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This Month in International Trade - March 2013

Client Alert | 9 min read | 03.29.13

THIS MONTH'S TOP FIVE DEVELOPMENTS

1) EU Initiates Anti-dumping Investigation of Solar Glass Imports from China

On February 28, the European Commission initiated an anti-dumping investigation into imports of solar glass from China, following the submission of a complaint by EU ProSun Glass, an association of EU solar glass producers, on January 15, 2013. The complaint provides prima facie evidence that a high volume of dumped Chinese imports of solar glass has caused material injury to the EU. Chinese products account for over 70% of all solar glass imports into the EU and import volumes have significantly increased over the last years. 

The EU investigation will take 15 months. The latest date for imposition of provisional measures is November 28, 2013, i.e. nine months after initiation; definitive measures must be imposed by May 27, 2014 at the latest. The investigation into imports of solar glass is the second EU investigation into the solar products sector after anti-dumping and anti-subsidy investigations against solar modules from China were launched by the EU Commission in the second half of 2012. 

For more information, contact: Laurent Ruessmann, Jochen Beck, Francesca Condello

2) Bi-Partisan Legislation to Reauthorize and Improve Customs Agencies Introduced

On March 22, 2013, Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch introduced the Trade Facilitation and Trade Enforcement Reauthorization Act of 2013 (S. 662). In addition to reauthorizing the existence of U.S. Customs and Border Protection Agency (CBP) and U.S. Immigration and Customs Enforcement Agency (ICE), the bill also makes trade facilitation and trade enforcement a top priority for each Agency.

Trade facilitation measures proposed in the bill include importantly for the Commissioner to identify commercially significant and measurable trade benefits for participants in CBP partnership programs, such as the Centers for Excellence and Expertise, as well as creating a new Deputy Commissioner of Trade position and Trade Advocate to work with the private sector. The bill also allocates funding for the Automated Commercial Environment (ACE) and International Trade Data System, which are technological advances designed to facilitate trade and communication. Proposed measures to increase trade enforcement include tools to combat the evasion of antidumping and countervailing duties, establishment of the National Intellectual Property Rights Coordination Center to coordinate Federal efforts to prevent intellectual property rights violations and import safety, among others.

For more information, contact: John Brew, Jini Koh

3) Japan Signals Intent to Negotiate FTAs with the TPP, EU, Others?

On March 15, Japanese Prime Minister Shinzo Abe announced his nation's intention to join 11 other countries in carrying forward the Trans-Pacific Partnership (TPP) negotiations. As was the case with previous entrants, all current TPP partners ─ Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Vietnam, Singapore and the United States ─ must agree on admitting any new member. Japan is now consulting with all TPP partners on a bilateral basis in hopes of securing admission. 

The Obama Administration continues to insist that Japan satisfy two general requirements before it can agree to its entry, namely that Japan refrain from imposing any preconditions (such as specific product exclusions in the market access discussions), and that it agree to the TPP text that has already been closed by negotiators. The Administration will also have to grapple with significant pushback from U.S. automakers and organized labor, as well as both Republicans and Democrats in Congress who doubt Japan's sincerity in truly opening its market. If Japan's entry goes forward, it could also jeopardize the goal of completing TPP negotiations this year.

Regardless of the outcome of consultations on its entry into TPP, Japan will have to deal with a busy trade policy agenda: on March 25 it officially launched FTA negotiations with the EU, and on March 26 it began trilateral FTA talks with China and Korea. Japan also plans to participate in upcoming negotiations on a Regional Comprehensive Economic Partnership (RCEP) with ASEAN and 6 other countries. While regional agreements promise to simplify the "noodle bowl" of FTAs in East Asia, the complexity of Japan's negotiating possibly four major agreements simultaneously will be its own problem to untangle.

For more information, contact: Melissa Coyle, Joshua Boswell, Dj Wolff, Michael Larmoyeux

4) EU and Thailand Negotiations for Free Trade Agreement and Public Consultation

On March 6, 2013, the EU and Thailand launched bilateral negotiations for a free trade agreement (FTA). The agenda covers tariffs, non-tariff barriers and other trade-related issues, such as services, investment, procurement, regulatory issues and sustainable development. Stakeholders can submit comments and proposals for topics to be included in the negotiations via the recently launched public consultation until May 13, 2013. A questionnaire and mailing details are available here

Thailand is one of the 10 members of the Association of Southeast Asian Nations (ASEAN), which is the EU's third largest trading partner outside Europe. The EU has already been focused on bilateral negotiations with ASEAN members. Negotiations with Malaysia and Vietnam are ongoing and the negotiations with Singapore were concluded at the end of 2012. The EU's ultimate aim is to sign an agreement with the ASEAN as a whole.

Over the last few years, as an ASEAN member, Thailand has concluded FTAs with China, India, Korea, Japan, Australia and New Zealand, and bilateral FTAs with Japan, Australia, New Zealand, India, Peru and Chile.

For more information, contact: Laurent Ruessmann, Jochen Beck, Francesca Condello

5) FDA Announces Plan for International Capacity Building and Tracing

As part of its continuing implementation of the Food Safety Modernization Act, the Food & Drug Administration (FDA) recently announced an international food safety capacity-building plan. The proposal will expand technical, scientific and regulatory food safety capacity of foreign governments and their respective food industries in countries from which foods are imported into the United States. 

The plan will likely include new tracking requirements for food production supply chains with flexibility on how the tracking is implemented. Additionally, the plan indicates that the FDA will engage with increased sharing of such information with its foreign counterparts. Interested parties can comment on the report and proposed plan.

For more information, contact: John Fuson, Jini Koh

THIS MONTH IN TRADE – OTHER NEWS

Agency Enforcement Actions

In reviewing this month's enforcement announcements, please take note that OFAC and other agencies are mining a growing database created in the course of large scale investigations, especially those involving large European banks. This database is a virtual treasure trove for investigators who are sure to use this harvested information to initiate many enforcement actions in the months and years to come.

Bureau of Industry and Security (BIS)

Customs and Border Protection (CBP)

  • CBP and EPA Seize Shipment of Unsafe ATVs, Counterfeit Headphones.

Office of Foreign Assets Control (OFAC)

  • Maritech Commercial Inc. of Kenner, LA, allegedly provided fuel inspection services to five vessels that were affiliated with Iran and appeared on the SDN List. Maritech did not voluntarily disclose its conduct, but the violations constituted a non-egregious case. Maritech settled for a payment of $20,800.
  • EGL, Inc. of Houston allegedly engaged in 280 transactions to and from Cuba and acted as a freight forwarder of ten shipments to Iran. The Cuba transactions were voluntarily disclosed, but EGL failed to self-report the violations of Iran Transactions and Sanctions Regulations. EGL settled for a payment of $139,650.

For more information, contact: Richard Massony, Dj Wolff

Peru-EU: Provisional Application of EU-Peru-Colombia Trade Agreement

As of March 1, 2013, the EU's comprehensive trade agreement concluded with Peru and Colombia in 2012 has been provisionally applied with Peru. Peru concluded its ratification procedures on February 8, whereas the EU's internal procedures for this provisional application had been completed on February 25.

One of the main benefits of this FTA is the creation of a stable, transparent, predictable and enforceable business environment, aimed at improving trade and investment conditions. In Colombia, the internal ratification procedures are expected to be completed later this year.

For more information, contact: Laurent Ruessmann, Jochen Beck, Francesca Condello

CITA Commercial Availability Determinations: CAFTA-DR Agreement and US-Colombia FTA

On March 22, the Committee for the Implementation of Textile Agreements (CITA) published a notice in the Federal Register regarding its determination that certain piece dyed three-thread fleece fabric is not available in commercial quantities in a timely manner under the Textile and Apparel Commercial Availability Provision of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR Agreement). The product will be added to the list in Annex 3.25 of the CAFTA-DR Agreement in unrestricted quantities.

On March 27, CITA published a second commercial availability determination in the Federal Register regarding certain cotton corduroy fabric that the CITA determined is not available in commercial quantities in a timely manner in the territory of either the United States or Colombia. The product will be added to the list in Annex 3-B of the United States-Colombia Trade Promotion Agreement (US-Colombia TPA) in unrestricted quantities.

The CAFTA-DR Agreement and US-Colombia TPA allow textile and apparel goods that meet the rule of origin to enter the United States duty-free. When the CITA determines a textile material is not available in commercial quantities in a timely manner, the material may be sourced from outside the countries for use in qualifying textile and apparel products.

For more information, contact: John Brew, Michael Larmoyeux

CROWELL AND MORING SPEAKS

Jonathan ("Josh") S. Kallmer spoke on "How Companies Can Use International Investment Agreements to Address Regulatory and Policy Concerns in India" at the New York City Bar's CLE program entitled "Doing Business in India" on March 1, 2013.

John B. Brew and John Fuson will be speaking at the Grocery Manufacturer's Association Science Forum on April 3, 2013. Their panel will include a discussion of Understanding the Food Safety Modernization Act's Impact on your International Supply Chain.

Jonathan ("Josh") S. Kallmer will speak on the United States' process for reviewing the national security implications of inward foreign investment as part of the "CFIUS Regulations and FINSA Compliance" Strafford CLE webinar on Tuesday, April 16, 2013 from 1:00 p.m. to 2:30 p.m. A limited number of free passes are available for the webinar – please contact Josh for details.

CROWELL AND MORING PUBLICATION

The Crowell & Moring Advertising and Project Risk Management Group has published a Crisis Management Handbook including a chapter on "Border Control Limbo: Saving Your Product From Seizures, Forfeitures, Fines and Delays" by John Brew and Richard Massony. To request a copy of the Handbook, please contact Gabrielle Ballantine.

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