U.S. and EU Outline Successes of Joint IPR Enforcement Program – Officials from the U.S. and the European Union met yesterday in Geneva to review progress on a joint program to tackle global intellectual property counterfeiting and piracy. Commerce Secretary Carlos Gutierrez, European Commission Vice President and Commissioner for Industry Gunter Verheugen and EU Trade Commissioner Peter Mandelson launched the program in June 2006. The strategy established closer customs cooperation, including more data sharing, joint border enforcement actions, joint enforcement in third countries and the creation of joint networks of U.S. and EU diplomats in third countries specially tasked with working on IP protection. According to the European Commission, U.S. and EU authorities are working to expand their efforts to combat the “rising economic damage to industry and the safety and health hazards posed by stolen technologies and fake products” and expect to see further cooperation in 2007.

Grassley Calls for Passage of FTAs with Peru, Colombia and Panama – In remarks on the Senate floor this week, Finance Committee Ranking Member Charles Grassley, R-Iowa, called on Congress to implement free trade agreements with Peru, Colombia and Panama. He also argued against extending benefits under the Andean Trade Promotion and Drug Eradication Act for Bolivia and Ecuador past the current June 30 expiration date of that program. Grassley asserted that holding up the FTAs with Peru, Colombia and Panama would be counterproductive to calls to “level the playing field for U.S. farmers, manufacturers and service providers.” He pointed out that under DR-CAFTA U.S. exports to Central America increased 17 percent in the period from January through November 2006 while U.S. imports from that region only rose three percent.

Foreign Affairs Chairman Wants Malaysia FTA Talks Suspended over Iran Deal – House Foreign Affairs Committee Chairman Tom Lantos, D-Calif., wrote to U.S. Trade Representative Susan Schwab this week asking her office to formally suspend FTA negotiations with Malaysia over reports that a Malaysian-based company has plans to help Iran develop gas fields and establish liquefied natural gas plants.

EPA Seeks Comments on Significant New Use Rule for Chloranil – The Environmental Protection Agency has reopened until March 16 the comment period on a May 12, 1993, proposed rule concerning any significant new use of the chemical chloranil. This rule would require persons to notify the EPA at least 90 days before commencing the manufacture, import or processing, for any use, of chloranil containing certain chlorinated dibenzo-p-dioxins and chlorinated dibenzofurans in total combined amounts greater than 20 parts per billion. The chloranil CDD/CDF concentration would be calculated based on the toxicity equivalence (TEQ) to 2,3,7,8-tetrachlorodibenzo-p-dioxin (2,3,7,8-TCDD). The EPA notes that this rule was intended to provide it with the opportunity to evaluate the intended new use and associated activities and to protect against unreasonable risks, if any, from CDD/CDF exposure that could result from the use of chloranil with higher CDD/CDF levels. Certain recordkeeping and certification requirements would also apply to manufacturers, importers and processors of all chloranil, no matter what the level of CDD/CDF contamination. The EPA states that it could not promulgate a final rule until it received data required under the dioxin furan test rule, which has now been completed and showed no chloranil dioxin levels above 20 ppb TEQ.

President Calls for Extension of Trade Promotion Authority – In remarks at Federal Hall in New York Jan. 31, President Bush called on Congress to renew trade promotion authority. Bush said his administration remains committed to a successful Doha Round, the conclusion of which he called “the most promising opportunity to expand free and fair trade,” but added that the only way to complete the WTO negotiations and other trade agreements is to extend TPA. A number of sources speculate that progress in the Doha Round talks could, in fact, give Congress an incentive to extend TPA until the round is completed.

English Introduces Trade Law Reform Bill – Rep. Phil English, R-Pa., introduced this week the Trade Law Reform Act of 2007 (H.R. 708), which would make significant changes to U.S. trade laws in what English called an effort to provide more effective and WTO-consistent remedies. The reforms in the bill fall into three main categories: (1) amendments to the antidumping and countervailing duty laws; (2) amendments to the global safeguard law; and (3) a provision to create a commission to review WTO decisions against U.S. interests and advise Congress if the WTO has exceeded its authority in making such decisions.

Democrats Get Serious about New Direction for U.S. Trade Policy – Congressional Democrats recently made it clear that they are serious about a new approach to trade policy now that they hold the majority in both the House and Senate. Ways and Means Trade Subcommittee Chairman Sander Levin, D-MI, laid out an ambitious schedule of oversight hearings. Nearly a dozen of the committee’s Democrats criticized the Bush administration’s apparent willingness to address their labor concerns regarding free trade agreements and urged the White House to extend that commitment to environmental provisions. And nearly all of the Democrat freshmen in the House asked Ways and Means Chairman Charles Rangel, D-N.Y., to include them in the policymaking process. The Ways and Means Committee held its organizational meeting Jan. 17 and outlined a number of hearings and oversight-related activities related to trade that it and its Trade Subcommittee intend to pursue in the 110th Congress. The full committee will examine the coming year’s priorities for the Office of the U.S. Trade Representative. The Trade Subcommittee will hold a hearing on trade promotion authority, which expires June 30, that will include a review of the FTAs concluded to date, the role of Congress, and labor and environmental concerns. It will also review existing and pending FTAs, preference programs, the Doha Round, strengthening U.S. trade laws, and specific trade issues with China, Europe, Haiti and developing countries.

Comments Sought on Haiti’s Eligibility under HOPE Act – The Office of the U.S. Trade Representative is seeking comments by Feb. 13 on whether Haiti meets the eligibility requirements for benefits under the Haitian Hemispheric Opportunity through Partnership Encouragement Act. The USTR notes that the Trade Policy Staff Committee will consider these comments in developing a recommendation to the president on Haiti’s eligibility for these benefits. The president is required to make this determination no later than March 30. The HOPE Act amends the Caribbean Basin Economic Recovery Act to authorize the president to designate Haiti as a beneficiary country eligible for duty-free treatment for certain apparel articles, as well as certain wire harness automotive components, if he determines and certifies to Congress that Haiti has established or is making continual progress toward establishing:

a market-based economy that protects private property rights, incorporates an open rules-based trading system and minimizes government interference in the economy through measures such as price controls, subsidies and government ownership of economic assets; the rule of law, political pluralism, and the right to due process, a fair trial and equal protection under the law; the elimination of barriers to U.S. trade and investment, including the provision of national treatment and measures to create an environment conducive to domestic and foreign investment, the protection of intellectual property, and the resolution of bilateral trade and investment disputes; economic policies to reduce poverty and increase the availability of health care and educational opportunities; a system to combat corruption and bribery; and the protection of internationally recognized worker rights. In addition, the president must certify that Haiti does not (a) engage in activities that undermine U.S. national security or foreign policy interests, (b) engage in gross violations of internationally recognized human rights, or (c) provide support for acts of international terrorism.

New Study Sees Opportunities in Trade in Services with China – According to a new study, the U.S. could add as many as 240,000 new, high-paying service industry jobs by 2015 as a result of the growing bilateral services trade with China. The study, which was conducted by Oxford Economics on behalf of The China Business Forum, the educational and research arm of the U.S.-China Business Council, finds that the dramatic expansion of trade and investment in services between China and the U.S. has benefited both economies substantially and will continue to do so for the foreseeable future.

Dorgan Introduces Bill to Ban Sale of Products Made in “Sweatshops” – Sen. Byron Dorgan, D-N.D., recently introduced the Decent Working Conditions and Fair Competition Act (S. 367), which would ban the sale in the U.S. of imported products made in factories found to violate workers’ core labor rights. The legislation would not only impose a substantial fine for violating this ban but would also give those who sell legitimately produced products the right to sue to recover damages from violators.

CITA Adjusts Limits under AGOA Third-Country Fabric Provision – The Committee for the Implementation of Textile Agreements has adjusted the fiscal year 2007 (Oct. 1, 2006, through Sept. 30, 2007) limits on apparel imports eligible for duty- and quota-free treatment under the African Growth and Opportunity Act. The recently passed Tax Relief and Health Care Act of 2006 extended the third-country fabric provision of AGOA until 2012 and provided that the quantitative limit for apparel imported under this provision for FY 2007 will be an amount not to exceed 3.5 percent of the aggregate square meters equivalent of all apparel articles imported into the U.S. in the preceding 12-month period. Accordingly, CITA has announced that the aggregate quantity of imports eligible for preferential treatment under AGOA for apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly made in one of more beneficiary countries from yarn originating in the U.S. or one or more beneficiary countries is 1,498,846,694 SME. Of this amount, 815,001,892 SME is available for apparel articles imported under the third-country fabric provision.

CBP to Increase Inspection, Other Fees as of April 1 – CBP has issued a final rule, effective April 1, which increases the fees charged for CBP services provided in connection with (a) inspections of vessels, trucks, railcars, aircraft, barges and passengers, (b) each item of dutiable mail for which a CBP officer prepares documentation, and (c) annual customs broker permits. Commercial vessels – Vessel owners or operators pay an inspection fee for each arrival up to a calendar year maximum amount. Under the final rule, this fee will increase from $397 to $437 per arrival, with no change to the $5,955 yearly maximum. Commercial trucks – Commercial truck owners or operators can pay for inspectional services per arrival, or they can pay a fee that covers an unlimited number of entries during a calendar year. The per arrival fee will be increased from $5.00 to $5.50 but the annual fee will remain $100. Railroad passengers/freight – Fees for CBP inspections of railroad cars carrying passengers or commercial freight can be paid for each arrival, or a decal may be purchased for the entire calendar year. Under the final rule, the per arrival fee will rise from $7.50 to $8.25, with no change to the annual fee of $100. Private aircraft and vessels – Owners and operators of both private aircraft and private vessels are required to purchase a decal each calendar year. The fee for this decal will increase from $25.00 to $27.50. Passengers aboard commercial aircraft or vessels – The fee for inspecting commercial airline and vessel passengers arriving at airports or seaports in the U.S. customs territory will increase from $5.00 to $5.50 per passenger. The fee for inspecting commercial vessel passengers arriving from Canada, Mexico, or a U.S. territory or possession or adjacent island will rise from $1.75 to $1.93 per passenger. Barges and other bulk carriers – The fee for inspecting barges and other bulk carriers from Canada and Mexico will increase from $100 to $110 per arrival, but the calendar year maximum will remain $1,500. Dutiable mail – The fee for inspecting packages and/or mail containing dutiable merchandise will increase from $5.00 to $5.50 per item. Customs broker permits – The annual fee for each district permit and each national permit held by an individual, partnership, association or corporation will rise from $125 to $138.

U.S. and Mexico Sign Customs Cooperation Agreement – U.S. Trade Representative Susan Schwab and Mexican Secretary of Economy Eduardo Sojo signed a customs cooperation agreement Jan. 26, marking the first step toward implementing the textile and apparel cumulation provision of DR-CAFTA. Cumulation will allow apparel produced in DR-CAFTA signatory countries that incorporate certain fabric and other inputs from Mexico to qualify for duty preferences when exported to the U.S. The USTR notes that the cumulation provision sets annual limits on the quantity of apparel that will receive preferential treatment and covers a limited set of products. Under the new agreement, Mexican and U.S. customs authorities will cooperate to ensure proper verification of claims of preferential treatment under DR-CAFTA for apparel that contain inputs from Mexico. The agreement provides for sharing of information and documents; procedures for production verification, including unannounced plant visits; and penalties in the event of inaccurate claims. The customs cooperation agreement is the first of several actions necessary to implement the cumulation provision. Mexico still has to amend its trade agreements with individual DR-CAFTA countries in order to grant reciprocal treatment to goods made in those countries that incorporate U.S. textile materials.

U.S. and Uruguay Sign Trade and Investment Framework Agreement – The U.S. and Uruguay signed Jan. 25 a Trade and Investment Framework Agreement aimed at deepening and strengthening trade and investment ties between the two countries. This action follows the Nov. 1 entry into force of a bilateral investment treaty. Under the TIFA, a joint Council on Trade and Investment will be established, composed of U.S. and Uruguayan government officials. The agreement also lays out a work program covering a number of different issues, including facilitation and liberalization of bilateral trade and investment (including agricultural issues), cooperation on sanitary and phytosanitary measures, technical barriers to trade, intellectual property rights, regulatory issues affecting trade policy and investment, information and communications technology and e-commerce, trade and technical capacity building, trade in services, and government procurement. According to the USTR, technical teams from both sides will soon exchange proposals in order to prepare for the first meeting of the Council on Trade and Investment in Washington, D.C., in April.

BIS Restricts Exports of Luxury Goods to North Korea – As a result of North Korea’s test launch of ballistic missiles in July and testing of a nuclear device in October, the Bureau of Industry and Security has issued a final rule, effective Jan. 26, imposing new export and re-export controls on that country. In accordance with recent United Nations Security Council resolutions, the BIS is imposing restrictions on exports and re-exports of luxury goods to North Korea and is continuing to restrict exports and re-exports of nuclear and missile-related items and other items included on the Commerce Control List. The BIS is therefore amending the Export Administration Regulations to impose license requirements for the export and re-export to North Korea of virtually all items subject to the EAR except food and medicines not listed on the CCL.

Sen. Rockefeller Introduces Bill Aimed at Strengthening U.S. Trade Laws – Sen. Jay Rockefeller, D-WV, recently introduced trade legislation that he said is aimed at leveling the playing field for U.S. manufacturers and cracking down on unfair foreign trade practices. According to a statement from the senator’s office, the Strengthening America’s Trade Laws Act (S. 364) would: bolster the U.S. position in WTO disputes and give Congress more authority to respond to adverse WTO decisions; tighten restrictions on unfair trade practices such as dumping goods at below-market prices and subsidizing exports; expand the reach of countervailing duties to include countering China’s currency manipulation; push the USTR to negotiate the end of unfair treatment of tax rebates that put U.S. producers at a disadvantage; and make the International Trade Commission’s recommended remedies the final word in cases regarding surges of imports from China by removing the president’s discretion to ignore the ITC’s recommendations. The bill has been referred to the Senate Finance Committee.

U.S. MOVES FORWARD ON DUTY-FREE/QUOTA-FREE COMMITMENT TO LDCS
Comments on WTO initiative due by March 15
Importers have just over a month to provide their input on an initiative that could offer substantial duty savings on goods from dozens of nations. The Office of the U.S. Trade Representative is inviting comments by March 15 on how the United States should implement a World Trade Organization agreement to provide duty-free/quota-free market access for most products of least-developed countries. Companies who want to ensure that their imports are accorded such treatment should act now to state their case. At a ministerial meeting in Hong Kong in December 2005, WTO member countries agreed that they would include as part of a final deal in the Doha Round of trade liberalization negotiations a commitment to use their individual preferential trade programs, such as the Generalized System of Preferences, to provide DF/QF treatment for LDCs. This treatment must cover at least 97 percent of tariff lines, meaning that each country will be able to prevent products it considers sensitive from receiving such treatment. With prospects brightening for the resumption of formal Doha Round negotiations, the USTR is now seeking input on the full range of issues that may affect U.S. implementation of the DF/QF commitment, including what products should be included or excluded.

Negotiators Agree to Resume Full-Scale Doha Round Talks – WTO Director-General Pascal Lamy indicated after the annual World Economic Forum gathering in Davos, Switzerland, this past weekend that formal Doha Round negotiations will resume in Geneva in the near future. Lamy said a meeting of trade ministers from 30 countries on the sidelines of the WEF “has put quite a lot of energy into the notion that the landing zone is in sight.” However, while most attendees agreed that the political will to restart full-scale negotiations exists, reports from Davos gave no indication of any concrete proposals to deal with the most contentious issues.

House Bill to Allow CV Duties Against Currency Manipulation to be Reintroduced – Reps. Duncan Hunter, R-CA, and Tim Ryan, D-OH, are circulating a letter seeking support for their soon-to-be-introduced Fair Currency Act, which would define foreign currency manipulation as an illegal export subsidy that could be countered by imposing countervailing duties. The bill garnered the support of 178 cosponsors in the 109th Congress. The bill would establish currency manipulation as one of the factors to be considered by the International Trade Commission in Section 421 investigations, which can result in safeguard actions if increased imports from China are found to be causing disruption in the U.S. market. In addition, the bill would require the Department of Defense to advise the ITC on whether Chinese articles subject to a Section 421 investigation are competitive with or similar to domestically manufactured items critical to the U.S. defense manufacturing base. If the ITC concludes that market disruption has occurred and the DOD determines that the domestic industry’s articles are critical to the U.S. defense industrial base, DOD procurement of the Chinese exports in question would be barred (although this prohibition could be waived by the president for national security reasons).

Paraguay and Kyrgyzstan Join Harmonized System Convention – According to the World Customs Organization, Paraguay and Kyrgyzstan recently became the 128th and 129th contracting parties, respectively, to the International Convention on the Harmonized Commodity Description and Coding System. The convention will enter into force for both countries as of Jan. 1, 2009, unless they decide to specify an earlier date. The WCO noted that more than 98 percent of international trade is now classified in terms of the Harmonized System.