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February 20 2013 Issue

Wednesday, February 20, 2013
Sandler, Travis & Rosenberg Trade Report

EU Pursuing Numerous Additional FTAs; Feb. 28 STTAS Webinar to Discuss

The European Union has released a list of the bilateral and regional free trade agreements it is currently pursuing as well as those already in effect. These FTAs offer numerous benefits, but only to those that comply with their exacting rules. Sandler & Travis Trade Advisory Services is offering a 90-minute webinar on Feb. 28 to help companies understand the challenges and opportunities presented by these agreements.

Negotiations Pending or Under Consideration

United States – The EU and the U.S. decided Feb. 13 to initiate the internal procedures necessary to launch negotiations on a Transatlantic Trade and Investment Partnership.

Japan – On Nov. 29, 2012, EU member states granted a mandate to open FTA negotiations with Japan. Europe can terminate negotiations after one year if Japan does not show evidence of removing certain non-tariff barriers in that period.

Southern Mediterranean (Egypt, Jordan, Morocco, Tunisia) – In December 2011 the European Council adopted negotiating directives for deep and comprehensive free trade areas with these four countries that would upgrade the EU’s current trade agreements with them. The Council agreed on Nov. 29 that negotiations with Morocco may begin soon.

Ongoing Negotiations

Canada – Negotiations started in May 2009 and are now in their final stretch. There are still some important gaps to be bridged before an agreement is reached, and both sides' chief negotiators are expected to meet again in the coming weeks to prepare, to the extent possible, the way toward political conclusion.

ASEAN – The EU is currently negotiating FTAs with Malaysia (launched in May 2010) and Vietnam (launched in June 2012) and is willing to consider additional partners as well, with the hope of one day completing a region-to-region trade agreement.

Eastern Europe – The EU is currently negotiating deep and comprehensive free trade areas as part of its association agreements with Georgia, Armenia and Moldova.

India – Talks started in 2007 and there is a renewed momentum recently, with the contours of a deal emerging.

Mercosur – After more than two years of technical work the EU estimates that it is now time to proceed to the exchange of market access offers.

Gulf Cooperation Council – FTA negotiations were suspended by the GCC in 2008 but informal contacts between negotiators continue to take place.

African, Caribbean and Pacific countries – Negotiations on economic partnership agreements started in 2002 and have now been concluded with three regions: the Caribbean (CARIFORUM), the Pacific (only Papua New Guinea currently involved), and Eastern and Southern Africa (Zimbabwe, Mauritius, Madagascar and Seychelles). Negotiations are entering a decisive phase in the Southern African Development Community group and progress is uneven in the rest of Sub-Saharan Africa.

FTAs Finished but Not Yet in Force

Singapore – Negotiations concluded on Dec. 16, 2012, and both sides will now seek endorsement from their respective political authorities, with an initialing of the draft agreement anticipated this spring.

Peru and Colombia – The European Parliament gave its consent on Dec. 11, 2012, and the procedure allowing for a provisional application of the agreement could be finalized soon.

Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) – The association agreement between the EU and Central America was adopted by the European Parliament on Dec. 11, 2012 , and the Central American partners are expected to ratify the agreement in March.

Ukraine – Negotiations for a deep and comprehensive FTA were concluded in December 2011. The next step will be the signature of the agreement by the Council once the political conditions
are met.

There are also economic partnership agreements with Cote d'Ivoire, Cameroon, SADC, Ghana and the Eastern African Community that have been negotiated but have not yet entered into force.

FTAs Already in Force

South Korea (effective July 1, 2011) – the first of a new generation of FTAs that went further at lifting trade barriers and making it easier for European and Korean companies to do business together

Mexico (effective October 2000) – bilateral trade has doubled since implementation and EU Trade Commissioner Karel de Gucht recently called for an upgrade of the current agreement

South Africa (effective 2000) – covers 90% of bilateral trade and liberalization schedules were completed by 2012

Chile (FTA effective February 2003)

The EU notes that FTAs are also a core component of many association agreements as well as customs unions (Andorra, San Marino, Turkey). Hence the EU also has FTAs in force with a number of countries in Europe (Faroe Islands, Norway, Iceland, Switzerland, the former Yugoslav Republic of Macedonia, Croatia, Albania, Montenegro, Bosnia and Herzegovina, and Serbia), the Southern Mediterranean (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria and Tunisia) and elsewhere.

Federal Agencies Warns of Dire Consequences if Funding Cuts Take Effect

U.S. government agencies warned Congress recently that the automatic federal funding cuts (sequestration) slated to take effect March 1 could have significant consequences for a number of international trade and business-related activities, including the following.

Department of Commerce – hampering commerce due to reduced survey, charting, geospatial and observing services related to maritime navigation; ending work through the Manufacturing Extension Partnership Center system to help small manufacturers develop market growth strategies and streamline their supply chains; delaying efforts to help return small manufacturing enterprises to the U.S. from offshore locations; significantly cutting travel to conduct checks to ensure that sensitive controlled commodities are being used in accordance with license conditions; reducing by nearly $15 million assistance to U.S. businesses looking to increase their exports and expand operations into foreign markets; cutting trade enforcement, compliance and market access activities by nearly $7 million; prohibiting the International Trade Administration from placing staffers in critical international growth markets

Department of Homeland Security – funding and staffing reductions will affect U.S. Customs and Border Protection’s ability to collect revenue owed to the federal government and slow screening and entry programs for those entering the U.S., reduce U.S. Immigration and Customs Enforcement activities such as commercial trade fraud investigations, and curtail U.S. Coast Guard operations to ensure the safe flow of commerce along U.S. waterways

Department of State – undermining progress made to ensure that visa requests are processed in a timely fashion; compromising the ability to help U.S. companies capture opportunities abroad in growing markets with trade agreements, investment treaties, direct advocacy and other diplomatic tools; and reducing economic assistance accounts, foreign military financing and export promotion programs, setting back efforts to open markets overseas and create U.S. exports and jobs

Department of Health and Human Services – reducing the number of inspections of domestic and foreign food facilities by about 2,100

Department of Agriculture – causing as much as 15 days of lost production at meat and poultry plans during a furlough of inspection personnel, eliminating export inspections and reducing import inspections

Department of Transportation – furloughing a large number of air traffic controllers and reducing air traffic to a level that can be safely managed by a smaller number

Department of Labor – reducing grants for child labor and trade-related workers’ rights projects

Department of Energy – hindering U.S. innovation as global markets for solar energy continue to grow rapidly and become more competitive 

In the News: China Trade Growth, New Cargo Container Design

China rejects status as world's biggest trader

New 20ft box design promises greater capacity for shippers

AD/CV Notices: Diamond Sawblades, Carboxymethylcellulose, Hot-Rolled Steel

Agency: International Trade Administration.
Commodity: Diamond sawblades and parts thereof.
Country: Korea.
Nature of Notice: Final results of administrative review of antidumping duty order for the period Jan. 23, 2009, through Oct. 31, 2010.
Details: Weighted average dumping margins of 3.76% to 120.90%. Importer-specific AD duties based on these rates have been calculated for entries of subject merchandise made during the period of review, but those duties will not be assessed pending resolution of associated litigation. AD cash deposits are no longer required since this order was revoked effective Oct. 24, 2011.

Agency: International Trade Administration.
Commodity: Purified carboxymethylcellulose.
Country: Finland.
Nature of Notice: Final results of administrative review of antidumping duty order for the period July 1, 2010, through June 30, 2011.
Details: Weighted average dumping margin of 12.06% for CP Kelco Oy. Importer-specific AD duties based on this rate will be assessed on entries of subject merchandise made during the period of review. AD cash deposits at this rate are required for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after Feb. 20.

Agency: International Trade Commission.
Commodity: Hot-rolled steel products.
Country: China, India, Indonesia, Taiwan, Thailand and Ukraine.
Nature of Notice: Determination to conduct full sunset reviews of antidumping and/or countervailing duty orders. 

Foreign-Trade Zone Procedures Expanded to Texas Eyewear Facility

The Foreign-Trade Zones Board has authorized production activity under zone procedures at the Richemont North America Inc. (d/b/a Cartier) facility within site 4 of FTZ 168 in Grand Prairie, Texas , which is used for the assembly and kitting of eyewear products. 

Export Declaration of Defense Technical Data or Services Under Review

The State Department’s Directorate of Defense Trade Controls is inviting comments through April 22 on the proposed extension of form DS-4071, Export Declaration of Defense Technical Data or Services. This form is used to monitor actual exports of defense technical data and defense services to ensure there is proper control of the transfer of sensitive U.S. technology. Comments should address whether this form is necessary for the proper functions of the DDTC, ways to enhance the quality, utility and clarify of the information collected, the accuracy of the DDTC’s estimate of the time and cost burden for this form and ways to minimize that burden, including the use of automated collection techniques or other forms of information technology. 

Ex-Im Bank Considers Financing Mining Equipment Exports

The Export-Import Bank of the United States has received an application for a $500 million direct loan to support the export of $325 million of U.S. mining equipment and services to mine copper concentrate in Mongolia. This concentrate contains approximately 30% copper and significantly less than 1% of gold and silver. The U.S. exports will enable the mine to produce an average of 828,000 metric tons of copper concentrate per year in the early years of production and 1,796,000 metric tons per year in the later years. Available information indicates that this output will mainly be sold to smelters in China. Interested parties may submit comments on this transaction no later than March 5. 

Foreign Regulatory Changes Could Affect Exports of Plastic, Footwear, Washing Machines

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.

Colombia – June 13 effective date of technical regulations on sanitary requirements for plastic or elastomeric materials, objects, packaging and equipment

Colombia – June 8 effective date of technical regulations on safety devices used in swimming pools

Ecuador – draft technical regulations on labeling of footwear and energy efficiency of household electric washing machines (comments due by April 23) 

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