West Coast Port Talks Update
Eric Jones - C-Air Los Angeles / www.c-air.com
The Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) began their daily negotiations May 12th to reach agreement on a new labor contract. The current contract expires June 30th. Last week the two sides exchanged 36 pages of demands to agree upon before a new contract is finalized. Most of the demands will either be agreed to or dismissed right away, setting the stage for the major positions to be argued.
The ILWU wants the PMA to be responsible for the “Cadillac tax” on their health care benefits set to go into effect in two years. The yearly penalty under Obamacare on the current health care program would be $190 million if the benefits remain the same. The PMA has countered to lower current health care benefits so the threshold penalty isn’t reached.
The ILWU is also seeking yearly salary increases of $5.50 hourly, and adding one paid work holiday and two vacation days yearly for all members in addition to an increase in pension benefits.
The PMA is looking to maintain the automation and technology contract language already in place. The ILWU wants to renegotiate this point to protect against the potential loss of jobs due to increased automation.
The ILWU wants the new contract to be for two years while the PMA wants another six year contract, as the one set to expire.
It is possible that a new contract will not be agreed to by June 30th, causing potential disruption of port operations during the first two weeks of July. The last major labor disruption on the West Coast was in 2002 that resulted in a ten day port shutdown and was ended when President Bush invoked the emergency provision under the Taft-Hartley Act.
Related to the contract expiration, the steamship carriers have announced a possible precautionary congestion surcharge of $800 per 20’ container and $1,000 per 40’ container due to a strike, lockout, or work stoppage.
FTC Approves Final Amendments to Wool Products Labeling Rules
Federal Trade Commission / http://www.ftc.gov/news-events/press-releases/2014/05/ftc-approves-final-amendments-wool-products-labeling-rules
The Federal Trade Commission has approved final changes to its Wool Products Labeling Rules (Wool Rules) that clarify and update the Rules, provide more flexibility to industry, and align several provisions with recent amendments to the Textile Fiber Products Identification Act Rules (Textile Rules).
The Wool Rules require that labels on wool products disclose the manufacturer’s or marketer’s name, the country where the product was processed or manufactured, and information about the fiber content. The FTC issued the Rules under the Wool Products Labeling Act of 1939 (Wool Act). The agency completed its last review of the Wool Rules in 1998 and modified the Rules in 1998 and 2000. In 2006, the Wool Act was amended by the Wool Suit Fabric Labeling Fairness and International Standards Conforming Act, which provides that wool products identified as cashmere or as containing very fine wools are misbranded unless they have no more than the average fiber diameter specified in the Act.
In January 2012, the FTC sought comment on the Wool Rules as part of its systematic review of all FTC rules and guides. In response to the comments received, the Commission proposed changes to the Rules in September 2013 and sought public comment.
The agency now has amended the Rules to conform with the 2006 amendments to the Wool Act and the amended Textile Rules. The changes include incorporating the Wool Act’s new definitions for cashmere and very fine wools, clarifying descriptions of products containing virgin or new wool, and allowing certain hang-tags disclosing fiber trademarks and performance even if they do not disclose the product’s full fiber content.
The Commission vote approving the Notice amending the Wool Rules was 5-0. The changes will become effective 30 days after the notice is published in the Federal Register. (FTC File No. P124201; the staff contact is Robert M. Frisby, Bureau of Consumer Protection, 202-326-2098)
For more information, read Threading Your Way Through the Labeling Requirements Under the Textile and Wool Acts and Cachet of Cashmere: Complying with the Wool Products Labeling Act.
HSI Seizes Counterfeit Items Worth Over $30 Million from Massachusetts Flea Markets
Homeland Security Investigations / http://www.ice.gov/news/releases/1405/140522lawrence.htm
LAWRENCE, Mass. — U.S. Immigration and Customs Enforcement's (ICE), Homeland Security Investigations (HSI), in coordination with the Lawrence Police Department, seized approximately three tractor trailers worth of counterfeit items between two flea markets with a retail value of approximately $30 million. The seizure marks the largest in HSI Boston's history.
In addition to the seized goods, 42 individuals were arrested and 13 vehicles were seized within the Don Flea Market and the Lawrence Flea Market & Auction House. The operation was a culmination of a federal investigation by HSI special agents, in coordination with the Lawrence Police Department.
"Criminals who sell counterfeit products are a drain on our economy. They put a strain on main street by hurting legitimate businesses and tax payers," said Special Agent in Charge Bruce Foucart, HSI Boston. "Anyone who thinks counterfeiting is a victimless crime should realize the profits of these black-market sales are routinely diverted to support further criminal activity such as drug trafficking, and money laundering."
"This is an effort to support local, legitimate businesses who have complained of these individuals selling bogus merchandise," said Interim Lawrence Police Chief James Fitzpatrick. "In recent history, I believe this is probably the largest raid in Massachusetts involving counterfeit goods."
The seized items include counterfeit designer clothing, handbags, shoes, sportswear and electronics and represented trademarks violations against more than a dozen different brands to include Michael Kors, Nike, Louis Vuitton, Prada, Coach, and Ugg Australia. Approximately 100 HSI, state and local law enforcement officers participated in the Saturday operation.
The seizures targeted the sale and trafficking of counterfeit merchandise and apparel, a multimillion dollar criminal industry. The trafficking of these items is a lucrative business for criminals and becomes even more profitable in markets involving popular designer items.
As part of the national effort to combat the growing problem on counterfeit goods, the HSI-led IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. Working in close coordination with the Department of Justice Task Force on Intellectual Property, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety and the U.S. economy.
U.S. Service Providers Remain Competitive in Global Services Market, Reports USITC
U.S. International Trade Commission / http://www.usitc.gov/press_room/news_release/2014/er0528mm2.htm?source=govdelivery&utm_medium=email&utm_source=govdelivery
The The United States is the world's largest services market and was the world's leading exporter and importer of services in 2012, reports the U.S. International Trade Commission (USITC) in its new publication Recent Trends in U.S. Services Trade, 2014 Annual Report.
The USITC, an independent, nonpartisan, factfinding federal agency, compiles the report annually. Each year's report presents a qualitative and quantitative overview of U.S. trade in services and highlights some of the service sectors and geographic markets that contribute substantially to recent services trade performance.
This year's report focuses on electronic services and includes chapters on three specific industries: audiovisual services, computer services, and telecommunication services. Each chapter analyzes global market conditions in the industry, examines recent trade performance, and summarizes the industry's outlook.
The report describes trade in services via cross-border transactions through 2012 and via affiliate sales through 2011 (latest available data). Highlights include:
• In 2012, the value of U.S. commercial services exports was $621 billion (14 percent of global services exports), while imports totaled $411 billion (10 percent of global services imports).
• From 2011 to 2012, U.S. cross-border services exports rose 5 percent (down from nearly 11 percent in 2011), while U.S. services imports grew 4 percent (down from 7 percent in 2011). Electronic services accounted for 7 percent of exports and 8 percent of imports, yielding a trade surplus of $7.1 billion in this subsector in 2012.
• Within the services sector, sales by foreign affiliates of U.S. firms -- the leading channel by which many U.S. services are delivered to foreign markets -- rose by a robust 11 percent to $1.3 trillion in 2011. Electronic services accounted for $193 billion, or 15 percent, of the total.
• The contribution of private sector electronic services to U.S. gross domestic product (GDP) was $822.1 billion in 2012, accounting for roughly 6 percent of total U.S. private sector GDP. The output of these services grew by nearly 7 percent in 2012, outpacing total GDP growth in the private sector (3 percent). After slower growth during the previous five years, two industries within electronic services -- computer systems design and related services, and data processing and information services -- had the fastest GDP growth in 2012 (about 13 percent each).
• In 2012, electronic services accounted for only about 3 percent of total private sector employment, or 3.3 million full-time equivalent (FTE) employees. Employment in computer systems design and related services and in broadcasting and telecommunication services together represented 81 percent of this total, whereas employment in information and data processing services, along with motion picture and sound recording services, together accounted for the remaining 19 percent. Electronic services were the most productive U.S. sector in 2012, with an average output per worker of $249,802.
• A variety of impediments restrict trade in electronic services. Two examples include localization requirements for computer servers and online privacy protection measures that restrict cross-border data flows (such as those in the European Union). In addition, limits on foreign investment and on competition are prominent in several countries' telecommunication sectors, where former monopolies limit access to domestic networks. Noteworthy barriers affecting audiovisual services trade include quotas on imported films in such markets as France and China; Internet piracy of copyrighted intellectual property; and censorship.
• The USITC hosted its seventh annual services roundtable on November 14, 2013. The discussion, summarized in the report, focused on recent services negotiations and the assessment of services commitments in international trade agreements, as well as middle-income job opportunities for non-degree holders in service industries.
Recent Trends in U.S. Services Trade, 2014 Annual Report (Investigation No. 332-345, USITC publication 4463, April 2014) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4463.pdf.
PRESS RELEASE: International Trade Administration
http://www.trade.gov/press/press-releases/
05/23/2014 Commerce Finds Dumping of Imports of Welded Stainless Pressure Pipe from Malaysia, Thailand, and the Socialist Republic of Vietnam
05/22/2014 Commerce Preliminarily Finds Dumping of Imports of 1,1,1,2-Tetrafluoroethane from the People’s Republic of China
FACT SHEET: WTO Case Challenging Chinese Antidumping and Countervailing duties on Certain American-Made Automobiles
Office of the U.S. Trade Representative/ http://www.ustr.gov/about-us/press-office/fact-sheets/2014/May/WTO-Case-Challenging-Chinese-Antidumping-Countervailing-Duties-US-Made-Automobiles
What is this case about?
- In December 2011, the Chinese investigating authority, China’s Ministry of Commerce (“MOFCOM”), imposed duties on American-made cars and SUVs. China asserted that it did so to counteract harmful dumping and subsidization. The antidumping duties (AD) ranged from 2.0 percent to 21.5 percent. The countervailing duties ranged from 6.2 percent to 12.9 percent.
- In July 2012, the United States initiated a WTO challenge to the AD/CVD duties imposed by China. A WTO dispute settlement panel issued its report on May 23, 2014, finding in favor of the United States on nearly all U.S. claims.
What products are affected by China’s AD/CVD duties?
- The products affected by China’s AD/CVD measures are U.S.-produced cars and SUVs with an engine capacity of 2.5 liters or larger.
- Exports to China include well known models like the Jeep Compass, Jeep Cherokee, Jeep Grand Cherokee, and Jeep Wrangler; Ford Explorer and Ford Mustang; Buick Enclave; and Cadillac CTS and Cadillac Escalade.
- Nine companies in ten U.S. States produce autos that are exported to China (chart attached).
Why is this case significant?
- In 2013, the U.S motor vehicle parts and manufacturing sector employed 849,400 American workers.
- In 2013, annual wages in motor vehicle and auto parts manufacturing were estimated at $37 billion.
- The United States exported a total of $64.9 billion of autos in 2013, of which $8.5 billion of autos were exported to China.
- China accounted for 11 percent of U.S. auto exports in 2013 (based on quantity) and 13 percent of U.S. auto exports (based on value). China is now the second-largest export market for U.S. autos (after Canada).
- An estimated $5.1 billion of U.S. auto exports were covered by China’s unjustified AD/CVD duties in 2013, which ranged up to 21.5 percent.
- The chief priority of President Obama’s trade policy is to support jobs and grow the American middle class by selling more Made-in-America exports to the world. Every day at USTR we are working to expand economic opportunity for American workers, farmers, and businesses of all sizes. Standing up for American trade rights abroad is at the heart of that effort.
- We also have systemic concerns. We believe it essential that China play by the rules to which it agreed when it joined the WTO, including commitments to maintain open markets on a non-discriminatory basis, and to abide by the procedural and due process requirements in the WTO agreements.
What did the Panel find?
Key findings by the WTO Panel include the following:
With regard to MOFCOM’s substantive errors, the Panel found that China breached its WTO obligations by:
- improperly determining that U.S. exports were causing injury to the domestic Chinese industry;
- improperly analyzing the effects of U.S. exports on prices in the Chinese market; and
- calculating the “all others” dumping margin and subsidy rates for unknown U.S. exporters without a factual basis.
With regard to procedural failings in the MOFCOM investigations, the Panel found that China breached its WTO obligations by:
- failing to disclose essential facts to U.S. companies, including how their dumping margins were calculated; and
- failing to provide non-confidential summaries of Chinese submissions containing confidential information.
What is the Effect of the Dispute on China’s AD/CVD duties on U.S.-produced cars and SUVs?
- Near the end of the panel proceeding, in December 2013, after the parties had submitted all of their arguments but before the Panel issued its findings, China announced the termination of the AD and CVD duties on American-made cars and SUVs. Since that announcement, the United States has monitored the situation in China, and has found no evidence that the AD and CVD duties are still being imposed.
- The U.S. victory in the dispute confirms that there was never a basis for China to have imposed AD/CVD duties on U.S.-produced cars and SUVs, because the evidence did not support MOFCOM’s finding of injury to the domestic Chinese auto industry, and there were numerous other flaws in MOFCOM’s investigations and determinations.
Doesn’t the United States conduct antidumping and countervailing duty investigations of Chinese imports into the United States? Why are China’s cases different?
- China, like any other WTO Member, is entitled to use the AD and CVD remedies, provided that it does so in a manner consistent with its WTO obligations. In this dispute, the United States believed – and a WTO Panel has confirmed – that China had not done so with respect to U.S. cars and SUVs. As the United States alleged, the WTO Panel found flaws in both the process of MOFCOM’s investigations as well as the results.
What does the WTO have to do with antidumping and countervailing duties?
- Under the WTO Agreement, Members are permitted to impose antidumping and countervailing duty measures. However, WTO Members have agreed to abide by various substantive and procedural obligations regarding how and when such measures may be imposed.
- The WTO Antidumping Agreement (AD Agreement) sets forth obligations related to antidumping investigations and measures.
- The WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement) sets forth obligations related to countervailing duty investigations and measures concerning alleged subsidies.
DOT Fines Southwest for Violating Price Advertising Rule, Assesses Additional Penalties for Violating Previous Cease and Desist Provisions
Department of Transportation / http://www.dot.gov/briefing-room/dot-fines-southwest-violating-price-advertising-rule-assesses-additional-penalties
WASHINGTON – The U.S. Department of Transportation today fined Southwest Airlines $200,000 for violating the Department’s full-fare advertising rules and ordered the carrier to cease and desist from further violations. By violating the full-fare advertising rule in this case, Southwest Airlines also violated the cease and desist provision of a previous order. In doing so, the carrier was required to pay an additional $100,000, which was suspended from an order issued in July 2013.
“DOT’s full-fare advertising rules were put into place to ensure that consumers are not deceived when they search for plane tickets,” U.S. Transportation Secretary Anthony Foxx said. “Consumers have rights, and DOT will continue to take enforcement action against carriers and ticket agents when our price advertising rules are violated.”
In October 2013, Southwest ran a television advertisement on eight networks in the Atlanta area advertising $59 sale fares to New York, Los Angeles, and Chicago on certain dates. An investigation by DOT’s Aviation Enforcement Office revealed that Southwest did not have any seats available for $59 between Atlanta and any of the three quoted cities on any of the applicable travel dates.
By advertising fares for which no seats were available at all, Southwest violated the full fare advertising rule and engaged in prohibited unfair and deceptive practices.
Today’s order and the order issued in 2013 both stem from violations of the same federal regulation, which requires that any advertisement or solicitation for air transportation that states a price for such transportation state the entire price to be paid. In both cases, Southwest advertised fares for which there were not a reasonable number of seats available. By violating the same regulation again within one year, Southwest also violated the cease and desist provision of the order issued in 2013, and was immediately required to pay $100,000, half of the original civil penalty which was suspended from the previous orde