Hirsh, a former official with the Office of the U.S. Trade Representative and most recently international trade counsel for Senate Finance Chairman Max Baucus, D-Mont., has been named the committee’s chief international trade counsel to replace Amber Cottle, who was promoted to committee staff director.

Other. Following is a list of additional trade-related legislation that has been introduced recently. The texts of these bills are or will shortly be available on the Library of Congress Web site (

H.R. 22 – a bill to allow U.S. Customs and Border Protection to provide certain information concerning imported or exported merchandise to the owner of a copyright or registered mark to determine whether the merchandise is infringing (introduced Jan. 3 by Rep. Poe, referred to the House Committee on the Judiciary)

H.R. 69 – to strengthen enforcement mechanisms to stop illegal, unreported and unregulated fishing (introduced Jan. 3 by Rep. Bordallo, referred to the House Committee on Natural Resources)

H.R. 156 – to provide for the withdrawal of the United States from the North American Free Trade Agreement (introduced Jan. 4 by Rep. McIntyre, referred to the House Committee on Ways and Means)

H.R. 166 – to prevent the evasion of antidumping and countervailing duty orders (introduced Jan. 4 by Rep. Boustany, referred to the House Committee on Ways and Means)

H.R. 191 – to assess the impact of NAFTA, require further negotiation of certain provisions of NAFTA, and provide for withdrawal from NAFTA unless certain conditions are met (introduced Jan. 4 by Rep. Kaptur, referred to the House Committee on Ways and Means)

H.R. 192 – to require that, in cases in which the annual trade deficit between the United States and another country is $10 billion or more for three consecutive years, the president must take the necessary steps to create a more balanced trading relationship with that country (introduced Jan. 4 by Rep. Kaptur, referred to the House Committee on Ways and Means)

H.R. 214 – to lift the trade embargo on Cuba (introduced Jan. 4 by Rep. Serrano, referred to the House committees on Foreign Affairs, Ways and Means, Energy and Commerce, Financial Services, the Judiciary, Oversight and Government Reform, and Agriculture) 

Trade Deficit Up 15.7% as Import Growth Outpaces Exports

Trade statistics released Jan. 11 by the Department of Commerce show that the monthly U.S. trade deficit in goods and services jumped 15.7% in November to $48.7 billion. Exports rose a modest 0.9% to $182.6 billion while imports, led by cell phones and other consumer electronics in high demand during the holidays, increased 3.8% to $231.3 billion. Compared to a year earlier, the November trade deficit was down $0.1 billion as exports gained $5.8 billion (3.3%) and imports were up $5.7 billion (2.5%).

According to the DOC, the deficit in goods trade soared $6.6 billion in November to $65.7 billion. Exports of goods increased 1.25% to $129.3 billion while imports rose 4.39% to $195.0 billion. The services surplus was virtually unchanged at $17.0 billion as exports edged up to $53.2 billion and imports reached $36.3 billion.

The bilateral trade deficit with China dropped slightly from a record-high $29.5 billion to $29.0 billion. The U.S. also ran deficits with the European Union (up 15.1% to $12.2 billion), Germany (up 14.8% to $6.2 billion), Japan (down 11.4% to $6.2 billion), Mexico (up 11.4% to $4.9 billion), Canada (up 76.5% to $3.0 billion), Ireland (up 27.8% to $2.3 billion), Venezuela (up 11.1% to $2.0 billion), Korea (up 12.5% to $1.8 billion), Taiwan (down 7.1% to $1.3 billion) and Nigeria (down 44.4% to $1.0 billion).

The U.S. continued to run surpluses with several trade partners, including Hong Kong (up 57.9% to $3.0 billion), Australia (unchanged at $1.8 billion), Singapore (up 120% to $1.1 billion), and Egypt (unchanged at $0.2 billion).

AD Notice: Steel Wire Rod from Mexico

Agency: International Trade Administration.
Commodity: Carbon and certain alloy steel wire rod.
Country: Mexico.
Nature of Notice: Rescission of administrative review of antidumping duty order for the period Oct. 1, 2011, through Sept. 30, 2012, due to withdrawal of petitioner’s request for review.
Details: The ITA will instruct U.S. Customs and Border Protection to assess AD duties on all entries of subject merchandise at rates equal to the cash deposit of estimated AD duties required at the time of entry or withdrawal from warehouse for consumption. 

Upcoming Regulations on Defense Imports and Exports

The Department of State recently issued its semiannual regulatory agenda. This document lists the following proposed and final regulations affecting international trade that could be issued this year.

- a proposed rule to require temporary import licenses only for those defense articles enumerated on the U.S. Munitions List-Import (May)

- a final rule establishing conditions under which a State Department license is not required for the export or reexport of defense articles incorporated into an end-item that is subject to the Export Administration Regulations (May)

- a final rule updating the policy regarding defense services and clarifying the scope of activities that are considered a defense service (May)

- a final rule providing a definition of “specially designed” (May)

- a final rule to amend the International Traffic in Arms Regulations provisions relating to brokers and brokering activities by clarifying registration requirements, the scope of brokering activities, prior approval requirements and exemptions, procedures for obtaining prior approval and guidance, and reporting and recordkeeping of such activities (June)

- a proposed rule to clarify the requirements for compliance with the Arms Export Control Act and the ITAR with regard to the maintenance of records and, when requested, the provision of such records to State’s Directorate of Defense Trade Controls (July) 

California Foreign-Trade Zone Seeks to Expand

The Foreign-Trade Zones Board has received from the San Francisco Port Commission, grantee of FTZ 3, a request for authority to expand its service area under the alternative site framework and to include an additional usage-driven site. FTZ 3 currently has a service area that includes the city and county of San Francisco and San Mateo County, Calif. The applicant is now requesting authority to expand this service area to include Contra Costa, Marin and Solano counties as well as portions of Napa and Sonoma counties, adjacent to the San Francisco U.S. Customs and Border Protection Port of Entry. The applicant is also requesting authority to include an additional usage-driven site at the Coda Automotive Company in Benicia, Calif. Public comments on these requests are due no later than Feb. 14.

Foreign Regulatory Changes Could Affect Exports of TVs, Headlights, Pottery, Vehicles

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.

China – national standards on low pressure carbon dioxide extinguishing systems and components, flat panel televisions, motor vehicle lamps, motor vehicle engine coolant, sawn timber for shaft lifting guides, and passenger cars (comments due by March 9)

Mexico – Dec. 14, 2012, entry into force of amendment to official standard on methods for testing soluble lead and cadmium in glazed pottery ware, glazed ceramic ware and porcelain ware

Mexico – draft amendment to official standard on diesel-powered road vehicles (comments due by Feb. 4) 

Renewable Energy and Energy Efficiency Committee to Meet Feb. 20

The Department of Commerce’s Renewable Energy and Energy Efficiency Advisory Committee will hold a public meeting Feb. 20 at DOC headquarters in Washington, D.C. This committee provides DOC with consensus advice from the private sector on the development and administration of programs and policies to enhance the international competitiveness of the U.S. renewable energy and energy efficiency industries. Members of the public wishing to attend the upcoming meeting must notify DOC no later than Feb. 15.

Ex-Im Bank Asked to Finance Exports of Airliners to Korea and Chile

The Export-Import Bank of the United States has received separate applications for final commitment for long-term loans or financial guarantees to support the export of U.S.-manufactured Boeing 747 and 777 aircraft to South Korea and Chile. These aircraft will be used for long-haul passenger and cargo air service from South Korea, Chile and Brazil to other countries. Comments on the proposed transactions are due no later than Feb. 8.

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