On February 22-23, 2011, trade officials from the U.S.-Central America Free Trade Agreement (CAFTA) met in San Salvador for the first meeting of the CAFTA Free Trade Commission. Attending the meeting were:
The officials discussed trade facilitation projects, regional investment, and initiatives to increase regional integration. In a Joint Statement, they said that CAFTA has dramatically increased trade and investment between the seven partner countries. According to the statement:
On March 1, the CAFTA-DR will complete its 5th year since first implementation. It has yielded positive results for all seven trading partners and has contributed to significant increases in trade and investment among our countries. When we signed the CAFTA-DR Agreement in 2004, we committed to promote economic growth and prosperity, expand trade and investment opportunities, and intensify regional integration and competitiveness. Much has been achieved, but there is more work to be done and we stand ready to meet this challenge.
The agenda also featured a consideration of the so-called "CAFTA fixes." According to the Joint Statement released following the conclusion of the CAFTA Free Trade Commission, the seven CAFTA countries reached an agreement on these issues. Following is a quote:
We approved a series of changes to the Agreement’s rules-of-origin for textile and apparel goods that will facilitate regional trade and integration. These changes will expand opportunities under the CAFTA-DR Agreement and encouraging a vibrant textile and apparel supply chain in the Western Hemisphere to effectively face the challenge that Asian competitors represent. We also agreed to increase the cumulation limits to encourage greater integration of regional production through limited reciprocal duty-free access with Mexico and Canada to be used in Central American and Dominican Republic apparel, as called for under the Agreement.
Following are the details of the changes CAFTA agreed to this week:
Cumulation with Mexico: The original cumulation limits were set before the Dominican Republic joined the CAFTA negotiations. The CAFTA Parties agreed to increase these limits by twenty-five percent to reflect the trade with the Dominican Republic. The increases will only take effect after all seven CAFTA countries have met their own legal requirements to implement the change. In addition, after March 1, 2012, the increases will only remain in effect if the Dominican Republic has satisfied all requirements to take part in cumulation. That means the Dominican Republic must complete FTA negotiations with Mexico. The new cumulation limit (and sublimits) will be:
| Cumulation TPL | 125 million SME |
| Cotton and MMF Trousers and Skirts | 56.25 million SME |
| Denim Trousers and Skirts | 25 million SME |
| Tailored Wool Apparel | 1.25 million SME |
Single Transformation Benefits: Certain women's and girls' sleepwear bottomsare added to the list of sleepwear eligible for single transformation benefits. The new agreement adds sleepwear classified in 6208.91 and 6208.92.
Sewing Thread: The CAFTA Chapter Rules are changed to always require CAFTA-originating thread. The original CAFTA text only required that sewing thread of headings 5204, 5401, and 5508 must be formed in one or more of the CAFTA countries. The new agreements adds single multifiliment yarn in heading 5402.
Short Supply: The new agreement includes several changes for eligibility for Short Supply:
In addition, the officials applauded a new initiative to create a CAFTA textile and apparel sourcing directory. They said that the CAFTA members are working the Inter-American Development Bank (IDB) to create the database with the expectation that it will enhance regional communication and sourcing. One of the major goals of CAFTA is to develop an integrated regional supply chain. For a copy of the CAFTA Free Trade Commission Joint Statement, please click on the globe icon above.
In a Federal Register notice published February 28, 2011, the Animal and Plant Health Inspection Service (APHIS) announces a review of Lacey Act Amendment implementation. The 2008 Farm Bill included provisions designed to eliminate illegal logging by banning U.S. trade in illegal timber and through the use of an import reporting requirement. While the provisions remain controversial among U.S. importers, APHIS has been praised for effectively managing the interagency implementation process and engaging with trade representatives.
The legislation also required that APHIS review the effectiveness of the statutory reporting requirement and the impact of product exemptions. APHIS also must include recommendations for additional legislation to make the Lacey Amendments more effective. In order to prepare this report, APHIS now requests public comments on the Lacey Act declaration requirement implementation. They note that the agency review will include all comments previously submitted in response related comment requests - so comments need not be resubmitted. The deadline for public comments is April 13, 2011. For a copy of the Federal Register notice, please click on the globe icon above.
On February 23, 2011, the Center for Strategic and International Studies (CSIS) released the commentary, Time to Exchange Andean Preferences for Reciprocal Free Trade Agreements, by Meredith Broadbent and Stephen Johnson. The authors say that the Andean Trade Promotion and Drug Eradication Act (ATPDEA) was useful to "get the ball rolling" on counternarcotics efforts. However, they point out that repeated short term extensions actually are harmful for businesses in the beneficiary countries, and allow the U.S. government to further delay action on Free Trade Agreements.
Broadbent and Johnson also point out that U.S. relations with the Andean countries (Bolivia, Colombia, Ecuador, and Peru) have changed and [mostly] matured. This means that programs designed twenty years ago no longer fit regional needs. Following is a quote:
In light of the dramatic changes in the region since preferences were first authorized in 1991, it is time for Congress to phase out Andean trade preferences. Next, the Obama administration should work to resolve any remaining questions on labor issues and request congressional approval of the U.S.-Colombia FTA (as well as pending pacts with Panama and South Korea). Since the United States and Peru have worked together to fully implement the bilateral trade pact approved in 2006, no further action is needed there. Lastly, the United States should invite Ecuador to resume negotiations on a full trade agreement on its own terms.
For a copy of the commentary, please click on the globe icon above.
On February 23, 2011, the American Manufacturing Trade Action Coalition (AMTAC) issued a press release responding to the U.S.-Central America Free Trade Agreement (CAFTA) Ministerial in El Salvador on February 22-23. AMTAC says that sewing thread manufacturers are pleased with changes to the U.S.-Central America Free Trade Agreement (CAFTA) that will require single multifilament yarns used as sewing thread in CAFTA-qualifying garments to be sourced from CAFTA countries. AMTAC Executive Director Auggie Tantillo said the following:
On behalf of all U.S. thread producers, we want to thank the Obama administration, especially Assistant U.S Trade Representative for Textiles Gail Strickler and the U.S. Commerce Department’s Deputy Assistant Secretary for Textiles and Apparel Kim Glas, for their tireless commitment to fix this longstanding problem...
With the closing of this unintended loophole, we believe that U.S. thread producers can begin to recapture market share in the important DR-CAFTA market, leading to more jobs...
Now that this deal is done, it is imperative for the U.S. Congress quickly to enact legislation to implement it so that U.S. companies and workers can reap the benefits.
For a copy of the AMTAC press release, please click on the globe icon above.
Following increased pressure from Congress to move forward with the pending Free Trade Agreements (FTAs) with Colombia and Panama, the Obama Administration sent an interagency team to Colombia this week. U.S. Trade Representative (USTR) Ron Kirk and other Administration officials have stressed repeatedly over the past month that President Obama would like to resolve outstanding issues with the FTA by the end of 2011. Meanwhile, House Republicans are pushing for a vote by July 1st.
While labor unions remain skeptical that issues related to violence and judicial enforcement can be resolved in such a short time, business groups see reason to be optimistic that the agreement could move quickly. In addition to the increased focus from Congress and the White House, they cite "constructive" discussions during this week's trip. Also promising was the inclusion of a White House official in the delegation that traveled to Colombia. Douglas Bell, National Security Council (NSC) Director for Trade and Investment, joined officials from other U.S. government agencies for the meetings.
However, the Administration has not released any information about what was discussed during the Colombia meetings. Press reports also indicate that the Administration has not yet briefed the House Ways and Means Committee or Senate Finance Committee on the FTA. As the two Congressional Committees responsible for trade issues, the Obama Administration will have to consult with them on any changes to the agreement.
On February 23, 2011, a group of eleven U.S. industry associations sent a letter to Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT), urging the Committee to confirm Customs Commissioner Alan Bersin. President Obama originally nominated Bersin in 2009. Lack of Senate action on a large number of Administration nominations lead Obama to make Recess Appointments in 2010. This allows Bersin to currently serve as Customs Commissioner, but his nomination will expire if he is not confirmed by the Senate.
The Obama Administration resubmitted Bersin's nomination earlier this year, but the Senate has not taken any action. Before a vote on the Senate floor, Bersin must first be cleared by the Senate Finance Committee. The industry groups tell Baucus and Hatch that Bersin is a transformative leader. Following is a quote from the letter:
We have had the opportunity to work with Mr. Bersin for the past year and have been impressed by the change that he is pursuing for the agency. First, Mr. Bersin has taken significant steps to increase outreach to and participation from the private sector on may issues. Almost immediately upon assuming the responsibilities of Commissioner, he sought our input and responded proactively by initiating action on a number of our recommendations. Second, Mr. Bersin is an advocate for modernizing CBP and is working jointly within CBP and with industry to accomplish this goal. Lastly, he has listened to concerns raised by Congress and industry by repeatedly stating that enhanced security and trade facilitation are not mutually exclusive.
Among the associations that signed the letter are the American Trucking Association, Joint industry Group, National Customs Brokers and Forwarders Association of American, U.S. Association of Importers of Textiles and Apparel (USA-ITA), and the U.S. Chamber of Commerce. For a copy of the letter, please click on the globe icon above.
On February 24, 2011, a group of six U.S. apparel and retail associations sent a letter to the Australian Wool Industries Secretariat (AWIS). The say that while they appreciate the AWIS response to take action to end the practice of mulesing, the organization did not address many of the concerns raised by U.S. companies about the practice. The associations repeat their request that AWIS develop a plan to eliminate the use of mulesing. Following is a quote:
The letter did not, however, address many of the points in our position paper, including our proposed 2013 timeframe as a target date for the industry to adopt mulesing alternatives. Therefore, we restate our view that the wool industry should move toward the widespread adoption of alternatives to mulesing (suitable to particular environmental conditions) in an expedited fashion, and commit to achieve this objective within a reasonable timeframe. We again call upon the representative organizations of the Australian wool industry to provide a public report that maps out a strategy with measureable milestones to achieve this goal.
The associations urge AWIS to require mulesing declarations at auction, and to expand the data collected about practices in Australia. They also say that while mulesing is still in use, AWIS should adopt the use of pain relievers on mulesed animals as an industry best practice. The associations that signed the letter are:
For a copy of the letter, please click on the globe icon above.
On February 25, 2011, U.S. Customs and Border Protection announced that the eleventh annual Trade Symposium, scheduled for April 13-14 has sold out. The annual event sells out on a regular basis. In response to the Trade Symposium's popularity, Customs also will webcast the event. Registration for the webcast is available on the Customs website (https://apps.cbp.gov/tradesymposium/?w=2) for a fee of $150.
On February 17, 2011, the House Energy Committee Commerce, Manufacturing, and Trade Subcommittee held a hearing on "A Review of CPSIA and CPSC Resources." The Subcommittee heard testimony from industry representatives, CPSC Chairman Inez Tenenbaum and CPSC Commissioner Anne Northup. The witnesses discussed potential changes to the Consumer Product Safety Improvement Act of 2008 (CPSIA) and the Consumer Product Safety Commission (CPSC) resources.
Northup and Tenenbaum agree that legislative fixes should be made to resolve outstanding unforeseen problems with the implementation of CPSIA. Also, they both agree that there should be more flexibility regarding the CPSC limit on lead content requirement. They proposed possible waiver authority for CPSC; although neither witness provided detailed information on this suggestion.
Much of the hearing focused on the CPSC public database for consumer product safety incidents, also mandated by CPSIA. The database is slated to launch on March 11, 2011. Witnesses raised four specific issues concerning the database:
During the hearing, Mike Pompeo (R-KS) announced he will introduce legislation to delay the database launch until Congress can pass a rule more suited to the goals of the CPSIA. Chairman Northup agreed with Pompeo's call for a delay. Subcommittee Ranking Member G.K. Butterfield (D-NC), John Dingell (D-MI) and Pompeo all said that they regret that their collective efforts to improve the CPSIA were not successful in the last Congress. [On February 19th, the House approved an amendment proposed by Pompeo to the Continuing Resolution for Fiscal Year 2011 that would eliminate funding for the database. The bill must still pass the Senate, which is expected to introduce substantial changes.]
Industry representatives told the Subcommittee they are very worried about the CPSC database. They asked for an extended period of time to respond to incident reports. Currently, the CPSC must notify manufacturers within five days, and firms have another ten days to respond before the incident report goes public. The witnesses also requested that the only persons with first-hand experience of the incident should be able to submit incident reports. For copies of the the Northup and Tenenbaum testimony, please click on the globe icons above.
On February 23, 2011, U.S. Customs and Border Protection released a report on Customs operations during Fiscal Year 2010. According to the data, Customs processed $1.99 trillion in trade, and collected $32.3 billion in duties, taxes, and fees. The factsheet released by Customs includes highlights for each Customs office. The factsheet listed the following trade-related accomplishments:
Customs officials:
For a copy of the Customs factsheet, please click on the globe icon above.
As more details continue to emerge about the proposed Turkey textile and apparel Safeguard, U.S. Commerce Department sources released information that the Turkish government will hold a hearing on the topic March 7-8, 2011 in Istanbul. As previously reported, if enacted, the Safeguards would place an additional tariff of up to forty percent on imports of certain textile and apparel products.
The two-day meeting is divided into four panels. The first day features one panel with Turkish professional associations, and one panel with foreign government representatives. On the second day, "producers, exporters, importers, and users" will testify in alphabetical order. The meetings will be held in Turkish without any translation service. Anyone who wishes to participate in a language other than Turkish must provide their own translator. The deadline to register to speak on any of the panels is March 2, 2011.
On February 22, 2011, GoodGuide, an online public resource on the health, environmental, and social impacts of consumer products, launched an apparel brand rating system. GoodGuide examines 118 apparel brands according to a variety of environmental and social issues. The results are available on the GoodGuide website. The GoodGuide environmental assessment is based on indicators of:
And, the social assessment is based on indicators of:
In the jeans category, out of 51 jeans brands, Levi's ranks at the top. Prana and H&M are close behind. In a statement on the launch of this rating system, Michael Kobori, Vice President of Social and Environmental Sustainability for Levi Strauss & Co. said the following:
We don’t have nutrition labels on clothing yet, but GoodGuide is the first independent company to give consumers data to make informed comparisons about the clothes they purchase. We believe that increased transparency is the best way to empower consumers to support brands that are creating products in a thoughtful way.
For a copy of the Levi's statement and GoodGuide apparel scoring metric, please click on the globe icons above.
On February 17, 2011, Senator John McCain (R-AZ) introduced S.380, the Andean Trade Preference Extension Act of 2011. The bill would extend Andean Trade Preference Act (ATPA) until November 30, 2012. ATPA expired on February 12, 2011. As previously reported, McCain attempted to force a vote on the legislation the day it was introduced. This move was blocked by Senators who want to link the ATPA extension to the extension of Trade Adjustment Assistance (TAA). For a copy of S. 380, please click on the globe icon above.
On February 17, 2011 Senator Carl Levin (D-MI) introduced S. 412, the Harbor Maintenance Act of 2011. This legislation is intended to ensure that that the Harbor Maintenance Trust Fund supports only harbor maintenance programs and is not siphoned to the general tax fund. The legislation also will increase funding for harbor maintenance in the Great Lakes System. Levin is joined by Senator Kay Bailey Hutchison (R-TX) and 12 other senators who co-sponsor this bill. Levin made the following statement:
The harbors and ports in the Great Lakes and around the country are critical hubs for the transportation of massive amounts of goods, including food, energy, and manufacturing supplies. Their poor maintenance is a threat not only for shipping, but to every industry and family in America that consumes the goods flowing through them. The Harbor Maintenance Act of 2011 is a sensible proposal that simply requires that money collected for harbor and port maintenance is actually spent on those needs.
According to Levin's statement the current balance of the fund is $5.7 billion, however, it is not being fully used for maintenance initiatives. For a copy of Levin's statement, please click on the globe icon above.
On February 16, 2011, the CPSC published a provisional settlement with an apparel retailer for failing to report the distribution of denim jackets that are deemed hazardous to children. The company, Ms. Bubbles, is fined $40,000 for the importation, selling and distribution of the girls denim passport jackets with terrycloth and a drawstring. In this settlement the company, Ms. Bubbles, is subject to civil penalties because it knowingly did not inform the CPSC of its actions.
In May 2006 the Commission published a letter to manufacturers, importers, and retailers reiterating the hazards of waist drawstrings on children's upper outerwear. Also, the letter included the CPSC's reporting requirements. The Commission is accepting comments on the provisional settlement until March 11th. For a copy of the CPSC notice and settlement agreement, please click on the globe icon above.
On February 22, 2011, the American Chambers of Commerce (AmChams) of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) countries issued a report timed for release before the DR-CAFTA Ministerial Summit taking place this week. The AmChams highlight several issues, and specifically mention three initiatives regarding the textile and apparel sector:
Overall the AmChams call for the ministerial summit to address the following larger issues regarding the CAFTA agreement:
1. Pending commitments on behalf of the United Sates on issues like:
2. Pending commitments on behalf of Central America and Dominican Republic
3. Relevant issues regarding the administration of the agreement and its better use
4. Annex on issues raised by members of AmCham Costa Rica:
A copy of the AmChams document is available by clicking on the globe icon above.
On February 17, 2011 Representative Jim Sensenbrenner (R-WI) introduced a House Resolution to support a U.S.-Turkey Free Trade Agreement (FTA). The resolution, H Res. 103, is co-sponsored by Representative Jim Moran (D-VA). The legislation lists the following reasons the U.S. should enter into a FTA with Turkey:
A copy of the legislation is available by clicking on the globe icon above.
On February 17, 2011, Representative Henry Cuellar (D-TX) introduced a bill to establish a Border Enforcement Security Task Force (BEST). This legislation, called the Border Enforcement Security Task Force Act of 2011, coordinates efforts from Federal, State and local agencies that focus on border protection. The goal of the multi-agency task force is to share information and to facilitate collaboration between the various agencies. BEST teams will be comprised of experts from the following agencies:
A copy of the legislation is available by clicking on the globe icon above.
On February 22, 2011, it was reported that the Levi's Strauss Co. (Levi's) and Hennes & Maurita (H&M) have agreed to collaborate with the International Textile Garment & Leather Worker's Federation (ITGLWF) to ban the practice of sandblasting denim. As of February 18th, the brands are collaborating with the industry organization on a manifesto to end sandblasting industry-wide. The two companies are hopeful that this will ignite a larger industry movement to end this practice, which is known to cause silicosis, a fatal lung disease. A spokeswoman for Levi's made the following statement regarding the manifesto and partnership with ITGLWF:
Sandblasting is a serious industry concern, and even though we at Levi Strauss & Co. are confident in our practices, we decided that the best way we can help ensure no worker in any garment factory faces the threat associated with exposure to crystalline silica is to move to end sandblasting industrywide. We will continue to focus on educating suppliers and other companies about why they should join us in this ban.
In the fall of 2010, Levi's announced an end to the company's use of sandblasting. As of December 31, 2010, Levi Strauss & Co. and H&M no longer use the sandblasting production finishing technique. The ban includes, but is not limited to, the use of aluminum oxide, aluminum silicate, silicon carbide, copper slag and garnet for abrasive blasting.
Last month, the International Textile Garment & Leather Worker's Federation (ITGLWF) hosted a meeting with 15 major apparel brands to address this issue. The ITGLWF is hosting a follow up meeting in the coming weeks to attract support from other brands.
The General Secretary of the ITGLWF, Patrick Itschert, said:
What we have done is try to get main brands around the world to the table to start a discussion with them [about the health risks associated with the sandblasting process] and see if they would agree to sign a voluntary agreement banning sandblasting. At the first meeting, a vast majority agreed, but some others were not at that stage yet.
Itschert reports that between 2005 to 2009 forty garment workers in Turkey died from exposure to sandblasting. There is concern that an additional 7,000 Turkish workers might develop lung cancer from the harmful effects of sandblasting. As a result, the Turkish government banned sandblasting in 2009. The ITGLWF hopes other governments in denim-producing countries, such as China, Pakistan, Bangladesh will take similar action.
A copy of the ITGLWF and Levi's & H&M announcement is available by clicking on the globe icons above.
In an address before the General Council on February 22, 2011, Pascal Lamy, the Director-General of the World Trade Organization (WTO) stressed the necessity for a major acceleration of the Doha Development Agenda (DDA) negotiations. Lamy referenced his earlier informal remarks before the Trade Negotiations Committee (TNC) on February 2, 2011, which also communicated the need for a collaborative and efficient negotiation effort.
In his speech, Lamy says that a major acceleration of negotiations that must take place across the board. Lamy highlighted that the multilateral and plurilateral negotiations must work together in order to move ahead and to preserve the hard work already accomplished by negotiators. In addition, Lamy praised the constructive discussions of Senior Officials and urged a continuation of this momentum in order "to put the multilateral pen to paper." In the conclusion to his speech he said the following:
At this point, I believe we need to collectively recall that we have agreed to a modus operandi for the current process, namely to produce elements of progress that Chairs can capture in texts, and to do so urgently. I must issue a serious warning that a major acceleration at all levels - multilaterally, plurilaterally, and bilaterally- is needed in order to make this possible. Furthermore, the output of all these processes needs to urgently move up a level, to real progress on key issues of substance. The window of opportunity is still there, but it is narrowing.
A copy of the speech is available by clicking on the globe icon above.
On February 16, 2011, Senator Frank Lautenberg (D-NJ) introduced legislation to establish the first National Freight Transportation Plan. The bill, also called the Focusing Resources, Economic Investment, and Guidance to Help Transportation Act or FREIGHT Act, is co-sponsored by Senators Maria Cantwell (D-WA) and Patty Murray (D-WA). The Act intends to facilitate an efficient and secure transportation system through three main initiatives:
The major goals for the FREIGHT Act are:
A copy of the legislation is available by clicking on the globe icon above.
On February 18, 2011, the fifth round of the Trans-Pacific Partnership (TPP) concluded, with reports by the Office of the United States Trade Representative (USTR) of continued progress at the negotiations. Representatives from Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam met in Santiago, Chile to begin goods negotiations following the fourth TPP round in January 2011. At the meeting the TPP partners agreed to exchange comments and improvements concerning what was agreed upon at the previous round. Also, the group resolved to submit new offers for services, investment and government procurement before the next round. In addition, the TPP negotiators started to discuss a TPP rule of origin. They agreed to share possible product specific rules of origin in March. The next round of negotiations is scheduled for the end of March in Singapore.
A copy of the press release is available by clicking on the globe icon above.
As Congress prepares for the Presidents' Day recess, there is no progress to renew the Andean Trade Promotion and Drug Eradication Act (ATPDEA) or Trade Adjustment Assistance (TAA). Both programs expired February 12th. The two programs are generally linked, and have traditionally moved together along with the Generalized System of Preferences (GSP), which expired on December 31, 2010. A battle continues to rage on both sides of the aisle regarding which programs to renew, for how long, and in what form.
This week, Senate Republicans tried to force a vote to extend ATPDEA. The move was blocked by Democrats, insistent that no trade legislation can move until TAA is extended. The action was similar to earlier drama in the House. Following failure in the Senate to take up a bill, Senator John McCain (R-AZ) said, that Congress will not be able to resolve the issue unless President Obama gets involved. In particular, McCain argued that failure to renew ATPDEA or move the Colombia FTA reflects badly on U.S. foreign policy. He said it sends the signal that:
...the United States is an unreliable and untrustworthy ally, that we seem to be incapable of rising above our own domestic political difficulties to consolidate our strategic partnership with one of our best friends in the world. This is just sad.
While Democrats are reluctant to pass new trade legislation without TAA, Congressional Republicans are equally intransigent in their opposition to renewing the expanded TAA benefits created under the stimulus bill.
Press reports also indicate that the programs are part of a conflict between Congress and the White House. U.S. Trade Representative(USTR) Ron Kirk, and other Administration officials, stress that the Obama Administration wants TAA, ATPDEA, and GSP all renewed for the longest time period possible. Meanwhile the Administration has not provided Congress with concrete action plans for progress on the pending Free Trade Agreements (FTAs) with Colombia and Panama. Members of Congress who support the FTAs have said they will not move forward on other trade programs until they receive specific information about the timeline for the FTAs.
On February 11, 2011, Representative Larry Kissell (D-NC), along with twenty-six cosponsors, introduced H.R. 679, the Berry Amendment Extension Act. If passed, the bill would extend the Kissell Amendment to the stimulus bill - one of the controversial Buy American provisions included in that legislation. The Kissell Amendment requires that textile and apparel products purchased by the Department of Homeland Security (DHS) must be sourced in the United States. The original Kissell Amendment applied only to two DHS agencies: the Transportation Security Administration (TSA) and the Coast Guard. However, H.R. 679 would allow the President to expand the sourcing requirement to cover all DHS agencies. The House passed similar legislation by voice vote in September 2010, but the Senate took no action.
On January 21, 2011, the Congressional Research Service (CRS) published the report, International Trade and Finance: Key Policy Issues for the 112th Congress. The report summarizes the major trade issues Congress is likely to consider during the current Congress. As an independent organization, CRS does not take positions on the issues it covers. However, the report offers a succinct appraisal of the debate that will likely surround some of the largest trade proposals during this Congress - particularly in 2011. Following is quote from the "Outlook" section of the report:
With U.S. companies invested around the globe and production specialized across national borders, assessments of the net costs and benefits of these agreements have become more complicated. The fact that many of these agreements contain provisions that reach into domestic policies such as labor, environmental, regulatory, and intellectual property rights also makes simple characterization of these agreements (such as “free trade versus fair trade”) difficult and perhaps misleading...
The outlook for congressional action on trade and finance issues could also be affected by domestic and foreign economic conditions. Domestically, receptivity to trade liberalizing agreements tends to be greater when the economy is expanding and unemployment is decreasing. The U.S. economy continues to struggle with slow growth and high unemployment, which may make it difficult to enact such measures...
In sum, as U.S. interaction with the world economy increasingly influences congressional deliberations on international trade and finance issues, congressional actions, in turn, may play an important role in affecting the growth of the U.S. economy and the creation of new jobs. Decisions of the 112th Congress on international trade and finance issues may also have important consequences for the country’s role in the world economy and in global political dynamics more generally.
The CRS report lists nineteen trade issues that may come before the 112th Congress. Most of these are issues that have been on the agenda for several years. Top on the list of contentious trade topics are Free Trade Agreements (FTAs). CRS discusses the challenges in passing the pending FTAs, as well as consideration of a Trans-Pacific Partnership (TPP) and any World Trade Organization (WTO) developments. Following is a brief summary of each of these points:
One of the largest issues left over from previous Congresses is discontent over U.S. China policy. CRS summarizes the benefits of expanded U.S. trade with China, such as lower consumer prices, stable interest rates, and complex production arrangements. However, China's industrial and economic policies remain a source of tension. In particular, Members of Congress are concerned about currency manipulation, Intellectual Property Rights (IPR), and indigenous innovation policies. Following is the CRS summary of the challenges facing the 112th Congress:
Opinions differ as to the most effective way of dealing with China on major economic issues. Some support a policy of engagement with China using various forums, such as the U.S.-China Strategic and Economic Dialogue (which holds government discussions on major issues at the cabinet level). Others support a somewhat mixed policy of using engagement when possible, coupled with a more aggressive use of WTO dispute settlement procedures to address China’s unfair trade policies. Still others, who see China as a growing threat to the U.S. economy and the global trading system, advocate a policy of trying to contain China’s economic power and using punitive measures when needed to force China to “play by the rules.”
How the United States responds to China’s economic rise and how it deals with China on major bilateral trade disputes are likely to be closely monitored by the 112th Congress. Some members may press the Administration to boost efforts to induce China to abide by its WTO commitments, including by bringing more trade dispute resolution cases against China in the WTO. They may also introduce new bills that seek to address China’s currency policy, trade restrictions, and lack of effective IPR protection.
Another problem that the previous Congress failed to address is Mexico trucking. Under the terms of the North American Free Trade Agreement (NAFTA), the U.S. required to allow Mexican long haul trucks to operate beyond the U.S. border by 2000. In 2009, Congress terminated a pilot program to implement this requirement. Mexico now maintains retaliatory tariffs on some important U.S. exports. In January 2011 the Obama Administration submitted a proposal to the Mexican government and to Congress to resolve the conflict. Although initial reactions were positive, it remains unclear how Congress will treat legislation to bring the U.S. into compliance with the NAFTA trucking provisions.
In addition to the issues discussed above, priority topics in the CRS report include the National Export Initiative, reauthorization of the Export-Import Bank and Overseas Private Investment Corporation (OPIC), trade remedy methodology, the long-awaited trade preference program overhaul, port security, and the Miscellaneous Tariff Bill (MTB). For a copy of the twenty-five page report, please click on the globe icon above.
On February 14, 2011, the British Embassy in Washington DC released the report, The Doha Round: What it Means for the 50 States. The report includes a one-pager for each U.S. state, describing how a successful conclusion to the World Trade Organization (WTO) Doha Round would boost their exports. In a statement releasing the report, British Ambassador to the U.S. Nigel Sheinwald emphasized the importance of completing the Doha Round:
Successfully concluding the Doha Trade Round is the overarching trade priority for the UK Government. The potential gains across the globe are significant. If completed, it would mean more jobs and higher incomes. It would drive growth both at home and abroad. Completing the Doha Round would lock tariffs at today’s levels or lower, could boost the global economy by at least $170 billion per year, and would provide a global boost of confidence in the openness of world markets.
The study, prepared by Trade Partnership Worldwide LLC, finds that the Doha agreement could increase U.S. national income by $37.9 billion, and create 393,000 jobs. The projections show that the states that already have larger economies will gain the most from Doha. However, key textile states also stand to benefit from the Doha Round. The following table shows the projected increase in Gross Domestic Product (GDP) and new job creation for major textile states:
| State | GDP Increase | New Jobs |
| Alabama | $341 million | 4,772 |
| Georgia | $948 million | 9,337 |
| North Carolina | $107 million | 6,359 |
| South Carolina | $243 million | 4,157 |
| Virginia | $1,193 million | 11,303 |
For a copy of the fifty-three page report, please click on the globe icon above.
Negotiators for the Trans-Pacific Partnership (TPP) met in Chile this week, where they tabled the first market access proposals. The TPP will create a Free Trade Area (FTA) among Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the U.S., and Vietnam. This is the fifth round of negotiations, with four more rounds scheduled for 2011. For a copy of the TPP fact sheet released by the Office of the U.S. Trade Representative (USTR) to coincide with the meetings, please click on the globe icon above.
The TPP partners have set the goal of finishing negotiations before the Asia Pacific Economic Cooperation (APEC) summit in November. However even the Obama Administration now admits this is ambitious. USTR Ron Kirk repeated the goal at a February 9th House Ways and Means Committee. However, he also said that "If we could meet that goal, that would be exceptional." Meanwhile, Commerce Department Undersecretary for International Trade Francisco Sanchez reports that he expects negotiators to reach a framework agreement by the end of the year.
According to the Office of the U.S. Trade Representative (USTR), the current negotiating round includes issues related to market access, trade rememdies, technical barriers to trade, customs cooperation, Intellectual Property Rights (IPR) and Rules of Origin. Meetings this week also involved civil society representatives, who presented information on child labor laws, IPR, and trade barriers.
On February 18, 2011, Washington Trade Daily published an interview with former U.S. Trade Representative (USTR) Carla Hills. She served in the George H.W. Bush Administration from 1989-1993. During the interview, Hills discusses her views on current U.S. trade policy. A staunch supporter of Free Trade Agreements, Hills admits that she is frustrated with the recent slowdown in trade liberalization. Asked about U.S. leadership on trade issues, and in the World Trade Organization (WTO) Doha Round in particular, she echoed a complaint heard from both Republicans and Democrats. Hills believes that the Doha Round will help to reverse some of the most regressive U.S. tariffs. Following is a quote:
Today, our tariffs on goods produced by the poorest countries in the world are about 15 to 20 times higher than our tariffs on the goods of rich countries. The Democratic Leadership Council looked at tariffs paid the first half of last year and reported that we collected $195 million on tariffs from the United Kingdom on imports of $27.9 billion and collected the same amount from Cambodia on imports of a mere $195 million, which means that we taxed Cambodia 23 times more on its sale of goods to us than we charged the UK. Similarly, France pays far less in tariffs on the $30 billion in goods that we buy from it do countries like Bangladesh or Nepal or other low income Asian and Muslim countries that rely upon agriculture, low-end manufactures and cheap tennis shoes. I go through the statistics and it breaks my heart. If these poor nations could trade freely in the global market and move up the economic scale, they could become purchasers of the Apple's I-Pad, or our automobiles or our other manufactured goods. Wouldn't that be a win-win situation? It was what Ricardo taught us two hundred years ago.
That bothers me a lot. It isn't just what we get out of Doha the day we sign, but also what we can build for our children by creating greater opportunity around the world. So yes, through Doha we would respond to the President's call for increasing exports and increasing jobs through exports. And by giving others the opportunity, we create new markets for our goods and services – just as we did with the Marshall plan. That is a very positive thing for our nation's future. So I wish we would move forward.
For a copy of the Washington Trade Daily interview with Hills, please click on the globe icon above.
On February 14, 2011, civil society groups sent letters to government officials in Australia, Chile, Malaysia, New Zealand, and the U.S. asking for more transparency in the Trans-Pacific Partnership negotiations. The groups say that the secrecy surrounding the TPP draft texts "does not meet the standard expected of a 21st century trade agreement." They argue that the scope of the agreement is too broad, and civil society must have an opportunity to review the text to avoid unintended consequences. Following is a quote from the letter to U.S. Trade Representative (USTR) Ron Kirk:
Enhanced transparency in the Trans-Pacific FTA process has many benefits. Having the expertise of a more diverse array of informed observers with access to text can safeguard against errors and the risks posed by limited understanding of possible consequences of proposals. An open process could also build confidence among the public and parliamentarians that Trans-Pacific FTA talks will indeed replace the past trade pact model – through which benefits and privileges were bestowed on various special interests and large multinational firms to the detriment of many in signatory countries.
In the past, nontransparent tradenegotiations that are only made public after the final deals have been signed and sealed have had expansive implications for the daily lives of millions of people. If Trans-Pacific FTA talks are truly intended to result in a new model, then a negotiating process with greater transparency and regular access to draft text is necessary. This is the only way to ensure that those who would live with the results can have a meaningful part in the process.
The letters urge TPP negotiators to take the following steps:
For copies of the letters sent in Australia, Malaysia, and the U.S., please click on the globe icon above.
On February 14, 2011, President Barack Obama released his Fiscal Year 2012 Budget Proposal. Explaining changes in the budget, the Administration says the U.S. must cut unnecessary spending, but also continue to invest in our economic future. Among the tools the Administration proposes are increased infrastructure development and continued commitment to the National Export Initiative. Following is a quote:
The President, in 2009, set the goal of doubling American exports over five years. To that end, the Administration will work to pass the U.S.-Korea Free Trade Agreement, which will open up the market of the twelfth-largest economy to U.S. goods and services and support thousands of jobs. The Budget proposes $526 million for the International Trade Administration (ITA) to continue implementation of the National Export Initiative, a broad Federal strategy to increase American exports and export-related jobs. With this funding, ITA can strengthen its efforts to promote exports from small businesses; help enforce international free trade agreements; fight to eliminate barriers to sales of U.S. products; and improve the competitiveness of U.S. firms. The Budget also supports the activities of the Export-Import Bank to strengthen its efforts to promote small business exports and to meet increased financing demands at no cost to the taxpayer. This will support billions of dollars in new exports and hundreds of thousands of U.S. jobs. The Administration also supports U.S. Trade and Development Agency activities to promote U.S. exports for priority development projects in emerging economies.
Despite overall reductions in agency budgets, key trade programs will actually see slight increases in funding. The request for the Office of the U.S. Trade Representative is $51 million, up from $49 million last year. The overall budget requested for Customs is up by $300 million. This includes $7.5 million to conduct a cargo screening pilot to replace the 100 percent screening mandate, as well as additional funds to implement cargo release functionality for the Automated Commercial Environment (ACE).
The budget request for the Commerce Department contains $242 million in cuts - including a $20 million drop in funding for the Foreign Commercial Service. Meanwhile, the President's budget requests increased funding for the International Trade Administration to support National Export Initiative projects. For a copy of the 216-page Fiscal Year 2012 Budget Proposal, please click on the globe icon above.
On February 16, 2011, U.S. Treasury Secretary Timothy Geithner testified before the Senate Finance Committee. Although the topic of the hearing was President Obama's proposed budget for Fiscal Year 2012, the Committee also engaged Geithner in a discussion of Administration plans related to the pending Free Trade Agreements (FTAs) and China currency policy.
Geithner repeated the Administration's commitment to pass the pending FTAs with Korea, Colombia, and Panama. He said that the Korea FTA is ready for Congress. Committee Chairman Max Baucus (D-MT) disagreed on this point - arguing that Korea must still loosen restrictions on imports of U.S. beef.
Echoing a statement made by U.S. Trade Representative (USTR) Ron Kirk during a House Ways and Means Committee hearing last week, Geithner stressed that the FTAs are vital to the Administration's National Export Initiative. Geithner told the Committee:
[The FTAs] are overwhelmingly in our favor economically, and if we don't do it, what it means is that business just goes to other countries. So we need to find a way to pass them.
Geithner also reported that the Administration believes the Chinese currency will continue to appreciate. He says the move is the result of rising inflation in China. Following is a quote:
I think they have reached the judgment themselves internally that they have no choice but to let the process happen over time. If they were not to, they'd be left with the risk of much more inflation, much more risk of the type of financial crisis we went through. They want to make sure they avoid that outcome.
For a copy of Geithner's prepared remarks, please click on the globe icon above.
In a Federal Register notice published February 18, 2011, the Committee for the Implementation of Textile Agreements (CITA) announces the procedures to consider a Textile Safeguard under the terms of the U.S.-Peru Free Trade Agreement (FTA). Under the terms of the FTA, a Textile Safeguard may initially be applied for two years, plus a one year extension. The Peru FTA Textile Safeguard provision expires on January 31, 2015.
According to the notice, CITA will determine within fifteen working days whether to accept a petition. If the petition is accepted, CITA will publish a Federal Register notice requesting comments on the petition, with a thirty day comment period. CITA then has sixty days after the close of the comment period to make a determination. Petitions will only be considered if they include all of the following information:
CITA may also self-initiate a Textile Safeguard case. If they do, CITA will follow the timeline described above. The procedures are effective immediately. For a copy of the Federal Register notice, please click on the globe icon above.
In a Federal Register notice published February 18, 2011, the U.S. Commerce Department requests comments on the methodology used to calculate the cost of labor in anti-dumping investigations against Non-Market Economies (NMEs). The Commerce Department says that they currently use data from the International Labor Organization (ILO) to determine labor costs in NME countries [Chapter 5B of the Yearbook of Labor Statistics]. However, they are concerned that the particular ILO data set they use might underestimate the cost of labor.
The Commerce Department requests public comments regarding what data sources would be most appropriate. As an example, they site another ILO data set [Chapter 6A of the Yearbook of Labor Statistics], but state that this data may tend to overestimate labor costs by including costs that are counted elsewhere in anti-dumping calculations. The Commerce Department says that data sources should cover as many countries as possible.
The Commerce Department also requests comments on the current interim methodology, in use since July 2010. Following is a quote from the Federal Register notice that describes the problems the Commerce Department encountered with this methodology:
Since implementing this interim industry-specific wage rate methodology, the Department has encountered a number of methodological and practical challenges that must be considered in evaluating whether this methodology should be adopted for the longer term. For example, the Department normally prefers using multiple data points when evaluating labor data, because of the large variance in wage rates, as explained above. However, relying on industry-specific data necessarily constrains the amount of available data. Additionally, the Department notes that the interim method is a significant endeavor that requires screening hundreds of data points in each case. Given the statutory time constraints present in every proceeding, the Department will also be evaluating this methodology in relation to its long-term administrative feasibility.
For a copy of the Federal Register notice, please click on the globe icon above.
On February 17, 2011, the European Parliament approved the EU-Korea Free Trade Agreement (FTA) by a vote of 465-128. The amendment negotiated earlier this year - which includes a Safeguard provision and provides for import monitoring of sensitive products - passed by an even wider margin. The FTA will provisionally go into effect on July 1, 2011. The European Commission (EC) notes that the FTA must still be ratified by each EU member. While this could take several years, they say that it will not affect the provisional implementation.
The EC says that the FTA eliminates 98.7 percent of tariffs within five years. They expect that the FTA will double bilateral trade with Korea within 20 years. For a copy of the EC announcement, please click on the globe icon above.
On February 8, 2011, Senate Foreign Relations Committee Ranking Member Richard Lugar (R-IN) introduced S. 309, To authorize the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of Moldova. Moldova is currently subject to the Jackson-Vanik amendment under the Trade Act of 1974, which sanctions countries that fail to comply with freedom of emigration requirements. This means that the President must renew Normal Trade Relations each year (which has happened every year since 1992). The Lugar bill would grant Permanent Normal Trade Relations (PNTR). S. 309 has four cosponsors: Senate Foreign Relations Committee Chairman John Kerry (D-MA), John McCain (R-AZ), Kay Hagan (D-NC), and Benjamin Cardin (D-MD). Lugar previously introduced legislation to grant PNTR for Moldova in both the 110th and 111th Congress.
On February 16, 2011, Japan and India signed a Comprehensive Economic Partnership Agreement (EPA) in Tokyo. Press reports indicate that under the agreement, ninety-four percent of trade between Japan and India will be duty-free within ten years. In a press release announcing the agreement, Indian Commerce Minister Shri Sharma say he hopes the EPA will double bilateral trade by 2014.
On February 11, 2011, Representative Rodney Frelinghuysen (R-NJ) introduced H. Res. 86, Recognizing the importance of trade to the United States economy and the importance of passing free trade agreements with Colombia, South Korea, and Panama. The resolution, which is non-binding, reflects the impatience among House Republicans to pass the pending Free Trade Agreements with Colombia, Korea, and Panama. If passed, H. Res. 86 would adopt the following statement:
Resolved, that -
- the House of Representatives recognizes the importance of reduced trade barriers to the United States for promoting economic development, creating jobs, and solidifying relations with trading partners; and
- it is the sense of the House of Representatives that the United States-Colombia Trade Promotion Agreement, United States-Panama Free Trade Agreement, and United States-Korea Free Trade Agreement should be implemented immediately.
On February 15, 2011, the World Trade Organization (WTO) released the tenth Trade Policy Review of Japan. The previous review was in 2009. The WTO reports that despite the global economic downturn, Japan refrained from introducing new trade barriers during the past two years. The WTO also reports that Japan does not tend to use trade remedy measures such anti-dumping or countervailing duties. While the economy contracted during the crisis, the WTO notes that Japan's exports have rebounded. Japan's Gross Domestic Product is projected to grow by 2.8% in 2010.
According to the WTO, manufacturing is historically the sector most open to competition in Japan. For this reason, labor productivity is higher in manufacturing than in any other sector of the Japanese economy. However, the report says that government support for manufacturing increased during 2009 with added funding through the Enterprise Turnaround Initiative Corporation.
The WTO report notes that Japan has pursued a series of Economic Partnership Agreements (EPAs). While these trade agreements address market access, trade facilitation, and investment. However, the EPAs with major exporting countries usually exclude sensitive products like leather and footwear. Japan also excludes these products from their trade preference programs. Unsurprisingly, they represent some of the highest duty rates in Japan's tariff schedule.
On February 14, 2011, the Senate Finance Committee announced that U.S. Trade Representative (USTR) Ron Kirk will testify before the Committee. Scheduled for March 9, 2011, the hearing will focus on the Obama Administration trade agenda - particularly with regard to the pending Free Trade Agreements (FTAs) with Colombia and Panama.
Kirk told the House Ways and Means Committee on February 9th that the Administration will resolve outstanding issues with the agreements by the end of 2011. Ways and Means Committee Members told Kirk they were displeased that he could not provide an exact timeline for the FTAs. The Senate Finance Committee echoes this sentiment, and ask Kirk to come prepared with this information at the March 9th hearing. Following is a quote:
We welcome your agreement to testify before the Senate Finance Committee on March 9, 2011. At that time, we expect that you will come prepared to (1) identify specifically any additional steps that the Administration believes Panama or Colombia should take; and (2) provide a clear and expeditious timetable for moving both agreements through the U.S. Congress.
For a copy of the Committee announcement and letter to Kirk, please click on the globe icon above.
On February 10, 2011, House Ways and Means Committee Chairman Dave Camp (R-MI) introduced H.R. 622, To extend the Andean Trade Preference Act, and for other purposes. If passed, the legislation would renew the Andean Trade Preference Act (ATPA) [and therefore the Andean Trade Promotion and Drug Eradication Act (ATPDEA)] for four months. ATPDEA expired on February 12, 2011. The program is generally renewed in conjunction with Trade Adjustment Assistance (TAA) and the Generalized System of Preferences (GSP). Both TAA and GSP have faced increased controversy over recent months, making it difficult to move any of the three programs. H.R. 622 is only the latest attempt to find a compromise on the trade programs.
On February 11, 2011, Representative Bobby Rush (D-IL) introduced H.R. 656, the African Investment and Diaspora Act. The purpose of the bill is to coordinate U.S. resources and priorities related to trade and development with Africa. If passed, the legislation would require the State Department to establish an Office of the Untied States-Africa Trade, Development, and Diaspora Affairs. The President would name a Special Representative to head the office.
In addition, the Special Representative would lead an interagency Consultative Action Group, including representatives of the Office of the U.S. Trade Representative (USTR), Trade and Development Agency (TDA), Commerce Department, Export-Import Bank, and others. The Consultative Action Group would determine the U.S.-African trade and development priorities, and develop strategies to to better utilize U.S. trade promotion and capacity building resources.
On February 14, 2011, Representative Ron Kind (D-WI) introduced an amendment to the House Continuing Appropriations Bill that would eliminate U.S. cotton payments to Brazil. Under an agreement to end the World Trade Organization (WTO) dispute between the the U.S. and Brazil over U.S. cotton subsidy programs, the U.S. agreed to make payments to the Brazil Cotton Institute. The fund provides technical assistance and capacity building for Brazil's cotton sector, and also can be used for "international cooperation in the cotton sector" in other countries. Kind has previously argued that the U.S. should not subsidize Brazil's cotton producers.
On February 14, 2011, Senate Finance Committee Chairman Max Baucus (D-MT) and Orrin Hatch (R-UT) announced the Subcommittee assignments for the 112th Congress. Although Democrats remain in control of the Senate - and therefore the Committee - there are some key changes. Notably, Hatch replaces Chuck Grassley (R-IA) as Ranking Member. Grassley remains on the Committee.
The twelve members of the Subcommittee on International Trade and Global Competitiveness are listed below. New Subcommittee Members are marked with an asterisk. Ranking Member John Thune (R-SD) is the only Subcommittee Member who is also new to the Senate Finance Committee.
| Democrats | Republicans |
| Ron Wyden (D-OR) - Chairman | John Thune (R-SD)* - Ranking Member |
| John D. Rockefller (D-WV) | Orrin Hatch (R-UT)* |
| John Kerry (D-MA) | Chuck Grassley (R-IA)* |
| Charles Schumer (D-NY)* | Mike Crapo (R-ID) |
| Debbie Stabenow (D-MI) | Pat Roberts (R-KS) |
| Bill Nelson (D-FL)* | |
| Robert Menendez (D-NJ) |
On February 14, 2011, U.S. Trade Representative (USTR) Ron Kirk released a statement calling on Congress to extend Trade Adjustment Assistance a(TAA), the Andean Trade Preference Act (ATPA), and the Generalized System of Preferences (GSP). TAA and ATPDEA expired on February 12, 2011, while GSP expired on December 31, 2010. Kirk urges Congress to act quickly, saying these programs are important for economic recovery. Following is a quote:
I am disappointed that Congress has not acted to extend Trade Adjustment Assistant (TAA), the Andean Trade Preference Act (ATPA), and the Generalized System of Preferences (GSP). These are important programs that support workers and help U.S. businesses compete in the global marketplace. As a result of this inaction, 155,000 Americans will go without the assistance they were promised under TAA to help retrain for a new job. Farmers and workers in Colombia will lose access to the U.S. market just as they are recovering from severe floods. At the same time, the continuing absence of ATPA and GSP benefits raises costs for American consumers and businesses as well as farmers in some of the world’s poorer countries.
We encourage Congress to extend these three programs as soon as possible and to do so for substantially more than a few months. We are committed to working with Congress to secure reauthorization of these essential trade programs.
For a copy of the USTR statement, please click on the globe icon above.
On February 14, 2011, the Office of the U.S. Trade Representative (USTR) announced an agreement with the Ukraine to improve intellectual property rights (IPR) enforcement. The plan includes actions to increase funding for IPR enforcement, pass pending IPR legislation, and improve agency cooperation. Ukraine was listed on the 2010 Special 301 Watch List. For a copy of the Ukraine Action Plan, please click on the globe icon above.
On February 11, 2011, the Office of the U.S. Trade Representative (USTR) requested that the World Trade Organization (WTO) establish Dispute Settlement panels in two cases against China. The cases concern anti-dumping and counterveiling duties on Chinese imports of U.S. steel, and restrictions on electronic payment services. The U.S. originally requested consultations with China in both cases in September 2010. However the two countries were unable to resolve the dispute. USTR Ron Kirk issued the following statement:
We are troubled by the procedures and decision-making employed by China in its trade remedy investigations, which have now led to serious restrictions on exports of American steel. We also remain deeply concerned about China’s continuing efforts to reserve its domestic payment card market for one state-owned enterprise, to the exclusion of American credit and debit card companies. In each of these disputes, USTR will be pressing to ensure that we obtain the trade benefits provided by the WTO Agreement, in particular the American jobs and economic growth at stake as a result of China’s action.
For a copy of the USTR announcement, please click on the globe icon above.
On February 8, 2011, the Commerce Department Office of Textiles and Apparel (OTEXA) published English translations of the Turkish government announcements of Safeguard investigations on textiles and apparel. The Turkish government originally published the announcements in the Official Gazette on January 13th. As previously reported, if enacted, the Safeguards would place an additional tariff of up to forty percent on Imports of certain textile and apparel products.
OTEXA publishes two communiques. The first concerns woven fabrics, and the second addresses knit and woven apparel. According to the OTEXA translations, the Safeguard tariff for fabrics is twenty-one percent for Least Developed Countries (LDCs), twenty-eight percent for developing countries, and thirty percent for all other countries. The Safeguard investigation includes the following fabrics:
For apparel, the the Safeguard duties are twenty-seven percent for LDCs, thirty-seven percent for developing countries, and forty percent for all other countries. The products included in the investigation are:
The announcements say that the investigations are affective on the day they were published (January 13th). The investigations must be completed within eleven months (nine months with a maximum two moth extension). However, earlier press reports indicate that the timing for implementation of additional duties is uncertain. If approved, the new tariffs would likely be implemented after a transition period that would allow most products already in the supply chain to clear with no penalty duty. For copies if the announcements, please click on the globe icons above.
On February 7, 2011, the European Parliament announced that they will vote on the proposed amendment to the EU-Korea Free Trade Agreement (FTA). The vote is scheduled for February 17th. The amendment reflects negotiations between the EU and Korea designed to make the FTA more acceptable to EU industries. The changes include modifications to a Safeguard measure that would allow the EU to repeal duty-free access for products where an import surge causes or threatens damage to an EU industry. The European Commission will now monitor imports in sensitive sectors in order to identify import surges. The sensitive industries named in the amendment are: textiles and clothing, consumer electronics, and passenger cars.
The European Parliament is expected to approve the amendment. This would put the EU-Korea FTA on target for the planned July 1, 2011 implementation date.
The Calendar Year 2010 U.S. import data released today shows some very good news for the textile and apparel industry. The nineteen percent increase in U.S. textile and apparel imports mean that these shipments now are at the highest level since the U.S. first started keeping electronic import data in 1989. At 55.4 billion Square Meter Equivalents (SME), the imports during 2010 are four percent higher than the previous peak in 2007. This figure represents an impressive recovery after textile apparel imports declined in both 2008 and 2009.
On February 11, 2011, the Consumer Product Safety Commission (CPSC) published an update on the status of the Stay of Enforcement on the testing and certification requirements under the Consumer Product Safety Improvement Act (CPSIA). The CPSC document lists the various rules, labels, and bans that could require testing and certification under the law. In addition, the table indicates whether that rule requires a Certificate of General Conformity or Certificate of Third Party Testing.
Where a label is subject to certification requirements, the CPSC lists whether the continued Stay of Enforcement remains in effect. The table also eases some of the confusion regarding which products actually require certification. To view the CPSC table, please click on the globe icon above.
On February 9, 2011, Representative Jerrold Nadler (D-NY) introduced H.R. 572, the Clean Ports Act of 2011. If passed the legislation would amend the Federal Aviation Administration Authorization Act (FAAAA) to allow states, and political subdivisions of states, to make their own requirements for motor carriers and commercial motor vehicles providing services at port facilities.
The Nadler bill is part of the ongoing battle over the rights of ports to regulate vehicles that operate within their facilities. In 2008, the Port of Los Angeles implemented a program that would ban owner-operator truckers in the Port. The purpose of this program was to improve the environmental standards of trucks in the ports by imposing the cost on larger firms, rather than individual truckers. Opponents say the program is a ploy to unionize port truckers. They argue that the move would violate the FAAAA.
The December 2010 U.S. General Import data was released on February 11, 2011. Total textile and apparel imports in the month of December 2010 were 4,127.8 million SME valued at $6,956.6 million. This represents an increase of 230.2 million SME, or 5.91 percent in quantity, and $551.4 million, or 8.61 percent, in value from the 3,897.6 million SME valued at $6,405.2 million imported during December 2009.
Total textile and apparel imports for the year ending December 31, 2010 were 55,441.4 million SME valued at $93,278.3 million. This represents an increase of 8,834.4 million SME, or 18.96 percent, in quantity, and $12,272.8 million, or 15.15 percent, in value over the 46,606.9 million SME valued at $81,005.6 million imported during the previous twelve month period.
|
Year Ending December 31, 2010 U.S. General Imports (in Millions) |
||||||
| 2010 | 2009 |
Percent Change |
||||
| Product | SME | Value | SME | Value | SME | Value |
| Total | 55,441.4 | 93,278.3 | 46,606.9 | 81,005.6 | 18.96 | 15.15 |
| Apparel | 24,744.3 | 71,398.3 | 21,317.2 | 63,104.7 | 16.08 | 13.14 |
| Non-Apparel | 30,697.0 | 21,880.0 | 25,289.7 | 17,900.9 | 21.38 | 22.23 |
| Yarns | 2,887.2 | 1,402.2 | 2,377.6 | 1,083.3 | 21.43 | 29.44 |
| Fabrics | 9,135.8 | 4,769.5 | 7,399.4 | 3,887.0 | 23.47 | 22.70 |
| Made-Ups | 18,674.0 | 15,708.3 | 15,512.6 | 12,930.5 | 20.38 | 21.48 |
On February 11, 2011, the Office of Textiles and Apparel (OTEXA) released a new set of data tracking the imports under the duty-free provisions created by the African Growth and Opportunity Act (AGOA), the Andean Trade Promotion and Drug Eradication Act (ATPDEA) and the Caribbean Basin Trade Partnership Act (CBTPA). The reports for Total Trade, in both quantity and value, may be viewed by clicking on the globe icons above.
These reports list regional and country-by-country totals for each of the Chapter 98 Harmonized Tariff Schedule (HTS) break-outs created for the specific benefits under each of the preference programs. The OTEXA data tracks the utilization of benefits under CBTPA and AGOA since the inception of the programs in 2000; and the ATPDEA since its implementation in October 2002. The latest data is based on the December 2010 U.S. General Import statistics from Census.
U.S. Yarn Remains Key to CBTPA Usage
In 2010, the U.S.-Central America Free Trade Agreement (CAFTA) is in effect for El Salvador (March 1, 2006), Honduras (April 1, 2006), Nicaragua (April 1, 2006), Guatemala (July 1, 2006), the Dominican Republic (March 1, 2007), and Costa Rica (January 1, 2009). Each of the CAFTA Parties "graduated" from the CBTPA program upon implementing the FTA. Although shipments from all six countries are no longer eligible for CBTPA benefits, formerly CBTPA-qualifying apparel meets the CAFTA yarn-forward rule of origin and is, therefore, still duty-free. Now, however, these goods made from regional fabric are no longer subject to any quantitative limitations. CAFTA-qualifying trade is not reflected in these CBTPA figures.
For the year ending December 2010, seven percent of the total U.S. imports from the CBI region claimed preferential treatment under CBTPA and the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act. One percent of CBTPA shipments utilize one of the two 809 provisions for knit or woven apparel using U.S. fabric of U.S. yarns, cut and assembled in the region with U.S. thread. Shipments entering the U.S. duty-free under the 807A+ provision, for apparel assembled in a beneficiary country from U.S. formed and cut fabric made of U.S. yarn, account for 0.01 percent of CBTPA. Overall, slightly less than one and a half percent of the CBTPA-qualifying shipments use U.S. fabric. Seventy-nine percent of the U.S. imports utilize one of the two Tariff Preference Levels, for apparel made from regional fabric using U.S. yarn.
An additional twenty percent of CBTPA enters under the Haiti HOPE benefits (which permit the use of inputs from a number of sources). More than ninety-nine percent of the apparel exports from Haiti enter the U.S. market duty-free. Of Haiti's duty-free trade, twenty percent utilizes HOPE benefits; the rest relies on the more established (but more restrictive) CBTPA program, which requires the use of U.S. yarns.
Third Country Fabric Dominates AGOA Shipments
For the same time period, eighty-seven percent of the total U.S. imports from AGOA beneficiary countries claimed preferential treatment. The most highly utilized AGOA benefit remains apparel assembled in one of the "lesser developed countries" from third country fabric. Ninety-five percent of the AGOA-qualifying imports enter the U.S. duty-free under this provision.
ATPDEA Shipments Incorporate Regional Fabric
Effective February 1, 2009, U.S. imports from Peru may enter
duty-free under
either the U.S.-Peru FTA or ATPDEA. Peru FTA-qualifying trade
is not
reflected in these ATPDEA figures. For the year ending
December 2010,
forty-six percent of the U.S. imports from the three Andean nations
continue to
enter the U.S. claiming a duty-free preference under the provisions of
the
ATPDEA. Eighty-nine percent of the ATPDEA-qualifying
shipments are of
apparel assembled from Andean regional fabric from U.S. or Andean yarns.
On February 9, 2011, U.S. Customs and Border Protection announced the registration process and agenda for the 2011 Trade Symposium. The Symposium, which regularly sells out, is scheduled for April 13-14th in Washington DC. Online registration opens Monday, February 14th at noon Eastern Standard Time through the Customs website. The fee for participation is $450, and all reservations are on a first come, first served basis. For a copy of the registration information and agenda, please click on the globe icon above.
On February 9, 2011, the House Ways and Means Committee held a hearing on President Obama's trade policy agenda. The only witness at the hearing was U.S. Trade Representative (USTR) Ron Kirk. This was the second Ways and Means Committee hearing on the topic this year. Both of these hearings were held early in the 112th Congress to demonstrate a change of course from the 111th Congress. The Republican leadership in the House intends to highlight the importance of action on trade.
Committee Chairman Dave Camp (R-MI) opened the hearing by calling for immediate Administration action to pass the pending Free Trade Agreements (FTAs) with Colombia, Korea, and Panama. Illustrating the ideological divide that has prevented movement on trade during the past two years, Camp and Ranking Member Sander Levin (D-MI) took opposing positions on the future of the FTAs. While the two men did not openly spar during the hearing, each made sure to hammer home his own point of view. Following is a quote from Camp's opening statement:
Whilethe President made positive reference to completing the agreement with South Korea in his State of the Union address, Colombia and Panama were mentioned only briefly – almost as afterthoughts – with no action plan or commitment, characterizing them as items the Administration intends to “pursue.” But we already have trade agreements – signed three and a half years ago! Ambassador, I hope you will provide clarity on what the President meant and lay out today a concrete timeline for the consideration of all three agreements. As I have said repeatedly, I would like to see all three agreements considered by July 1st.
Frankly, the lack of commitment on these critical, job-creating agreements is hindering the rest of our trade agenda – most notably ATPA and TAA. The President’s unwillingness to engage, especially on Colombia, has ground everything else to a halt and our workers are suffering as a result.
By contrast, Levin criticizes the the FTAs, and praises the new trade policy pursued by Democrats during the previous Congress:
Congressional Democrats have been actively working to shape a new trade policy that is responsive to the changing dynamics of a global economy. We rejected the passive, hands-off approach of the last administration, embracing expansion of trade in ways that assess its impact and broaden the benefits from expanded trade.
Carrying out this new policy, we succeeded in pushing for the inclusion of enforceable worker rights and environmental standards, beginning with their incorporation in the Peru FTA. We have fought for vigorous enforcement of the basic rules of competition with our trading partners. We have insisted that trade must be a two-way street – not a one-way street – in critical areas of trade.
This is in sharp contrast to the approach of the last Administration, whose view was that trade was good in and of itself, and that more trade automatically was better, regardless of its terms. As President Obama responded, ‘we just went through a decade where we were told that it didn’t matter, you just keep on importing, buying stuff from other countries … and everything is going to be okay. … [B]ut it was all built on a house of cards.’
During the hearing, Kirk presented a statement (available by clicking on the globe icon above), and answered questions covering key trade issues. He also addressed the partisan divide in trade in Congress, saying that he could get all three pending FTAs passed and implemented if the Members of the Ways and Means Committee and others in Congress could manage to work together on the issue. Following is a brief summary of the topics discussed at the hearing:
U.S.-Korea FTA: Kirk reported that the Obama Administration hopes to send the implementing legislation for the FTA to Congress within a matter of weeks. When pressed by Peter Roskam (R-IL), Kirk confirmed that "weeks" does mean "less than a month," and is not a euphemism for some other indefinite point in the future. He said that the Administration is committed to pass the FTA by July 1st, which means that the implementing legislation must go to Congress soon. The Korea FTA was one of the few areas of agreement for Democrats and Republicans on the Committee. Members of both parties congratulated Kirk on the deal.
U.S. Colombia FTA and U.S.-Panama FTA: Kirk reports that President Obama has instructed him to conclude any fixes to the FTAs with Colombia and Panama this year. He says that USTR will follow the same model as they did with the changes to the U.S.-Korea FTA. The Democrats on the Committee blasted the Administration for pushing ahead with the agreements, while Republicans were angry that Kirk could not provide a concrete timeline or benchmarks. Kirk repeated the following concerns with each FTA:
China: Another rare point of agreement for the Committee Members was concern over China's trade practices. The Members brought up familiar complaints, including currency policy, government subsidies to industry, intellectual property rights (IPR) enforcement, and indigenous innovation policies. Kirk said that the Obama Administration has been working closely with the Chinese government on all of these concerns. He said that President Obama has met with Chinese President Hu Jintao eight times in the past two years, and currency manipulation has been a major topic at every meeting. Kirk also called attention to a recent agreement with China to improve IPR protections, and delink IPR from innovation policy.
Finally, the Committee asked Kirk about the progress of negotiating a Bilateral Investment Treaty (BIT) with China. Kirk said that the process is delayed by a USTR internal review to update the U.S. BIT model. He reported that this review is almost complete, and negotiations with China have been conducted simultaneously. Kirk also said that the U.S. will next pursue a BIT with India.
Trans-Pacific Partnership (TPP): Kirk said that the U.S. will table an offer during the upcoming fifth round of negotiations. Although he repeated the Administration's goal to complete the TPP negotiations before the U.S. hosts the Asia Pacific Economic Cooperation (APEC) in November 2011, neither he, nor any Member of the Committee, seemed to think that this was an attainable goal.
Kirk pointed out that the benefits of TPP will be different for each of the partner countries. He said that where the U.S. already has FTAs (Australia, Chile, Peru and Singapore), USTR does not plan to pursue changes in market access, but will primarily negotiate based on non-tariff barriers. By contrast, for Brunei, Malaysia, New Zealand, and Vietnam, the focus will be on market access. When asked about the labor and environmental provisions included in the "May 10th" agreement with Congress, Kirk said that the U.S. negotiating objectives for TPP include the values the agreement represents.
Russia: Kirk was adamant that the Obama Administration wants to pass Permanent Normal Trade Relations (PNTR) for Russia this year. This would be the next step in Russia's accession to the World Trade Organization (WTO). Similar to his comments on Panama, Kirk said that getting Russia into the WTO is vital to improving their trade practices. However, Trade Subcommittee Chairman Kevin Brady (R-TX) told him that there is "virtually no chance" Congress will consider PNTR for Russia before passing all three pending FTAs.
Trade Adjustment Assistance (TAA): Kirk, along with most of the Democratic Committee Members, urged the Committee to pass a TAA extension quickly. They said that the program is important to help advance further trade opening. TAA currently is scheduled to expireon February 12, 2011. Republicans oppose TAA extension. In his opening remarks, Kirk also linked TAA to the Generalized System of Preferences (GSP) and the Andean Trade Promotion and Drug Eradication Act (ATPDEA). GSP expired on December 13, 2010, and ATPDEA will expire at the same time as TAA. Kirk said that all three of these programs represent ways that the U.S. can spread the benefits of trade to poor populations in the U.S. and abroad. He urged Congress to to renew all three, for the longest time period possible.
On February 10, 2011, House Ways and Means Committee Ranking Member Sander Levin (D-MI) and Senator Sherrod Brown (D-OH) introduced the Currency Reform for Fair Trade Act of 2011 in the House and the Senate. Levin says that the bill is identical to the legislation passed in the House in 2010 - but with minor technical changes. For a copy of the Levin press release announcing the legislation, please click on the globe icon above. Following is a quote from Levin:
China has been given free rein to manipulate its currency for far too long, with hundreds of thousands of American jobs lost and unsustainable global trade imbalances as a result. Those imbalances contributed to the global economic crisis, and most experts expect the imbalances will worsen in the coming years unless there is a significant change in the status quo. The measures included in this bill provide the Administration with additional tools for enforcing the rules of trade and are consistent with our WTO obligations. It will also bolster the Administration’s efforts to bring about a multilateral framework for addressing this global issue.
The bill requires the Commerce Department to determine if currency undervaluation is a prohibited subsidy. Their decision must be based on the WTO definition. This means that in order to be considered a subsidy:
The House of Representatives passed H.R. 2378 by a vote of 348-79 in September 2010. However, the Senate failed to vote on the legislation during the 111th Congress. This means that in order for the bill to become law, supporters must pass it again the House as well as the Senate. Speaker of the House John Boehner (R-OH) and Ways and Means Committee Chairman Dave Camp (R-MI) have already indicated that they will not consider currency legislation during 2011.
On February 7, 2011, the Office of the Intellectual Property Enforcement Coordinator (IPEC) released the first Annual Report on Intellectual Property Enforcement. The IPEC previously released a Joint Strategic Plan in June 2010, and the Annual Report details U.S. government progress toward implementing that plan. The purpose of the IPEC is to lead and coordinate interagency efforts to improve intellectual property rights (IPR) enforcement. For a copy of the fifty-seven page report, please click on the globe icon above.
Among the IPEC efforts, U.S. government agencies have increased cross training to improve international IPR enforcement. The U.S. has signed agreements with Latvia and Korea, and worked with Mexico to stop trade in infringing goods, and extradite counterfeiters. In addition, the U.S. continues to engage with China at all levels. to address IPR enforcement.
Of course, IPR highlight of the past year was the completion of negotiations for the Anti-Counterfeiting Trade Agreement (ACTA). The agreement, signed with countries that represent fifty percent of world trade, establishes best practices for IPR enforcement.
IPEC also reports that an interagency working group identified seventeen countries where U.S. embassy staff could do more to improve IPR enforcement in their host country. Each of these embassies was instructed to set up local working groups, and adopt work plans. These countries are: Brazil, Canada, Chile, China, Colombia, Egypt, India, Israel, Mexico, Nigeria, Peru, Russia, Saudi Arabia, Spain, Thailand, Turkey, and Ukraine. The working groups will conduct activities such as judicial training programs, industry roundtables, and community outreach.
The report details efforts by rade agencies to increase transparency in their IPR policy. IPEC highlights a Federal Register notice published by the Commerce Department International Trade Administration (ITA). The agency requested public comments regarding the IPR challenges that businesses encounter in difficult markets, and what the U.S. government can do to support them. In addition, the Office of the U.S. Trade Representative (USTR) requested comments identifying infringing markets, and this year will conduct an out-of-cycle Special 301 review on infringing market. The 2011 Special 301 report due in April also will highlight trading partner best practices.
On February 9, 2011, House Appropriations Committee Chairman Hal Rogers (R-KY) announced a partial list of spending cuts. The cuts will be included in a bill designed to fund the federal government through the end of Fiscal Year 2011. Rogers says he is proposing $74 billion in cuts. These include a $93 million reduction in the budget for the Commerce Department International Trade Administration (ITA). For a copy of the Rogers announcement, please click on the globe icon above.
Earlier this month, the Brussels-based European Centre for International Political Economy (ECIPE) released the working paper, Is the Renminbi Undervalued? The myths of China's trade surplus and global imbalances. The paper, written by Sylvain Plasschaert, makes the case that a measured increase in the value of the renminbi would not balance U.S.-China trade flows. Following is an excerpt from the abstract:
...the record growth of China’s exports to the US stems largely from joint ventures and affiliates of multinational enterprises; exports attributed to China usually contain a large percentage of imported components with modest value-added attributed to China itself ... . Neither are the gigantic foreign exchange reserves primarily linked to the modest surpluses of exports over imports of China, but they are fed by these large net inward direct investments; and, in recent years, by ‘hot money’ which sneaks into China, notwithstanding the non-convertibility of capital flows.
One of the topics addressed in the paper is "relocation:" when a firm moves its operations to China or another lower-cost producer. ECIPE uses the example of footwear and apparel products to show that faulting companies for relocating may not be justified. Following is an excerpt:
The accusation of unfair relocation is particularly unfounded, when the manufacturing of the goods in question has already been terminated in the home country, as is the case for footwear in the USA. Ironically, in the case of ladies’ underwear, the complaints by American producers in 2003 against imports from China were particularly hollow, as most of their ‘production’ was already outsourced to Honduras, within a USA-Honduras bilateral arrangement, which provided for duty-free re-entry of the processed goods into the USA.
A copy of the sixteen-page ECIPE paper is available by clicking on the globe icon above.
On February 9, 2011, the Americas Society and the Council of the Americas published the Winter Issue of the policy journal Americas Quarterly. The journal contains an article, Ask the Experts: Market Access and Free Trade, that sheds light on U.S. free trade priorities. The article contains an essay by U.S. Trade Representative Ron Kirk saying that President Obama wants to submit the Free Trade Agreements (FTAs) with Colombia and Panama quickly to the Congress for approval. Kirk added that the Office of the U.S. Trade Representative (USTR) continues to work with Colombia and Panama to remedy the areas of concern in the FTAs. Following is a quote from Kirk's essay:
... the Office of the United States Trade Representative (USTR) is addressing outstanding issues related to agreements with Colombia and Panama, all of which President Obama would like to advance for congressional consideration quickly.
A copy of the article containing Kirk's essay is available by clicking on the globe icon above.
On February 8, 2011, Senate Foreign Relations Committee Ranking Member Dick Lugar (R-IN) released the staff report, Losing Jobs and Alienating Friends: the Consequences of Falling Behind on Free Trade With Colombia and Panama. The report is based on research conducted by Foreign Relations Committee minority staff, including a fact finding trip January 18-21, 2011. The staff finds that delays in passing the Free Trade Agreements (FTAs) with Colombia and Panama, continue to cost the U.S. in the form of lost business and influence in Latin America. Following are the summary observations:
Staff believes that three U.S. policy priorities will be affected if Congress does not ratify the U.S.-Colombia and U.S.-Panama Free Trade Agreements. First, in an ailing economy, our ability to create jobs depends largely on expanding domestic and international commerce. The FTAs would create jobs, while the failure to approve the FTAs would lead to a loss of U.S. jobs and market share. Second, if we fail to pursue ratification of the Colombia FTA, we will likely miss an opportunity to expand on gains achieved through Plan Colombia on issues of human rights and labor in Colombia. Lastly, without the FTAs, the U.S. loses credibility and diminishes its ability to influence countries in Latin America.
The report argues that both governments are frustrated with U.S. reluctance to pass the FTAs. They have done everything the U.S. requests to overhaul labor (Colombia) and tax (Panama) policies. The staff reports that the U.S. is losing leverage in Colombia in particular, where FTAs with several other trading partners are in the works. In addition, government officials in Panama are pushing for movement in the next three months, based on Panama's concessions to U.S. demands. According to the report:
Given the lack of movement on the FTA after Panama signed the TIEA, Panamanian officials were outraged. Minister Papadimitriu and Minister of Commerce and Industry Roberto Henriquez both explained that they had been given a list of conditions relating to the FTA, which were delivered by Dan Restrepo, President Obama’s senior aide for the Western Hemisphere, in June 2009. In reaction, Minister Henriquez said that ‘‘Panama has given what was requested and has received nothing in return.’’ He further noted that U.S. inaction on the FTA was ‘‘pushing Panama away’’ and that the current course would damage commercial relations. He also referenced the agreements with Canada and the European Union as potentially reducing U.S. sales in the short term.
The report concludes by reminding the Committee that the debate focused on what the U.S. will gain from the FTAs is misguided. The staff says that the U.S. must now pass the agreement to "prevent further losses." For a copy of the eight-page report, please click on the globe icon above.
On February 8, 2011, Senators Robert Casey (R-PA) and Sherrod Brown (D-OH) introduced S. 308, the Trade Extenders Act of 2011. If passed, the legislation would renew Trade Adjustment Assistance (TAA), the Andean Trade Promotion and Drug Eradication Act (ATPDEA), and the Generalized System of Preferences (GSP). All three programs would be extended through June 30, 2010. TAA and ATPDEA currently are scheduled to expire on February 12th. GSP lapsed on December 31, 2010 due to concerns over duty-free treatment for sleeping bags made in Bangladesh. This renewal includes retroactive GSP benefits for the period between January 1, 2011 and the date the legislation enters force.
The Casey-Brown legislation also would
terminate GSP eligibility for certain sleeping bags. Products
classified in HTS number 9404.30.80 would only be eligible for GSP
duty-free treatment if they meet one of the following criteria:
For a copy of the legislation, please click on the globe icon above.
On February 10, 2011, the Office of the U.S. Trade Representative (USTR) and Korean Trade Ministry exchanged the final legal texts of the U.S.-Korea Free Trade Agreement. The texts reflect the supplemental agreement reached in December 2010. The signed texts include the following documents, available by clicking on the globe icons below:
On February 9, 2011, U.S. Senator John McCain (R-AZ) spoke to the Americas Society and the Council of the Americas about U.S. relations with Latin America. One major theme of his speech was the importance of free trade. McCain criticized the Administration's inaction on the three outstanding Free Trade Agreements (FTAs) with Korea, Colombia, and Panama. McCain acknowledges that the Administration has taken some steps with regards to trade -- such as the commitment to effectuate the Korea FTA -- but he says these steps are insufficient. In his remarks, McCain called for "a concrete plan of action -- with clear goals and timelines, backed by political will -- to pass existing trade agreements, and to sign and ratify new ones." McCain also says the U.S. FTAs with Colombia and Panama "should have been passed yesterday" and do not require any changes. McCain concluded by calling for the U.S. to take a leadership role in global trade policy. A copy of his remarks is available by clicking on the globe icon above.
On February 8, 2011, Deputy U.S. Trade Representative Miriam Sapiro spoke about U.S. trade policy during an international conference held in Tel Aviv, Israel. In her remarks, Sapiro said the U.S. is committed to concluding the Doha Round of World Trade Organization (WTO) negotiations. Sapiro also says a successful conclusion depends on the willingness of China, India, and Brazil to further open their markets. Following is an excerpt from her speech:
Our commitment to the WTO is the reason why we are so resolved to achieving an ambitious and balanced outcome to the Doha Round. ... But to achieve that we will need to see – relatively quickly – greater willingness from China, India and Brazil to act like the global players that they are and provide more access to their markets for goods and services. As President Obama stated at the G-20 in Seoul in November, “just as emerging economies have gained a greater voice at international financial institutions . . . so, too, must they embrace their responsibilities to open markets to the trade and investment that creates jobs in all our countries.”
A copy of Sapiro's speech is available by clicking on the globe icon above.
On February 8, 2011, the Department of Commerce's Office of Textiles and Apparel (OTEXA) released updated statistics showing the country-by-country utilization for the tariff preference levels (regional fabric caps) under the Africa Growth and Opportunity Act (AGOA), the Andean Trade Promotion and Drug Eradication Act (ATPDEA), the Caribbean Basin Trade Partnership Act (CBTPA), and the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE). The latest report shows U.S. imports during the first four months of the quota period which began on October 1, 2010. This is the eleventh year for AGOA and CBTPA, the ninth year of the ATPDEA program, and the fifth quota period for HOPE. A copy of the OTEXA data is available by clicking on the globe icon above.
AGOA Trade
During the first four months of this quota period, eleven of the eligible AGOA countries shipped qualifying apparel to the U.S. market using the regional fabric cap. Apparel of regional fabric made of U.S. or regional yarns was shipped from Ghana, Lesotho, Mauritius, South Africa, Swaziland, and Uganda. Apparel using third country fabric was shipped from Botswana, Ethiopia, Ghana, Kenya, Lesotho, Malawi, Mauritius, Swaziland, Tanzania, and Uganda.
As of January 31, 2011, the regional fabric cap of 1,733.5 million SME filled by 4.07 percent. Third country fabric use by 'lesser developed countries' accounts for ninety-eight percent of the trade, and the sublimit of 866.7 million SME is filled by 8.01 percent. Kenya, Lesotho, Swaziland, and Mauritius (in descending order) are the leading users of the third country fabric benefit. Lesotho accounts for sixty-two percent of the regional fabric trade, while South Africa supplies an additional twenty-two percent. South Africa is not eligible for the third country fabric benefit.
ATPDEA Trade
All three of the Andean countries shipped goods under the regional fabric cap in the first four months of the quota period. Shipments from Colombia account for sixty-five percent of all qualifying goods. Shipments from Peru account for an additional twenty-three percent. As of December 31, 2010 the limit of 1,238.2 million SME is filled by 1.13 percent.
CBTPA Trade
As of January 31, 2011, the CBTPA T-Shirt cap of 12,000,000 dozen is filled by 24.12 percent. Haiti ships all of the qualifying T-shirts. Haiti also is the only supplier using the CBTPA Knit Apparel regional fabric cap. As of January 31, 2011, the Knit Apparel cap is filled by 4.74 percent.
HOPE Trade
There are three Tariff Preference Levels (TPLs) for HOPE shipments. During the four months of imports included in the OTEXA data, the HOPE Woven Apparel Limit of 70.0 million SME is filled by 8.99 percent, and the HOPE Knit Apparel Limit of 70.0 million SME is filled by 10.05 percent. Unlike the other limits, the quota period for the HOPE Value-Added Apparel Limit began on December 20, 2010. As of January 31, 2011, the limit of 284.9 million SME is filled by 1.02 percent.
The Andean Trade Preference and Drug Eradication Act (ATPDEA) and Trade Adjustment Assistance (TAA) both expire on February 12, 2011. Only a few days before ATPDEA and TAA expire, hope for renewal continues to dwindle. Over the weekend, House Ways and Means Committee Chairman Dave Camp (R-MI) submitted a bill that would extend the two programs by four months. Initially, there was optimism that the House would quickly pass the Camp legislation and extend ATPDEA and TAA. While that still would have left very little time for the Senate to act, it could have been possible to renew the programs before they expire. However, the House leadership canceled a planned February 8th vote on legislation.
Press reports indicate that the bill was pulled due to partisan bickering. While TAA is a central part of Democratic trade policy, Republicans are upset at the slow pace of action on trade. Republicans want President Obama to present a clear timeline to send the pending Free Trade Agreements (FTAs) to Congress. Meanwhile, Democrats continue to stall trade legislation pending TAA extension.
Although traditionally moved along with ATPDEA and TAA, GSP renewal currently is held up by Senator Jeff Sessions (R-AL). The Generalized System of Preferences (GSP) expired December 31, 2010. Sessions placed a hold on the last two attempts to renew GSP, due to concerns over duty-free benefits for sleeping bags made in Bangladesh. So far, there is no compromise on the horizon to resolve this dispute.
In February 2011, the National Council of Textile Organizations (NCTO) posted a petition to its website that opposes the U.S.-Korea Free Trade Agreement (FTA). The petition says that the U.S. textile industry strongly opposes the agreement, because that it gives Korean apparel manufacturers a better deal than U.S. textile manufacturers. Following is a quote from the petition:
The KOREA FTA has 3 major flaws regarding textiles. It has weak customs language which means China will use the agreement to destroy more American textile jobs. It gives big Korean exporters far more generous terms than U.S. textile producers - that means more job losses. And it excludes key industry products from its coverage so U.S. workers lose yet again.
The petition urges Senators and Representatives to "Stop outsourcing our textile jobs." The petition is available at: http://www.bipac.net/petition_1.asp?chk=jClXnU&g=NCTO&id=62436.
On February 8, 2011, President Barack Obama issued an Executive Order to establish the Senior Intellectual Property Enforcement Advisory Committee (SIPEAC) and the Intellectual Property Enforcement Advisory Committee (IPEAC). The Senior Committee will be lead by the Intellectual Property Enforcement Coordinator (IPEC), with representatives from nine executive agencies, including the Justice Department, Commerce Department, Office of the U.S. Trade Representative, and Department of Homeland Security. The IPEAC also will be chaired by the IPEC, with representatives from relevant units within any executive agency or department involved in Intellectual Property Rights (IPR) enforcement. The Committee members must hold positions that are subject Senate approval.
The purpose of the Committees is to assist the IPEC to develop and implement the Joint Strategic Plan. By law, the IPEC must publish the Joint Strategic Plan to Combat Intellectual Property Infringement every three years. For a copy of the Executive Order, please click on the globe icon above.
On February 6, 2011, the Obama Administration published the report, A Strategy for American Innovation: Securing Our Economic Growth and Prosperity. The report summarizes the Administration's plans to promote U.S. economic growth and future development. These initiatives range from education to high speed rail and patent reform. Following is a brief summary of the topics that directly impact trade:
Export promotion: The Administration report highlights the President's National Export Initiative (NEI). The goal of the NEI is to double U.S. exports by 2015. Following is a quote from the report that describes the Administration efforts to open markets:
Promote innovative, open, and competitive markets. President Obama is working to encourage innovation by improving regulation and enhancing market access at home and abroad. The revised Horizontal Merger Guidelines, released in August 2010, bring innovation considerations forcefully into antitrust evaluation. In addition, through efforts such as the free trade agreement with South Korea, the National Export Initiative brings a sustained, vigorous commitment to ensure fair and open export markets for American producers, allowing our innovative businesses to expand globally with the goal of doubling exports by the end of 2014.
Intellectual Property Rights (IPR) enforcement: The report says U.S. IPR is important to promote innovation and create jobs. They emphasize two developments:
Regulatory reform: In January 2011, the Obama Administration launched an initiative to review and streamline government regulations. The report states that outdated and duplicative regulations stifle innovation and hamper U.S. competitiveness.
Infrastructure investment: The strategy includes initiatives to improve U.S. rail, air, and roads. In particular, the report supports the creation of the National Infrastructure Bank - designed to provide a more reliable system for funding infrastructure projects. Following is the description of the Bank:
The proposal marks an important complement to traditional federal investment in infrastructure, as the Bank will base its investment decisions on clear analytical measures, selecting those projects with the greatest return for American taxpayers and leveraging private, state, and local dollars to complete projects as efficiently as possible. The Bank will also promote multi-modal projects, which currently face significant obstacles and bureaucratic delays due to the narrow focus of existing programs that fund specific infrastructure modes.
For a copy of the sixty-nine page report, please click on the globe icon above.
On February 7, 2011, President Barack Obama spoke at the U.S. Chamber of Commerce. The Obama speech focused on what the Administration can do to help business, but also challenged businesses do to more to help the U.S. economy. Obama said that the government has a responsibility to open markets for U.S. products. Among the priorities in this area, Obama highlighted export promotion deals with China and India, as well as the pending Free Trade Agreements (FTAs) with Korea, Colombia and Panama. Following is a quote:
This brings me to the final responsibility of government: breaking down barriers that stand in the way of your success. As far as exports are concerned, that means seeking new opportunities and opening new markets for your goods. I’ll go anywhere to be a booster for American businesses, American workers, and American products. We recently signed export deals with India and China that will support more than 250,000 jobs here in the United States. And we finalized a trade agreement with South Korea that will support at least 70,000 American jobs – a deal that has unprecedented support from business and labor; Democrats and Republicans. That’s the kind of deal I’ll be looking for as we pursue trade agreements with Panama and Colombia and work to bring Russia into the international trading system.
Republicans who sit on the House Ways and Means Committee released a response to Obama's remarks that specifically criticizes this section of the speech. They argue that the Obama Administration should commit to support the pending FTAs with Panama and Colombia as written, rather than pressing renegotiation. According to the statement:
In a 3,400 word speech the President mentioned Colombia once. Regardless of how many times Colombia was mentioned, passing all three agreements in the next six months has the potential to increase U.S. GDP by $10 billion and create jobs in the U.S.
In his speech today to the U.S. Chamber, the President demonstrated yet again that his Administration is making no progress on advancing the U.S.-Colombia and U.S.-Panama trade agreements. These agreements were signed in 2007. Yet today’s speech reiterates the President’s confusing declaration in his State of the Union address to Congress two weeks ago: that he is “pursuing” agreements.
For a copy of Obama's remarks and the Republican response, please click on the globe icon above.
On February 7, 2011, U.S. Treasury Secretary Timothy Geithner visited Brazil to prepare for President Obama's trip next month. During his visit, Geithner encouraged Brazilian officials to come out against Chinese currency policy. Press reports indicate that the new President of Brazil, Dilma Rousseff, may be worried about the appreciation of Brazil's currency, and more willing to cooperate with the U.S. than her predecessor. Following is a quote from remarks Geithner made at a Sao Paulo business school:
Brazil is seeing a surge in capital inflows. These flows have been magnified by the policies of other emerging economies that are trying to sustain undervalued currencies with tightly controlled exchange rates.
On February 7, 2011, Senate Minority Leader Mitch McConnell (R-KY) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT) sent a letter to President Obama asking the Administration to support the pending Free Trade Agreements (FTAs) with Colombia and Panama as currently written. The Senators say they appreciate Obama's support for the U.S.-Korea FTA, but are disappointed that he has not shown the same commitment to the FTAs with Colombia and Panama. They urge the President to push for quick passage of the agreements.
McConnell and Hatch say that without these two FTAs, U.S. exports will continue to lose market share to other countries that have already implemented trade agreements with Colombia and Panama. They warn that both Canada and the European Union soon will implement FTAs with Colombia. Following is a quote that offers what may be an overly optimistic view of Congressional support for the FTAs:
Finally, given what we believe is broad, bipartisan support in Congress for these agreements, we would like to make clear that we see no need for further negotiations with Colombia and Panama. As currently written, they are solid agreements which benefit our nation and our workers. We are confident that they would receive strong support in the Senate and the House of Representatives. We urge you to immediately engage with Congress to achieve Congressional approval to get these agreements signed into law as soon as possible.
For a copy of the letter, please click on the globe icon above.
On February 7, 2011, the World Trade Organization (WTO) Dispute Settlement Body (DSB) established a panel to consider complaints about Safeguards imposed by the Dominican Republic on imports of polypropylene bags and tubular fabric from Costa Rica, Guatemala, Honduras, and El Salvador. [On October 5, 2010 the Dominican Republic announced a thirty-eight percent Safeguard on these imports. The Safeguard was instituted on October 18, 2010 and is in force for 18 months.] To view the WTO announcement, please click on the globe icon above.
On February 4, 2011, President Barack Obama met with Canadian Prime Minister Stephen Harper in Washington, DC. After their meeting, the leaders launched two new initiatives designed to facilitate trade and improve security on the U.S.-Canada border. To view the announcements, please click on the globe icons below:
;
andThe purpose is to remove unnecessary barriers to trade and travel between the U.S. and Canada. Obama says that the RCC is an extension of his recent pledge to conduct a review of all government regulations. The RCC will meet within ninety days, and will be made up of senior officials responsible for trade and foreign affairs. There is a two year mandate to promote economic growth, job creation, and transparency in both countries.
The Beyond the Border Working Group will develop an action plan to implement greater security cooperation and economic integration between the U.S. and Canada. This will include developing a joint cargo security strategy to make sure that imports are screened before they are shipped to North America. Following is a quote from the announcement:
We intend to pursue creative and effective solutions to manage the flow of traffic between the United States and Canada. We will focus investment in modern infrastructure and technology at our busiest land ports of entry, which are essential to our economic well-being.
We will strive to ensure that our border crossings have the capacity to support the volume of commercial and passenger traffic inherent to economic growth and job creation on both sides of the border...
We aim to build on the success of current joint programs by expanding trusted traveler and trader programs, harmonizing existing programs, and automating processes at the land border to increase efficiency.
We will look for ways to reduce the cost of conducting legitimate business across the border by implementing, where practicable, common practices and streamlined procedures for customs processing and regulatory compliance.
On February 5, 2011, World Trade Organization (WTO) Director-General Pascal Lamy spoke at the World Federation of Sporting Goods Industries annual meeting in Munich. During his remarks, Lamy highlighted how sporting goods - especially shoes and apparel - are integrated into the global supply chain. Referencing the standard iPod example, he pointed out that "Made in China" or "Made in Vietnam" labels on running shoes don't reflect the fact that the raw materials and design are sourced in a range of Asian and Western countries. Much like the iPod, only a small percentage of the value of the shoe is added in the official country of origin.
Lamy argues that this complex supply chain means that the sporting goods industry - and business groups in general - should take an active interest in the Doha Round. He says that their support will help speed up the pace of the negotiations. Follow is a quote:
Many in the WTO think that we need to explore new issues — such as trade and investment, trade and competition, and standards — in order to further advance business opportunities around the world. But we first need to safeguard and promote trading opportunities by concluding the current Round. And for that, we need the support of business and labour. I believe that both have an important stake in pushing for the conclusion of the Doha Round, because a reduction in trade barriers and stronger, clearer and more transparent trade rules will boost trade. Hence efficiency, hence growth, hence development, hence poverty reduction.
Lamy also said that complex supply chains call for a new system to monitor trade flows. He advocates for the development of trade data that would track the value added in various countries, rather than simply the final country of origin. Lamy said:
>At present, international trade flows are computed by attributing the full commercial value of a product to the last country of origin. But with so much trade now involving foreign companies operating within national jurisdictions — and with so many components now criss-crossing the same border many times — this method results in a statistical bias. The need of the hour is a new approach to trade statistics which measures the value-added at each stage in the production chain. This would ensure that international interactions resulting from globalization are properly recorded. And that related employment is properly assessed. Such a system would require the creation of appropriate statistical bridges between different national accounting systems.
For a copy of Lamy's remarks, please click on the globe icon above.
In a Federal Register notice published February 8, 2011, the Office of the U.S. Trade Representative (USTR) announces that Liberia is eligible for African Growth and Opportunity Act (AGOA) textile and apparel benefits, effective February 7th. In order to qualify for AGOA textile and apparel benefits, Sub-Saharan African countries must adopt effective visa systems to prevent Customs fraud, and establish procedures to help U.S. Customs verify origin claims.
While all AGOA countries are eligible for duty-free benefits on textiles and apparel made from U.S. or African yarns and fabric, as a Least Developed Country (LDC) Liberia also is eligible for duty-free treatment for apparel made from fabric of any origin. [Among AGOA beneficiaries, only South Africa is ineligible for third-country fabric benefits.] Although both benefits are subject to a cap, these limits are underutilized. For a copy of the Federal Register notice, please click on the globe icon above.
On January 25, 2011, Senator John Ensign (R-NV) introduced S. 105, the Save Our Industries Act of 2011 (SAVE Act). Similar to legislation introduced by Senators Kit Bond (R-MO) and Daniel Inouye (D-HI) during the previous Congress (with slightly modified product coverage), the bill would create new duty-free and reduced duty benefits for qualifying textile and apparel imports from the Philippines. The benefits would be available for ten years. The bill says they are designed as a step toward a Free Trade Agreement (FTA) between the U.S. and the Philippines.
Following is a summary of the key provisions included in S. 105:
Originating Cotton and Man-Made Fiber Apparel
The major cotton and man-made fiber apparel products (listed below) receive two types of duty preferences.
- Apparel is duty-free if assembled in the U.S. or the Philippines using U.S. formed fabric of U.S. formed yarns.
- Apparel is charged fifty percent of the column one duty rate if it is assembled in the U.S. or the Philippines using Philippine fabric made from U.S. yarns.
| Knit Tops (Categories 338, 339, 638, and 639) | Trousers (Categories 347, 348, 647, and 648) |
| Men's and Boys' Underwear (Categories 352 and 652) | Men's and Boys' Man-Made Fiber Woven Shirts (Category 640) |
| Brassieres (Categories 349 and 649) | Swimwear (Categories 359 S and 659 S) |
| Man-Made Fiber Coats (Categories 633, 634 and 635) |
Non-Originating Cotton, Man-Made Fiber, and Wool Apparel
A wide range of other apparel products would also be eligible for duty-free treatment. These include all of the HTS lines eligible for Single Transformation benefits under the U.S.-Central America Free Trade Agreement (CAFTA), as well as an expanded list of other apparel products. Eligible garments must be assembled or knit-to-shape in the Philippines. However, yarn and fabric can be of any origin. Following is the list of additional products contained in the legislation:
| Babies' Garments and Clothing Accessories (Category 239) | Women's and Girls' Coats (Categories 335,435 and 635) |
| Dresses (Categories 336 and 636) | Men's and Boys' Cotton Woven Shirts (Category 340) |
| Nightwear and Pajamas (Categories 351 and 651) | Skirts (Categories 342, 442 and 642) |
| Women's and Girls' Wool Trousers (Category 447) | Women's and Girls' Woven Tops (Categories 341 and 641) |
| Men's and Boys' Coats (Categories 433, 434, 633, 634) | Women's and Girls' Underwear (Categories 352 and 652) |
Enforcement
H.R. 3039 requires the Philippines and the U.S. to re-establish the Electronic Visa Information System (ELVIS). The purpose of the visa system is to prevent Customs fraud through the use of visas for all shipments. In addition, the Philippines must enforce the Memorandum of Understanding between the United States and the Republic of the Philippines Concerning Cooperation on Trade in textile and Apparel Goods, signed in 2006.
The legislation also contains a new provision that requires the Philippines to establish procedures with the Commerce Department Office of Textiles and Apparel (OTEXA) to track U.S. fabric shipments to the Philippines. The system would allow the U.S. to verify whether apparel claiming preferences using this program actually was made from U.S. yarns and fabrics. The legislation lists the following information to be collected, but states that OTEXA may require additional data elements:
On January 25, 2011, Senator John Ensign (R-NV) introduced S. 108, the Affordable Footwear Act of 2011. If passed, the legislation would eliminate duties on many footwear products. The bill's provisions are largely the same as legislation introduced in the 110th and 111th Congresses.
The Findings and Sense of Congress sections of S. 108 emphasize that current U.S. footwear tariffs are a regressive tax on poor families. The tariffs on inexpensive footwear were designed to protect U.S. domestic production - which has mostly moved overseas - and are among the highest tariff rates in the U.S. Harmonized Tariff Schedule (HTS). The legislation gives duty-free treatment to footwear classified in HTS numbers 6401, 6402, 6403, 6404, and 6405. The list of affected footwear includes inexpensive shoes, athletic footwear, work footwear, and children's shoes.
In addition, the bill creates new benefits for footwear imports from Haiti. S. 108 extends the U.S.-Central America Free Trade Agreement (CAFTA) footwear benefits to shoes made in Haiti.
On February 2, 2011, the Center for Strategic and International Studies (CSIS) published the web feature, Critical Questions: Status of the Free Trade Agreements with Korea, Colombia, and Panama, written by Meredith Broadbent, CSIS Senior Adviser and William M. Scholl Chair in International Business. Prior to joining CSIS, Broadbent served as the Assistant U.S. Trade Representative (USTR) for Industry, Market Access, and Telecommunications in the the Bush Administration. She also previously served on staff for the House Ways and Means Committee.
Broadbent answers five questions about the status of the U.S. Free Trade Agreements (FTAs) with Colombia, Korea, and Panama. The posting begins with concerns about the deteriorating relationship between the Congress and President Obama. When asked about the legal authority to manage U.S. trade relations, she says that one of the challenges to U.S. trade negotiations is the breakdown in cooperation between Congress and the President. She points out that the division of powers on trade puts the pending Free Trade Agreements (FTAs) - with Colombia, Korea, and Panama - in a "procedural no man's land."
Trade Promotion Authority (TPA) was designed to fix this problem. Also called fast-track, TPA limits the timeline for Congress to consider a bill, and prohibits amendments. In the past, Congress used the TPA to streamline trade negotiations - leading to greater confidence that the Administration would actually be able to ratify the deals they struck. TPA expired on July 1, 2007, but all of the pending FTAs were signed before that date and are eligible for expedited consideration. So far, Congress has been unwilling to grant TPA to President Obama (or earlier to former President George H. W. Bush) due to the increase in partisan bickering.
Although the Colombia FTA was negotiated under TPA, when
the
Bush
Administration introduced the implementing legislation to Congress in
2009, House
Democrats voted to eliminate TPA privileges for the bill.
Summarizing the status of the three FTAs, Broadbent points
out that the political
maneuvering around the Colombia FTA has important implications for the
other FTAs as well. Following is a quote:
If the fast-track rules for Colombia were “turned off” by the House in 2008, some are making the argument that they could be “turned on” again now that the body is under new leadership. If so, the question then arises, how will the Senate, where the threat of damaging amendments is arguably greater, treat such an implementing bill? On Korea, the agreement President Obama will ask the Congress to implement was not signed by the July 1, 2007, expiration of TPA, so it is unclear exactly how the supplemental changes on auto and pork tariff rates and safeguard measures will be considered by Congress or whether the implementing bill will be open to amendment. TPA protections should apply to the Korea FTA, but we won’t know for sure until the president sends the draft bill to Capitol Hill.
The good news is that the responsible parties in Congress have begun the tough thinking and debate it will take to rescue three good allies from the procedural no-man’s land where our challenging political system has placed them.
Opponents of trade liberalization are strong and can be expected to take full advantage of opportunities to block congressional approval of these agreements if the bipartisan partnership on trade between the White House and the leadership in Congress cannot be reestablished.
For a copy of Critical Questions: Status of the Free Trade Agreements with Korea, Colombia, and Panama, please click on the globe icon above.
On February 4, 2011 the U.S. Department of Treasury released the semi-annual Report to Congress on International Economic and Exchange Rate Policies. In the report Treasury does not label China a currency manipulator, based on the commitments Chinese President Hu made during his recent state visit. Treasury says China's progress in strengthening its currency is insufficient, and announces it will "continue to closely monitor the pace of appreciation of the RMB by China".
A copy of the Treasury report is available by clicking on the globe icon above.
There has been substantial response to the Administration's announcement of a reform initiative focused on consolidating trade and export agencies. Most business groups raised concerns over the necessity for such an effort. They argue that in the past similar large-scale federal reform initiatives faced challenges over merging and maintaining the interests of separate government entities. Also, they are concerned over the possible negative effects to the Office of the US Trade Representative, which negotiates with foreign governments.
An article from Inside U.S. Trade quotes a former Commerce official, who specifically cautions against this reorganization. He references the complications the Clinton Administration encountered over whether to house the Office of Textiles and Apparel in the Commerce's Import Administration, which is geared towards the needs of domestic producers, or in the Department's Market Access and Compliance Administration, which focuses on opening up foreign markets. With regard to the current proposed agency reforms by President Obama, this former Commerce official said the following:
I think it would be stirring a hornet's nest of parochial interests--people who may be substantially wrong but are trying to protect their parochial interests--combined with people who have legitimate objections.
Industry veterans also worry that this reorganization will attract criticism from Congress. Inside U.S. Tradequotes a lobbyist who remembers the 2002 removal of U.S. Customs from the Treasury Department to the Department of Homeland Security. He says that this move sparked fears in the House Ways and Means Committee and Senate Finance Committee that trade issues would be placed second to national security and border protection issues.
Also, another former Commerce Department official, shared with Inside U.S. Trade that there is concern that a organizational shift could spark a debate over the authority of the Senate Finance Committee, and Senate Banking Committee, which respectively focus on export promotion and export controls.
However, a recent Center for American Progress (CAP) report called for the creation of new Department of Business, Trade and Technology. The new department would merge the efforts of the Department of Commerce, the Export-Import Bank, and the Office of the U.S. Trade Representative (USTR). Industry sources say that if the Administration implemented this suggestion, it would remove the Office of the USTR from the Executive Office of the President. Such a move might have negative effects on the Administration ability to influence trade policy. In fact, the USTR post was created in the 1970s to eliminate inefficiencies in affecting trade policy due to Cabinet level disagreements.
On the other side of the debate, Ken Hughes, an economics expert at the Woodrow Wilson Center, has come out in support of the President's reorganization program. He says that consolidating agencies will not hinder professional expertise on all aspects of trade and export policy. Instead, this initiative will create one federal entity with a wider range of expertise, and an improved understanding of trade policy.
On January 31, 2011, the World Trade Organization (WTO) reported widespread support for Afghanistan to join the WTO. At the first Working Party meeting, Ambassador Boudewijn J. Van Eenennaam, chair of the meeting, said trade cooperation and integration are key vehicles for Afghanistan to improve the welfare of its people. He added that the WTO accession negotiations will take into account the challenges Afghanistan faces in recovering from decades of conflict, and will address the country's development needs.
Afghanistan Finance Minister Dr. Anwar-ul-Haq-Ahady communicated his country's commitment to reforming its economy to become eligible for WTO accession. He stressed that Afghanistan will work hard to produce an accession agreement which is sensitive to the concerns of Afghanistan's infant industry and least-developed country status. He added that WTO membership will provide the tools to build an effective trade and investment infrastructure to help bring the country out of poverty.
WTO members endorse Afghanistan's entry into the multilateral trading system, and agree that Afghanistan would benefit from full membership.
The next step in the WTO accession process is that the WTO Secretariat will compile a Factual Summary of information from Afghanistan regarding current trade policies.
On February 3, 2011, Senators Harry Reid (D-NV) and Sherrod Brown (D-OH) sent a letter to House Speaker John Boehner (R-OH), Minority Leader Nancy Pelosi (D-CA), Ways and Means Committee Chairman Dave Camp (R-MI), and Ways and Means Committee Ranking Member Sander Levin (D-MI) urging the House to introduce and pass a long-term extension to the Trade Adjustment Assistance (TAA) program. The TAA program expires next week on February 12.
Senators Reid and Brown, joined by twelve other Senators who co-signed the letter, are calling for the House to take quick action. All trade legislation must originate in the House so the Senators are pressing for an immediate response. On December 15, 2010, the House passed, H.R. 6517, an eighteen month extension for TAA. Ultimately, the extension was reduced to six-weeks when it passed the Senate.
TAA programs provide educational and skill building assistance to workers laid off as a result of international trade. In the letter the Senators quantify the benefits of the TAA program, including critical reforms put in place in 2009. They write:
All told, reforms to TAA in 2009 help hundreds of workers, in every state. Over 360,000 Americans have been certified for TAA assistance over the past two years, and over 40 percent of them were certified because of the improvements to TAA that were enacted in 2009. The 2009 improvements also help ensure TAA program accountability and results by requiring data on performance and worker outcomes, enabling Congress to identify where improvements are needed. It is critical we preserve all these improvements.
Senator Brown made the following statement regarding the need for a long-term TAA extension:
In the last several years, hundreds of thousands of Americans, including Ohioans, have benefited from Trade Adjustment Assistance. It is truly a lifeline for trade-affected workers, helping these individuals get back on their feet and get the skills they need to land new, good-paying jobs. It's irresponsible to pass trade agreements that close factories and send jobs overseas, and then turn our backs on the workers and communities these agreements affect. We cannot allow TAA to expire next week, which is why I am urging the House to pass a long-term extension as soon as possible.
A copy of the letter and press release are available by clicking on the globe icon.
On February 2, 2011, United States Trade Representative (USTR)Ron Kirk and Commerce Secretary Gary Locke met with the Technology CEO Council (TCC). The meeting focused on ways to enhance U.S. competitiveness and innovation, and to create U.S. jobs. Companies participating in the meeting included IBM, Micron Technology, Xerox, Applied Materials and Dell. Kirk emphasized the new markets that will be open to these companie through the Free Trade Agreement with Korea. More generally, Kirk stressed USTR's ongoing efforts to boost U.S. innovation and global competitiveness.
On February 3, 2011, the U.S. Business Coalition for TPP sent a letter to Gene Sperling Director of the National Economic Council and Assistant to the President for Economic Policy urging the United States to demand a high-level Trans-Pacific Partnership (TPP) agreement to produce the most meaningful and long lasting outcome. The U.S. Business Coalition for TPP is comprised of companies and business groups in manufacturing, agriculture, and the service industry. The Coalition calls upon the U.S. to demand a "high-standard outcome, with strong and binding enforcement mechanisms". The letter argues that this effort will garner respect from the existing countries participating in TPP negotiations, as well as, provide momentum to expand the partnership to other Asian economies. It also shares the Administration's goal to complete the TPP negotiations by November 2011.
Christopher Padilla, Co-Chair of the TPP Coalition and Vice-President of Governmental Programs with IBM, made the following comment on the need for American leadership in this endeavor:
Achieving a strong TPP by November 2011 that eliminates barriers and opens markets can be achieved with strong U.S. leadership. The TPP Coalition looks forward to continue working with the Administration to achieve this important result.
The letter outlines the following six key areas for the U.S. to highlight during the TPP negotiations:
Also, the letter references the detailed reporting service the Coalition provides to the U.S. TPP negotiators. In September 2010, it published the Coalition's Trans-Pacific Partnership (TPP) Agreement Principles.
The letter was signed by over 100 associations, including the Unites States Association of Importers of Textile and Apparel, Footwear Distributors & Retailers of America, J.C. Penney Corporation, Inc., Levi Strauss & Co., Pacific Sunwear of California, Inc., Target Corporation, AnnTaylor Stores Corporation, Wal-Mart Stores, Inc.
A copy of the Coalition letter, press release, and TPP Agreement Principles paper is available by clicking on the globe icon above.
On February 2, 2011, World Trade Organization's (WTO's) Director-General and Trade Negotiations Committee (TNC) Chairperson Pascal Lamy addressed WTO ambassadors at an informal TNC meeting. Lamy calls for WTO members to participate in both bilateral and small discussion groups to try to work out the key differences holding up the negotiations.
He outlined the progress that has been made towards concluding to the Round. Lamy highlighted the progress that Non-Agriculture Market Access negotiations (NAMA) have made in moving to the text phase of negotiations by working in small groups.Lamy advised that the discussions on tariffs are not as successful as NAMA talks and they must pick up in order to meet the July goal.
In the conclusion to his speech, Lamy spelled out his vision for the Doha negotiations:
We urgently need to build on the good atmospherics to accelerate negotiations at all levels if we are to record substantial progress across the board by the summer break. Bilateral and plurilateral contacts, which I already said are lagging behind, need to get into substance now. This was the message from our political masters and I am confident that the Geneva process can respond not only in style, but more importantly in substance. For my part, I will continue my regular coordination meetings with the Negotiating Chairs, including ensuring that the schedule of meetings takes into account the constraints of smaller delegations and of course my own personal consultations. Acceleration, texts, convergence is now the name of the game.
A copy of the speech is available by clicking on the globe icon above.
On January 31, 2011, the World Trade Organization released a report about the Council for Trade in Goods (CTG) meeting that day. The headline reports that European Union (EU) officials are still working on getting support for a waiver for special trade preferences to Pakistan. The E.U. has requested the waiver to help Pakistan recover from the devastating floods in 2010. The E.U will report the outcome of these talks at the next CTG meeting in March.
On February 3, 2011, House Ways and Means Chairman Dave Camp (R-MI) announced a House Ways and Means Committee hearing to discuss the Administration's trade policy agenda. The United States Trade Representative Ron Kirk will be the only witness to testify at the hearing. The hearing is scheduled for Wednesday, February 9th at 10 am.
Camp says the Committee is interested in setting a timetable for the three pending Free Trade Agreements (FTAs) with Korea, Colombia and Panama. In addition, the Committee plans to discuss the outstanding issues surrounding the automotive provisions in the Korea FTA. In his announcement Camp said the hearing will address the following five issues concerning U.S. trade policy:
Camp made the following statement regarding the Committee's trade hearing:
In these challenging economic times for Americans, opening new markets to U.S. exports provides a proven way to fuel economic growth, create well-paying jobs here at home, enhance consumer choice, and raise our standard of living. An important first step is to consider three pending trade agreements in the next six months. In this increasingly globalized economy, we must work together to maximize American competitiveness and prevent us from falling behind. I look forward to hearing Ambassador Kirk in his first appearance before the Committee as he lays out the President's trade priorities.
A copy of the press release is available by clicking on the globe icon.
In a Federal Register notice, published on February 4, the Department of Commerce requests public comments on the Strategy for American Innovation. The America COMPETES Reauthorization Act of 2010 mandates the Department to study U.S. innovative capacity and competitiveness. The Department is working with the National Economic Council to produce this study for Congress. The goal of the Department's request for comments is to learn new ways the Administration can develop the Strategy initiatives. The Strategy for American Innovation, launched in 2009, has three main initiatives:
In the notice, Commerce provides the following list of suggested area of investigation from which to start the public diologue:
The deadline for public comments is April 1, 2011. The Department of Commerce says it will host a series of events where the public can share comments and provide information on the Strategy. A copy of the Federal Register notice is available by clicking on the globe icon.
On January 28th, Senators from Ohio, Arkansas and New Hampshire sent a letter to Commerce Secretary Gary Locke on behalf of the U.S. candle industry. The letter says a proposal by the Department of Commerce to limit the scope of an Antidumping Duty Order on candles from China would hurt the U.S. candle industry. Senators John Boozman (R-AR), Sherrod Brown (D-OH), Rob Portman (R-OH), Mark Pryor (D-AR), and Jeanne Shaheen (D-NH) signed the letter urging the Department to not modify the existing anti-dumping duty order.
In a press release, Portman, a former United States Trade Representative, emphasized his trade background:
Increased exports mean increased jobs for Ohio, but we need to make sure Ohio companies and Ohio workers are treated fairly. That's why, as U.S. Trade Representative, I was the first to successfully take China to court, and why we're coming together in this letter to highlight the potential unfair trade practices that could harm Ohio's candle industry and the jobs that depend on it.
Senator Pryor, said:
We cannot allow China and other countries to use unfair practices to price Arkansas candle companies out of the market and force them to close their doors or cut jobs. I hope Secretary Locke will heed our concerns to ensure that Arkansas businesses are able to compete on a fair playing field.
Copies of these press releases and the letter are available by clicking on the globe icon.
On January 29, 2011, trade ministers from 24 countries, and the World Trade Organization (WTO) Director General Pascal Lamy met to discuss the Doha Development Agenda (DDA) at the World Economic Forum at Davos. At the invitation from the Swiss Federal Councillor, Johann N. Schneider-Ammann, the ministers discussed plans to forge a collaborative effort to conclude the Doha Round. They collectively agreed that in order to conclude the Round in 2011, it is necessary for all negotiating groups to provide negotiating text in April, and an overall agreement in July.
The meeting host, Schneider-Ammann, outlined the following three key elements to achieving a conclusion to the trade negotiations:
Schneider-Ammann added that Members must think about what they can bring to the negotiating table and can feasibly promise, not only what they stand to gain from the Doha round discussions.
The day before, on January 28, 2011, trade ministers from the United States, Australia, China, Brazil, India, Japan, and South Africa were invited by E.U. Trade Commissioner, Karel De Gucht, to meet informally to discuss the DDA. The meeting highlighted the continuing gap between developed and developing countries. Officials from Brazil, China, India, and South Africa said the development issues on the DDA need to be expanded. The U.S. Trade Representative (USTR) Ambassador Ron Kirk, stressed the U.S. commitment to addressing the difficult issues, and calls upon developing countries to open their markets further. The following is a statement from a USTR blog post on the meeting:
In bilateral and multilateral meetings, Ambassador Kirk stressed the need for key emerging economies such as Brazil, China, and India to agree to open their markets further, so that the outcome of the talks will make a real difference for developing and developed countries alike. The United States remains committed to a successful, ambitious conclusion of the round, but Ambassador Kirk cautioned that if the talks are to be completed in 2011, real give-and-take negotiations must begin immediately. He said that the United States will engage on difficult issues, but that it is essential for all partners to do the same.
Finally, De Gucht also announced the publication of a report on the DDA by Professor Jagdish Bhagwati, Columbia University and Chairman Goldman Sachs International, Peter Sutherland. The report, Facts and Figures on the Doha Development Agenda, examines the DDA's positive effects on the world economy, as well as, the costs of not completing the Doha Round. De Gucht said the following regarding the release of the report:
I welcome the international export report on the need to conclude the Doha round-just ahead of the EU's and its trade partners' gathering in Davos to look at giving the negotiations a real kick-start. Today's report is a timely reminder of the huge economic benefits that striking a deal will bring to all corners of the globe as well as the importance of reinforcing the role of the WTO in global trade governance. At the same time, it sends a healthy warning of the risks associated with failure.
Copies of the statements are available by clicking on the globe icons above.
In a Federal Register notice dated February 2, 2011, the U.S. Consumer Product Safety Commission (CPSC) announces it is extending the Stay of Enforcement on the testing and certification requirements for the total lead content in children's products. [This extension does not cover the metal components of children's metal jewelry.] The Commission extends the stay until December 31, 2011. The longer extension will help prevent disruptions for the 2011 holiday sales. This is an improvement over the CPSC staff recommendation, which only suggested an extension until September 14, 2011.
Copies of the Federal Register notice and CPSC announcement are available by clicking on the globe icons above.
On January 27, 2011, House Ways and Means Committee Chairman Dave Camp (R-MI) sent a letter to Deanna Tanner Okun, Chairman of the U.S. International Trade Commission (ITC). Camp requested an updated assessment of the impact of the automotive provisions in the the U.S.-Korea Free Trade Agreement (FTA) on the U.S. passenger vehicle industry.
On January 27, 2011, the Senate passed a binding resolution to require public disclosure when a Senator places a hold on legislation or nominations. The legislation, S. Res. 28, passed the Senate by a vote of 92-4. The resolution stipulates that an objection must be noted in The Congressional Record within two legislative days of being raised. The resolution was first introduced by Senators Ron Wyden (D-OR) and Chuck Grassley (R-IA) over a decade ago. Last year, Senator Claire McCaskill (D-MO) wrote a letter in support of legislation to end secret holds, which was signed by sixty-eight fellow Senators.
The resolution requires that a notice of hold be made as soon as a Senator raises a hold. The Senate rules previously stipulated that the disclosure of a hold was only required once a bill has been brought to the floor. Also, S. Res 28 prohibits Senators from passing their hold onto another Senator, in an effort to evade publicly disclosing their legislative hold.
In a press release Senator Wyden shared the following comments on the Senate's approval:
Passage of this legislation is a victory for accountability. It will establish transparency with the significant power each senator holds to stop legislation and nominations. That's an important right of senators, but it ought to be exercised in the light of day. Disclosure will be good for the legislative process and this reform will be meaningful in helping to make the public's business public.
Copies of the press release and resolution are available by clicking on the globe icon above.
On January 28, 2011, Secretary of Homeland Security, Janet Napolitano was in London to meet with British and international partners to discuss global supply chain security. She took this opportunity to talk about the World Customs Organization (WCO) initiatives that were announced in January. Napolitano met with Efthimios Mitropoulos, Secretary General of the International Maritime Organization (IMO), the United Nations organization to ensure safety and security in global shipping. During the discussion Napolitano highlighted the U.S. plans to encourage cooperation between global organizations like the IMO, the International Civil Aviation Organization (ICAO), and the WCO.
Secretary Napolitano said the following regarding U.S. efforts to strengthen global supply chain security:
Securing the global supply chain is part and parcel of securing both the lives of people around the world, and the stability of the global economy. The United States is committed to working closely with the United Kingdom and all of our global partners to prevent attacks or disruptions of this powerful engine of jobs and prosperity.
Napolitano also met with the United Kingdom Home Secretary, Theresa May, and the U.K. Secretary of State for Transport, Philip Hammond, to talk about cyber network and infrastructure security, as well as overall global supply chain security.
In early January, the Department of Homeland Security (DHS) announced a partnership with the World Customs Organization (WCO) to strengthen the global supply chain. This DHS-WCO initiative engages other nations, international organizations and the privates sector. It focuses on the following three areas to secure the global supply chain:
A copy of the DHS press release is available by clicking on the globe icon above.
On January 30, 2011, the White House announced that the government reform program which President Obama unveiled in the State of the Union Address, will focus on streamlining agencies that work on U.S. trade and export issues. In his speech President Obama announced this initiative to "merge, consolidate, and reorganize the federal government" in order to boost U.S. competitiveness. The White House reports that currently there are a dozen agencies that work on trade and export issues, making them an inefficient allocation of government resources. White House Chief of Staff, William Daley, made the following comment in a recent White House blog post:
We have a number of agencies right now that deal with exports and trade, and I think we're going to take a first look at those agencies. There's enormous duplication. So I think you're going to see a very concerted effort by the president. No doubt about it, it's a major task and we want to work with Congress to make sure that we get this right, whatever changes we propose.
This reorganization effort is led by Jeffrey Zients, who was appointed by the President to be the first Chief Performance Officer (CPO) and Deputy Director of the Office of Management and Budget. Zients has been in this post for two years, leading the Accountable Government Initiative (AGI), working to make government more accessible and efficient. In December, Zients publicly endorsed a Center for American Progress report, that called for the creation of new Department of Business, Trade and Technology. The new department would merge the efforts of the Department of Commerce, the Export-Import Bank, and the Office of the U.S. Trade Representative.
A copy of the White House blog post is available by clicking on the globe icon.
On January 31, 2011, U.S. Customs and Border Protection (CBP) released the Import Trade Trends Report: Fiscal Year 2010 Year-End Report. This report, the first in a series of annual reports, emphasizes the importance of CBP partnership programs, especially those with importers. Daniel Baldwin, the Assistant Commissioner, CBP, said the following regarding the year's successes and CBP partnership initiatives:
Fiscal Year 2010 was a welcome relief for most U.S. importers. After the economy's tumultuous previous two years, traditional trade patterns resumed this year and the volume of imports entering the United States increased substantially. Preliminary indications show that importing trends are back on track, which means that CBP's partnerships with the trade community have never been more critical.
Consequently, this issue of Import Trade Trends focuses on importers and CBP's partnership programs. Our partnership programs allow CBP to use the agency's limited resources most efficiently. By building cooperative relationships with importers for security and compliance purposes, CBP is able to focus on non-partnered accounts, which we believe pose a higher risk for the nation.
First, the report highlights that the Customs-Trade Partnership Against Terrorism (C-TPAT) program and the Importer Self-Assessment (ISA) program, two initiatives launched after September 11th, are Customs's most successful programs. In 2010, C-TPAT participation has grown to more than 10,000 members, and is the first and largest anti-terrorism partnership program worldwide. CBP emphasizes that the ISA program is tailored to fit the needs of an importer, whether it be a large company or a small business.
Second, the report notes that these partnerships are part of CBP's effort to provide industry-specific outreach and support. CBP aims to manage by account and to shift the focus of trade processing from individual shipments to internal compliance controls. CBP's Commercial Operations Advisory Committee (COAC)advises the department to apply an account management business model. According to the report, this practice "is viewed as an important step to provide real-world improvement in trade compliance, security, intellectual property rights, import safety and information technology support."
Considering COAC's recommendations, as well as support from the entire trade community, CBP outlines the following account management goals:
Third, the report notes two pilot programs were launched in response to suggestions from the trade community, the ISA-Product Safety pilot program, and the Center of Excellence and Expertise, and Account Executive pilot program. The ISA-Product Safety program collaborates with the U.S. Consumer Product Safety Commission to ensure import product safety. The Center of Excellence and Expertise, and Account Executive pilot program fosters a partnership between the trade and business community, with an initial focus on the pharmaceutical sector.
Overall, the report finds that during fiscal year 2010, the volume of U.S. imports is on the rise. In 2010 there was a 13 percent rise in the volume of imports. While not as high as the total for 2008, this level exceeds the annual average increase seen during fiscal years 2004-2008. In addition, trade compliance is on the rise. Based on a random sampling, CBP notes that 98.9 percent of fiscal year 2010 imports were materially compliant with all U.S. trade laws and regulations. Since fiscal year 2007, overall compliance has been increasing.
During fiscal year 2010, China was the leading country of origin of imports to the United States. Canada ranks second, trailing China by about $80 billion. China is expected to maintain the top spot in fiscal year 2011.
A copy of the CBP report is available by clicking on the globe icon.
In a Federal Register notice, published on February 2nd, the U.S. International Trade Commission (ITC) announces the schedule for a public hearing as part of the second annual Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic. The meeting is scheduled for March 22, and will be held at the ITC.
The ITC will evaluate the effectiveness of Earned Import Allowance (EIA) program and make recommendations. The Dominican Republic-Central America Free Trade Agreement (CAFTA) Act requires annual reviews of this program. The EIA program provides a special credit to companies in the Dominican Republic who purchase a certain quantity of U.S. fabric to manufacture cotton bottoms. These producers in turn can ship certain eligible apparel, using third country fabrics, to the U.S. duty-free.
In the first report, the ITC found that the program is not only beneficial for the economy of the Dominican Republic, but also for U.S. firms -- especially U.S. companies that dye and finish unfinished fabric from third countries.
The Federal Register notice, with detailed information on how to submit requests to appear and documents for the hearing, is available by clicking on the globe icon above.
On January 26, 2011, Representative Frank Wolf (R-VA) introduced legislation intended to rehabilitate the U.S. manufacturing sector. The legislation, Bring Jobs Back to America Act, is a bipartisan initiative to attract manufacturing and call center jobs back to America. The Act will reallocate federal funding to support the manufacturing industry, investigate possible tax breaks for companies that bring jobs back to the U.S., and make the patent process for American research universities more efficient. The bill has seven co-sponsors, including Representative Dan Lipinski (D-IL), who was the leading Democrat to support this bill in the last Congress. In a statement announcing the new bill, Wolf said:
With this legislation we can begin the re-birth of our crumbling manufacturing sector. It's time for state to begin competing for job with the rest of the world, not with each other.
Lipinski also commented on the Act, he said:
This bill represents the kind of bipartisan approach we need to create good-paying jobs. Neither out manufacturing sector nor our middle class can afford another decade of job losses like the one that just ended. The time for coordinated, farsighted action is now.
The Act includes the following six initiatives which Wolf outlines in a press release:
- Requires the secretary of Commerce to create a National Manufacturing and Repatriation Strategy and report back to Congress within 90 days;
- Creates Repatriation Task Forces with representatives from the Commerce Department and private sector to support efforts of state and local economic development agencies to attract foreign jobs;
- Re-institutes President Reagan’s, "Project Socrates," to study international manufacturing trends and offer solutions for how America can compete against countries such as China, Japan, and India;
- Mandates a study of a major new tax incentive to lower the barriers to entry for companies looking to return jobs to the U.S. market;
- Prioritizes patent applications from American universities to ensure that cutting-edge new technologies are rapidly transferred for U.S. firms create jobs; and
- Provides intellectual property protections to prevent other countries from stealing U.S. technology, based on recommendations from the U.S. - China Economic and Security Commission
A copy of the press release is available by clicking on the globe icon above.
On January 28, 2011, Senator Mike Johanns (R-NE) introduced Senate Resolution 20, Expressing the Sense of Senate that the United States Should Immediately Approve the United States-Korea Free Trade Agreement, the United States-Colombia Trade Promotion Agreement, and the United States-Panama Trade Promotion Agreement. Along with thirteen co-sponsors, Johanns calls for immediate approval and implementation of the pending Free Trade Agreements. Announcing the resolution, Johanns said:
With our country's unemployment rate still unacceptably high and our trade competitors rapidly leveling the playing field for their workers, it is imperative that President Obama send the trade agreements with South Korea, Colombia and Panama to the Senate for approval. Because of the Administration's inaction, tens of thousands of jobs and billions of dollars in exports are on hold while the agreements collect dust on the shelf.
Co-sponsor Senator Mike Enzi (R-WY) said the resolution will open the global market for Wyoming beef. He issued the following statement:
Getting American products and services out into foreign markets is a great step to help stimulate the economy and create jobs. We need to help our business, farmers, and ranchers, to compete and conduct business globally.
The resolution, which is non-binding, notes it is the sense of the Senate that the FTAs will create U.S. jobs, increase exports, and develop cross-border business relationships between the U.S. and Korea, Colombia and Panama. Copies of the press releases and resolution are available by clicking on the globe icons above.