For SPI Members Only – March 6, 2006

In This Edition

Hill Activity | China Update | Trade Enforcement | Trade Agreements and Negotiations | WTO Update | Member Services | Export Promotion | Global Business Council

USTR Portman Outlines 2006 Trade Agenda. . .  On February 15–16, U.S. Trade Representative Rob Portman testified before the House Ways and Means and Senate Finance Committees on the Bush Administration’s Trade Policy Agenda for 2006. Ambassador Portman highlighted three areas of focus: (1) conclusion of the World Trade Organization (WTO) Doha talks by the end of this year with increased market access for U.S. companies in the industrial, agricultural, and services negotiations; (2) continued negotiation of free trade agreements with key U.S. trading partners; and (3) stronger enforcement of U.S. trade laws and rights under existing trade agreements. He noted that substantial cuts in tariffs applied by emerging markets such as Brazil, China, and India is a primary goal in the Doha negotiations on industrial goods. Amb. Portman also highlighted ongoing bilateral trade negotiations, and USTR’s launch of talks with South Korea. Finally, he outlined enforcement matters that USTR is currently working on with trading partners in seeking elimination of barriers to U.S. goods and services.

Ambassador Portman’s statement and other hearing documents...

Senators Introduce Bill to Strengthen Enforcement of U.S. Trading Rights. . .  On February 16, on the heels of Ambassador Portman’s testimony, Ranking Democrat on the Senate Finance Committee Max Baucus (D-MT) and Sens. Orrin Hatch (R-UT) and Debbie Stabenow (D-MI) introduced the “Trade Competitiveness Act of 2006” (S. 2317). The bill requires USTR to take specific actions, including consultation with Congress, to secure the elimination of unfair trade practices that would have the greatest potential to boost U.S. economic growth if removed. To facilitate this mission, S. 2317 creates a new Chief Trade Enforcement Officer within USTR responsible for investigating and prosecuting trade disputes under U.S. trade agreements, including the WTO. The legislation also urges more aggressive use of procedures under the International Monetary Fund to remedy distortive exchange rate policies by Asian central banks. Finally, S. 2317 requires consideration of sovereignty issues in the negotiation, implementation, and enforcement of U.S. trade agreements. "I want American companies to get aggressive about getting their products and their people into foreign markets, to bolster the U.S. presence around the world and bring jobs and dollars back home," stated Sen. Baucus in a press release. “And when American companies embrace these new market opportunities, the American government needs to have their backs.”

Copy of the press release announcing introduction of the Trade Competitiveness Act of 2006...

Senator Grassley to Introduce China Trade Bill; SPI Works to Ensure Safeguards. . .  During Ambassador Portman’s appearance before the Senate Finance Committee, Chairman Charles Grassley (R-IA) indicated that he would soon announce support for trade legislation that addresses China’s currency undervaluation, trade enforcement and enhancement mechanisms. According to Inside U.S. Trade, sources have confirmed that Sen. Grassley is evaluating a number of proposals, including application of the subsidies law to China and other non-market economies. The House has already passed this proposed amendment to the subsidies law, but the Senate has not taken action on the companion bill (S. 1421) introduced by Sen. Sue Collins (R-ME). SPI, NAM, and other industry groups that consider China’s undervalued yuan to be a prohibited export subsidy, support application of the subsidies law to China because it can be invoked as a WTO-consistent remedy to combat unfair subsidization by non-market economy countries. However, these groups back the Collins-version of the bill contingent on three technical changes to safeguard against undermining other provisions of the subsidies law. SPI representatives have participated in discussions with Sen. Grassley’s staff to garner his support for this language in any trade bill Sen. Grassley introduces in the coming weeks.

If you want to lend your support to this lobbying effort, please contact Karen Toliver or Gennie Ross.

Prospects Improve for Passage of a Miscellaneous Tariff Bill (MTB). . .  Last spring, the House Ways and Means Committee opened procedures for representatives to submit bills seeking temporary suspension of import duties on certain products imported by U.S. companies. Despite several months of inaction in the House, the Committee is preparing to move forward, possibly with a March vote. Action in the House will likely prompt Sen. Finance Chairman Grassley to take up consideration of a Senate version of the tariff bill. Many businesses avail themselves of the MTB process because the temporary lifting of import duties on their imports can generate substantial cost savings.

If you are interested in learning more about this process, see Member Services below for more details.

Senior Level USTR Officials to Press IPR Concerns in Beijing. . .  Assistant USTR for China Affairs Tim Stratford, General Counsel Jim Mendenhall, and Acting Assistant USTR for Intellectual Property Victoria Espinel traveled to Beijing this week to press Chinese officials for more detailed information on China’s enforcement of intellectual property rights (IPR). The meetings follow USTR’s formal request under WTO rules for detailed information about China’s prosecution of IP violations. China failed to provide the extensive data and information requested by USTR, but instead challenged the request’s legality under WTO rules. GC Mendenhall reported that USTR’s goal is to discuss what information China can expeditiously provide, noting that a formal dispute challenge within the WTO is an option “that is on the table.”

SPI Seeks Your Input on IPR Issues. . .  USTR has requested input from U.S. businesses regarding intellectual property rights (IPR) problems they are encountering with several countries, including China, India, and South Korea. USTR will be engaging India on IPR enforcement in the coming weeks as a part of a new bilateral Trade Policy Forum. Similarly, USTR is seeking information from U.S. industry on issues to be addressed during the negotiations of the IPR section of the prospective U.S.–Korea FTA (see below). USTR is also considering a formal WTO complaint against China’s IPR enforcement. SPI is working with USTR and other industry groups through the private-sector Coalition Against Counterfeiting and Piracy (CACP) to convey the plastics industry’s specific IPR concerns, but we need input from our members.

To share your IPR-related problems with SPI, or for more information about SPI’s activities in this area, please contact Karen Toliver or Gennie Ross by March 10, 2006. Information reported to SPI will be kept confidential

Share Your Concerns About Korean Market Access with SPI. . .  Now that the U.S. has launched trade talks with South Korea, USTR needs input from U.S. industries and businesses to help establish priorities for the free trade negotiations. In addition to the elimination and/or reduction of tariffs on U.S. goods, USTR will seek removal of other barriers that hinder access to the Korean market. If your company has experienced any difficulties either operating in or exporting to Korea, SPI would like to hear from you by March 10, 2006.

Please share your concerns with SPI representatives. Any information you submit will be kept confidential and will be included in a comprehensive report submitted to USTR on the plastics industry’s priorities in the U.S.-Korea free trade negotiations.

U.S. Concludes FTA Talks with Colombia. . .  On February 27, USTR announced completion of negotiations with Colombia on an agreement to eliminate tariffs and other barriers to U.S. exports of goods and services. Upon implementation of the deal, over 80 percent of U.S. exports of industrial goods will enjoy immediate duty-free access to Colombia and another seven percent will have duty-free access within five years. Based on input provided by SPI, U.S. trade negotiators obtained either duty-free access or substantial tariff cuts over five years for most resins/polymers, plastics machinery, molds, and certain processed products such as pipes, tubes and bags. Colombia has also agreed to permit trade in remanufactured goods, which USTR anticipates will increase exports and investment opportunities for U.S. companies involved in remanufactured machinery, computers, and other devices. Of particular interest are special provisions that call for working groups to evaluate the agreement’s impact on small and medium-sized businesses.

More information about the U.S.–Columbia FTA...

CAFTA–DR Agreement to Take Effect for El Salvador. . .  On February 24, after working with El Salvador to ensure that its legislative and regulatory system reflects commitments it made under the Central America-Dominican Republic Free Trade Agreement, USTR has recommended issuance of a proclamation to implement the agreement for El Salvador effective March 1, 2006. USTR continues to work with the Dominican Republic, Guatemala, Honduras, and Nicaragua to obtain their full implementation of the deal. Costa Rica remains the only country that has not ratified the agreement.

WTO Members Seek Liberalized Trade in Medicines and Medical Devices. . .  The United States, Singapore and Switzerland have submitted a proposal to eliminate worldwide tariffs on pharmaceuticals and medical devices. Noting that some countries impose tariffs on pharmaceuticals as high as 40 percent, and tariffs on medical devices as high as 30 percent, the proposal calls on WTO members to agree to free trade in this sector as a humanitarian means of improving healthcare and access to medicines and medical devices for citizens worldwide, particularly those in poorer countries. Medical devices covered by the proposal include equipment, diagnostic products, surgical instruments, dental instruments and orthopedics. The medical device agreement would also seek to eliminate non-tariff barriers such as undue delays in customs clearance, trade restrictive conformity assessment procedures, and other obstacles that hinder market access for these goods.

USTR’s press release describing the proposal...

If your company is interested in learning about how the proposed agreement on medicines and medical devices may impact you, please contact Karen Toliver or Gennie Ross.

Reduce Your Costs with Temporary Suspension of U.S. Import Duties. . .  Is your company compelled to import a product because no U.S. company produces it? Do you pay import duties on such products? If so, then you may be eligible to obtain the temporary suspension of the import duties and experience a reduction in your input costs. The Senate may soon consider requests from U.S. businesses to temporarily suspend import duties on products of interest to their constituents. Such suspensions will be enacted through a Miscellaneous Tariff Bill (see related story above). To be eligible for the temporary duty suspension, there must be no U.S. production of the product and the potential loss of revenue to U.S. Treasury (from the lifting of import duties) cannot exceed $500,000 annually.

If you are interested in determining whether you have imports that are potentially eligible for inclusion in the MTB, please immediately contact Gennie Ross.

Customs Compliance Seminars. . .  As a pilot program for future seminars, SPI representatives recently presented an overview of U.S. customs import and export procedures to an SPI member. The seminar provided a review of required documentation for international shipping, tips on how to classify products under the Harmonized Tariff Schedule, and guidance on complying with shipping requirements under the North America Free Trade Agreement. These and other import/export compliance issues will be discussed in SPI’s upcoming Guide to Importing and Exporting, a booklet soon available to members at no cost. Coinciding with the release of the booklet, SPI will schedule a series of webcast seminars over the next several months covering the basics of importing and exporting.

Free Legal Advice on IPR Protection in China for Small Businesses. . .  The Department of Commerce, in conjunction with the American Bar Association and the National Association of Manufacturers, is offering a new China Intellectual Property Rights Advisory Program. U.S. small and medium-sized enterprises (SMEs) can request a free, one-hour consultation with a volunteer attorney experienced in both IPR issues and the Chinese market to learn how to protect and enforce their intellectual property (such as trademarks, patents and copyrights) in China.

Request your free China IPR legal consultation!

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.

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