Aderholt Threatens To Reject TPA, Korea FTA Over CAFTA Socks
According to Inside US Trade, Rep. Robert Aderholt (R-AL) this week threatened to vote against Bush Administration trade priorities, including extension of trade promotion authority and the U.S.-Korea free trade agreement, if the administration does not show progress toward protecting the sock industry in the United States. Taking steps to help U.S. sock makers is something the administration committed to doing in exchange for Aderholt’s vote in favor of the Central America Free Trade Agreement (CAFTA) in July 2005. Aderholt said the application of the CAFTA safeguard clause for socks might be sufficient to convince him that the administration was addressing his concerns on socks, thereby enabling him to vote in favor of these trade agreements. However, he said the administration would have to show it has “exhausted every effort” in attempting to negotiate a change to the rule of origin or an extended U.S. tariff phase-out in CAFTA for socks.

DR-CAFTA Enters into Force for Dominican Republic
The White House has announced that DR-CAFTA entered into force for the Dominican Republic yesterday. Consequently, originating merchandise from the Dominican Republic that is entered, or withdrawn from warehouse for consumption, on or after March 1 is eligible for duty-free treatment under the agreement. The announcement also authorizes the Committee for the Implementation of Textile Agreements to determine whether Nicaragua has failed to comply with a commitment made regarding the administration of the DR-CAFTA tariff preference level for certain apparel. It provides for certain modifications to the NAFTA rules of origin to implement the cumulation provision as soon as Mexico amends 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. Once Mexico completes this step, the Office of the U.S. Trade Representative is instructed to issue a notice in the Federal Register announcing the effective date of the cumulation provision. DR-CAFTA is now in force for five of the six signatory countries. It went into effect for El Salvador March 1, 2006; for Nicaragua and Honduras April 1, 2006; and for Guatemala July 1, 2006. Costa Rica has not yet ratified the agreement.

Clarification on Investigation of Modifications to DR-CAFTA Pocketing Rule. The ITC has issued a notice clarifying that in its investigation of the probable economic effect of modifications to the DR-CAFTA rules of origin and tariffs for certain apparel goods it intends to examine the effect of these changes for all parties to the agreement, not just Costa Rica and the Dominican Republic. The ITC has also extended the deadline for filing written submissions in this investigation to March 16.

Senators Introduce Legislation to Revoke China PNTR
Following the Department of Commerce’s recent announcement of a record U.S. trade deficit with China that surpassed $230 billion in 2006, Sens. Byron Dorgan, D-N.D., Lindsey Graham, R-S.C., and Sherrod Brown, D-Ohio, introduced legislation to rescind the permanent normal trade relations status granted to China in 2000. The senators indicated that the bill is aimed at giving the U.S. another trade enforcement tool with respect to China. However, withdrawing PNTR would likely result in the two countries rescinding their treatment of each other as WTO members, meaning, among other things, that the U.S. would no longer be able to use the WTO dispute settlement system to resolve complaints about China’s trade practices.

DOD Finalizes Implementation of DR-CAFTA Government Procurement Provisions
The Department of Defense has adopted as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement to implement the DR-CAFTA with respect to El Salvador, Honduras and Nicaragua. According to the DOD, DR-CAFTA waives the applicability of the Buy American Act for some foreign supplies and construction materials and specifies procurement procedures designed to ensure fairness in the acquisition of supplies and services. The excluded services for DR-CAFTA are the same as for the Chile FTA and NAFTA. For supply and service contracts, DR-CAFTA has the same threshold as other FTAs ($64,786), except the Morocco FTA and NAFTA, with respect to supply contracts involving Canada. For construction contracts, DR-CAFTA has the same threshold as the Chile, Morocco and Singapore FTAs and the WTO Government Procurement Agreement ($7.41 million), which is lower than the NAFTA threshold of $8.42 million.

CPSC Seeks Comments on Proposed Changes to Textile Flammability Standard
The Consumer Product Safety Commission is seeking comments by May 14 on a proposed rule that would amend the Standard for the Flammability of Clothing Textiles (16 CFR part 1610). The CPSC states that this standard, which was originally issued in 1953, has become outdated in several respects and that the proposed rule would revise it to better reflect current consumer practices and technologies. The products regulated under the standard are clothing and fabrics intended to be used for clothing. The standard applies to all items of clothing and fabrics used for such clothing, whether for adults or children, for daywear or nightwear. The CPSC has other regulations governing the flammability of children's sleepwear that are more stringent than this general wearing apparel flammability standard, and the proposed changes would therefore not affect the children's sleepwear standards.

The CPSC is proposing the following changes.

• the addition of certain relevant definitions
• a more modern flammability tester
• changes to the dry cleaning procedure
• revised hand laundering requirements
• clarification regarding the selection of the surface and direction for flammability testing
• clarification on when five additional specimens need to be tested
• clarification on how to conduct the flammability test
• clarification regarding when ignition of the base fabric occurs
• the addition of uniform codes to report complex test results

Requests to make an oral presentation concerning the proposed rule must be received by April 13. If the CPSC receives such a request, a date will be set for a public meeting and notice thereof will be provided in the Federal Register.

Amended AGOA Short Supply Procedures. The ITC has issued an interim rule, now effective, amending its rules of practice and procedure regarding short supply procedures under the African Growth and Opportunity Act. This rule reflects recent amendments to AGOA that provide for ITC investigations and determinations concerning (1) whether a fabric or yarn produced in beneficiary sub-Saharan African countries is available in commercial quantities for use by lesser-developed beneficiary sub-Saharan African countries and, if so, (2) the quantity of the fabric or yarn that will be so available in lesser-developed beneficiary countries in the applicable one-year period (Oct. 1 to Sept. 30) after the determination is made. The amendments further provide for additional ITC determinations during and after the applicable one-year period when the ITC makes an affirmative determination. The interim rule: identifies the types of entities that may file a petition and describes the information that must be included in a petition; provides for ITC investigations and establishes procedures for conducting them, including with respect to confidential business information; and describes the determinations and reports that the ITC will make and their content and timing.

WTO/ILO Report Examines Impact of Trade on Labor and Social Policies
The WTO and the International Labor Organization released this week a joint study on the connections between trade policies and labor and social policies. The study finds that globalization is producing an increased demand for skilled labor and skill premiums, particularly in developing countries, which have in turn exacerbated income inequality within countries. The report concludes that “trade policies and labor and social policies do interact and that greater policy coherence in the two domains can help to ensure that trade reforms have significantly positive effects on both growth and employment.”

EU Releases Study on Market Access Opportunities in China
The EU recently released the findings of a new study assessing market opportunities for EU companies in key sectors in China. According to the EU, the study identifies major opportunities for EU exporters in environmentally-friendly goods, business services and high-value products. But it also concludes that EU exports to China are still seriously restricted by market access barriers and poor intellectual property rights protection.

CBP to Extend Trade Preference Program Information Collections
CBP is seeking comments by April 23 regarding the extension without change of the following information collections. African Growth and Opportunity Act Certificate of Origin, which is required to implement the duty preference provisions of the AGOA to provide extension of duty-free treatment under the Generalized System of Preferences to sensitive articles normally excluded from GSP. It also provides for the duty- and quota-free entry of specific textile and apparel articles from the countries of sub-Saharan Africa. Form CBP-450, U.S.-Caribbean Basin Trade Partnership Act, which is required to implement the duty preference provisions of the CBTPA.

Feingold Introduces Bill Aimed at Strengthening Buy American Act
Sen. Russ Feingold, D-Wis., recently reintroduced the Buy American Improvement Act, which aims to strengthen current law requiring the federal government to buy U.S.-made goods whenever possible. According to Feingold’s office, the bill would strengthen domestic manufacturing by making it harder to waive the Buy American requirement. The bill would also make the Senate, House of Representatives and Architect of the Capitol subject to the Buy American Act for the first time.

CITA Makes Affirmative Short Supply Determinations on Two-Way Stretch Fabric
The Committee for the Implementation of Textile Agreements has made affirmative determinations regarding two DR-CAFTA short supply petitions dealing with certain two-way stretch woven fabric of polyester, rayon and elastomeric yarns, classified under HTSUS 5515.11.10. As a result, these products will be added to the list in Annex 3.25 of the DR-CAFTA in unrestricted quantities.