Hill Activity

Senate Closes Loophole on China Duty Collection . . . On November 16, 2005, the Senate approved a bill (S. 695) that would suspend new shipper bonding privileges for three years. Specifically, the legislation would lift the ability of new shippers of goods subject to an antidumping order to post a bond in lieu of making cash deposits to cover the shipment. This closes a loophole under existing U.S. laws which has allowed some Chinese exporters to avoid paying antidumping duties after posting inexpensive bonds through shell corporations. Inside US Trade reports that, in 2004, the U.S. failed to collect about $220 million in antidumping duties on imports from China, out of a total of $260 million uncollected.

Vote on Schumer-Graham Bill Delayed . . . Sens. Charles Schumer (D-NY) and Lindsey Graham (R-N.C.) have agreed to postpone until March 31, 2006, Senate consideration of legislation that would impose a 27.5% tariff on Chinese imports in retaliation for China's continued currency manipulation. A vote on the bill had been scheduled to occur by December 2005 after the Senate voted overwhelming against tabling the bill this past Spring. Many political analysts do not believe that the Schumer-Graham bill will be enacted into law. SPI has not supported the bill, but is disappointed by the delay because many lawmakers are unwilling to discuss alternative bills that could provide tangible relief to U.S. plastics manufacturers adversely impacted by China's trade practices. SPI is supportive of H.R. 1498, sponsored by Reps. Duncan Hunter (R-CA) and Tim Ryan (D-OH), which would define currency manipulation and require the Commerce Department to treat it as an illegal subsidy. Although the Ryan-Hunter bill has over 140 co-sponsors, it has so far languished in the House Ways and Means Committee. SPI is also supportive of legislation introduced by Sen. Susan Collins (R-ME) that would allow the Commerce Department to apply countervailing duties against non-market economies, such as China. Companion legislation to the Collins bill, sponsored by House Ways and Means Committee Chairman Bill Thomas (R-CA) and Rep. Phil English (R-PA), passed in the House this past summer. Despite these two vehicles for providing U.S. companies with remedies to China's currency manipulation, lawmakers have been reluctant to move forward on either bill pending the outcome of a vote on the Schumer-Graham bill. For more information about legislative proposals related to U.S.-China trade, please contact Karen Toliver or Gennie Ross.

China Update

Treasury Department Fails to Cite China for Currency Manipulation . . . On November 28, 2005, the U.S. Treasury Department issued its long-awaited report on international economic and exchange rate policies. Despite pressure by SPI and other industry groups, the Treasury Department found that neither China nor any other major U.S. trading partner meets the technical requirements for designation as a currency manipulator. Secretary Snow acknowledged that China's "progress to date is limited and far too slow to be sufficient," while the actual operation of the China's new currency regime is "highly constricted." Click here to access Treasury's report. SPI has expressed strong disappointment with Treasury's failure to identify China as a currency manipulator. Click here to view the SPI press release.

President Bush Visits China . . . On November 19-20, 2005, President Bush visited China during an Asian tour that included visits to Japan, South Korea, and Mongolia. President Bush raised currency manipulation, intellectual property rights enforcement, and market access for U.S. companies during his discussions with Chinese Prime Minister Wen Jiabao and President Hu Jintao. President Bush remarked publicly that he had discussed these and other trade issues with Chinese leaders, reminding Beijing that it needs to further expand its domestic economic reforms. Structural reforms that U.S. officials have raised with China include banking reform, stronger criminal IPR enforcement, changes to its currency regime, and the elimination of export subsidies. However, Inside U.S. Trade reports that the President made no apparent progress on any of these issues during his meetings with the Chinese leadership.

Trade Enforcement

Trade Compliance Forum in San Francisco . . . SPI members are invited to attend an "Import Compliance Forum" in San Francisco, CA on December 8-9, 2005. The conference will address "Corporate Counsel Best Practices for Devising, Implementing and Sustaining Successful Trade Practices," and will focus on compliance with Customs regulations and supply chain security. Also, representatives of the international trade law firm Collier Shannon Scott will conduct a pre-conference workshop on "Navigating the Trade Triangle: Importer's Master Class in Maximizing the Benefits and Duty Savings Available under NAFTA." This workshop will be held on December 7, 2005, at 3:30 p.m. at the Hyatt Regency San Francisco. For more information on this seminar and the Import Compliance Forum, click here.

Trade Agreements and Negotiations

Andean FTA Negotiations Continue . . . Last week, U.S. trade officials convened another round of negotiations with their counterparts from Colombia, Ecuador, and Peru. The U.S. is reportedly close to concluding negotiations with Peru, while wider differences remain between the U.S. and Colombia and Ecuador. The primary outstanding issues with all of the countries are agriculture and intellectual property rights (IPR) protection. According to Inside U.S. Trade, the U.S-Peru negotiations may continue in the coming weeks (prior to the December 13-19, 2005 WTO Ministerial meeting). An intensive negotiating session with Colombia is also likely during the first week of December 2005, while the U.S.-Ecuador talks are not expected to resume until January 2006. SPI has been actively engaged with U.S. negotiators to secure the elimination of tariffs on U.S. plastics exports to the Andean region.

WTO Update

NAMA Chairman Issues "Progress Report" of the Negotiations . . . On November 22, 2005, the Chairman of the WTO negotiating group on non-agricultural market access (NAMA) issued a status report on the market access negotiations for industrial goods. The report concluded that WTO members remain far from completing the framework for overall tariff reductions. The NAMA negotiations hold high potential for worldwide reduction of tariffs applied to plastics products. In these talks, the U.S. is also elimination of tariffs through product-specific agreements. SPI is working with U.S. trade negotiators to develop an agreement covering plastics machinery and equipment. For more information on the Doha Round negotiations or if you would like a copy of the NAMA Chairman's report, please contact Gennie Ross.

Export Promotion - Tools to Expand Your Markets

Commerce Department Market Research Reports . . . The Commerce Department'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.

The Commerce Department has recently issued the following reports:

     Plastics Materials and Resins: Colombia - This report provides an analysis of current conditions and trends affecting the plastics materials and resins market in Colombia. The Commerce Department notes that the "plastics sector is one of the most dynamic of the Colombian economy. There are expectations within Colombia that imports of plastics materials and resins will grow significantly in the coming years, as the proposed Andean FTA is will likely bring new opportunities for plastics production in the country.

     Advanced Plastics Materials: Germany - This report reviews trends in the German market to advanced plastics materials. The report notes that Germany is the world's third-largest plastics producer and its plastics sector is an important pillar of the country's economy. The report concludes that "The German plastics market, the largest in the EU, offers profitable market opportunities for U.S. producers of innovative plastics materials."

     Plastics Extrusion Equipment: Russia - This report reviews Russia's production of polyethylene films and the market for plastic extrusion equipment in the country. The report outlines trends in the development of Russia's plastics machinery market and identifies important competitive pressures affecting exports of U.S. plastics machinery to Russia.

For copies of these reports, please contact Karen Toliver or Gennie Ross, or go directly to Commerce's website at www.export.gov.

Global Business Council

GBC Program on Central and Eastern Europe . . . Always at the forefront of global issues impacting the plastics industry, the GBC is organizing a program to be held during NPE 2006. Attendees will hear about developments and business opportunities for plastics manufacturing in Central and Eastern Europe. Stay tuned for more details.

Join the GBC!
Does your company experience difficulties in exporting overseas? Are you concerned about import competition in your market? Do you want to have input on planning trade missions to overseas markets and SPI's positions on trade policy matters? Then consider joining SPI's Global Business Council.

The GBC's mission is to increase global awareness and competitiveness by providing resources to SPI members, while fostering growth of the plastics industry worldwide. All SPI members in good standing are eligible to join. If you are interested in joining the GBC, please contact Karen Toliver. More information on the GBC and its activities is available on the SPI website.

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.

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