U.S. Trade Representative
Kirk Expresses Support for Pending Free Trade Agreements
U.S. Trade Representative Ron Kirk announced on July 16, 2009, in a speech to steel workers in Pennsylvania, that among his top priorities for 2009 will be concluding the proposed free trade agreements with Colombia, Panama and South Korea. After the speech, he noted that the Obama Administration would soon start pushing the free trade agreements with the Congress.
The irony here is that free trade is more often than not inimical to the Democratic Party and was an issue in the last two Presidential campaigns and in the Presidential debates. Both Gore and Obama questioned the various free trade agreements in their long Presidential campaigns. However, now that Democrats are in power and the reality is that the entire world is turning toward free trade, the Obama Administration has changed its tune and is apparently going to push these three free trade agreements. And by most accounts, that is the correct policy for this country.
U.S. Department of Agriculture
Consensus Statement Issued on Implementation of Lacey Act
On July 17, 2009, a group composed of importers, forestry and environmental groups and other non governmental organizations (“NGOs”) impacted by the 2008 amendment to the Lacey Act, released a Consensus Statement on how to implement the amendment. You may recall that under the 2008 amendment, importers have to certify that their imported products made from wood do not contain wood from any illegally harvested plant.
Under the Consensus Statement, all importers would be allowed to make use of blanket declarations for repeat type imports. This would be a substantial expansion from current practice where only importers of certain wood products from Canada, who use expedited border release programs, can use the blanket declarations.
The NGOs note in this regard:
“In many instances, shippers may import the same products from the same sources on a regular basis, which, in some cases can total thousands of shipments a year. The identical declarations for these repeat importations add an administrative burden and cost on the agencies, importers and customs brokers in filing and collecting the required import declaration under the Lacey Act without providing additional benefit for tracing the source of wood.” Consensus Statement at 1.
In order to qualify for use of the proposed blanket declaration, the importer must request approval from U.S. Customs and Border Protection (“CBP”) to participate in the proposed Blanket Lacey Act Declaration Program. And in order to participate, the importer must meet the following requirements:
· Participate in the Customs-Trade Partnership Against Terrorism (C-TPAT)
· Maintain a continuous bond
· Identify the products to the sixth digit of the HTS
· Identify the foreign supplier of the product
· Provide, throughout the duration of the blanket duration, the estimated annual quantities, by quarter, of the product to be shipped
· Identify the “deliver to party”
· List the anticipated genus and species and countries of origin of the plant.
Upon approval from CBP, the importer may then file a blanket declaration within 30 days following the end of each calendar year quarter.
The Consensus Statement also addresses the tricky issue of products made from a composite of woods, such as particle board or fiberboard. The NGOs propose that these two HTS categories “…should not be mandatory…” until there is some practical way to obtain the required information. Consensus Statement at 3.
Another suggestion from the Consensus Statement is that after April 2010 (the last phase in period), new HTS items should not become mandatory “…sooner than one year after initial notice is given in the Federal Register.” Consensus Statement at 5. The NGOs then go on to suggest that future HTS items, including HTS Chapter 96, covering pencils, only need to declare the solid wood in the product, if there are multiple components in the product. This is the first time that I have seen pencils specifically referred to in the discussion of effected wood products. So it now appears that it is possible that finished pencils may be added down the road. Currently, only pencil slats are included in the initial phases of USDA’s implementation of the program.
Finally, the Consensus Statement suggests that implementation of the amendment to the Lacey Act be “…prospective only” and should not apply to any products made before the amendment was enacted. Consensus Statement at 7. This seems only reasonable since the law was amended with very little advance notice, and once goods are entered, it is very hard to send them back to the exporter.
It will be interesting to observe Congressional and Executive Branch reaction to the Consensus Statement. It is our understanding that Customs supports most of the concepts proposed in the Consensus Statement. We will keep our readers apprised of this important negotiation.
U.S. Department of Commerce
Exports Increase in May 2009
As regular readers of this update know, I regularly track the U.S. export data. Exports have been on a serious decline since late last year. However, I am pleased to report that exports of goods and services increased by $1.9 million in May. The biggest increase came in the industrial supply and material sector, which is in many ways the backbone of the U.S. economy. The biggest decrease was in the auto sector, slightly offsetting a $2.1 billion increase in the industrial supply sector.
We will report further when the June (6 month) numbers come out.