HILL ACTIVITY

Congress Approves U.S. – Bahrain FTA . . . On December 7, 2005, the House of Representatives approved the U.S. – Bahrain Free Trade Agreement (Bahrain FTA) with a margin of 327–95. On December 13, 2005, the Senate also approved the pact by unanimous consent. Congressional support for the Agreement was strengthened after Bahrain agreed to enhance its labor laws and end all aspects of its boycott of Israel. According to the Bush Administration, the Agreement is an important step forward in the creation of a Middle East Free Trade Area, building on existing U.S. FTAs with Jordan and Morocco. Bahrain is a small market for plastics industry goods. In 2004, U.S. plastics exports totaled nearly $3 million. Imports from the Middle Eastern country were only $562 thousand. Upon implementation, the U.S.-Bahrain FTA will provide immediate duty-free access to U.S. exports of resins, most manufactured goods, machinery, and molds. Tariffs on plastic bags, certain medical and pharmaceutical devices, and certain tableware will be gradually reduced to zero over a 10-year period.

House Hearing on IPR Problems in Russia and China . . . On December 7, 2005, the House Judiciary Committee held a hearing on intellectual property rights (IPR) protection issues in Russia and China. Chris Israel, the Commerce Department's new IPR coordinator and Victoria Espinel, Assistant U.S. Trade Representative for Intellectual Property Protection, were among the witnesses at the hearing. The witnesses outlined serious IPR problems in China. At the same time, the discussion focused on concerns about Russia's failure to address flagrant IPR violations, including massive piracy of films and music CDs. One witness stressed that recent statements by senior Russian government officials appear to condone and even encourage this illegal activity. Separately, the Coalition Against Counterfeiting and Piracy (CACP), of which SPI is an active member, sent a letter to U.S. Trade Representative Robert Portman and Commerce Secretary Carlos Gutierrez cautioning against U.S. approval of Russia's World Trade Organization (WTO) membership until Moscow had improved its IPR enforcement. The CACP letter urged U.S. negotiators to "remain steadfast not only in insisting that Russia commit to strong IPR protectionsÉbut also demonstrate that commitment by taking prior actions," such as an effort to dismantle criminal networks engaged in piracy and counterfeiting. Click here to access the hearing proceedings. For more information on IPR issues, or for a copy of the CACP letter on Russia, please contact SPI's Karen Toliver or Gennie Ross.

CHINA UPDATE

USTR Issues Report on China's WTO Compliance . . . On December 11, 2005, the Office of the U.S. Trade Representative (USTR) issued its 4th annual report to Congress on China's compliance with its WTO obligations. The report states that China's implementation of its WTO commitments remains "incomplete" and notes that "there are still serious problems in some important areas, especially enforcement of intellectual property rights." USTR also outlined concerns about Chinese use of "industrial tools" to promote and protect favored industries. According to USTR, China has made important progress toward the implementation of specific commitments, its deficiencies in this process stem from its incomplete transition from being a state-planned economy." Based on input received from members, on September 9, 2005, SPI filed comments to USTR on China's WTO compliance. SPI identified a number of key areas where China has not fully complied with rules it agreed to when joining the WTO in 2001. USTR used the comments from SPI and other industry organizations to prepare its latest report. Click here to view SPI's China WTO comments. Click here to access the entire report.

U.S. – China Economic and Security Review Commission Holds a Hearing on the Doha Round . . . On December 8, 2005, the U.S. – China Economic and Security Review Commission held a hearing on the Doha Round and the World Trade Organization's Hong Kong Ministerial (see below). The hearing covered progress made in reaching the U.S. government's policy goals for the Doha Round. Particular emphasis was placed on China's implementation of its WTO accession commitments, as well as its role in the Doha Round. A number of U.S. industry representatives addressed these topics, stressing the importance of a successful conclusion of the Doha Round and of continued Chinese engagement in the international trading system. Several presenters noted the importance of preserving and strengthening U.S. trade remedy laws (i.e. antidumping and countervailing duty regulations), especially as a means to address the unfair trade practices of countries such as China. Click here to access the hearing statements and proceedings. The Commission's latest report, issued on November 9, 2005, is available here.

TRADE ENFORCEMENT

ITC Retains Antidumping Duty Order on Granular PTFE Resin . . . On November 30, 2005, the U.S. International Trade Commission (ITC) completed a five-year (also known as "sunset") review of antidumping duty orders on granular polytetrafluoroethylene (PTFE) resin from Italy and Japan. The Commission determined that revocation of the antidumping duty orders "would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time." As a result of this determination and the Department of Commerce's recent affirmative findings regarding the likely recurrence of dumping, the existing orders on imports of granular PTFE resin from Italy and Japan will remain in place.

EU Unveils New Customs Code . . . On November 30, 2005, the European Commission (EC) announced that amendments to the EU's Customs code aimed at streamlining customs procedures within the EU. Introducing an electronic, paper-free customs environment in the EU, the modifications will make the electronic customs systems of the EU's 25 member states compatible with each other; introduce EU-wide electronic risk analysis and improve information exchange between border control authorities; popularize electronic declarations; and introduce a centralized Customs clearance arrangement. The Commission touts these reforms as increasing the competitiveness of companies doing business in the EU, reducing customs compliance costs, and enhancing EU security. According to The Journal of Commerce, the reforms are expected to result in a 50-billion euro increase in global trade with the EU. The governments of the EU member states and the European Parliament must approve the new measures before they can be enacted. The EC is hopeful that these approvals will be in place by 2009 and the reforms will be implemented by 2012.

U.S. Adopts New International Customs Convention . . . On December 6, 2005, the U.S. became the 41st country to accede to the new World Customs Organization (WCO) Convention on the Simplification and Harmonization of Customs Procedures (known as the "Revised Kyoto Convention"). The revised customs procedures contained in the convention are intended to address issues relating to the globalization of supply chains, security, and movement of passengers. A key goal of the accord is to provide more predictability for the business community and improve the movement of goods and people through customs. For more information on the convention is available here.

EU's REACH Chemicals Registration Proposal Nears Final Approval . . . On December 13, 2005, EU Competitiveness Ministers approved the draft legislation on chemicals registration and testing (REACH). During their discussions, the ministers added new changes to the draft to further reduce the compliance burden on industry, particularly small and medium-sized companies. On November 16, 2005, the European Parliament approved and amended the REACH proposal, also reducing its compliance burden. The draft regulation must undergo final reconciliation, which is expected to be completed expeditiously to allow for REACH to enter into effect in 2007. This directive has concerned many U.S. chemical producers and plastics manufacturers. Even though the latest REACH draft appears to be an improvement over previous drafts, the regulations is still likely to impose substantial additional costs to chemical companies operating in the EU market. The new registration and testing requirements are expected to affect chemicals producers in particular. Click here for more information on REACH.

Commerce Secretary Discusses U.S. Business Agenda with EU Leaders . . . On November 29–30, 2005, U.S. Commerce Secretary Carlos Gutierrez led a senior-level U.S. delegation to Brussels to attend the first informal U.S.-European Union economic ministerial meeting. The U.S. delegation sought action on a range of business issues, including improved cooperation on industry regulation and standards, harmonization of financial regulations, and initiatives to promote transatlantic innovation and R&D. A conference of U.S. and EU regulators will be held in early 2006 as the first new major regulatory initiative. Click here to access Commerce Department information on the meeting. To discuss EU-related business concerns with SPI, please contact Karen Toliver or Gennie Ross.

TRADE AGREEMENTS AND NEGOTIATIONS

U.S. and Peru Conclude FTA Negotiations . . . On December 7, 2005, the Office of the U.S. Trade Representative (USTR) announced the completion of a bilateral "Trade Promotion Agreement with Peru" (PTPA) as a part of the ongoing U.S.-Andean FTA negotiations, which also include Colombia and Ecuador. According to USTR, the PTPA is a comprehensive agreement that "will eliminate tariffs and other barriers to goods and services and expand trade between the United States and Peru." In addition to eliminating tariffs, Peru will remove barriers to trade in services, provide a secure legal framework for U.S. investors operating in the country, strengthen its enforcement of labor and environmental laws, protect intellectual property, and provide an effective system of dispute settlement. In 2004, total two-way goods trade with Peru was $5.8 billion, with U.S. goods exports totaling $2.1 billion. The top export categories included machinery and electrical machinery, plastics, cereals, and mineral fuel. U.S. plastics exports to Peru amounted to $203.6 million in 2004. Together with Colombia and Ecuador, the three Andean states represent a market of over $8 billion for U.S. exports, and of $638.6 million for the U.S. plastics industry in particular.

U.S. and Egypt Close to Launching FTA Talks . . . Both U.S. and Egyptian trade negotiators indicated recently that the two sides are nearing an agreement on launching FTA talks. The Bush Administration has been seeking greater democratic reforms in Egypt, and improvements in this area appear to be linked to the FTA discussions. USTR has also indicated that the launch of any new negotiations would depend on whether the talks can be completed before the expiration of the President's Trade Promotion Authority (TPA, or "fast-track") in mid-2007. An FTA with Egypt would allow for the elimination of Egypt's tariffs on plastics products, which currently fall mainly in the 20-60 percent range.

EU and U.S. Reach Agreement on Trade Concessions for EU Enlargement . . . On November 30, 2005, U.S. Trade Representative Robert Portman announced a package of "compensation" from the European Union to the U.S. for trade losses incurred by U.S. exporters when 10 Eastern European countries acceded to the Union in May 2004. As a part of their EU accession, some of the Union's new members raised some of their tariffs on U.S. products to match the EU's external tariff. The EU trade package primarily includes concessions on agricultural products (fish, meat, and grain). It also contains permanent reduction in tariffs on aluminum tube, polyvinyl butyral, and molybdenum wire. Negotiated under WTO rules, the agreement is subject to approval by the EU Member States and is expected to go into effect during 2006. Click here to access USTR information on the agreement.

WTO UPDATE

WTO Members Conclude Hong Kong for Ministerial Meeting . . . On December 13–18, 2005, trade ministers from the WTO's 149 member states gathered in Hong Kong for the Organization's Sixth Ministerial Conference. The talks focused on the ongoing Doha Round of multilateral trade talks and proposals for greater trade preferences for developing countries to achieve the Round's "development objectives." The Round deliberations are not progressing as smoothly as desired, as significant divergence remains among WTO members most of the areas of negotiations. Specifically, the continuing disagreements on agricultural trade liberalization have stalled progress in the services and industrial goods areas. In Hong Kong, ministers failed to agree on specific frameworks for the various aspects of the negotiations. However, in a modest success, the ministers set April 30, 2006 as the date by which countries must agree to a detailed blueprint for negotiating agriculture and industrial market access. The ministers also set the deadline of July 31, 2006 for submission of draft tariff schedules. SPI is closely monitoring the non-agricultural market access (NAMA) negotiations, and is seeking an ambitious result for the U.S. plastics industry. SPI is also working with U.S. trade negotiators to develop a sectoral agreement covering plastics machinery and equipment. For more information on the Doha Round negotiations, please contact Gennie Ross.

EXPORT PROMOTION — TOOLS TO EXPAND YOUR MARKETS

South Carolina Opens Trade Park . . . On December  6, 2005, South Carolina opened the Global Trade Center (GTC), a new 75-acre facility. The park is located in Mauldi, SC, about 200 miles from the Port of Charleston. The park features a 200 thousand sq. ft. building and exhibition hall. The GTC will serve as a market-entry incubator to assist both foreign companies entering the U.S. market and U.S. companies entering foreign markets, with particular emphasis on trade with China. Over 140 Chinese companies will reportedly display their products at the GTC during the coming year. Additionally, several U.S. companies are currently working with the center to do business with China. The GTC is a general-purpose Foreign Trade Zone (FTZ), and will continue to expand under South Carolina's Upstate FTZ, which includes additional sites. The South Carolina State Ports Authority overseas the Upstate FTZ and developed the new trade park.

U.S. Exporter Promotion Service Available Online . . . U.S. manufacturers can now promote their products over the Internet utilizing a service launched recently by the U.S. Commercial Service. Featured U.S. Exporters (or FUSE) is a directory of U.S. products featured on U.S. Commercial Service websites around the world. It gives your company an opportunity to target specific markets in the local language. Because of high demand and to assure that your product is right for the markets you choose, listings are offered to companies registered with their nearest U.S. Export Assistance Center. It is easy to locate the office nearest to you by zip code and takes just a few minutes to sign up as a client. The nominal participation fee (minimum $25) is based on the number of markets selected and translation requirements. Companies are required to choose at least 5 English language markets, or some other combination totaling $25 or more. To see a sample FUSE listing, click here — this listing was created for a U.S. manufacturer of waterproofing products seeking a distributor for the Australian market. Click here to sign up for FUSE.

Webinar Program on Doing Business in Mexico . . . The U.S. Commercial Service in Mexico is offering a free monthly web seminar program for U.S. companies looking to enter or increase their presence in this dynamic and growing market. Lasting through September 2006, sessions in this program will include information on general commercial and economic information, cultural differences, legal aspects, and financing and trade logistics. Click here for the monthly webinar schedule. More information on doing business in Mexico is available here. Mexico is the second-largest trading partner for the U.S. plastics industry, and is a significant market for all industry segments. In 2004, the U.S. plastics industry had a trade surplus of nearly $6 billion with Mexico.

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 International Trade Update, mailing list additions/deletions, or to receive the publication by e-mail, contact Tracy Cullen, (202) 974-5282; e-mail tcullen@socplas.org.

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