USTR Announces Outcome of Generalized System of Preferences Review
Office of the U.S. Trade Representative / www.ustr.gov
Washington, D.C. – United States Trade Representative Ron Kirk announced today the outcome of the Obama Administration’s 2011 Annual Review under the Generalized System of Preferences (GSP) program. GSP is a 36-year-old trade preference program under which the United States provides duty-free treatment to many imports from developing countries.
Ambassador Kirk said, “GSP is a valuable tool for advancing the Administration’s goals to boost trade and to advance international economic development. The GSP program helps developing countries to grow their economies while also helping U.S. businesses, workers, and consumers by lowering the costs of imported goods, including those used as inputs for U.S. manufacturing. The annual review allows the Administration to ensure that the program is working as intended.”
Based on the Administration’s review of various issues and petitions related to eligibility of products under the GSP program, President Obama made several determinations today affecting product coverage under GSP. He determined that seven cotton fiber products should be added to the list of those eligible for duty-free treatment under the program when imported from least developed country (LDC) beneficiaries. The addition of these products implements one element of the LDC trade initiatives that USTR announced at the December 2011 World Trade Organization Ministerial. The President also: 1) redesignated one product as eligible for duty-free treatment under the GSP program; 2) granted waivers of competitive need limitations (CNLs) for over 100 products from 12 countries, including both petitioned and de minimis waivers; and 3) determined that eleven products from six countries should no longer be eligible for duty-free treatment under the GSP program because the relevant country is sufficiently competitive and exceeded CNLs for the product. The changes to GSP eligibility for these products will become effective on July 1, 2012.
As part of this year’s review, the Administration also considered petitions to withdraw or suspend certain countries’ eligibility for GSP benefits based on statutory criteria, including whether a country is taking steps to afford internationally recognized standards for worker rights and the extent to which a country adequately and effectively protects intellectual property rights (IPR). In the course of the 2011 review, USTR has accepted for formal review four new country practice petitions: on Fiji and Iraq regarding worker rights, and Indonesia and Ukraine regarding IPR. Next steps in the review of these petitions will be announced in a forthcoming notice in the Federal Register. As announced in a separate release, as part of this year’s review, USTR has decided to close the GSP country practice review of worker rights in Sri Lanka without any change to Sri Lanka’s GSP trade benefits. Several other country practice petitions accepted in previous years remain under review: Lebanon, Russia, and Uzbekistan regarding IPR protection, and Bangladesh, Georgia, Niger, the Philippines, and Uzbekistan regarding worker rights.
The full results of the 2011 GSP Annual Review are available here and will also be announced in the Federal Register.
BACKGROUND
Under the GSP program, up to 5,000 types of products from 128 beneficiary developing countries, including 43 least-developed countries, are eligible for duty-free importation into the United States. In 2011, the total value of imports that entered the United States duty-free under GSP was $18.5 billion.
As part of the annual GSP review, an interagency U.S. Government committee led by USTR receives and considers petitions seeking 1) to add or remove products from the list of those eligible for duty-free treatment under GSP, 2) to waive product exclusions for certain countries based on statutory requirements related to competitiveness (CNLs), and 3) to withdraw or limit a country’s eligibility for GSP tariff benefits based on statutory eligibility criteria. The committee also reviews products eligible for de minimis waivers of CNLs and the reinstatement of GSP eligibility for products previously excluded from duty-free treatment when imported from certain countries based on CNLs. For those product and country practice petitions accepted for review, the USTR-led committee holds public hearings, solicits public comments, and – in the case of product petitions – reviews analyses prepared by the U.S. International Trade Commission of the economic impact of product eligibility decisions on domestic industries and consumers.
For more information on the GSP program, visit the GSP page on the USTR Web site at http://www.ustr.gov/trade-topics/trade-development/preference-programs/generalized-system-preference-gsp
Retroactive Merchandise Processing Fee (MPF) Billing
U.S. Customs & Border Protection / www.cbp.gov
The week of June 11, 2012, CBP began the retroactive MPF billing process for merchandise entered October 1, 2011 through November 4, 2011.
Background
Trade Adjustment Assistance Extension Act of 2011 (TAA) was signed into law on October 21, 2011. This law increased the merchandise processing fee (MPF) rate for formal entries from 0.21% (.0021) to 0.3464% (.003464), effective October 1, 2011. The minimum and maximum fees, $25 and $485 respectively, did not change. CBP automated system programming was completed on November 5, 2011. CBP advised the trade that we would bill importers for those entries entered October 1 through November 4, 2011; however, we were unable to begin billing until the refund processing was completed for the Generalized System of Preferences, Andean Trade Preference Act, and the Andean Trade Promotion, and Drug Eradication Act retroactive renewals, also passed on October 21, 2011.
See also Cargo Systems Messaging Service notices CSMS ( CSMS 12-000229 ) , ( 11-000274 ) , and ( 11-000262 ) .
Additional details
- The retroactive increase affected over 650,000 entry summaries, and CBP will process the bills in batches from June to September 2012.
- CBP will not bill for de minimis amounts (i.e., increases of less than $20.00).
- CBP will generate bills for entries that are not liquidated and are not flagged for reconciliation.
- Please note that multiple bills may be paid with one check, as long as a supplemental spreadsheet is provided, which lists each bill number and bill amount.
- CBP will not assess interest on bill amounts for the increased MPF.
Interest Rates
U.S. Customs & Border Protection / www.cbp.gov
Interest rates for additional duty payments are updated quarterly per published IRS interest rate.
When a reconciliation results in additional monies owed Customs, the payment must be made with interest. Instructions for calculating interest were given via ABI Administrative message #99-0777 on September 14, 1999. These instructions are also available at Customs Reconciliation.
Refund interest is calculated by customs. Interest on additional payments is calculated by the reconciliation filer, using the rates below for the time periods indicated.
FROM TO RATE
07/01/2012 09/30/2012 3 percent
04/01/2012 06/30/2012 2 percent
01/01/2012 03/31/2012 3 percent
10/01/2011 12/31/2011 3 percent
04/01/2011 09/30/2011 4 percent
01/01/2011 03/31/2011 3 percent
10/01/2010 12/31/2010 4 percent
07/01/2010 09/30/2010 4 percent
04/01/2010 06/30/2010 4 percent
01/01/2010 03/31/2010 4 percent
10/01/2009 12/31/2009 4 percent
07/01/2009 09/30/2009 4 percent
04/01/2009 06/30/2009 4 percent
01/01/2009 03/31/2009 5 percent
10/01/2008 12/31/2008 6 percent
07/01/2008 09/30/2008 5 percent
04/01/2008 06/30/2008 6 percent
01/01/2008 03/31/2008 7 percent
10/01/2007 12/31/2007 8 percent
07/01/2007 09/30/2007 8 percent
04/01/2007 03/31/2007 8 percent
01/01/2007 03/31/2007 8 percent
10/01/2006 12/31/2006 8 percent
07/01/2006 09/30/2006 8 percent
04/01/2006 06/30/2006 7 percent
01/01/2006 03/31/2006 7 percent
10/01/2005 12/31/2005 7 percent
07/01/2005 09/30/2005 6 percent
04/01/2005 06/30/2005 6 percent
01/01/2005 03/30/2005 5 percent
10/01/2004 12/31/2004 5 percent
These rates are also published quarterly in the Federal Register.
United States Seeks to Eliminate China’s Unfair Export Restraints on Rare Earths
Office of the United States Trade Representative / www.ustr.gov
Washington, D.C. – United States Trade Representative Ron Kirk announced today that the U. S. has requested the establishment of a World Trade Organization (WTO) dispute settlement panel to decide U.S. claims regarding China’s unfair export restraints on rare earths, tungsten and molybdenum. The European Union and Japan have also requested the establishment of panels on this matter today.
“These materials are key inputs in a multitude of U.S. manufacturing sectors and American-made products, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals,” said Ambassador Kirk. “It is vital that U.S. workers and manufacturers obtain the fair and equal access to raw materials like rare earths that China specifically agreed to when it joined the WTO.”
Earlier this year, the United States won a landmark WTO challenge against China’s export restraints on nine other industrial inputs. Although China argued in that case that its export restraints could be justified as conservation or environmental protection measures, the WTO concluded otherwise. Once again, despite China’s characterizations, its export restraint measures on rare earths, tungsten and molybdenum appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers at the expense of foreign manufacturers. Specifically, because of China’s position as a leading global producer of these materials, its export restraint measures give China the ability significantly to affect global supply and pricing. These measures can provide important advantages to China’s downstream producers, to the detriment of their U.S. and other foreign counterparts. These measures also can create substantial pressure on foreign producers to move their operations, jobs and technologies to China.
The United States, the European Union and Japan requested formal consultations with China on March 13, 2012. The parties held consultations on April 25-26, 2012, without resolution of the matter.
Background
China unfairly imposes export restraints – including export duties and quotas – on rare earths, tungsten and molybdenum, as well as many intermediate products processed from these raw materials. In all, China’s export restraints on the materials at issue in this dispute cover approximately 100 tariff codes.
With respect to the harmful export duties that China imposes on rare earths, tungsten and molybdenum, China committed as part of the terms of its WTO accession to eliminate export duties for all products other than those listed in a specific annex. The export duties the United States is challenging are imposed on products not listed in that annex. The WTO recently confirmed in the China – Measures Related to the Exportation of Various Raw Materials dispute that China cannot justify its imposition of such export duties under the exceptions provided in Article XX of the General Agreement on Tariffs and Trade 1994 (GATT 1994).
The separate trade-distorting export quotas that China imposes on rare earths, tungsten and molybdenum, as well as the other export restrictions imposed through related export requirements, appear to be inconsistent with Article XI:1 of the GATT 1994, which generally prohibits these types of restrictions on exports. In addition, rules and requirements that China imposes in the administration of these export quotas also appear to run afoul of commitments set forth in China's WTO Accession Protocol not to restrict the right to export goods.
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Volvo to Pay $1.5 Million in Civil Penalties for Delayed Reporting of Recalls in 2010, 2012
U.S. Department of Transportation / www.dot.gov
WASHINGTON – The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) today announced that Volvo Cars North America, LLC has agreed to pay $1.5 million in civil penalties in response to the agency’s assertion that the automaker failed to report safety defects and noncompliances to the federal government in a timely manner.
The National Traffic and Motor Vehicle Safety Act requires all auto manufacturers to notify NHTSA within five business days of determining that a safety defect exists or that the manufacturer is not in compliance with federal motor vehicle safety standards – and to promptly conduct a recall.
“With millions of vehicles traveling our highways every single day, we take our responsibility to safeguard the driving public very seriously and we expect automakers to do the same,” said U.S. Transportation Secretary Ray LaHood. “Manufacturers are required to handle any safety issues both quickly and appropriately.”
In January 2011, NHTSA launched an investigation to determine whether Volvo met its obligation under the law to notify the agency of a safety defect and conduct a recall in a timely manner. NHTSA’s evaluation of six recalls issued in 2010 and one recall announced in 2012 found evidence that Volvo failed to report safety defects and noncompliances to the agency in accordance with federal law. As part of today’s settlement, Volvo Cars North America, LLC and its parent company Volvo Car Corporation agreed to make internal changes to its recall decision-making process to ensure timely reporting to consumers and the federal government in the future.
“It’s critical to the safety of everyone on our roadways that automakers promptly report safety defects – and take immediate action to resolve the issue,” said NHTSA Administrator David Strickland. “NHTSA expects all manufacturers to obey the law and address automotive safety concerns without delay.”
NHTSA’s investigation led the agency to believe that Volvo did not report known safety defects within five days, as required under the law. The fines received from the automaker will be paid into the General Fund of the U.S. Treasury.
Obama Administration Challenges China’s Unfair Imposition of Duties on American-Made Automobiles
Office of the U.S. Trade Representative / www.ustr.gov
Washington, D.C. – United States Trade Representative Ron Kirk announced today that the United States is challenging China’s imposition of antidumping and countervailing duties on more than $3 billion in exports of American-produced automobiles. Specifically, the United States has requested dispute settlement consultations with China at the World Trade Organization (WTO) in an attempt to eliminate these unfair duties, which appear to represent yet another abuse of trade remedies by China.
“As we have made clear, the Obama Administration will continue to fight to ensure that China does not misuse its trade laws and violate its international trade commitments to block exports of American-made products,” Ambassador Kirk said. “American auto workers and manufacturers deserve a level playing field and we are taking every step necessary to stand up for them. This is the third time that the Obama Administration has challenged China’s misuse of trade remedies.”
Through this case, the United States is addressing its concerns that China’s duties on imports of American-made vehicles appear to be inconsistent with WTO rules. Consultations are the first step in a WTO dispute. Under WTO rules, if parties do not resolve a matter through consultations within 60 days, complainants may request the establishment of a WTO dispute settlement panel.
This is the latest in a series of enforcement steps the Administration has recently taken to continue to hold China accountable for its WTO commitments. In two earlier WTO cases, the United States challenged duties that China had imposed to restrict imports of certain steel products and chicken products from the United States. The United States has also brought actions against China’s export restraints on several industrial raw materials, including rare earths, China’s restrictions on electronic payment services and subsidies to China’s wind power equipment sector. In each of these matters, the key principle at stake is that China must play by the rules to which it agreed when it joined the WTO. Those commitments include maintaining open markets on a non-discriminatory basis, and following internationally-agreed procedures in a transparent way. In addition, the United States previously invoked a China-specific safeguard to address rapidly increasing imports of Chinese passenger and light truck tires.
Background:
Shortly after President Obama decided in September 2009 to impose a safeguard measure against Chinese tire imports, China’s Ministry of Commerce announced that it would initiate antidumping and countervailing duty investigations of imports of American-made cars and sport utility vehicles (SUVs). Then, in May 2011, China’s Ministry of Commerce issued final determinations in which it found that imports of American-made automobiles had been sold at less than fair value (i.e., “dumped”) into the Chinese market and had also benefited from subsidies. WTO rules permit imposition of duties on imports of merchandise that are found to be dumped or subsidized, if those imports cause injury to the domestic industry. However, at that time, China suspended the imposition of duties.
Subsequently, in December 2011, China began imposing both antidumping and countervailing duties on imports of American-produced automobiles. The antidumping duties range from 2.0 percent to 8.9 percent, with an “all others” rate of 21.5 percent, and the countervailing duties range from 6.2 percent to 12.9 percent, with an “all others” rate of 12.9 percent. The specific products affected by the duties are American-produced cars and SUVs with an engine capacity of 2.5 liters or larger. Last year, the United States exported more than $3 billion of these automobiles to China.
The United States believes that China initiated the investigations without sufficient evidence; failed to objectively examine the evidence; and made unsupported findings of injury to China’s domestic industry. In addition, China failed to disclose “essential facts” underlying its conclusions; failed to provide an adequate explanation of its conclusions; improperly used investigative procedures; and failed to require non-confidential summaries of Chinese company submissions.
See here for a copy of the U.S.'s request letter to the WTO.
CBP Officers Find Almost 10,000 Pounds of Marijuana in Cargo Shipments
U.S. Customs & Border Protection / www.cbp.gov
Otay Mesa, Calif. - U.S. Customs and Border Protection officers at the Otay Mesa cargo facility on Friday discovered almost 10,000 pounds of marijuana in two separate commercial shipments, with a street value of about $4.9 million.
At about June 29, at about 10 a.m., a 33-year-old male Mexican citizen entered the cargo port driving a tractor pulling a trailer with a shipment of disposable razors. The CBP officer referred the driver and conveyance for a more in-depth examination.
CBP officers ran the conveyance through the port’s imaging system, revealing anomalies with the cargo. 
Officers subsequently removed 298 packages of marijuana weighing almost 7,500 pounds that were comingled within the shipment of disposable razors.
CBP officers seized the tractor and trailer, and the marijuana. U.S. Immigration and Customs Enforcement special agents arrested five individuals in connection with the alleged smuggling attempt.
Later on June 29, at about 7 p.m., a 31-year-old male Mexican citizen driving a 2002 International Bobtail entered the commercial port for inspection with a shipment of plastic articles. The CBP officer pulled the driver and conveyance aside for an intensive examination.
CBP officers used the port’s imaging system to screen the cargo and discovered anomalies with the shipment. They extracted 341 packages of marijuana weighing almost 2,253 pounds.
CBP seized the marijuana and conveyance.
The matter remains under investigation by special agents with U.S. Immigration and Customs Enforcement.