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March 18 2013 Issue

Monday, March 18, 2013
Sandler, Travis & Rosenberg Trade Report

Kirk’s Resignation as Trade Ambassador Effective March 15

The Office of the U.S. Trade Representative announced March 14 that Ron Kirk’s resignation as U.S. Trade Representative became effective on March 15. Kirk had announced in January his intention to resign but he subsequently decided to stay a bit longer than initially planned to help the USTR deal with the initial impact of budget sequestration. Deputy U.S. Trade Representative Demetrios Marantis, who has been responsible for U.S. trade negotiations and enforcement in Asia and Africa, has assumed the post of acting USTR. Kirk noted in a press release that Marantis has been “instrumental in successes from the completion of the U.S.-Korea trade agreement to the advancing of the Trans-Pacific Partnership and beyond.”

There is still 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. Another potential candidate is Jeff Zients, the deputy director of the Office of Management and Budget, although an Inside Trade article observes that his candidacy has seemingly lost momentum in recent weeks.

Lawmakers Raise Concern about Japan’s Interest in Joining TPP Talks

A group of 35 representatives and eight senators, including the entire Michigan delegation to Congress, sent a letter to President Obama on March 14 expressing serious concern about Japan’s interest in joining the Trans-Pacific Partnership negotiations. The lawmakers are looking to engage the administration on this critical matter in order to address Japan’s “significant, long-standing, and persistent economic barriers,” which they believe “have hurt American workers and businesses for decades.”

The letter states that Japan ranks last among OECD members in terms of auto market import penetration at 5.9% in 2012 despite being the third-largest auto market in the world. The lawmakers contend that barriers in Japan have included currency manipulation; a discriminatory system of taxes; onerous and costly vehicle certification procedures for imported automobiles; a complex and changing set of safety, noise and pollution standards; an unwillingness by Japanese dealerships to carry foreign automobiles and insufficient enforcement of competition laws to address anti-competitive practices; zoning restrictions that make it difficult or impossible to establish new dealerships in important markets; government incentives to purchase Japanese-made kei cars; and exclusionary consumer preferences shaped by decades of government policies directed at promoting the national car companies.

These practices have allegedly contributed to the growing U.S. automotive trade deficit with Japan, which increased from $31 billion 20 years ago to $53.5 billion last year. The lawmakers argue that negotiations to open the Japanese market to foreign competition have repeatedly failed. As a result, they conclude that “confidence building measures and promises of a level playing field in the future do not address the basic concern how, under any circumstances, a TPP agreement could be sufficiently equipped to address the necessary transformation of the Japanese market.”    

Senate Finance Committee to Hold March 19 Hearing on President’s Trade Agenda

The Senate Finance Committee has announced that it will hold a public hearing on March 19 to discuss President Obama’s trade policy agenda for this year. While details of the hearing (including the list of participating witnesses) are not yet available, the event is expected to cover such priority issues as the Trans-Pacific Partnership agreement negotiations, a Transatlantic Trade and Investment Partnership with the European Union, the recently-announced negotiations on an International Services Agreement, and efforts within the World Trade Organization on trade facilitation, information technology and services.  

U.S. Requests Panel in WTO Case Involving Indonesia’s Import Restrictions on Horticultural and Animal Products, Seeks Input on Vietnamese Shrimp Case

The USTR announced March 14 that it has formally requested the WTO to establish a dispute settlement panel to examine allegations that Indonesia applies certain trade-restrictive measures to horticultural products, animals and animal products. The U.S. contends that Indonesia has created a complex web of import licensing requirements that, along with quotas, have the effect of unfairly restricting U.S. exports. According to the USTR, these measures appear to be designed to protect Indonesia’s domestic agriculture industry. The U.S. and Indonesia held bilateral consultations on this matter on Feb. 21-22 but the two sides were unable to reach a mutually-acceptable agreement. The USTR indicates that the Interagency Trade Enforcement Center, which was created by President Obama to enhance U.S. trade enforcement capabilities, provided “key support” to the USTR’s monitoring and enforcement unit in the development and initiation of this case.

The U.S. request for the formation of a panel will likely be considered at the March 26 meeting of the WTO Dispute Settlement Body. While Indonesia has the prerogative to block the request, that action would probably only delay the establishment of the panel by a few weeks.

In a separate action, the USTR is seeking input from interested parties by April 16 on the issues raised in a WTO dispute by Vietnam relating to the antidumping administrative reviews and a sunset review conducted by the U.S. Department of Commerce on certain frozen warm water shrimp from Vietnam.     

CITA Approves Colombia FTA Short Supply Requests for Certain Laminated Composite Fabric

The Committee for the Implementation of Textile Agreements has approved two short supply requests filed under the U.S.-Colombia Trade Promotion Agreement for certain laminated composite fabric classified under HTSUS 6001.20.0000, 6001.22.0000 and 6001.92.0000 and complying with certain specifications. As a result, effective March 18 these fabrics will be added to the short supply list in Annex 3-B of the U.S.-Colombia TPA in unrestricted quantities.     

Ten-Year Suspension of Export Privileges for Unlicensed Shipment of Night Vision Goggles

The Bureau of Industry and Security has suspended for ten years the export privileges of a California man convicted of aiding and abetting and willfully exporting from the U.S. to Vietnam a set of night vision goggles designed as a defense articles on the U.S. Munitions List without having first obtained a State Department license. BIS is also revoking all export licenses in which this man had an interest at the time of his conviction.

As a result, until April 17, 2022, neither this man nor anyone on his behalf may directly or indirectly participate in any way in any transaction involving any commodity, software or technology exported or to be exported from the U.S. that is subject to the Export Administration Regulations. However, this order does not prohibit any export, reexport or other transaction subject to the EAR where the only items involved that are subject to the EAR are the foreign-produced direct product of U.S.-origin technology.


DOC Extends Deadline for Russia Trade Mission Applications

The DOC has extended from March 15 to March 29 the deadline for interested U.S. healthcare firms and trade organizations to submit applications to participate in a healthcare trade mission to Moscow and St. Petersburg, Russia, from June 3-7, 2013. The extension was motivated by the recent snow closures and the upcoming Easter holiday season. The DOC notes that this trade mission will help participants gain market insights, make industry contacts, solidify business strategies, and advance specific projects with the goal of increasing U.S. exports to Russia. The mission will include one-on-one business appointments with pre-screened potential partners, market briefings and networking events.     

Maritime Security Meeting to Discuss Impact of Cyber Security Executive Order, Other Matters

The National Maritime Security Advisory Committee will hold an open meeting April 2-3 in Washington, D.C. Members of the public wishing to attend the open sessions should register no later than March. 25. This meeting will also be broadcast via a Web-enabled interactive online format and teleconference line.

The upcoming meeting will include a discussion of the following topics.

- the cyber security executive order issued by President Obama on Feb. 12 and initial work in developing a framework for the maritime community

- presidential policy directive 21 issued by the president on Feb. 12 on critical infrastructure security and resilience and its impact on the maritime community

- efforts of the Coast Guard and the Department of Homeland Security to implement maritime domain awareness and information sharing

- receipt of a brief and public comments on the National Suspicious Activity Reporting Initiative

- a discussion of radiation portal monitoring

- a discussion of the Port Security Grant Program     

AD Notices: Steel Nails, Activated Carbon

Agency: ITA.
Commodity: Certain steel nails.
Country: China.
Nature of Notice: Final results in AD administrative review.
Details: The ITA has calculated weighted-average dumping margins ranging from zero to 118.04% in this review, which covers the period Aug. 1, 2010, through July. 31, 2011. CBP will assess AD duties on all appropriate entries using these rates, which will also be used to determine new AD cash deposit requirements. CBP will not assess AD duties or impose cash deposit requirements on entries subject to a zero rate.

Agency: ITA.
Commodity: Certain activated carbon.
Country: China.
Nature of Notice: Continuation of AD duty order.
Details: The ITC determined on Feb. 8 that revocation of this AD duty order would likely lead to continuation or recurrence of material injury to an industry in the U.S. within a reasonably foreseeable time. Accordingly, the ITA has extended the order for an additional five years.     

Ex-Im Bank Asked to Finance Exports of Turbines and Aircraft

The Export-Import Bank of the United States has received two separate applications for final commitment for a long-term loan or financial guarantee to support the export of U.S.-manufactured turbines to the United Arab Emirates and aircraft to Kuwait. The turbines would be used to expand a power plant to support an expansion of an aluminum smelter in the UAE. The aircraft would be used for long-haul passenger service between Indonesia and destinations in Europe, Asia and the Middle East. Comments on these applications are due no later than April 12.     

IPR Enforcement Actions on Certain Electronic Devices, Digital Photo Frames, Inverter Circuits

Potential IPR Probe of Certain Electronic Devices Evaluated for Public Interest Issues. The ITC is requesting comments no later than March 26 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Sling Media Inc. against certain electronic devices having placeshifting or display replication functionality and products containing the same. 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.

Remedies in Section 337 Probe of Digital Photo Frames and Image Display Devices. The ITC has issued limited exclusion and cease and desist orders in its Section 337 investigation of certain digital photo frames and image display devices and components thereof. The limited exclusion order prohibits the unlicensed entry of subject merchandise covered by certain patents that are manufactured abroad by or on behalf of, or imported by or on behalf of, certain respondents or any of their affiliated companies, parents, subsidiaries, licensees, contractors or other related business entities, or their successors or assigns. The cease and desist orders prohibit certain respondents from importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), and soliciting U.S. agents or distributors for infringing subject merchandise. The ITC has set a bond in the amount of 100% of the entered value of the subject merchandise for importations during the 60-day presidential review period.

Consent Order in Section 337 Proceeding Involving Certain Inverter Circuits Amended. The ITC has instituted a modification proceeding, modified a Sept. 25, 2009, consent order, and terminated a modification proceeding related to the Section 337 proceeding involving certain cold cathode fluorescent lamp inverter circuits and products containing the same.

CBP Reviewing Information Collection on FTZ Applications

CBP is soliciting comments by April 17 on the extension without change of the application for foreign trade zone admission and/or status designation and the application for FTZ activity permit (CBP Forms 214, 214A, 214B, 214C and 216). CBP Forms 214, 214A, 214B and 214C are used by companies that bring merchandise into an FTZ to register the admission of such merchandise into FTZs and to apply for the appropriate zone status. CBP Form CBP 216 is used by companies to request approval to manipulate, manufacture, exhibit or destroy merchandise in an FTZ.      

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