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January 30 2013 Issue

Wednesday, January 30, 2013
Sandler, Travis & Rosenberg Trade Report

Annual Export Strategy Reviews Progress, Outlines Future Efforts

The Trade Promotion Coordinating Committee released recently the 2012 National Export Strategy, which reviews progress made to date toward President Obama’s goal of doubling U.S. exports by the end of 2014 and discusses additional efforts that will be made in 2013.

Export Figures. The report notes that U.S. goods and services exports reached a record $2.1 trillion in 2011, a 33% increase from 2009, and were up an additional $76.5 billion through September 2012. Also in 2011 the U.S. ran record trade surpluses in services ($178.5 billion) and agriculture ($37.2 billion).

A record 293,000 U.S. companies exported in 2010, up 6% from 2009, including an all-time high of 287,000 small and medium-sized enterprises. Also that year SMEs’ share of overall U.S. exports rose to 34% (from 27% in 2002) and the value of their exports was more than $380 billion, a 24% jump over the previous year.

Achievements. The report lists the following achievements in implementing the more than 70 recommendations for boosting U.S. exports that were made in the initial NES in June 2011.

Metropolitan Export Plans. The Department of Commerce has collaborated with the Brookings Institution Metropolitan Policy Program on its effort to help regional civic, business and political leaders create and implement customized metropolitan export plans. These localized plans apply market intelligence to develop better, targeted and integrated export-related services and strategies to help regions better connect their firms to global customers, as outlined by their individualized export goals. Pilot plans have been completed and made available online in Los Angeles, Portland, Ore., Minneapolis and Syracuse, NY. As a next step, Brookings has developed a metropolitan export strategy template that builds on these pilot MEPs and is working to help facilitate the adoption of export plans in additional markets.

USTDA Partnerships. The U.S. Trade and Development Agency launched “Making Global Local,” an initiative designed to build strategic partnerships between USTDA and local business organizations. Partner organizations include World Trade Centers, local non-profit economic development organizations, state or municipal governmental entities, and others. USTDA currently has 17 partner organizations in California, Colorado, Georgia, Louisiana, Maryland, Mississippi, Missouri, New York, Pennsylvania, Vermont, Virginia and Washington.

Containers for Exports. To help expand the availability of containers for exports the Department of Transportation has provided credit assistance for inland port facilities in Joliet, Ill., and Kansas City, Mo. These ports allow double-stack container trains to move marine containers directly from West Coast ports to the Midwest, where they are unloaded into trucks for final delivery. The inland ports then have a ready supply of empty containers that can be filled with grain and manufactured goods for export.

The Department of Agriculture’s Agricultural Marketing Service has begun publishing a weekly report that provides data on the availability of ocean shipping containers at 18 intermodal locations around the U.S. Data provided in this report indicate that the worldwide supply of containers grew by 7.0% in 2010 and 8.5% in 2011.

Trade Agreement Compliance. Under the Trade Agreement Compliance Program, federal agencies work with individual firms or business groups to identify barriers to exports and then use the leverage of existing trade agreements to seek removal of those barriers. In 2011 the International Trade Administration initiated 246 compliance and market access cases (up 12% from 2010) and successfully resolved 91 (an 11% increase). The USDA’s Foreign Agricultural Service reviewed 285 market access measures in 52 countries and preserved $3.9 billion worth of market access for U.S. companies, a 70% jump from the previous year.

Moving Ahead. One of the ways the government will work to further increase U.S. exports is by adding 50,000 SME exporters by 2017. Efforts in this area will include generating a national marketing campaign to educate SMEs on the benefits of exporting and the availability of federal export assistance resources, launching a “Global Business Solutions” program that will develop unified U.S. government domestic, export and investment financing solution packages that will better meet the needs of SMEs and lenders, developing a clear process for referring clients to the correct federal services, fully developing into a virtual one-stop shop for federal export assistance (including the rollout of 2.0, which will deliver personalized information on events, market research and trade leads to SMEs), and launching biannual interagency strategic discussions on resource allocations in U.S. embassies and consulates to improve the way the federal government delivers export promotion services overseas and partners with the private sector in priority export markets.

The Obama administration has also structured its fiscal year 2013 budget request so as to be able to allocate resources to priority markets and sectors with the greatest export potential for U.S. companies. This request includes $30.3 million to expand the U.S. and Foreign Commercial Service’s overseas export promotion activities and $12.3 million to implement the SelectUSA program’s mission of promoting business investment in the U.S. by foreign and domestic sources. Also included is an increase of $19 million over FY 2012 for the Export-Import Bank, the U.S. Trade and Development Agency, the Office of the U.S. Trade Representative, the International Trade Commission and the Overseas Private Investment Corporation.

Other initiatives will include the following.

- increasing Export-Import Bank activity in nine priority countries with the greatest potential for increasing exports: Brazil, Colombia, Mexico, Nigeria, South Africa, Turkey, India, Indonesia and Vietnam

- continuing Ex-Im Bank focus on the following industries with high potential for U.S. export growth: agribusiness, aircraft and avionics, construction, medical technologies, mining, oil and gas, and power generation, including renewable energy

- strengthening trade policy engagement with major established partners such as Canada and Mexico (including border management and regulatory harmonization), Japan (e.g., the U.S.-Japan Economic Harmonization Initiative) and the European Union (e.g., a potential bilateral free trade agreement)

- deepening engagement with major emerging markets such as China (including intellectual property rights, investment, indigenous innovation and agriculture), India (including market access) and Brazil (including investment, services, IPR and biotechnology)

- expanding trade policy engagement with key emerging markets such as Colombia (e.g., labor rights), Indonesia (e.g., investment climate), Saudi Arabia (e.g., IPR enforcement and government procurement), South Africa (e.g., tariff preferences and IPR), Turkey (e.g., restrictive import requirements) and Vietnam (e.g., IPR, labor and trade facilitation) 

Rising Latin American Group Plans Big Step Toward Free Trade

The Pacific Alliance, a group created in 2011 in an effort to deepen regional trade and economic cooperation, has announced plans to eliminate tariffs on 90% of the goods traded among member countries by March 31. No timetable has yet been set for doing away with duties on the remaining 10%. Other goals for 2013 include agreements on rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs cooperation , investment, government procurement, and the exchange of financial, transportation, telecommunications and professional services.

The Pacific Alliance is currently composed of Chile, Colombia, Mexico and Peru, which Colombian President Juan Manuel Santos asserts are “the fastest growing economies in Latin America.” Press reports have pointed out the contrast between this group, all of whose members have implemented free trade agreements with the United States and taken numerous other trade liberalization steps as well, and Mercosur, whose 20+ years of efforts to form a common market have been repeatedly stymied by cross-border squabbles and protectionist tendencies, particularly with respect to leading economies Brazil and Argentina. While Mercosur has added only one member (Venezuela) since its creation in 1991, the Pacific Alliance has already received a membership application from Spain and granted observer status to Japan, Guatemala, Uruguay, Panama and Costa Rica. 

U.S., Jordan Deepen Cooperation on Investment, Information Technology, Labor

The Office of the U.S. Trade Representative announced Jan. 28 agreements between the U.S. and Jordan to deepen cooperation between the free trade agreement partners on investment, information technology products, and labor rights and working conditions.

Investment. The two sides agreed on a set of joint principles for international investment that represent “a statement of the United States’ and Jordan’s continuing commitment to adopt and maintain a policy environment that enables and encourages international investment,” including an open and non-discriminatory investment regime, strong protections for foreign investment, transparency and public participation in the development of laws and regulations, and a level competitive playing field. It is unclear if these principles are the same as, or based on, those agreed between the U.S. and the European Union in April 2012.

Information and Communication Technology. USTR states that the adoption of joint principles for information and communication technology services “will support the global development of ICT services, including Internet and other network-based applications that are critical to innovative e-commerce.” The principles address issues such as the free flow of information across borders, facilitating the cross-border supply of services, and foreign investment in ICT sectors.

Labor Rights. Officials concluded an implementation plan related to working and living conditions of workers that “reaffirms Jordan’s commitment to protect internationally recognized labor rights and effectively enforce its labor laws.” USTR notes that the two sides will follow up on the provisions of this plan in the coming months, including through cooperative efforts and ongoing dialogue as part of the Labor Subcommittee established under the U.S.-Jordan FTA. 

In the News: Plans for WTO Ministerial, Foreign Apparel Makers Sued

WTO December Ministerial May Yield Pacts on Trade Facilitation, Agriculture, LDCs

California Alleges Two Clothing Firms Used Pirated Software 

AD/CV Notices: New Admin Reviews, Frozen Fish

Agency: International Trade Administration.
Nature of Notice: Initiation of administrative reviews of antidumping and countervailing duty orders on the following products for the periods Dec. 1, 2011, through Nov. 30, 2012 (AD), and Jan. 1 through Dec. 31, 2012 (CV).
- hot-rolled carbon steel flat products from India (AD/CV)
- cased pencils from China (AD)
- hand trucks and parts thereof from China (AD)
- honey from China (AD)
- multilayered wood flooring from China (AD, review period May 26, 2011, through Nov. 30, 2012; and CV, review period April 6, 2011, through Dec. 31, 2011)
Details: The ITA intends to issue the final results of these reviews no later than Dec. 31.

Agency: International Trade Administration.
Commodity: Frozen fish fillets.
Country: Vietnam.
Nature of Notice: Preliminary results of new shipper reviews of antidumping duty order for the period Aug. 1, 2011, through Jan. 31, 2012.
Details: Preliminary determination that new shipper respondents did not sell subject merchandise at less than normal value. 

PR Enforcement Actions on Reflector Lamps, Base Stations

New IPR Infringement Petition on Reflector Lamps. The International Trade Commission received Jan. 28 on behalf of Andrzej Bobel and Nuptun Light Inc. a petition requesting that it institute a Section 337 investigation regarding certain compact fluorescent reflector lamps and products and components containing same. The proposed respondents are 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.

Potential IPR Probe of Wireless Base Stations Evaluated for Public Interest Issues. The International Trade Commission is requesting comments no later than Feb. 7 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Adaptix Inc. against certain wireless communications base stations and components thereof. Comments should address whether the issuance of exclusion orders and/or cease and desist orders pursuant to this complaint 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 ITC is interested in comments that:

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

- identify any public health, safety or welfare concerns in the U.S. relating to the potential 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, the complainant’s licensees and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the requested orders within a commercially reasonable time; and

- explain how the requested orders would impact U.S. consumers. 

Trade Facilitation and Recovery Among Topics for March 19 Shipping Committee Meeting

The State Department’s Shipping Coordinating Committee will hold an open meeting March 19 at Coast Guard headquarters in Washington, D.C. The primary purpose of this meeting is to prepare for the 38th session of the International Maritime Organization's Facilitation Committee, which will be held April 8-12 at IMO headquarters in the United Kingdom. Items to be considered at the March 19 meeting include the following.

- e-business possibilities for the facilitation of maritime traffic, including (a) electronic means for the clearance of ships, cargo and passengers and (b) electronic access to, or electronic versions of, certificates and documents required to be carried on ships

- ensuring security in and facilitating international trade, including trade recovery

Members of the public planning to attend this meeting should contact meeting coordinator David DuPont by email or phone at (202) 372-1497 no later than March 12. The meeting will also be available via teleconference. 

Ocean Transportation Intermediary 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.

- Champion International Moving Ltd., Canonsburg, Pa.
- Easy Shipping Corporation, Oak Lawn, Ill.
- Miami Freight & Logistics Services Inc., Miami, Fla.
- Naca Logistics (USA) Inc. d/b/a Brennan International Transport d/b/a Brennan d/b/a Conterm Consolidation Services d/b/a Conterm d/b/a Direct Container Line d/b/a DCL d/b/a Ocean World Shipping d/b/a OWS d/b/a Ocean Express d/b/a Oceanexpress Vanguard Logistics Services d/b/a Vanguard, Carson, Calif.
- Nautical Shipping Line (PVT) Limited d/b/a Nautical Shipping Line, Karachi, Pakistan
- S&R Marine Services B.V. Inc., Rotterdam, Netherlands
- Sprint Global Inc., Cary, N.C.
- Hua Yang Transportation Co., Carson, Calif.
- Transportes Zuleta Inc., Miami, Fla.
- Universal Containers LLC, Encino, Calif. 

State Dept. Proposes to Amend Export Controls on Nuclear Weapons Related Articles

The State Department is proposing to amend the International Traffic in Arms Regulations to revise Category XVI (nuclear weapons related articles) of the U.S. Munitions List. Comments on this proposal are due no later than March 18.

According to State, this proposed rule would remove most of the articles enumerated in Category XVI because exports of most equipment, technical data or services currently described in this category are under the control of the Department of Energy. The only articles now covered under Category XVI that would remain subject to USML control are tools that model or simulate the environments generated by nuclear detonations or the effects of these environments on systems, subsystems, components, structures or humans, as well as technical data and defense services directly related to such tools. Nuclear radiation detection and measurement devices currently controlled in paragraph (c) would become subject to the jurisdiction of the Department of Commerce under already existing Export Control Classification Numbers 1A004.c.2 or 2A291.e.

Among other things, State is requesting specific examples of nuclear-related items whose jurisdiction would be in doubt based on this revision. Comments are particularly sought on whether the proposed paragraph (b) is appropriately captured in USML Category XVI or if there is a more suitable control within the USML or CCL. 

USDA Proposes to Allow Imports of Avocados, Apricots from Spain

The Department of Agriculture’s Animal and Plant Health Inspection Service is accepting comments through April 1 on separate proposals to allow the importation of avocados and fresh apricots from continental Spain into the United States.

Avocados. As a condition of entry avocados from continental Spain (excluding the Balearic Islands and Canary Islands, which would not be allowed under this proposal) would have to be produced in accordance with a systems approach that would include requirements for importation in commercial consignments, registration and monitoring of places of production and packinghouses, grove sanitation, and inspection for quarantine pests by the national plant protection organization of Spain. Consignments of avocados other than the Hass variety would also have to be treated for the Mediterranean fruit fly either prior to moving to the U.S. or upon arrival prior to release. Consignments would also be required to be accompanied by a phytosanitary certificate with an additional declaration stating that the avocados were grown and inspected and found to be free of pests in accordance with the proposed requirements.

Fresh Apricots. As a condition of entry fresh apricots would have to be produced in accordance with a systems approach that would include registration of production locations and packinghouses, pest monitoring, sanitary practices, chemical and biological controls, and phytosanitary treatment. The fruit would also have to be imported in commercial consignments, with each consignment identified throughout its movement from place of production to port of entry in the U.S. Consignments would have to be accompanied by a phytosanitary certificate issued by the national plant protection organization of Spain certifying that the fruit is free from all quarantine pests and has been produced in accordance with the systems approach. 

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