Calming Troubled Diplomatic Waters

(Halifax Chronicle-Herald – Lee-Anne Goodman, The Canadian Press)
Gary Doer has met hundreds of politicians in the U.S. capital in his first year as Canadian ambassador, educating the most powerful people in the most powerful nation on Earth about the importance of the Canada-U.S relationship. [...]

“When people say: ’You’ve left politics,’ after stepping down as premier, I say: ’Are you kidding me?’ There’s 435 of them down the street, and 30,000 lobbyists in this town,” he says with a rueful laugh. “The over-used term is it’s been the best of times and the worst of times ... it was a good year, public to public, Canadians and Americans are friends and neighbours, but there were obviously a lot of issues that I had to deal with. But I knew that coming in.” Read more here.

U.S. Presses Canada on Softwood Lumber

(American Shipper)

The United States on Friday requested consultations with Canada under the 2006 Softwood Lumber Agreement (SLA) regarding alleged unfair under-pricing of timber harvested from public lands of British Columbia.

The consultations provide an opportunity for the United States and Canada to exchange views and attempt to resolve their differences. If the matter cannot be resolved this way, then either the United States or Canada may request arbitration.

“The decision to move to consultations is intended to emphasize the importance of resolving this matter,” said U.S. Trade Representative Ron Kirk, in a statement.

To the United States, it appears that British Columbia is providing softwood lumber producers a low-cost input for their products and circumventing the SLA export measures. Read more here.

Related: Canada Says U.S. Softwood Complaint Unjustified (Reuters)

Russia Resolves Key Issues with U.S. over WTO Accession

(Bridges Weekly)

Russia and the United States have reached bilateral resolutions on several trade issues, removing another set of hurdles facing the entry to the WTO of the world’s largest economy that is not already a member of the global trade body.

On October 1, Russian Finance Minister Alexei Kudrin announced in Yalta that Russia had resolved its bilateral negotiations with the US over WTO accession, and would now move to conclude its multilateral negotiations in Geneva. US Trade Representative Ron Kirk welcomed “bilateral agreement on key issues related to the accession process,” adding that Moscow would now be free to devote more attention to remaining barriers at the multilateral level.

According to a statement from Kirk’s office, Washington and Moscow have reached agreements in principle on issues such as intellectual property rights, government procurement, and transparency in the decision-making process on trade-related issues. The bilaterally-agreed solutions reflect what the US would like to see in Russia’s eventual WTO commitments; the compromises will now be considered by other countries in the WTO Working Party on Russia’s accession. Read more here.

U.S. Trade Policy Extremely Open, World Trade Organization Finds

(America.gov)

“The U.S. trade and investment regimes are among the most open in the world,” the World Trade Organization (WTO) Secretariat reported September 29 in its 10th review of the trade policies and practices of the United States.

“Like most other WTO Members, the United States very largely resisted pressures to respond to the global economic recession by tightening restrictions on imports,” the Secretariat reported in its executive summary. “The restraint shown by the United States helped forestall a worldwide slide into protectionism.”

Because surveillance of national trade policies is fundamentally important to the work of the WTO, the organization has established a trade policy review mechanism under which all WTO members are examined periodically. The frequency of each country’s review varies according to its share of world trade. The previous review of U.S. trade policies took place in 2008. Read more here.

India Protests Against US Trade Barriers at WTO

(Economic Times)

India at WTO today protested against escalating tariff and non-tariff barriers imposed by the on Indian goods and services including enhanced visa fee on Indian short-term services providers and the ban in Ohio on state outsourcing projects.

New Delhi cautioned the USA on its recent trade initiatives, particularly the Anti-Counterfeit Trade Agreement (ACTA), saying “they contribute collectively to undermining not only the (Trade related Intellectual Property Rights) agreement but the multilateral trading system as well in some measure.”

“The US, which is the undisputed leader of the global trade arena, needs to set the bar high for the other nations to emulate” instead of delaying compliance with trade rulings pronounced by the WTO’s dispute settlement body, it said. Read more here.

House Approves Two ‘Make it in America’ Provisions

(Sidley Austin LLP)

On September 15, the House of Representatives approved two bills aimed at bolstering U.S. manufacturing by requiring parts of the U.S. government to buy only U.S.-made products. Both bills would need to be approved by the Senate and signed by President Obama before they become law, but nonetheless signal a possible spate of “Buy American” legislation in the coming weeks.

The bills are:

1. The “Berry Amendment Extension Act,” which would require two agencies within the Department of Homeland Security to buy U.S.-made textiles, clothing, cotton and other related goods; and


2. The “Congressional Made in America Promise Act,” which requires goods and supplies used by Congress to be sourced in America, with limited exceptions.

The bills are part of the broader “Make it in America” legislative initiative launched by the Democratic leadership in Congress, which has been under increasing pressure to stimulate U.S. job creation and manufacturing. The initiative is still under development but could also include the consideration of a China currency bill and other pro-U.S. manufacturing legislation (the Foreign Manufacturers Legal Accountability Act, H.R. 4678/S.1606, has been mentioned as a possibility) in the few weeks – perhaps only days – left before Congress adjourns for the mid-term elections. Read more here.

WTO Calls on US to Cut Farm Subsidies

(AFP via CommonDreams.org)

The World Trade Organization called on the United States on Wednesday to cut its farm subsidies, saying that they were so “considerable” that they could affect market prices. In a report analysing Washington’s policies since 2007, the trade body said that while promoting its exports, the United States should also reduce “distorting measures ... including ... support for agriculture.”

The WTO noted that support granted to the sector under the multi-billion-dollar 2008 Farm Act are mostly “linked to prices and or production.” Thanks to this support, “producers of cereals, oilseeds, and cotton are effectively insulated from market prices while sugar and dairy have market price support programmes,” said the WTO. “The large size of the agriculture sector means that the absolute amount of support is considerable, varies from one year to another depending on prices, and can affect world prices,” it added. Read more here.

Export Initiative to Emphasize Small Business

(Journal of Commerce Online – R.G.Edmonson)

President’s program focuses SBA, Ex-Im Bank, other agencies on initiative

The federal government will step up its efforts to help U.S. exporters sell goods abroad, the White House said Thursday.

Several agencies will increase the number of trade missions and encourage foreign buyers to come to U.S. exhibitions, according to a report developed by the Export Promotion Cabinet, which includes the Secretaries of Commerce, State, Treasury, Agriculture and Labor and the heads of all the trade-related government agencies. The government will also be a commercial advocate for U.S. firms competing for international contracts and work to break down barriers to trade.

The report puts trade promotion for small and medium-sized enterprises at the top of the priority list. The Small Business Administration identified more than 2,000 potential exporters in its central contract registration. Read more here.

Officials Say Obama’s Plan to Boost Exports on Track

(Bridges Weekly)

U.S. President Barack Obama’s National Export Initiative (NEI) is on track to double U.S. exports over the next five years, trade officials in Washington announced Monday. Gary Locke, the U.S. Commerce Secretary pointed towards the 17% increase in exports from this time last year, rising to slightly over US$1 billion. In order to achieve the five year goal, U.S. exports would have to maintain a year on year increase of about 15%.

The encouraging indicators come from sources including the Commerce Department and the Export-Import Bank. The Obama administration says these data suggest the NEI will reach or exceed the intended goal.

Critics, however, say the data is not being portrayed accurately and have expressed doubts that the 15% growth rate can be maintained. That the base data year being used by the Obama administration is 2009, a year which saw a three year low for U.S. exports, they say. Read more here.

U.S. Commerce Department Proposes Significant Changes to Antidumping/Countervailing Duty Rules

(Lexology – Arent Fox LLP)

It was a long hot summer in Washington, DC, but that did not stop the U.S. Department of Commerce from quietly floating proposals that would significantly alter the landscape in administering U.S. antidumping and countervailing duty (AD/CVD) rules. Cloaked in the guise of enhancing U.S. “competitiveness” and supporting the National Export Initiative, these new proposals would make it more difficult for foreign companies, especially those based in so-called non-market economies (e.g., China) to avoid costly AD/CVD measures. The question is, how do these measures do anything to enhance U.S. exports? [...]

A detailed listing of the proposals can be found here. Read more here.

Buy American, The Sequel? New Canada-U.S. Trade Battle Looms Ahead

(Lee-Anne Goodman — The Canadian Press)

Seven months after the Buy American resolution, Canadian manufacturers are poised to become ensnared in yet another protectionist piece of U.S. legislation even though the Chinese are the intended target.

Gary Doer, Canada’s ambassador to the United States, is sending a letter this week to congressional leaders, urging them to consider the impact on the Canada-U.S. trade relationship if the Foreign Manufacturers Legal Accountability Act passes Congress in the weeks to come. “As we are each other’s largest trading partner, Canada is concerned this legislation seeks to solve a problem that does not exist,” Doer wrote. “It could instead result in unintended consequences of unduly burdening our bilateral trade.”

The act, currently before the U.S. House of Representatives, is aimed at ensuring that the foreign manufacturers of defective protects can be served with legal papers. It was the result of the Chinese drywall fiasco that has damaged some U.S. homes and made homeowners sick; consequently, it isn’t expected to face many hurdles in Congress.

The act is part of a “Make It In America” initiative by nervous Democrats who are hoping it will score them points in what’s known as the Rust Belt, a manufacturing-heavy region of the Midwest and northeastern United States where exasperation about the widening trade deficit is off the charts. Rust Belt Democrats are vulnerable to defeat in the November mid-term elections less than eight weeks away. Read more here.

Loosening of Controls on Exports Draws Fire

(Washington Times – Eli Lake)

Trade groups laud new Obama policies

The Obama administration’s overhaul of regulations aimed at loosening controls on the export of some military technology is drawing fire from groups that monitor arms proliferation but praise from trade groups.

President Obama on Tuesday announced the export-control policies in a video during the Commerce Department’s annual conference on updates to export controls. The policy seeks to streamline and standardize the licensing process for defense-related exports and create a new unified enforcement agency to crack down on violators of the export controls. [...]

Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, called the new policy a “defense industry bailout.” “The financial industry and the auto industry had their bailouts, now it is the defense industry’s turn,” he said. Mr. Milhollin also said the United States steadily relaxed arms-export controls since the end of the Cold War. “We have already reduced controls to the bone,” he said.

Mr. Milhollin said most defense technology being deregulated was developed with public money. “The lion’s share of the technology we are decontrolling has been developed with taxpayer dollars,” Mr. Milhollin said. “This is taxpayer-owned technology that the companies now want to sell to the whole world.” Read more here.

U.S. Manufacturers Welcome Improvements in Trade Practices

(Industry Week)

The ENFORCE Act of 2010 will give the Commerce Department and U.S. Customs and Border Protection new tools to combat illegal schemes to evade special duties.

The Coalition for Enforcement of Antidumping and Countervailing Duty Orders applauded a set of 14 proposals released by the U.S. Department of Commerce that would introduce changes in a variety of the agency’s practices.

“These changes will result in more accurate and effective trade orders,” said Joe Downes, spokesperson for the Coalition and Senior Vice President of Leggett & Platt, Inc.

At the same time, the Coalition noted the need for continued efforts to provide Commerce and U.S. Customs and Border Protection with enhanced capabilities and tools to combat illegal schemes to circumvent trade orders once they are in place. Read more here.

U.S. Lays Out Plan to Strengthen Anti-Dumping Regime

(Reuters – Doug Palmer)

The United States on Thursday announced plans to toughen rules against what it sees as unfair foreign trade practices, proposing a number of changes likely to irk China, its biggest import supplier. At least some of the proposals could lead to higher anti-dumping or countervailing duties on goods from the Asian manufacturing giant, the most frequent target of U.S. complaints about unfair trade in recent years.

But the plan seeks to strengthen the effectiveness of U.S. trade protection measures “across a range of areas,” a senior Commerce Department official told Reuters.

With President Barack Obama’s popularity falling and Democrats in danger of losing control of Congress in November elections, the party has been pushing a “Make it in America” agenda aimed at creating U.S. manufacturing jobs.

“Today’s announcement is another demonstration of our continuing efforts to sharpen our trade enforcement tools,” U.S. Commerce Secretary Gary Locke said in a statement. It outlined 14 proposals that increase penalties or toughen requirements on foreign companies that sell goods the United States deems unfairly priced or subsidized.

Although less than 3% of imports into the United States are hit with anti-dumping or countervailing duties, the trade laws can be an important source of protection for sectors such as steel, tires, paper and other industrial goods. Read more here.

U.S. May Face WTO Disputes over “Zeroing” from Developing Economies

(World Bank Research e-Newsletter)

The U.S. use of the controversial method of “zeroing” in its antidumping procedures and its failure to reform in light of World Trade Organization legal rulings threaten the legitimacy of the WTO’s dispute settlement system, according to a new working paper by Chad Bown and Thomas J. Prusa.

With zeroing, when a country calculates a weighted average margin of dumping, it uses zero to replace the actual amount of dumping that yields negative dumping margins, which effectively increases overall dumping margins and the size of the antidumping duty. Not surprisingly, zeroing especially punishes suppliers with export price variation.

Evidence suggests imports from developing economies into the U.S. subject to antidumping have prices that are just as volatile as imports from rich economies. Hence, zeroing is just as likely to impact the size of U.S. antidumping duties applied on developing country exports as developed-economy exports.

Thus while developed economies have so far filed the vast majority of WTO disputes against the U.S. over zeroing, zeroing is also likely a relevant issue for developing-country exporters. In fact, more than 60% of the product lines currently subject to U.S. antidumping are exported by developing countries.

Read the World Bank Policy Research Working Paper 5352 here.

US-Bahrain Customs Meeting Held

(Gulf Daily News)

Customs officials from Bahrain and the US met to discuss ways to further enhance the capability of Bahrain Customs to effectively implement all the aspects of the US-Bahrain Free Trade Agreement (FTA).

The officials from Bahrain Customs and the US Department of Commerce, US Customs and Border protection officials attended programmes that were organised and funded by the Middle East Partnership Initiative under the Commercial Law Development Programme of the US Department of Commerce.

Phase I programme was conducted in Bahrain in June and phase II in Washington this month.

Phase I covered the overall aspects of “advance ruling”, which is one of the vital components of the FTA.

Phase II programme was an extension of Phase I and covered an in-depth understanding of all the specific sub-clauses of this aspect such as, valuation determination, regulatory audit, penalties, classification and determinations.

Further joint committee meetings are expected to be held between US and Bahrain officials soon.

Few “Green” Technologies Subject to Export Controls but BIS Pledges Further Improvements

(World Trade Interactive)

An assessment of the impact of U.S. export controls on “green” technology items released this month by the Bureau of Industry and Security finds that while most such items do not currently require an export license there are steps BIS can take to further promote and expedite exports in this sector.

This assessment examines the potential effects of export controls on commodities, software and technology that either are or can be used to create products that contribute to clean energy, energy efficiency and other environmental or green initiatives (i.e., green technology). BIS states that although this is not an exhaustive assessment of all green technology items and initiatives that may be captured by dual-use export controls, it is an attempt to anticipate ways that BIS can support the creation of green jobs and advances in green technology by facilitating secure trade while mitigating national security concerns. Read more here.

Proposed U.S. Legislation Would Raise Risks and Costs of Exporting

(Gregory O. Somers, Ogilvy Renault LLP)

A bill currently before the United States Congress – the Foreign Manufacturers Legal Accountability Act of 2010 (FMLAA)-could, if made into law, have an adverse impact on businesses and manufacturers that export products to the United States. [...]

Implications for Canadian and other foreign exporters and manufacturers

Potential consequences of the FMLAA include:

• Comparative disadvantage: The expense associated with having a registered agent in the U.S. may decrease the competitiveness of foreign manufacturers and exporters in relation to their U.S. domestic counterparts.

• Regulatory difficulties: Exporters will face the challenge of overseeing the activities of their suppliers, as they may be required to declare that their suppliers meet the requirements of the FMLAA. Even compliant exporters may have their goods delayed at the border if there are irregularities in documentation.

• Increased exposure for liability: Ordinarily, foreign manufacturers are often well-advised to defend product liability lawsuits in their home country. The U.S. imposes greater burdens on manufacturers for product liability than foreign laws of many other jurisdictions. By compelling submission of exporters to the jurisdiction of U.S. courts, costs of litigation and the likelihood of a negative outcome may be significantly increased. Read more here.

Legislative Update: Registered Agents, China Currency, Food Safety on Tap for September

(world Trade Interactive)

Congress is now out of session for its annual summer recess, but lawmakers and trade groups are keeping a number of trade-related issues on the radar screen for possible action once the House and Senate resume activity in mid-September. These include registered agents for foreign manufacturers, China’s currency and food safety. Read more here.

Golf President Battles Extradition to US for ‘selling batteries for Iran missiles’

(Helen Pidd — The Guardian)

Christopher Tappin, 63, made £320 from freight deal which he says was unlawful sting by US agents posing as exporters

A retired businessman from London is battling extradition to the US over claims he sold batteries for missiles to Iran in a deal that he says netted him £320 profit.

Christopher Tappin, 63, from Orpington, is the latest Briton to become caught up in the controversial extradition agreement with the US. He could face 35 years in jail if convicted in an American court.

At a press conference today, the Kent county golf union president insisted he was innocent and said he had been the victim of a sting carried out by US agents posing as exporters.

Tappin, who ran a freight forwarding company for 35 years, is accused of “knowingly” plotting to export five batteries for surface-to-air missiles to Tehran. Read more here.