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Industry sources also believe Treasury's failure to cite China will be a catalyst for action in the Senate, possibly by mid- to late-November. The Schumer-Graham bill, which would impose punitive duties of 27.5 percent on all Chinese imports, remains subject to vote on the Senate's calendar. However, congressional staff says a version of the U.S. Trading Rights Enforcement Act (H.R. 3283), which passed in the House this past summer, is more likely to gain broad support in the Senate. Senator Collins (R-ME) introduced the bill (S. 1421), but so far no action has been taken because Finance Committee Chairman Grassley (R-IA) opposes certain provisions that would subject China to the U.S. subsidies law. However, many observers believe that lack of action from Treasury will generate intense pressure for legislation and Chairman Grassley may relax his opposition. SPI supports S. 1421, and is working with NAM and other industry associations to garner sufficient support in the Senate for passage this year.
Senate poised to strengthen protections against counterfeiting . . . On September 14, Senate judiciary committee chairman Arlen Specter (R-PA) and ranking member Patrick Leahy (D-VT) introduced the "Stop Counterfeiting in Manufactured Goods Act" (S.1699), aimed at strengthening criminal penalties against trafficking in counterfeit goods. Currently, federal law does not prohibit an individual from selling counterfeit labels bearing otherwise protected trademarks within the U.S. The proposed legislation would enable law enforcement authorities to seize and destroy counterfeited manufactured goods, along with the equipment used to produce them, and would close a legislative loophole that invalidated the conviction of a business dealing in tags and labels on the technicality that those labels were not attached to specific counterfeit goods. With 11 co-sponsors, S. 1699 enjoys bipartisan support. The Bureau of Customs and Border Protection estimates that trafficking in counterfeit goods costs the United States approximately $200 million annually.
G-7 finance ministers press China on currency reform . . . The finance ministers of the Group of Seven (G-7) industrialized countries met in Washington, DC on September 23, 2005 in conjunction with meetings of the International Monetary Fund (IMF) and the World Bank. Among other issues, the G-7 finance ministers discussed exchange rate imbalances. In their formal meeting communiqué, the ministers reaffirmed the position that "exchange rates should reflect economic fundamentals." They publicly welcomed the recent decision by the Chinese government to pursue greater flexibility in its exchange rate regime. More privately, the participating ministers repeated their insistence that China allow greater appreciation of the yuan. The G-7 is seeking the orderly revaluation of the yuan, as well as of other dollar-pegged Asian currencies, such as the Malaysian ringgit. Tim Stratford appointed Assistant USTR for China . . . Ambassador Portman recently announced the appointment of Tim Stratford to serve as Assistant U.S. Trade Representative for China. Mr. Stratford comes from General Motors, where he was General Counsel in China. Previously, Mr. Stratford was a partner in the Beijing office of the law firm Coudert Brothers (1995-1998) and a U.S. Commercial Officer at the Embassy in Beijing (1988-1992). In his new position, Mr. Stratford will oversee the development and implementation of U.S. trade policy toward Mainland China, Taiwan, Hong Kong, Macao, and Mongolia. SPI joins chamber coalition to combat counterfeiting and piracy . . . SPI recently joined a large coalition sponsored by the U.S. Chamber of Commerce to strengthen protection of U.S. intellectual property rights. Known as the "Coalition Against Counterfeiting and Piracy (CACP)," the group works on a broad array of issues designed to help U.S. businesses protect their intellectual property rights both in the U.S. and abroad. A number of the CACP's initiatives include advocacy of stronger U.S. laws, addressing counterfeiting and piracy at international trade shows, sharing best practices, and other programs. One of CACP's task forces, "No Trade in Fakes," is preparing guidelines for best practices in protecting intellectual property rights throughout the supply chain. Once completed, the guidelines will be published and disseminated to U.S. businesses throughout the country. The "No Trade in Fakes" Task Force has issued draft "secure supply chain" guidelines and is seeking input from coalition members on ways to improve them. Given the diverse operations entailed in plastics manufacturing, the Task Force particularly welcomes input from SPI. SPI's Global Business Council is currently reviewing the draft guidelines. SPI also encourages other SPI members to review and provide feedback on the draft guidelines. Your input will help us effectively advocate the needs of SPI members in the CACP meetings. SPI will treat all comments with utmost confidentiality. If you would like to provide input on the draft "Secure Supply Chain" Guidelines, please contact Karen Toliver or Gennie Ross. We request your input no later than October 21, 2005.
GAO issues report on the Byrd Amendment . . . On September 26, 2005, the Government Accountability Office (GAO) issued a long-awaited report on the effectiveness of the Continued Dumping and Subsidy Offset Act (CDSOA), also known as the "Byrd Amendment." This law requires the Bureau of Customs and Border Protection to distribute collected antidumping and countervailing duties to the U.S. producers that petitioned/supported imposition of the underlying antidumping/countervailing duty orders. The GAO report concluded that the program is not an effective trade remedy for U.S. companies injured by unfair trade. According to the report, nearly half of the $1 billion in CDSOA payments have been distributed to only five companies. Moreover, two-thirds of all payments have gone to only three industries: bearings, candles, and steel. The World Trade Organization (WTO) has ruled that the Byrd Amendment is inconsistent with U.S. international trade obligations, and has authorized several trading partners to retaliate against U.S. exports. To-date, Canada, the European Union, Japan, and Mexico have imposed retaliation totaling almost $115 million against a variety of U.S. exports. Click here to obtain a copy of GAO's report.
State Department Business Visa Center available online . . . The State Department recently announced that its Business Visa Center is now accessible via the Internet. The Business Visa Center, which was launched in July 2005, is designed to offer business travelers information about obtaining business visas. It also includes information for U.S. companies seeking business visas for their foreign employees, customers, and partners. Click here to access the site. The Business Visa Center may also be contacted via email at BusinessVisa@state.gov, or by phone at (202) 663-3198. Trade Agreements and Negotiations US-Oman FTA negotiations completed . . . On October 3, 2005, the Bush Administration announced the conclusion of bilateral FTA negotiations with Oman. Oman is the fifth Middle Eastern country to have negotiated an FTA with the United States. Two-way goods trade between the U.S. and Oman was $748 million in 2004. U.S. goods exports to Oman in 2004 totaled $330 million, including machinery, automobiles, optic and medical instruments, and electrical machinery. The bilateral FTA negotiations were launched on March 12, 2005, and were completed after only two formal rounds of negotiations. According to USTR Robert Portman, the deal will eliminate Oman's tariffs on U.S. products and will provide U.S. exporters with substantial access to the Omani market "across the country's entire services regime," as well as with "a secure, predictable legal framework for U.S. investors operating in Oman," "effective enforcement of labor and environmental laws," and intellectual property rights protection. Under the Trade Act of 2002, the Administration must notify Congress at least 90 days before signing the agreement. The White House intends to soon send a formal notification of its intent to sign the U.S.-Oman FTA to Capitol Hill. Congressional consideration of the Agreement is unlikely to occur until 2006. Andean FTA negotiations continue . . . The latest round of talks between the U.S. and the three Andean countries of Colombia, Ecuador, and Peru was held on September 19-23, 2005 in Cartagena, Colombia. Bolivia is also participating in the talks as an observer. The negotiations were launched in May 2004 and have undergone 12 rounds. SPI has provided input to U.S. trade negotiators on key priorities for the elimination of tariffs, particularly on processed plastics products. The talks are scheduled to resume on October 19-21, 2005 in Washington, DC in what the participating countries are hoping would be the final negotiating round. Colombia and Peru are eager to complete the negotiations by November 2005, prior to the start of electoral campaigns in these countries. Meanwhile, some members of Congress, including House Ways and Means Committee chair Bill Thomas (R-CA), have indicated that Congress does not intend to renew the Andean Trade Preferences Act (ATPA) after the legislation expires in December 2006, regardless of the outcome of the Andean FTA negotiations. ATPA provides preferential access to the U.S. market for a wide range of exports from the Andean region Progress at latest round of U.S.-Thailand FTA talks . . . The U.S. and Thailand concluded the fifth round of FTA negotiations in Honolulu, Hawaii on September 30, 2005. The two sides made significant progress on a range of issues covered by the FTA, including services and investment provisions. The two sides plan to meet again in November 2005 to maintain the momentum of the negotiations. The U.S.-Thailand FTA negotiations were launched in July 2004, with successive rounds held in October 2004, April 2005, and July 2005. The Bush Administration is hopeful that the negotiations would be completed in early 2006. In 2004, U.S.-Thailand trade flows amounted to $24 billion, up nearly 11 percent from the previous year and nearly doubling in the past decade. U.S. goods exports totaled $6.4 billion, an increase of 10.3 percent since 2003. Exports of Thai goods to the United States grew 15.8 percent last year to $17.6 billion. U.S.-SACU FTA talks restarted . . . On September 28-29, 2005, Botswana hosted a meeting of the U.S.-Southern African Customs Union (SACU) FTA negotiations. SACU comprises Botswana, Lesotho, Namibia, South Africa, and Swaziland. The negotiations covered mainly trade in industrial products. Additional discussions were planned on labor, intellectual property rights, and government procurement issues. The U.S.-SACU FTA negotiations were launched in June 2003, and were initially intended for completion by December 2004. However, the talks stalled in mid-2004 due to disagreements over the scope of the prospective agreement and problems with trade negotiating capacity experienced by the SACU participants. As a way to build momentum for the talks, negotiators have now agreed to hold regular smaller meetings, rather than large periodic rounds of talks. Following the meeting in Botswana, talks are planned for every six weeks on different issues. The participating countries are now seeking to complete the negotiations in December 2006. Potential new FTA negotiations . . . The Bush Administration plans to decide by the end of this year whether to initiate free trade talks with several countries that have expressed interest in completing FTAs with the United States, including Egypt, South Korea, Malaysia, and Switzerland. According to U.S. Trade Representative Rob Portman, the Administration is seeking to ensure that the prospective FTA partners are committed to comprehensive trade pacts, and that the negotiations would be completed prior to the expiration of Trade Promotion Authority (TPA) in July 2007. U.S. officials have met continually with their counterparts from these countries in an effort to remove current trade frictions and prepare for possible FTA negotiations. Nevertheless, Ambassador Portman has emphasized that Washington may choose not to pursue FTAs with all of these countries. The NAM believes that Egypt and South Korea are the most appropriate candidates for FTAs with the U.S. given the time constraints imposed by TPA and the size of their economies. SPI will analyze U.S. plastics trade with these countries and the potential benefits of such FTAs for the U.S. plastics industry.
Doha Round negotiations in critical stage . . . The Doha Round negotiations have entered a critical stage in the past several weeks, as the participating countries are preparing for the upcoming WTO Ministerial in Hong Kong in December 2005. The Hong Kong ministerial is key to obtaining a successful conclusion of the Doha Round by the end of 2006. The multilateral talks have lagged as the U.S. and EU could not reach agreement on disciplines for agricultural products. Members such as Brazil and India have not been willing to discuss lowering tariffs on industrial products until they are assured of better market access for their agricultural goods. This week, however, during a meeting in Zurich among key countries, the United States tabled a proposal that offers deep cuts on trade-distorting agricultural subsidies and elimination of all agricultural subsidies by 2010. It is hoped that the U.S. proposal will help end the stalemate on the agricultural negotiations, which in turn, will enable other negotiations to move forward. U.S. and Saudi Arabia complete accession agreement . . . On September 9, 2005, USTR announced the conclusion of negotiations with Saudi Arabia over the terms of its efforts to join the WTO. As a result of the negotiations, Saudi Arabia agreed to provide greater market access for U.S. exports, strengthening intellectual property, and reforming its laws to make them compliant with WTO rules. In terms of specific market opening commitments, Saudi Arabia has agreed to lift burdensome non-tariff measures and inspection requirements, and to replace them with a WTO-compatible system of inspection for health and safety reasons. Saudi Arabia's tariff commitments include duty-free entry of aircraft and information technology products, as well as substantial tariff cuts to zero or very low duty rates on certain plastics products and resins. Click here to view details of the U.S.-Saudi Arabia Accession Agreement. Export Promotion - Tools to Expand Your Markets Commerce Department market research reports . . . The Commerce Department U.S. Commercial Service offers a host of services to U.S. companies seeking to export their products. Industry and country market research reports prepared by Commercial Service officers stationed in overseas markets are particularly helpful to get an assessment of domestic market conditions and an understanding of the business climate for entering the particular market. The reports are brief and typically contain contact information to request additional information. These reports are available on the Commercial Service's export portal at www.export.gov. This site also provides information on the extensive export services offered by the Commerce Department.
For more information about SPI Link, mailing list additions/deletions, or to receive the publication by e-mail, contact Paula Weis, (202) 974-5282; e-mail pweis@socplas.org. More About SPI: Vision and Mission . Membership . Business Units . Regional Offices . News and Publications . Calendar of Events . Terms and Conditions of Use |
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Treasury backing down, may spur Senate action . . . The Treasury Department will delay its semi-annual report on foreign currency exchange rate practices until after President Bush visits China in November, and close observers have interpreted recent actions by department officials as signs that the report will not cite China for currency manipulation, according to Inside U.S. Trade. This summer, Treasury officials signaled that they were ready to cite China for currency manipulation if the country did not make "significant" progress toward a market-based yuan value by October, the original deadline for releasing the report. SPI, the National Association of Manufacturers, and other industry groups had been pressing for this citation, which would require Treasury to seek action under the International Monetary Fund (IMF). Despite Treasury's stronger posture this past summer, department officials have recently referred to China's revaluation as "significant." 
Congressional hearings on US-Bahrain FTA . . . In recent weeks, both the House Ways and Means Committee and the Senate Finance Committee held hearings on the U.S.-Bahrain Free Trade Agreement (FTA), signed on September 14, 2004. Both committees heard testimony from officials in the U.S. Trade Representative's office and U.S. business and labor interests on their views of the FTA. USTR officials noted that under the agreement, 100% of U.S. consumer and industrial goods and 81% of U.S. agricultural products will have immediate duty-free access to Bahrain. Despite the small size of the agreement, USTR officials emphasized that the Bahrain FTA is "an important element of U.S. policy in the Middle East." The Bush Administration would like Congress to approve the FTA before the end of the session this year, and many industry and business groups are also urging Congress to take action soon. SPI is currently analyzing the Bahrain FTA and its potential benefits for the U.S. plastics industry. Click 
SPI identifies plastics-specific concerns on China's WTO compliance record . . . Based on input received from members, on September 9, 2005, SPI filed a report with the Office of the U.S. Trade Representative (USTR) on China's compliance with its WTO obligations. SPI identified China's undervalued currency; rampant intellectual property rights violations; remaining high tariffs on plastics industry products; lack of transparent customs procedures; de facto discriminatory enforcement of tax policies; and implementation of standards, technical regulations, and phytosanitary and sanitary measures as areas where China has not fully complied with rules it agreed to when joining the WTO in 2001. SPI concluded that "[d]espite some progress in recent years . . . numerous areas exist where we believe China must significantly improve its compliance record. These are critical areas for U.S. plastics companies, because . . .China is and will remain a critical market for plastics industry goods." In addition to SPI, numerous other industry associations filed comments with USTR, which will use them to prepare a report to Congress on China's compliance record. SPI's China WTO comments are available on its website. Click 
New IPR "attachè" program . . . The Commerce Department has announced new initiatives to combat intellectual property rights (IPR) violations. A key aspect of these new initiatives is the appointment of IPR experts in key foreign countries including Brazil, China, India, Russia, and Thailand. Commerce Secretary Carlos Gutierrez said that the new IPR attachès will have the legal and technical expertise to effectively advocate for improved IPR protection. The Bush Administration also plans to expand its new "Small Business Outreach" program to educate U.S. small businesses on how to protect their intellectual property rights. The Administration also plans to institute a "Global Intellectual Property Academy," which will be coordinated by the U.S. Patent and Trademark Office and will provide training programs for foreign government officials on global IPR issues. The launch of these initiatives follows the appointment in July 2005 of Chris Israel as a senior-level Coordinator of Intellectual Property Enforcement at the Department of Commerce to help combat intellectual property violations. IP theft costs U.S. businesses an estimated $250 billion per year, and 750,000 U.S. jobs.
Discussions ongoing on compliance with the EU's RoHS Directive . . . In August 2005, the European Union's Waste Electrical and Electronic Equipment (WEEE) directive entered into effect, subjecting local companies and importers of electrical and electronic equipment in the EU to new requirements for recycling and waste treatment. EU member states are also finalizing their regulations related to the Restriction of Use of Certain Hazardous Substances (RoHS) directive, which will enter into effect on July 1, 2006. The RoHS directive requires the substitution of various heavy metals (lead, mercury, cadmium, and hexavalent chromium) and brominated flame retardants (polybrominated biphenyls (PBB) or polybrominated diphenyl ethers (PBDE)) in new electrical and electronic equipment entering the EU market. The RoHS directive applies to a wide array of products, including household appliances, consumer equipment, electrical and electronic tools, and toys, leisure and sports equipment. The EU has approved a number of exemptions to the RoHS directive and is currently accepting applications for further exemptions. China and several U.S. states are considering regulations similar to the EU's RoHS directive. If you are affected by this directive and/or would like further information about it, please contact 
SPI advocates plastics industry interests before the WTO . . . On October 4-8, 2005, Karen Toliver, SPI's Senior Director of International Trade, participated in a Geneva Fly-in sponsored by the NAM. The delegation consisted of various representatives of U.S., European, and Korean manufacturing trade associations. This was the second Fly-in of global manufacturers to emphasize the need to substantially reduce tariffs and non-tariff barriers on industrial goods in the ongoing Doha Round multilateral trade negotiations. The delegates met with the trade ministers of several WTO members, including China, Brazil, and India, to stress the importance of cutting tariffs on industrial goods and to keep momentum going up to the Hong Kong ministerial in December. Ms. Toliver provided input on SPI members' concern about global tariffs on plastics industry goods. She also advocated the need for a multilateral agreement to lower and harmonize tariffs on a sector-specific basis for plastics machinery and equipment and other products of interest to the plastics industry. Currently, both plastics machinery and molds are included under a proposed sectoral initiative on electronics and electrical machinery. Chemicals (including plastic resins), toys, and sporting equipment and goods are other areas where WTO members are exploring sectoral initiatives.