U.S. Trade Deficit Narrows Sharply in July

(Industry Week – Agence France-Presse)

Exports reach highest level in two years

The U.S. trade deficit dropped more than expected in July as exports reached their highest level in two years, official data showed Thursday, boosting hopes for the U.S. economic recovery. The trade deficit dropped to $42.8 billion in July, a 14% decline from the previous month’s revised figure of $49.8 billion – its highest level in 20 months, the Department of Commerce said.

The total July exports rose 1.8% to $153.3 billion from June to its highest level since August 2008 on the back of strong sales of aircraft, industrial machinery, computers and telecommunications equipment, it said. Imports fell 2.1% to $196.1 billion in July from the previous month. Read more here.

Tariff Wars: US Penalises Aluminum Imports From China

((domain-b.com)

Aluminum and glossy paper manufacturers had claimed that an undervalued currency acted as a subsidy for Chinese producers allowing them to undercut American competitors.

The Commerce Department rejected these arguments.

The petition became a cause celebre of sorts with American manufacturers as the Treasury Department refused to escalate matters with the Chinese by dubbing them as currency manipulators.

US Congressional lawmakers have been pressing hard to introduce legislation that would compel the Commerce Department to act in this regard and recognise China’s currency manipulation, if it fails to act on its own.

“The Commerce Department made its finding while still managing to ignore the elephant in the room, which is China’s currency manipulation,” Senator Charles Schumer, a New York Democrat, said yesterday in a statement. “Once again, even when the opportunity is thrust into its hands, the administration has refused to take action.”

Commerce department officials said the complaints were rejected as China’s currency policy wasn’t “specific to the enterprise or industries being investigated.” Read more here.

BIS Clarifies Scope of Commodity Classifications, Advisory Opinions

(Lexology – Jimmie V. Reyna, Williams Mullen)

According to a recently issued interim final rule amending the Export Administration Regulations (EAR), exporters may not rely on commodity classification determinations and advisory opinions issued by the Commerce Department’s Bureau of Industry and Security (BIS) as official U.S. Government determinations of whether an item is subject to the EAR or to another agency’s exclusive jurisdiction. BIS has jurisdiction over items only if they are described in the EAR and not exclusively controlled by another agency.

Some agencies, such as the State Department’s Directorate of Defense Trade Controls, issue “commodity jurisdiction” determinations as official statements of whether a specific item is subject to the agency’s jurisdiction. The EAR does not authorize BIS, however, to issue commodity jurisdiction determinations. Instead, it may provide only “commodity classifications” – official determinations only of which Export Control Classification Numbers (ECCNs) describe an item. BIS may also issue advisory opinions that describe how BIS interprets the EAR.

Thus, while BIS may officially state whether the ECCNs describe an item, BIS may not state officially whether an item is subject to another agency’s exclusive jurisdiction or whether the item is subject to the EAR.

The new rule does not change BIS policy but simply reminds the public that BIS may not make commodity jurisdiction determinations and that exporters may not rely on commodity classifications and advisory interpretations as official U.S. Government determinations of whether an item is subject to the EAR or to another agency’s exclusive jurisdiction.

New DOC Initiative with Post Office Aims to Boost Small Business Exports

(World Trade Interactive)

The Department of Commerce announced July 12 a new initiative with the U.S. Postal Service to help increase small business exports. The New Market Exporter Initiative will utilize “the combined strength of customized consulting from the Commerce Department’s Commercial Service officers and the value-based logistics expertise and business solutions from the Postal Service” to “provide a simplified roadmap for companies to successfully enter new markets.”

Specifically, through its network of 32,000 post offices and partner posts in 191 countries, the USPS will identify small and medium-sized businesses that already export and alert them to government sources that can help them find new overseas markets. The DOC, with its network of trade specialists in 109 U.S. cities and U.S. embassies and consulates in 77 countries, will serve as a resource to those companies and connect them with potential international buyers. Together, DOC and the USPS will work with these businesses to identify key markets, build market entry strategies and provide guidance for taking their products and services to markets worldwide. Read more here.

Department of Commerce Imposes AD/CV Duty Orders on Plastic Grocery and Shopping Bags from Indonesia, Taiwan, and Vietnam

(Business Wire)

The U.S. Department of Commerce today published antidumping duty orders on imports of plastic grocery and shopping bags (referred to as polyethylene retail carrier bags) from Indonesia, Taiwan, and Vietnam and a countervailing duty (anti-subsidy) order on plastic bags from Vietnam. Today’s actions follow last month’s affirmative determination by the U.S. International Trade Commission (“ITC”) that the U.S. industry is threatened with material injury by reason of the dumped and subsidized imports. The orders reflect the high levels of dumping and subsidization found by the Department in March.

The antidumping orders direct U.S. Customs to collect antidumping duty cash deposits from U.S. importers on all covered plastic bags from Indonesia, Taiwan, and Vietnam. The duty rates are 69.64 to 85.17 percent for imports from Indonesia, 36.54 to 95.81 percent for imports from Taiwan, and 52.30 to 76.11 percent for imports from Vietnam. Certain Vietnamese imports also will be subject to countervailing duty cash deposits of up to 52.56 percent. Thus, for example, if an importer enters subject bags from Vietnam, the importer could be required to pay combined antidumping and countervailing duty cash deposits of up to 128.67 percent of the customs value at the time of entry. Read more here.

Imports Rose in February, Building Hope for Recovery

(Javier Hernandez — New York Times)

Trade data on Tuesday provided another piece of evidence that spending by consumers and businesses was picking up, bolstering hopes that the recovery was gaining momentum.

The Commerce Department’s monthly report on trade showed a 1.7 percent increase in imports. Exports barely rose, leading the trade deficit to increase 7.4 percent from January, to $39.7 billion, more than forecast.

The surge in imports, while reflecting a healthy pickup in spending, may be a drag on economic expansion in the short term. That is because the government subtracts imports when it calculates gross domestic product, the total value of goods and services in the economy. […]

Much of the growth in imports came from consumer goods, like televisions and pharmaceutical products, as the jobs market improved slightly and Americans began to spend more.

Businesses imported goods to restock inventories and replace aging equipment. Industrial supplies and capital goods, like machinery and tools, bolstered much of the growth. Read more here.

Inconsistent Filing Penalties Can Leave U.S. Exporters Scratching Their Heads

(Lexology – Joan Koenig and Nicolas Guzman Drinker, Biddle & Reath LLP)

United States Customs and Border Protection (CBP) has begun enforcing the heightened civil penalties outlined in its January 2009 enforcement guidelines against parties who violate the export filing requirements of the Foreign Trade Regulations (FTR) of the Department of Commerce, Bureau of the Census (Census). As enforcement has ramped up, an apparent conflict has arisen between the final rule on the mandatory use of the Automated Export System (AES), published in June of 2008 by Census, and the Guidelines published in the Customs Bulletin for enforcement.

Specifically, CBP has begun imposing fines of up to $10,000 on shipments at the Southern Border when the required notification for those shipments is not given within the one-hour window required by the Census regulations, but the filing occurs same day. These heightened fines have been imposed on exporters because of a conflicting definition of “failure to file” between the Census regulations and the CBP Enforcement Guidelines. Read more here.

U.S. BIS Publishes Export Compliance Guidelines

(CIFFA eBulletin)

The Department of Commerce’s (Commerce) Bureau of Industry and Security (BIS) has published on its website a document titled Compliance Guidelines: How to Develop an Effective Export Management Compliance Program and Manual. According to the document, the guidelines were developed in order to provide assistance with the establishment or enhancement of an Export Management and Compliance Program (EMCP). The guidelines aim to help companies develop both an operational and written EMCP in order to ensure that export decisions and transactions comply with the Export Administration Regulations (EAR).

The guidelines cover nine “key elements” of an effective EMCP, which include (but are not limited to): Risk assessment, the written EMCP, Compliance training, Recordkeeping, Compliance auditing.

The full text of the guidelines can be accessed online here.

Report Details U.S.-China Trade Data Differences

(American Shipper)

The U.S. Commerce Department released a report Thursday highlighting the differences between official trade statistics produced by the United States and China.

The report was prepared by the U.S.-China Joint Commission on Commerce and Trade Statistics Working Group, which includes officials from the U.S. Commerce Department’s Economic and Statistics Administration and Census Bureau, and China’s Ministry of Commerce and General Administration of Customs.

The analysis found that official Chinese data on exports to the United States are typically lower than official U.S. data on imports from China. Similarly, China reports higher imports from the United States than the United States reports that it exports to China. “The result is that Chinese data have historically shown a much smaller trade deficit with the United States than do U.S. data,” the Commerce Department said. Read more here.

View the USTR/ESA report here and press release here.

US to Impose Anti-Dumping Duties on Chinese Salts, Coated Paper

(Xinhua)

The US Commerce Department said Tuesday that it would impose preliminary duties on imported Chinese potassium phosphate salts and coated paper, a move that may escalate trade disputes between the two countries.

In these countervailing duty (CVD) cases, the two products will face 109 percent and up to 13 percent duties, respectively.

Potassium salts are used in industrial cleaning products, fertilizers and food additives, while coated paper is used in printing of corporate annual reports and high-end catalogues and magazines.

The department said in separate statements that it had “preliminarily determined” that Chinese producers and exporters of the two products had received subsidies equivalent to the duties that were imposed.

“As a result of this preliminary determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates,” said the statement.

According to the US government data, from 2006 to 2008, imports of certain potassium phosphate salts from China increased 228 percent by volume and were valued at about $16.4 million.

The Commerce Department will make its final determination in May. Read more here.

Mixed Messages from the White House Amid New Focus on Trade

(Bridges Weekly)

The White House appears to have awoken from its year-long slumber on trade matters, but the political climate for liberalising trade in the world’s biggest national economy remains problematic.

The action began on 27 January, when U.S. President Barack Obama, addressing a joint session of Congress for his State of the Union address, highlighted trade as an important tool for economic recovery and job creation, calling for the U.S. to double its exports in five years.

A week later, Commerce Secretary Gary Locke explained how the White House intends to achieve those goals. The administration will create the first-ever “government-wide export-promotion strategy” that will receive “the focused attention” of the president and his cabinet, Locke said in an address at Washington’s National Press Club on 4 February. The new National Export Initiative will work on three fronts: expanding trade advocacy at home and abroad; helping companies, especially small- and medium-sized firms, access the credit they need to export their products; and enforcing trade rules so that U.S. exporters will not be unfairly blocked from foreign markets.

“This initiative will correct an economic blind spot that has allowed other countries to chip away at America’s international competitiveness,” Locke said.

Turning to new markets, the Commerce Secretary mentioned the work that the U.S. Trade Representative’s Office is doing to open up trade with “key growth areas” in Asia and elsewhere, as well as the USTR’s efforts to strike “an ambitious and balanced” deal to end the WTO’s Doha Round talks. Locke referred briefly to Washington’s three pending bilateral trade deals – with Colombia, Panama and South Korea – noting that the White House aims to address “outstanding concerns” with each of the pacts. Read more here.

US Steel Adds to its Complaint Against Chinese Steel Imports

(Malia Spencer — Pittsburgh Business Times)

In another federal petition, U.S. Steel Corp. (NYSE:X) said Thursday that it wants duties placed retroactively on seamless standard, line and pressure pipe that is imported from China if a federal trade commission finds that the Asian nation is dumping the product into the American market.

The Downtown Pittsburgh-based steelmaker — along with TMK IPSCO, a Downers Grove, Ill., manufacturer; V&M Star LP, a Houston manufacturer; and two labor groups — filed a complaint in September with the U.S. International Trade Commission over Chinese-made steel pipes imported during 2008. The pipe, which is not welded, and up to 16 inches in outside diameter, is used to move liquids and gases and can be found in plumbing and heating systems or industrial piping systems. […]

During this investigation US Steel has opted to ask that if any duties are implemented, they be retroactive 90 days from the date of the determination, the company said. Normally, duties would be assessed from date of the determination forward.

The Department of Commerce is expected to make a preliminary determination around Feb. 16. Read more here.

U.S. Sets Preliminary Duties on China Steel Products

(Xinhua News Agency)

The U.S. government announced preliminary determination in the countervailing duty investigation on imports of prestressed concrete steel wire strand from China, according to a statement released by the Commerce Department on Tuesday.

The department said that Chinese producers and exporters of prestressed concrete steel wire stand have received net countervailable subsidies ranging from 7.53 to 12.06 percent.

As a result of this preliminary determination, the Commerce Department will instruct U.S. Customs and Border Protection to collect a cash deposit or bond on imports prestressed concrete steel wire strand from China.

In 2008, imports of prestressed concrete steel wire strand from China were valued at an estimated 178 million U.S. dollars, up from 112 million dollars in 2006.

The petition was filed on May 27, 2009. The U.S. International Trade Commission (ITC) made its preliminary determination on July 13.

The Commerce Department is scheduled to issue its final determination in January 2010. Read more here.

Export Control Bill Seeks to Improve AES, Tighten Enforcement

(World Trade Interactive)

Rep. Brad Sherman, D-Calif., introduced recently the Export Control Improvements Act (H.R. 3515), a bill similar to but different in some key aspects from similar legislation introduced in 2008.

H.R. 3515 incorporates several provisions relating to the electronic filing of export data via the Automated Export System.

• The Department of Commerce may establish a registration program for agents to file information in AES on behalf of the U.S. principal party in interest or the foreign PPI. This program could include requiring individuals, corporations, associations or partnerships to obtain authorization to file.

• AES would alert filers to export license requirements based on data elements they enter and issue notices, compliance alerts and other warnings if a given transaction may not comply with export control laws or regulations. AES would not, however, prohibit potentially violative transactions from proceeding.

• AES would be modernized so as to (i) enable the classification of exported products, (ii) ensure that changes in export control laws and regulations are reflected in AES immediately upon implementation, (iii) make the various restricted parties lists available in a standardized format, and (iv) retain records of user actions while filing export data.

Read more here.

$1 Billion Lawsuit Filed on Behalf of Domestic Producers Against Insurers and U.S. Government for Damages Caused by Dumped Chinese Food Products

(Business Wire)

Today, domestic producers of fresh garlic, crawfish tail meat, canned mushrooms and honey, represented by the law firm of Kelley Drye & Warren LLP, filed a class action lawsuit against major insurance companies to recover close to $1 billion in damages. The Washington, D.C. law firm of Adduci, Mastriani & Schaumberg, LLP is co-counsel with Kelly Drye for many domestic producers of crawfish tail meat.

The complaint states that the insurers’ negligent issuance of customs surety bonds, and subsequent refusal to pay under those bonds, allowed the sale of huge amounts of competing food imports from China at below-cost, or “dumped” prices. This caused severe financial damages to the domestic producers. The lawsuit, filed in the federal Court of International Trade, also claims that the U.S. Customs and Border Protection and the Commerce Department failed to enforce the four antidumping orders issued years ago to protect the domestic producers from dumped Chinese imports. Read more here.

Senate Confirms Locke as Commerce Chief

(CQ Politics – Adrianne Kroepsch)

Two months after President Obama’s inauguration and after two withdrawn nominations, the Senate confirmed Gary Locke as Commerce secretary by voice vote Tuesday.

Locke, 59, enjoyed a friendly reception from Democrats and Republicans on the Commerce, Science and Transportation Committee at his March 19 confirmation hearing. The panel approved the former Democratic governor of Washington for the job, 25-0.

During the vetting, he appeared to satisfy panel members of both parties with his positions on the wide range of issues and programs managed by the Commerce Department. In particular, he assured senators that the Commerce Department will run an open and independent 2010 census, beating back suggestions that the White House would control and politicize the population count. Census results are used to determine the distribution of congressional districts and the apportionment of House lawmakers.

Locke also took an aggressive stance on trade during his confirmation hearing. A free-trade supporter, he said he would work to open markets for American-made goods and would take a tough stance on enforcement of U.S. trade laws.

Richardson Exits Cabinet Due to Probe

(Politico)

New Mexico Gov. Bill Richardson announced Sunday afternoon that he is withdrawing as President-elect Barack Obama’s nominee for secretary of Commerce because of unanswered questions about a federal grand jury investigation back home.

“I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process,” Richardson said in an e-mailed statement issued by the transition.

Obama accepted the withdrawal with regret, saying in an accompanying statement that he looks forward to Richardson’s “future service to our country and in my administration.”

Richardson said he had told Obama that “eager to serve in the future in any way he deems useful.”

The grand jury has been investigating “pay-to-play” allegations concerning a New Mexico state contract awarded to a California firm that has contributed to three political committees formed by Richardson, The Associated Press reported last month. Read more here.

Time to End “Zeroing” in Trade Dumping Calculations

(Daniella Markheim — Heritage Foundation)

Brazil and Thailand are the latest to join the list of countries that have filed disputes against the U.S. within the World Trade Organization (WTO) in response to America’s practice of “zeroing” in anti-dumping investigations. Even though the WTO has ruled that zeroing — the tactic of zeroing out dumping calculations when a producer in another country charges a higher price in the U.S. market than in its home market or above its production costs — is not compliant with international trade rules, America refuses to change its dumping methodology. America’s refusal to comply with WTO rulings and eliminate this unfair trade practice erodes U.S. credibility and influence in multilateral trade negotiations and leaves America open to retaliation from affected trade partners. With the new year should come a new commitment to cleaning up U.S. dumping practices.

“Zeroing” is used by the U.S. Department of Commerce (DOC) in its calculation of dumping margins. The DOC first determines a product's “normal value,” which can be based on the product's price in the exporter's home market, the price charged by the exporter in another country, or on the exporter's production costs. The DOC then compares the normal price of the good to the price charged in the U.S. for each sale and calculates the dumping margin--the average of the differences between the two prices. When the normal value of the good is more than the price charged in the U.S., the difference contributes to the dumping margin. However, when the normal value is less than the price charged in the U.S., the DOC assigns a zero value to the transaction rather than deduct the difference from the final dumping margin. This practice of “zeroing” artificially inflates dumping margins, increasing both the likelihood that the DOC will find injury and the value of punitive duties that can be assessed on “dumped” products.

Read the complete article here.