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Washington Trade Daily
Volume 17, Numbers 164 and 165 Friday and Monday, August 15 and 18, 2008
_______________________________Trade Reports International Group___________________________
ITC Votes on Off-Road Vehicle Tires
The US International Trade Commission determined Friday that a US industry is materially injured by reason of imports of off-the-road tires from China that are subsidized and sold in the United States at less than fair value (WTD, 7/9/08).
The five-to-one decision drew praise from Congressional lawmakers, labor and domestic producers who said the unfair Chinese imports had cost US jobs.
As a result of the Commission’s affirmative determinations, the Commerce Department will issue a countervailing duty order and an antidumping duty order on the Chinese imports. The commissioners did not agree with Commerce’s finding that critical circumstances exist.
Speaking to reporters by telephone Friday, Illinois Democrat Phil Hare noted that Chinese imports dropped after Commerce imposed preliminary duties late last year after surging by 75 percent from 2004 to 2007. “This decision shows US trade remedy laws can work for US companies and workers,” he said. Titan Tire Corporation – the chief petitioner along with the United Steelworkers Union – is located in Mr. Hare’s district.
Commerce found subsidy rates up to 14 percent and dumping margins up to 210 percent.
Graphite Electrodes
Separately, Commerce on Friday announced its affirmative preliminary determination in the antidumping duty investigation of imports of graphite electrodes from China (WTD, 3/3/08). Graphite electrodes are typically applied in primary melting, ladle metallurgy and specialty industrial furnace applications such as foundries, smelters and steel refining operations.
Commerce determined that Chinese exporters sold small diameter graphite electrodes in the United States at less than normal value. Chinese mandatory respondents, Fushun Jinly Petrochemical Carbon Co., Ltd., and the Fangda Group received preliminary antidumping margins of 132.8 and 147.80 percent, respectively. In addition, 11 Chinese respondents qualified for a separate rate of 140.3 percent. All other Chinese exporters are subject to the China-wide rate of 159.34 percent.
NAM and NAMA
The influential National Association of Manufacturers last Thursday gave a failing grade to the latest iteration of the Doha Development Agenda’s market access negotiations state of play – charging that the analysis by negotiations chair Don Stephenson does not match the “ambition” expected from the industrial goods talks – especially relating to sectoral tariff negotiations (WTD, 8/13/08).
“The NAM is dismayed at the chairman’s report, which represents a further and unacceptable weakening of ambition in the Doha Round. Moreover, the report is a sharp departure from what was discussed at the July WTO Mini-ministerial in Geneva,” commented NAM President John Engler in a statement.
“Rather than finding a way forward for the Doha round, the chairman’s report diminishes the chances for any convergence of views. The report has no official standing and the NAM has urged US Trade Representative Susan Schwab to make it clear the United States does not see the report as providing a basis for negotiations,” the statement went on.
Industrial goods are nearly two-thirds of all world trade, Mr. Engler pointed out. NAM and its counterpart organizations abroad have made it plain that agreement is possible only if there is a balance in industrial negotiations. “Given the weakness of the present across-the-board industrial tariff cutting proposal, balance is only possible if the key countries of Brazil, China and India were to participate in negotiating sectoral agreements that would eliminate duties in major industrial sectors.”
NAM agreed that World Trade Organization Secretary General Pascal Lamy’s July 25th compromise text could provide the basis for a balanced negotiation – with the understanding that Brazil, China and India would agree to participate in negotiating industrial sector agreements. “The sectoral proposals in Lamy’s text have been completely revised unilaterally in the NAMA chairman’s report. His report undercuts the possibility for meaningful sectoral agreements, and hence the possibility for a balanced outcome to the negotiations,” Mr. Engler stated.
“The chairman’s report in essence reopens the July 25 Lamy compromise text and tilts it against the United States. ... If the text is to be revisited in some areas, then it should be revisited in others – including by restoring a robust tariff-cutting formula that would significantly reduce advanced developing country tariffs and shrink the scope of their unacceptably large loopholes.”
The basis for moving ahead is not the August 14 NAMA report, but rather the Director General’s July 25th text – with Brazil, China and India agreeing to participate in sectoral negotiations, NAM concluded.
Trade – McCain and Obama
The two top Presidential contenders head into their parties’ political conventions in the next few weeks with vastly differing road maps for the future of US trade policy (WTD, 08/13/08).
Democrat Sen. Barack Obama (Ill) and Republican John McCain (Ariz) hold opposing views on the fate of pending free trade agreements negotiated by the Bush Administration. They also have competing visions of what future trade pacts should look like.
Both candidates agree trade can create US jobs. Sen. McCain supports the pending free trade agreements with Colombia, South Korea and Panama and promises to pursue multiple new trade pacts if elected president. But Sen. Obama wants pending FTAs with Colombia and South Korea renegotiated and argues any future trade pacts should be with countries that can live up to high labor and environmental protection standards.
Following is a summary of each candidate’s positions over the past several months on various trade issues:
McCain
Agriculture – vows to seek an end to all agricultural tariffs and farm subsidies that are not based on clear need. Opposed the 2007 Farm Bill.
Cuba – believes trade should not be normalized until there is a return to democracy.
NAFTA – believes the North American Free Trade Agreement has been a boon to the US economy and opposes any US unilateral effort to amend the agreement.
Russia – in the wake of Russia’s recent military actions in Georgia, Sen. McCain raised the possibility of blocking Moscow’s accession to the WTO and questioning its continued membership in the G-8.
Trade Adjustment Assistance – wants to overhaul unemployment insurance and make it a program for retraining, relocating and assisting workers who have lost a job. He wants to reform the half-dozen existing training programs, strengthen community colleges and technical training and give displaced workers more choices.
Trade Agreements – “believes that globalization is an opportunity for American workers today and in the future,” according to his campaign website. “Ninety-five percent of the world’s customers lie outside our borders, and we need to be at the table when the rules for access to those markets are written. To do so, the US should engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules.” Sen. McCain has specifically said he wants to negotiate a free trade agreement with the European Union.
Trade Enforcement – believes trade agreements must be effectively enforced.
Trade Promotion Authority – believes the next President must have TPA, including “fast track” authority preventing Congress from amending FTAs.
US-Colombia FTA – supports.
US-Korea FTA – supports.
World Trade Organization – supports a successful conclusion to the Doha Round.
Obama
China – has said trade with China can only be good for America if China plays by the rules. He has accused China of manipulating its currency, dumping goods into the US market and violating intellectual property rights.
Cuba – as a candidate for the US Senate, said he would favor lifting the long-standing trade embargo. More recently, he has said any change in US policy should depend on signs of democratic change in Cuba.
NAFTA – Sen. Obama’s position on the North American Free Trade Agreement has modulated somewhat since earlier this year, when he called for renegotiating the agreement to include worker rights and environmental protections. Now he pledges to work with the leaders of Canada and Mexico to amend the agreement so that it works better for all three countries – a position taken in the Democratic Platform.
Russia – In the wake of Russia’s recent military action in George, Sen. Obama has called for reviewing Moscow’s bid to join the WTO.
Trade Adjustment Assistance – wants to update current TAA by extending it to services workers, creating flexible education accounts to help workers retrain and providing retraining assistance for workers in sectors of the economy vulnerable to dislocation before they lose their jobs.
Trade Agreements – “believes that trade with foreign nations should strengthen the American economy and create more American jobs,” according to his campaign website. “He will stand firm against agreements that undermine our national security... He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks.”
Trade Enforcement: has criticized the Bush Administration for failing to enforce existing trade agreements and has said this will be a high priority for his Administration.
Trade Promotion Authority – wants to give Congress a bigger role in selecting countries for free trade agreements.
US-Colombia FTA – opposes the agreement until the Colombian government does more to end violence against trade unionists.
US-Korea FTA – opposes the FTA and wants a renegotiation of provisions on automobile trade and agriculture. In a letter to President Bush, Sen. Obama called the agreement “badly flawed.”
World Trade Organization – supports conclusion of the ongoing Doha trade round and believes the final agreement should help developing countries. Has also said he wants the WTO to take on worker rights and environmental protection issues and says he will pressure the WTO to do a better job of enforcing trade agreements and stopping countries from providing unfair government subsidies to their exporters.
Around the Globe
Brazil's foreign minister says President Luiz Inacio Lula da Silva is personally lobbying world leaders to reinitiate the failed Doha round of trade talks under the World Trade Organization, the Associated Press news service reported from Brasilia (WTD, 8/14/08). Celso Amorim says that Silva has spoken with Indian Prime Minister Manmohan Singh, British Prime Minister Gordon Brown, Chinese President Hu Jintao and President George W. Bush.
Amorim said Thursday that “in all the conversations the president got a good reception, but we know the devil is in the details.” The talks collapsed at the end of July in Geneva over disagreements on farm imports that ultimately divided the United States and developing countries led by China and India.
Sen. Max Baucus thinks the United States is missing the boat when it comes to trade, the Associated Press news service reported from Kalispell, Montana (WTD, 7/30/08). At a global trade conference Wednesday in Kalispell, the Montana Democrat said other nations are sealing free-trade deals among themselves, lowering and eliminating tariffs to pump new vigor into their markets. But he says the United States is “a little slow.”
Most on a panel of 5 international trade ambassadors – from Vietnam, Colombia, Morocco, New Zealand and Peru – agreed. Baucus pointed to New Zealand trade ambassador Roy Ferguson. His country has a trade agreement with China, but not with the United States; and Baucus says it's not for lack of interest on the part of New Zealand. Baucus says America needs to reach out more aggressively to get trade agreements with other countries.
A South American trade group gave member states the go-ahead to set their own intellectual property laws on Thursday, letting Peru clear a key hurdle toward implementing a free-trade deal with the United States, the Associated Press news service reported from Lima (WTD, 7/17/08). The change gives member states the right to make their own intellectual property laws, allowing Peru to tighten copyright, trademark and patent protections, which the US required it to do before enacting a free-trade deal signed in 2006.
The South American group, known as the Andean Community, has been divided over a possible trade deal with the European Union, and over member nations' separate trade pacts with other countries, including the US. The group also has its own agreement on intellectual property laws, and must approve any changes that members might make to their own related laws.
Ecuador and Bolivia have criticized Peru's freer trade stance, and Bolivian opposition has stalled trade talks between the Andean Community and the EU. The two nations have opposed past attempts to change the group's trade policies, arguing that Peru's trade deal with the US impedes regional integration. But Ecuador reversed course Thursday, joining Colombia and Peru in backing the change during a second round of voting, Peru's Trade Minister Mercedes Araoz said.
The United States ranked among Cuba's top five trading partners in 2007 for the first time since imposing a trade embargo in 1962, Reuters news service reported. Data for 2007 on the Web site of Cuba's National Statistics Office placed the United States fifth at $582 million, up from $484 million in 2006. The United States began selling food to Cuba in 2002 under an amendment to the embargo.
Southern African countries say they have launched a free-trade agreement after two decades of negotiations, the Associated Press news service reported from Johannesburg (WTD, 8/14/08). Sunday's announcement came at the end of a summit of the 15-country Southern African Development Community. It means tariff-free movement of 85 per cent of the goods traded among members.
But import licences, visa fees and bureaucratic delays can still make cross-border business expensive. There also are fears industries in South Africa, with the most sophisticated economy in the region, will flood neighboring markets. SADC members Angola and Congo, with their war-devastated economies, did not immediately sign on.
Colombia posted a trade surplus of $567 million in June compared with a deficit of $407 million in the same month in 2007, the national statistics department, said Friday according to a Dow Jones news service report from Bogota. The country reported a trade surplus of $1.32 billion in the first six months of the year. Imports in June rose 24 percent to $2.67 billion, boosted by imports of machinery, electric appliances and vehicles. Imports in the first six months of the year rose 24 percent to $18.93 billion.
Peru posted a trade surplus of $420 million in July, a 55 percent decline compared with a surplus of $930 million in the same month a year earlier, the Central Reserve Bank of Peru said Friday according to a Dow Jones news service report from Lima. That decline came mainly about due to a large increase in imports. The central bank said that exports reached $3.16 billion in July, a 17 percent increase over the same month the previous year. Imports in July rose 55 percent to $2.74 billion.
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On the Web......
Agriculture
Meat Exports. US Meat Export Federation statement on meat exports. (available at: http://www.usmef.org ) issued: 8/14/08.
Aviation
European Union. Statement by Sen. Brown on the US-European Union open skies aviation agreement and outsourcing. (available at: http://brown.senate.gov/newsroom/press_releases/release/?id=e6e18d33-873c-422d-b4c8-14d6830fe85d ) issued: 8/14/08.
Export Controls. Aerospace Industries Association statement on the final State Department rules on 17(c) aircraft parts exports. (available at: http://www.aia-aerospace.org/ ) issued: 8/15/08.
Canada
Lumber. Customs Bureau final rule on imports of softwood lumber from Canada. (available at: http://www.customs.treas.gov/xp/cgov/newsroom/news_releases/08142008_5.xml ) issued: 8/14/08.
China
Electrodes. Commerce Department statement on dumping of small diameter graphite electrodes from China. (available at: http://trade.gov/press/press_releases/2008/graphite_081508.asp ) issued: 8/14/08.
Electrodes. Kelley Drye & Warren LLP statement on Commerce Department antidumping decision on imports of small diameter graphite electrodes from China. issued: 8/15/08.
Off Road Tires. International Trade Commission statement on imports of off road tires from China. (available at: http://www.usitc.gov/ext_relations/news_release/2008/er0815ff2.htm ) issued: 8/15/08.
Off Road Tires. United Steelworkers of America statement on the International Trade Commission determination on imports of off-road tires from China. (available at: http://www.usw.org ) issued: 8/15/08.
Off Road Tires. Statement by Sen. Brown on International Trade Commission determination on off-road tires from China. issued: 8/15/08.
Off Road Tires. Statement by Rep. Hare on International Trade Commission determination on off-road tires from China. issued: 8/15/08.
Off Road Tires. Statement by Rep. Manzullo on International Trade Commission determination on imports of off road tires from China. issued: 8/15/08.
US Relations. Center for American Progress report on US-China relations. (available at: http://www.americanprogress.org/issues/2008/08/china_report.html ) issued: 8/15/08.
Doha Development Agenda
NAMA. National Association of Manufactures statement on the Doha Development Agenda NAMA negotiations. (available at: http://www.nam.org ) issued: 8/14/08l.
East Europe
Business. Doing Business report on doing business in Southeast Europe. (available at: http://www.doingbusiness.org/documents/subnational/DB08_Subnational_Report_SEEurope.pdf ) issued: 8/15/08.
European Union
Aviation. Statement by Sen. Brown on the US-European Union open skies aviation agreement and outsourcing. (available at: http://brown.senate.gov/newsroom/press_releases/release/?id=e6e18d33-873c-422d-b4c8-14d6830fe85d ) issued: 8/14/08.
Export Controls
Aviation. Aerospace Industries Association statement on the final State Department rules on 17(c) aircraft parts exports. (available at: http://www.aia-aerospace.org/ ) issued: 8/15/08.
Violation. Commerce Department announcement of illegal exports of underwater navigation equipment. (available at: http://www.bis.doc.gov/news/2008/bis_press08142008.htm ) issued: 8/14/08.
Forest Products
Canadian Lumber. Customs Bureau final rule on imports of softwood lumber from Canada. (available at: http://www.customs.treas.gov/xp/cgov/newsroom/news_releases/08142008_5.xml ) issued: 8/14/08.
Imports
China. Commerce Department statement on dumping of small diameter graphite electrodes from China. (available at: http://trade.gov/press/press_releases/2008/graphite_081508.asp ) issued: 8/14/08.
China. United Steelworkers of America statement on the International Trade Commission determination on imports of off-road tires from China. (available at: http://www.usw.org ) issued: 8/15/08.
China. International Trade Commission statement on imports of off road tires from China. (available at: http://www.usitc.gov/ext_relations/news_release/2008/er0815ff2.htm ) issued: 8/15/08.
China. Statement by Sen. Brown on International Trade Commission determination on off-road tires from China. issued: 8/15/08.
China. Statement by Rep. Hare on International Trade Commission determination on off-road tires from China. issued: 8/15/08.
China. Statement by Rep. Manzullo on International Trade Commission determination on imports of off road tires from China. issued: 8/15/08.
China. Kelley Drye & Warren LLP statement on Commerce Department antidumping decision on imports of small diameter graphite electrodes from China. issued: 8/15/08.
Intellectual Property Rights
UNCTAD. UNCTAD announcement of new world data bank on creative products. (available at: http://www.unctad.org ) issued: 8/15/08.
Libya
US Relations. State Department statement on the Libya claims commission report. (available at: http://www.state.gov/r/pa/prs/ps/2008/aug/108251.htm ) issued: 8/15/08.
Mexico
Trucking. California Travel and Tourism Administration statement on Mexican cross-border trucking. (available at: http://www.visitcalifornia.com/AM/Template.cfm?Section=Home ) issued: 8/15/08.
States
California. California Travel and Tourism Administration statement on Mexican cross-border trucking. (available at: http://www.visitcalifornia.com/AM/Template.cfm?Section=Home ) issued: 8/15/08.
Steel
Imports. Specialty Steel Industry of North America statement on steel imports. (available at: http://www.ssina.com/news/releases/pdf_releases/20080814.pdf ) issued: 8/14/08.
Transportation
Mexican Trucking. California Travel and Tourism Administration statement on Mexican cross-border trucking. (available at: http://www.visitcalifornia.com/AM/Template.cfm?Section=Home ) issued: 8/15/08.
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