The following article appeared in the King & Spalding Trade & Manufacturing Alert here.

In response to petitions filed by members of various domestic industries, the Administration initiated five antidumping (“AD”) and countervailing duty (“CVD”) investigations on April 19-20. The five industry-specific cases were brought against (a) bottom mount refrigerator-freezers from Korea and Mexico, (b) steel wheels from China, (c) galvanized steel wire from China and Mexico, (d) stilbenic optical brightening agents from China and Taiwan, and (e) steel nails from United Arab Emirates. A major factor in initiating these cases was the increase in imports during 2010 after lower imports in 2009. In most of these cases, the total value and/or volume of imports of the subject merchandise decreased from 2008 to 2009, but increased from 2009 to 2010. These increases appear to be following the trend of growth in the U.S. economy, indicating that conditions may be ripe for more trade petitions.

These new petitions came after a significant lull in trade remedy petitions. Only one investigation was initiated from May 2010 to April 2011. Several U.S. government officials and private practitioners offered their views on the lull in the April 12, 2011 program “Are AD/CVD Remedies Still Viable For U.S. Producers?” held at American University’s Washington College of Law. Christian Marsh, Deputy Assistant Secretary for AD and CVD Operations at the Department of Commerce suggested that the dip in AD and CVD petitions during 2010 may be related to circumvention issues. Mr. Marsh stated that because of the continuing burden on petitioners to fight circumvention after the initial case is won, an industry may perceive the that the cost of bringing a new trade petition to be high. The newly filed petitions, however, suggest that the real reason for a decline in filings may have been a temporary decline in imports caused by the recession.

Bradford Ward, Deputy General Counsel & Acting Assistant U.S. Trade Representative for Monitoring and Enforcement remarked that industries will continue to file AD and CVD petitions if they experience distortions in the market because trade remedies are one of the last tools available to combat international unfair trade practices. Mr. Ward also commented that industries may file AD and CVD petitions if they believe that the government is not responding to their concerns through legislation or other government-to-government dialogues.

The following article by Sewell Chan appeared in the New York Times here.

WASHINGTON — The World Trade Organization on Monday upheld the Obama administration’s decision last year to impose tariffs of up to 35 percent on tires from China, rejecting a complaint by Beijing that the punitive duties violated international agreements.

Reuters reported Tuesday that the Chinese Ministry of Commerce planned to appeal the W.T.O. ruling. The ministry said in a statement on its Web site that it was ‘‘deeply concerned’’ about negative consequences from the Monday ruling.      ‘‘The U.S. safeguard measures adopted toward Chinese tires are trade protectionism intended to shift domestic political pressure,’’ the statement said, according to Reuters. ‘‘They are not in line with W.T.O. rules and have been widely criticized.’’

Monday’s decision, which the United States trade representative called “a major victory,” came on the same day that differences on trade and currency between the world’s two largest economies were highlighted on two other fronts.

A federal agency found on Monday that ineffective enforcement by the Chinese authorities had contributed to widespread trademark, copyright and patent infringement in China.

Also on Monday, two senators, Sherrod Brown, Democrat of Ohio, and Olympia J. Snowe, Republican of Maine, proposed amending the tax bill in the Senate to include a measure that would let theUnited States impose higher duties on some Chinese imports in retaliation what most economists agree is an undervalued currency.

The developments came on the eve of two days of talks here between Wang Qishan, China’s vice premier for economic affairs, and the United States commerce secretary, Gary Locke, and the trade representative, Ron Kirk. Those talks are expected to include enforcement of intellectual property rights but not currency valuations, which in the United States is the purview of the Treasury Department.

Mr. Kirk applauded the ruling in the tire case, saying it “demonstrates that the Obama administration is strongly committed to using and defending our trade remedy laws to address harm to our workers and industries.”

The tariffs were a significant victory for the United Steelworkers, which had requested the tariffs, contending that a surge in imports had threatened domestic manufacturing.

“Since the tariffs have been in effect, U.S. domestic tire production has increased, tire producers have made new capital investments, and new jobs have been created for American tire workers,” the union’s president, Leo W. Gerard, said in a statement after the W.T.O. ruling was issued in Geneva.

The imposition of the tariffs was the first time that the United States invoked a special safeguard provision that was part of its agreement to support China’s entry into the W.T.O. in 2001.

Under that provision, United States companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that American producers have suffered a “market disruption” or have experienced a surge in imports from China. In more traditional antidumping cases, the government would have to determine that a trading partner was competing unfairly or selling its products at less than their true cost.

The United States International Trade Commission, a quasi-judicial independent agency, had recommended that the Obama administration impose the tariffs for three years.

According to the steelworkers’ union, a surge in imports from China resulted in sharp declines in capacity, production, shipments and employment by American tire producers between 2004 and 2008.

Domestic tire capacity declined to 186.4 million tires, from 226.8 million, during that period, while production dropped to 160.3 million tires, from 218.4 million.

The United States already had a 4 percent tariff on Chinese tires. The new duties involved an additional tariff of 35 percent for one year, reduced to 30 percent in the second year and 25 percent in the third.

Three days after the administration announced its decision, the Chinese government brought a complaint to the W.T.O., calling the duties “a serious case of trade protectionism, which China resolutely opposes.”

A three-member W.T.O. panel found that the United States “did not fail to comply with its obligations” under world trade agreements. China can appeal the panel’s findings to the W.T.O.’s appellate body within 60 days.

The Obama administration said the tariffs had helped domestic producers increase production, preserve jobs and consider new investments. But the Tire Industry Association, a trade group that seeks to end the tariffs, has questioned the tariff’s effectiveness and called for it to be lifted.

On the matter of intellectual property, the trade commission released a report Monday finding that violations of intellectual property rights “remains a central concern in the U.S.-China bilateral trade relationship.”

The report noted that the federal Customs and Border Protection agency seized $204.7 million worth of counterfeit and pirated goods that originated in China in the 2009 fiscal year. Footwear made up nearly half of that amount, followed by handbags, wallets and backpacks; consumer electronics; and apparel.

The report also covered a move by China to promote “indigenous innovation” through policies and regulations that United States companies view as potentially discriminatory.

Senator Max Baucus, a Montana Democrat and chairman of the Senate Finance Committee, which oversees trade, urged China to address the report’s findings during the bilateral talks scheduled for Tuesday and Wednesday here, part of a forum known as the United States-China Joint Commission on Commerce and Trade.

A second report, due in May, will try to quantify the impact of intellectual property violations and “indigenous innovation” policies on American jobs and workers.

Damning:

At yesterday’s hearing, former FDA officials blamed the agency’s
middle and upper management for its unwillingness to change. Benjamin
England, a former regulatory counsel and 17-year veteran at the FDA,
said the agency failed to act on more than 100 proposals for change,
and he described the current food-import system as outdated, inadequate
and wasteful.

See full article from the WSJ. (Read more). 

FDA Is Expected to Seek More Food-Safety Powers Plan Would Include A Proactive Approach, Faster Response System
By JANE ZHANG
September 26, 2007; Page D12

WASHINGTON — The Food and Drug Administration, following a
series of recent food scares, for the first time in years will likely
seek additional powers to police food safety.

Assistant FDA Commissioner David Acheson told a House subcommittee that
his agency lacks the needed authority now and may request such power in
a new food-safety proposal. An FDA spokesman declined to elaborate what
the new authorities will be, but says the plan will be announced in
four to six weeks.

In his testimony, Dr. Acheson, the FDA’s point man to draft the plan,
said it will include three pieces: a proactive approach to prevent
contamination, a risk-based inspection system to focus on troublesome
products and a faster response system to contamination. The plan, if
enacted, would reflect a strategic shift inside the agency away from
the FDA’s traditional method of reacting to crises.

The announcement came as Democrats on Capitol Hill are becoming
increasingly impatient for what they perceive to be the Bush
administration’s lack of action to overhaul the nation’s food-safety
system. Already, the agency has been struggling to deal with a slew of
food scares in the past year, involving products ranging from bagged
spinach and peanut butter to contaminated wheat flour from China.

"Food safety at FDA is a stepchild," said Rep. Rosa DeLauro, the
Connecticut Democrat who is chairwoman of the House Agriculture
Appropriations Subcommittee. While FDA officials said they are limited
by the resources they have, Ms. DeLauro said the FDA hasn’t made good
use of the money in the past and she isn’t willing to "appropriate
further money into a black hole."

The Democratic majority has proposed to fix the system, instead,
through overhauls such as establishing a single-food agency, giving the
FDA new recall authority and allowing the agency to charge importers
user fees to fund food inspection. A House Energy and Commerce
subcommittee will hold a hearing on the user-fee legislation today.

At yesterday’s hearing, former FDA officials blamed the agency’s middle
and upper management for its unwillingness to change. Benjamin England,
a former regulatory counsel and 17-year veteran at the FDA, said the
agency failed to act on more than 100 proposals for change, and he
described the current food-import system as outdated, inadequate and
wasteful.

"Given these circumstances, increasing funding to support the FDA’s
current import paradigm without requiring significant change in its
approach would produce far too much additional waste, result in even
more shipping delays for compliant and safe import shipments," said Mr.
England, a lawyer at Jones Walker in Washington.

There are signs of a shift. While the FDA’s parent agency, Department
of Health and Human Services, rebuked the agency’s proposal to regulate
produce this year, the HHS Secretary Mike Leavitt now heads the White
House’s panel on imports. His recent proposal to overhaul the import
system is similar in many respects to Dr. Acheson’s food-safety plan.
The food industry also came out to support such a risk-based,
preventive approach.

President Bush has formed a high level panel to study the safety of
imports.  These food safety experts will be on the panel.

Alberto (I don’t recall) Gonzales, Attorney General;

Michael Leavitt, Secretary of Health and Human Services;

Condoleeza (piano player) Rice, Secretary of State;

Mike (meat packer lackey) Johanns, Secretary of Agriculture;

Michael (New Orleans) Chertoff, Secretary of Homeland Security;

Henry (I hate protectionists) Paulson, Secretary of the Treasury;

Carlos (I see no currency manipulation) Gutierrez, Secretary of Commerce;

Mary Peters, Secretary of Transportation.

I
suggest starting with Chinese (salmonella) shrimp, Vietnamese
(flouroquinolone) catfish, Hersheys (salmonella) kisses and Uruguayan
(foot and mouth disease) beef as the main courses for a personal taste
test.  Served nicely, with white linen, on that big table around
which they meet.

While problems with Chinese goods bedevil US buyers and
others, even the news from China
may be tainted. According to a recent report, Chinese news agency Xinhua could
be illegally adulterating its own financial reports.

The wild frontier of Chinese business is far too immature
for the United States,
where lies may be told, but are never condoned for long.

Meanwhile, our own news
agencies wrestle with takeover artists, leading some of us to ask, “How long
will honest and objective news reporting be available", even here?

" February 13, 2007

Soaring imports of steel, high-tech goods, and other products from
China combined with sharply higher oil prices to drive trade deficit to
new record

by Robert E. Scott with research assistance from Lauren Marra

The U.S. Department of Commerce today reported that the goods and
services trade deficit reached a record level of $764 billion in the
2006, an increase of $47 billion (6.5%) since 2005. The trade deficit
increased by an unexpectedly large $3 billion in December due to sharp
increases in imports of industrial supplies, autos and parts, and
capital goods. Notable facts from today’s report include:

The U.S. merchandise trade deficit, which includes only manufactured
goods and commodities, was $836 billion in 2006, an increased of $53
billion (6.8%) while the services surplus increased to $72 billion, a
$6 billion improvement (10.0%).

Petroleum product imports, including crude oil, accounted for all the increase in the U.S. trade deficit.

Rapid growth in the U.S. trade deficit with China, which rose to $233
billion (a 15% increase, or $31 billion), offset improvements in the
trade deficit with other countries such as Canada, Germany, the United
Kingdom and other European Union countries, Korea, Argentina, and
Brazil.

The U.S. absorbed very large increases in steel imports in 2006 (an
increase of 12 million tons, or 40%). Falling import prices and rapidly
growing foreign steel production capacity caused this import surge.
Unit values of many basic steel commodities fell sharply, including hot
rolled sheet (-6%), cold rolled sheet (-10%), wire rods (-85) and
standard pipe (-5.8%), and the average unit value of all steel imports
fell by 5%.

The United States had a $40 billion global trade deficit in advanced
technology products (ATP) in 2006, a $4 billion improvement over 2005
levels. The U.S. ATP deficit with China, however, increased $10
billion, and trade with China accounts for the entire U.S. ATP deficit
in 2006. The United States had a trade surplus in ATP products with the
rest of the world in 2005, which increased $14 billion in 2006. If the
U.S. ATP deficit with China had not grown in 2006, the overall
improvement in the U.S. ATP trade balance would have been much greater.

But for increases in the trade deficit in petroleum products and the
deficit with China, the U.S. trade balance would have improved
significantly in 2006, as shown in the figure below. U.S. trade
problems would be greatly reduced if the United States imported less
oil and balanced trade with China.

The U.S. merchandise trade
deficit has increased every year since 1991 (except for the recession
year of 2001). The deficit reached 6.2% of GDP in 2006, as shown in the
figure. U.S. petroleum imports and the trade deficit with China explain
a growing share of this deficit, especially since 2002, after China
entered the WTO and oil prices began to rise rapidly.  Excluding
petroleum products, the U.S. trade deficit with the rest of the world
(except China) declined in 2006. If the United States could eliminate
its trade deficit with China and achieve energy independence, then the
remaining trade deficit could be reduced to a sustainable 2-3% of GDP.

The U.S. deficit in manufactured goods rose from $602 billion in 2005
to $630 in 2006, an increase of 2%. Manufactured imports are
responsible for the bulk of the U.S. trade deficit. The manufacturing
sector has lost 3 million jobs since January 2001. Manufacturing
employment picked up in late 2005 and early 2006, but 129,000 jobs have
been lost since June of 2006. More than 43,000 U.S. manufacturing
establishments closed between 1999 and 2004.

Trade deficits, manufacturing job losses and plant closures are due, in
large part, to overvaluation of the U.S. dollar, which increases the
prices of U.S. exports and makes imports cheap. Depreciation of the
U.S. dollar against the Euro and Canadian dollar since 2002 has
contributed to improvements in the U.S. trade balance with those
countries. By contrast, China, Japan, and other countries in Asia have
intervened heavily in foreign currency markets to artificially depress
the value of their currencies. The U.S. trade deficit is unlikely to
recover until they halt these practices and allow their currencies to
appreciate substantially (e.g., 30% to 40%). Currency adjustment is
needed now before these problems get any larger. The costs of
adjustment will increase in the future if the trade deficit continues
to grow."