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USTR: China Must “Allow Market Forces to Operate”

USTR: China Must “Allow Market Forces to Operate”

Washington, D.C. – If China is going to deal successfully with its economic challenges at home, “it must allow market forces to operate, which requires altering the role of the state in planning the economy,” according to the latest Report to Congress on China’s WTO Compliance compiled by the Office of the U.S. Trade Representative (USTR).

The country, the report added, likewise “must reform state-owned enterprises, eliminate preferences for domestic national champions and remove market access barriers currently confronting foreign goods and services.”

The report cited a “dramatic expansion in trade and investment” among China and its many trading partners since the country acceded to the WTO in December 2001.

U.S. exports of goods to China totaled $122 billion in 2013, representing an increase of 535 percent since 2001 and positioning China as the U.S.’ largest goods export market outside of North America, while U.S. services exports reached $38 billion in 2013, representing an increase of 603 percent since 2001.

Services supplied through majority U.S.-invested companies in China also have been increasing dramatically, totaling an additional $39 billion in 2012, the latest year for which data is available.

“Despite these results, however, the overall picture currently presented by China’s WTO membership remains complex, largely due to the Chinese government’s interventionist policies and practices and the large role of state-owned enterprises and other national champions in China’s economy,” the report said.

In 2014, as in past years, when trade frictions have arisen, the U.S. “pursued dialogue with China to resolve them,” it said.

But, when dialogue with China “has not led to the resolution of key trade issues, the United States has not hesitated to invoke the WTO’s dispute settlement mechanism.”

Since China’s accession to the WTO, the U.S. has brought 15 WTO cases against China, more than twice as many WTO cases as any other WTO member has brought against China, according to data supplied by the Geneva-headquartered global trade group.

In doing so, “the United States has placed a strong emphasis on the need for China to adhere to WTO rules, holding China fully accountable as a mature participant in, and a major beneficiary of, the WTO’s global trading system,” the USTR report said.

“The United States views economic reform in China as a win-win for the United States and China,” the report concludes “not only because the Chinese government’s interventionist policies and practices and the large role of state-owned enterprises in China’s economy are principal drivers of trade frictions, but also because a sustainable Chinese economy will lead to increased U.S. exports and a more balanced U.S.-China trade and investment relationship will help drive global economic growth.”

12/31/2014

Senators Urge FTA Investment Protections Purged

Washington, D.C. – Five Democratic members of the House Ways and Means Committee have written to the White House urging President Barack Obama to exclude foreign investment protections from major free trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP).

The five argue that such protections “might undermine buffers against future financial crises” and damage public support for future free trade deals.

The House Ways & means Committee has Congressional jurisdiction over trade issues.

Foreign investment protection is hot-button topic in the TTIP trade deal, prompting the European Union to call a halt to talks on the investment-related components of the proposed pact while the bloc’s 28 members consult “more widely.”

The letter follows a similar letter sent last week by three U.S. senators to U.S. Trade Representative (USTR) Michael Froman asking him not to include investment protection rules in the proposed 12-nation Trans-Pacific Partnership (TPP).

“The consequence would be to strip our regulators of the tools they need to prevent the next crisis,” said the letter, which also cautioned against rules “limiting the use of capital controls or allowing open access for risky financial products.”

Among the letter’s signatories was 2016 presidential hopeful Senator Elizabeth Warren (D-MA), who said such rules would expose “critical” U.S. financial regulations to challenge and dissuade policymakers from writing rules that impact foreign banks.

In response, a spokesman for the USTR said the TPP “would in no way limit the ability of governments to put in place strong consumer protections or to regulate financial markets” and would include “specific provisions protecting regulation.”

12/29/2014

White House ‘Optimistic’ on Pacific Trade Deal

Los Angeles, CA – The White House is optimistic on the chances that negotiators can forge a strong, comprehensive Trans-Pacific Partnership (TPP) deal that would impact 11 countries and encompass nearly 40 percent of the world economy.

“I’m much more optimistic about us being able to close out an agreement with our TPP partners than I was last year,” said President Barack Obama at a recent meeting of the President’s Export Council.

Confident that the administration could make a “strong case” in Congress for a TPP, Obama added, “It doesn’t mean it’s a done deal, but I think the odds of us being able to get a strong agreement are significantly higher than 50-50.”

According to the Office of the U.S. Trade Representative, the White House has held more than 1,500 meetings with members of Congress on TPP, including sharing negotiating text, and would continue to consult closely.

U.S. Representative Sander Levin of Michigan, the senior Democrat on the House of Representatives Ways and Means Committee, which has jurisdiction over trade, has said there was still a long list of “major issues” impacting the final make-up of the proposed trade pact.

Levin is calling for Congress to have more input into the deal, asserting that workers’ rights, access to medicines in developing countries and the phase-out period for U.S. tariffs on Japanese cars top the list of of major issues still to be resolved.

With the ongoing talks wrapping-up this week in Washington, D.C., negotiators may meet again next month in either the U.S. or Australia.

The 11 countries included in the TPP are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the U.S.

12/16/2014

Kuwait Under Scrutiny for IP Rights Violations

Washington, DC – The U.S. moved Kuwait a notch higher on its Watch List of countries to monitor for potential breaches of U.S. patents, copyrights and other intellectual property (IP) rights.

U.S. Trade Representative Michael Froman said Kuwait had failed to introduce a copyright law in line with international standards and to properly protect copyright and trademarks.

According to the USTR, the status of copyright legislation in that country “hampers the market environment for intellectual-property-intensive industries.”

Kuwait’s “lack of sustained enforcement action” against trademark infringement is another reason for the priority-watch designation, he said.

The U.S., Froman added,  is “encouraged” by reported recent progress on enforcement against copyright infringement, by the country’s recent accessions to several intellectual-property-related treaties and seeks to “engage Kuwaiti authorities on these issues in the contest of the long-standing cooperation” between the two countries, according to the statement.

“The U.S. remains concerned about the lack of sustained enforcement action against trademark infringement and the lack of progress in passage of updates to Kuwait’s copyright legislation, which hamper the overall market environment for intellectual property-intensive industries,” he said.

Kuwait will join 10 countries, including India and China, on the “Priority Watch List,” one rung higher than its current status.

More often than not, say observers, a place on the list signals a higher level of scrutiny and diplomatic pressure to bring policies into line.

11/14/2014

 

Transpac Trade Deal Forecasted By Years End

Los Angeles, CA – Momentum is reportedly building toward the successful drafting of  Trans-Pacific Partnership (TPP) trade agreement by the end of the year.

Talks between representative of the 12 nations involved have resumed in Sydney, Australia, with Australian Trade Minister Andrew Robb, host of the current round of talks, telling the media that reports from attending trade ministers convey that “there does seem to be a real head of steam.”

All signs, he said, point to a trade agreement being forged “by the end of the year.”

 

If agreed upon, a TPP, which has been negotiated for several years, would encompass 40 percent of the global economy and hundreds of billions of dollars in goods and services trade.

According to US Trade Representative Mike Froman, trade ministers had been in “almost constant” talks since the last TPP meeting in Singapore in May.

“We are enjoying a great deal of momentum and focus across the board, and it’s up to us to seize that momentum and make sure that this meeting is maximally productive,” he said.

Over the past year, talks slowed while the Washington and Tokyo ironed out several key ‘sticking points’ including Japanese tariffs on agricultural imports and access to Japan’s auto market for US-made vehicles.

“The issues left at the end are often times the most challenging but now is the time to start working through those and finding solutions,” Froman said, adding the TPP “is within our grasp.”

The 12 prospective TPP members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the US.

10/27/2014

‘Significant Progress’ Seen in Recent TPP Talks

Washington, DC – The recent negotiations between the 12 Pacific Rim nations crafting the Trans-Pacific Partnership (TPP) trade agreement “made significant progress” on proposed rules for state-owned enterprises despite differences over tariffs remaining one of the obstacles to a final deal.

Spanning ten days in Hanoi, the talks “spent successive rounds trying to narrow the gaps,” said US delegation leader, Barbara Weisel, US Trade Representative for Southeast Asia and the Pacific.

The TPP would create a free-trade zone from Australia to Peru with $28 trillion in economic output, or 39 percent of the global total. The deal is seen as a major component of the White House’s effort to bolster boost US exports.

The pact, would be the biggest trade deal in US history. The TPP “goes beyond typical trade agreements that focus on reducing tariffs, and highlights issues such as stricter safeguards for patents and copyrights and leveling the playing field for companies that compete with government-backed businesses,” said Weisel.

Responding to the status of the TPP talks, US Chamber of Commerce Executive Vice President and Head of International Affairs Myron Brilliant said, “Now is the time to seize upon the extensive economic benefits that the TPP offers every participating country.”

All parties to the negotiations, he said following a recent USCOC event, “must show the political courage required to make the hard decisions needed to conclude the TPP negotiations soon, as this will not get any easier with time.”

Commenting on what he called the “importance of crafting a high-standard, comprehensive trade agreement,” Brilliant said, “If Japan, the United States, or any negotiating partner cannot meet the high standards of the TPP on market access or rules, then the overall ambition of the agreement will be lowered to the detriment of every nation’s interests. We should all guard against that outcome.”

The proposed TPP’s geopolitical importance, he concluded, “is unmistakable. While we must not subordinate commercial priorities to foreign policy goals, the TPP’s geostrategic importance should strengthen our resolve to achieve an ambitious, comprehensive agreement.”

The countries covered by the trade pact are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the US.

China, which has been excluded from the TPP, is separately moving on trade talks with countries such as South Korea, Japan and Australia.

09/30/2014

 

Denim Jeans Makers Hit with ‘Section 337’ Investigation

Washington, DC – Seventeen of the apparel world’s largest denim jeans manufacturers are being targeted with a ‘Section 337′ investigation on charges of patent infringement by the US International Trade Commission (ITC).

The investigation stems from a complaint filed by RevoLaze Inc., a laser technology firm headquartered in Westlake, Ohio, charging that the manufacturers violated US patent law by illegally utilizing the company’s proprietary laser scribing technology.

“From the beginning we were confident that there was overwhelming evidence to support the investigation. We’re pleased with the ITC’s decision to move forward,” said a spokesman for the law firm representing RevoLaze.

The denim jean companies named include ‘big name’ manufacturers in the US, Canada, Sweden, and Italy such as Levi Strauss & Co.; Abercrombie & Fitch; American Eagle Outfitters; H&M Hennes & Mauritz AB; Roberto Cavalli S.p.Ali.; Buffalo International; The Gap Inc.; Guess? Inc.; Fashion Box S.p.A.; and Eddie Bauer LLC.

The next step calls for the ITC’s Chief Administrative Law Judge will assign the case to one of the agency’s administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will then make an initial determination as to whether there is a violation of section 337 with that initial determination subject to review by the Commission.

The ITC “will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation.”

Remedial orders in Section 337 cases “are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the US Trade Representative within that 60-day period,” the UITC said.

09/26/2014

Changes Planned for Harmonized Tariff Codes

Washington, DC – International customs officials at the World Customs Organization (WCO) have agreed on 234 changes to the global system that categorizes products that are imported and exported around the world.

In the US, those mandated changes will be implemented by the International Trade Commission – the federal government agency responsible for maintaining and updating the Harmonized Tariff Schedule (HTS) product category system utilized by US-based companies involved in global trade.

As a result of the move by the WCO, the agency has said it will make the appropriate recommendations to the White House on the necessary modifications to the HTS.

The US and other countries have until January 1, 2017, to incorporate the changes, “but much work lies ahead,” according to Jim Holbein, director of the ITC office that maintains the HTS.

“The first step for importers and exporters is to become aware of the changes being made at the international level,” he said. “If they believe they will be affected, they will want to stay on top of the process as it moves forward.”

‘Nomenclature analysts’ at the ITC “are analyzing the WCO document” with the ITC expecting to issue proposed recommendations on changes to the HTS by the end of this year, he added.

“At that time, the USITC will seek public comments on the proposed recommendations,” he said. “Detailed information on how to submit comments and related deadlines will be provided at that time.”

The USITC, said Holbein, will consider all public comments, as well as comments from other US government agencies in making its recommendations, which will be submitted to the White House via the Office of the US Trade Representative by July 2015.

Following expiration of a 60-day layover period before Congress, the president has the authority to forward the modifications to the HTS for action. .

The Brussels, Belgium-headquartered World Customs Organization (WCO) was established in 1952 as the Customs Co-operation Council (CCC).

An independent inter-governmental body, it represents 179 Customs administrations across the globe that collectively process approximately 98 percent of world trade.

09/12/2014

US Sugar Groups Oppose Mexico Trade Deal

Los Angeles, CA – Several national industry groups representing candy makers, soda companies, and other food manufacturers are urging Washington to reject pressure to negotiate a trade deal with Mexico to end a months-long dispute over allegations of cheap sweetener imports from south of the border.

In a recent letter to several top US trade officials, several national business groups including the Coalition for Sugar Reform, the American Beverage Association, and the Grocery Manufacturers Association said any move to restrict imports “could incite retaliation from Mexico on other products, undermine free trade across the continent under the North American Free Trade Act, and threaten over $220 billion in US exports to Mexico.”

Such a move by Washington, the letter said, would “jeopardize this robust trading relationship [with Mexico] by providing US sugar producers with even more insulation from market forces.”

The joint letter, addressed to US Agriculture Secretary Thomas Vilsack, Commerce Secretary Penny Pritzker and US Trade Representative Michael Froman, cited “troubling rumors” that pressure is being applied on the government to hammer out a deal that would include trade barriers.

The communication is seen as the latest indication of escalating tensions in the US sugar industry between sugar producers that favor restricting imports or implementing dumping duties and end-users who oppose any change to NAFTA that allows Mexico to import sugar duty-free in the otherwise protected American market.

US sugar producers filed a complaint with the International Trade Commission earlier this year charging Mexico with dumping sugar on the US market. Two months later, Vilsack said he would “encourage a negotiated agreement” that “could set a ceiling on Mexican sugar imports, which are currently unrestricted.”

The letter also said an agreement could threaten the completion of negotiations of the Trans-Pacific Partnership, the ambitious Pacific trade pact.

07/28/2014

Talks Begin on New Environmental Trade Pact

Washington, DC – The US and 13 other WTO member nations have launched negotiations on the proposed Environmental Goods Agreement (EGA) in Geneva, Switzerland. 

The EGA aims to eliminate tariffs on environmental technologies that can be as high as 35 percent and, says US Trade Representative Michael Froman, “pose a significant barrier to trade for US companies.”

The EGA negotiations will build on a list of 54 environmental goods on which APEC – Asia-Pacific Economic Cooperation – leaders agreed to reduce tariffs to five percent or less by the end of 2015, and will explore a wide range of additional products. 

The APEC list includes a variety of environmental technologies used in a number of environmental applications including renewable and clean energy generation such as solar panels and gas and wind turbines; wastewater treatment; air pollution control; solid and hazardous waste treatment; and environmental monitoring and assessment.

In addition to the US, Australia, Canada, China, Costa Rica, the European Union, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland and Taiwan are participating in the negotiations.

The countries involved in the talks generate fully 86 percent, about $1 trillion, of global trade in environmental goods annually.

US exports of environmental goods totaled $106 billion last year and have been growing at an annual rate of eight percent since 2009, according to the US Department of Commerce.

“By eliminating tariffs on the technologies we all need to protect our environment, we can make environmental goods cheaper and more accessible for everyone,” Froman said.

07/14/2014