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New Legislation on Cybertheft, Foreign Manufacturers, Outsourcing, Exports, Agriculture

Friday, May 17, 2013
Sandler, Travis & Rosenberg Trade Report

Legislation affecting the following international trade issues has recently been introduced in the House and/or Senate.

Trade Secrets. The Deter Cyber Theft Act (S. 884) would require the director of national intelligence to compile an annual report on foreign economic and industrial espionage that includes the following information.

- a list of foreign countries that engage in economic or industrial espionage in cyberspace against U.S. firms or individuals, including a priority watch list of the worst offenders

- a list of U.S. technologies or proprietary information targeted by such espionage and, to the extent possible, a list of such information that has been stolen

- a list of items produced using such stolen information

- a list of foreign companies, including state-owned firms, that benefit from such theft

- details of the espionage activities of foreign countries

- actions taken by the DNI and other federal agencies to combat industrial or economic espionage in cyberspace

The bill would also require the president to block imports of products containing stolen U.S. technology, products made by state-owned enterprises of nations on the DNI’s priority watch list that are similar to items identified in the DNI’s report as stolen or targeted U.S. technology, or products made by a company the DNI identifies as having benefited from the theft of U.S. technology or proprietary information.

A press release from the senators who introduced this measure notes that “recent reports indicate that China is by far the largest source of theft attempts against U.S. companies.”

Registered Agents for Foreign Manufacturers. The Foreign Manufacturers Legal Accountability Act (H.R. 1910) aims to improve recourse for defective imports by requiring require foreign manufacturers of products imported into the United States to establish registered agents in the U.S. who are authorized to accept service of process on behalf of those manufacturers. The bill would also ensure that, at a minimum, courts in the state where the registered agent is located have personal jurisdiction over the foreign manufacturer. According to a press release from Rep. Matthew Cartwright, D-Pa., this measure would apply to major product categories such as consumer goods, drugs, cosmetics and chemicals and would authorize a study of how to apply similar rules to foreign food producers.

Similar legislation has been introduced several times in recent years and in at least one case was marked up by a House committee. However, the European Union warned that a registered agent requirement could violate U.S. obligations under various international rules and the National Retail Federation said it could slow imports of consumer merchandise while exposing U.S. companies to retaliation abroad.

Outsourcing. The Fighting for American Jobs Act (H.R. 1899) would prohibit business enterprises that lay off a greater percentage of their U.S. workers than workers in other countries from receiving any federal assistance. Each federal agency that provides contracts, grants, loans or loan guarantees to businesses would have to require, as a condition of such assistance, that the businesses report annually (a) the number of employees they employ in the U.S. (including its territories and possessions) and in foreign countries, along with wage information on U.S. employees, and (b) the percentage of their workforce that has been laid off or forced to resign during the preceding year.

Exports. The Export Coordination Act (H.R. 1909) would amend the Export Enhancement Act of 1988 to make improvements to federal trade promotion policies and programs. Among other things, this bill would require the Trade Promotion Coordinating Committee to identify opportunities to consolidate or co-locate offices of federal agencies involved in export promotion and export financing activities, assess the use and coordination of electronic databases among federal agencies in support of such activities, and provide a detailed listing of current and future federal and state-led trade missions, trade fairs and related activities to ensure better delivery of services to U.S. businesses. In addition, the government-wide strategic plan for federal trade promotion efforts would have to clearly identify and explain the role, goals and objectives of each TPCC member agency with respect its export promotion and export financing activities, include the recommendations of the Government Accountability Office relating to coordination of the TPCC and member agencies, and reflect the recommendations of the U.S. Travel Association to the degree considered appropriate by the TPCC.

The Transparent Rules Allow Direct Exporting (TRADE) for Small Businesses and Jobs Act (H.R. 1916) would direct the pertinent trade agencies to monitor and collect up-to-date information on changes to foreign tariff and non-tariff laws, regulations and practices affecting exports of U.S. goods and services and display them in a clear and easy-to-read format.

Farm Bill. The Agriculture Reform, Food and Jobs Act (S. 954) was approved May 14 by the Senate Committee on Agriculture, Nutrition and Forestry. Among other things this bill reduces from $5.5 billion to $4.5 billion the amount available under the Export Credit Guarantee Program (GSM-102) to address issues raised in a World Trade Organization ruling against U.S. cotton subsidies. The WTO has authorized Brazil to impose sanctions in this dispute in the form of both higher tariffs on goods imported from the U.S. and the suspension of U.S. intellectual property rights, but those sanctions are currently being suspended pending the enactment of a new farm bill.

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