Several clothing and retail associations are concerned about revised rules of origin in NAFTA, the groups said in a letter to U.S. Trade Representative Robert Lighthizer. "We remain concerned that the newly negotiated rule of origin may contain new onerous chapter notes, such as requirements that pocketing, elastics strips, or sewing thread now need to originate," said the groups, which include the American Apparel and Footwear Association and the Retail Council of Canada. "Such changes, even though they may seem insignificant, add tremendous sourcing costs and compliance burdens when multiplied across the entire supply chain." There also is some worry over changes to tariff preference levels, the groups said. Lighthizer's Canadian and Mexican counterparts also were addressed in the letter.
Consultations at the World Trade Organization have failed to resolve trade barriers to U.S. wine in British Columbia grocery stores, so the U.S. has asked for a dispute settlement panel to take up the issue, the U.S. announced on May 25. Consultations started last October. The issue is the stores require that imported wine be stocked in a separate building from the main store (see 1701180083). The news release announcing the panel request said that as far as the U.S. has been able to learn, no stores have made the investment to sell imported wines. American wines are still sold at liquor stores, which used to be the only place to buy wine in the province.
A set of new information requirements for China Customs is of concern to the Airforwarders Association, the group said in an email. The AfA "has contacted the United States Trade Representative to urge engagement with China Customs to determine if there may be an alternative to this requirement in the form of a safer and more suitable identifier other than the one mandated in China Customs Declaration No. 56," it said. China Customs will require the shipper code and contact identifier for all master and house airway bills starting June 1 (see 1805140017). "The Airforwarders Association's Regulatory Compliance Committee recently learned that a number of our members are receiving resistance from shipping clients who export goods to China, and their concerns with sharing tax ID numbers or similar government identifiers with any party in China," AfA Executive Director Brandon Fried said. "We certainly anticipate the exporting community's increasing concern over why the U.S. company's unique identifier must be provided, and what it will (or could) be used for in China. We also assume that various clients' legal, compliance, and security groups will express major concerns over this requirement." USTR didn't comment.
Despite the Trump administration's pause (see 1805200002) in adding Section 301 tariffs on goods from China, it's too early to end efforts toward product exemptions, Baker & McKenzie lawyer Ted Murphy said in a blog post. "While this is a positive development, it is also subject to change," he said. "As a result, for now, we are recommending that companies continue to pursue exclusions just in case."
The Office of the U.S. Trade Representative is beginning a second inquiry into whether Thailand should remain eligible for the Generalized System of Preferences program, USTR said in a May 17 press release. The review was requested by the National Pork Producers Council (NPPC), which alleges Thailand is not providing fair market access to U.S. pork products. The review comes in addition to a separate eligibility review launched at the request of the AFL-CIO labor union in 2015 (see 1511240017).
The Section 301 tariffs list should not be used to "pick winners and losers in the free market," the American Apparel and Footwear Association announced just after the National Council of Textile Organizations testified to a review panel that it wants clothing added to the tariff list. In 2017, the U.S. imported nearly $100 billion more in apparel and textiles than it exported, the NCTO said in its submission to the panel, and Chinese exports in these categories account for about 12 percent of the overall bilateral trade deficit. China's exports are responsible for the loss of hundreds of thousands of mill and garment factory jobs, they said, and "the remaining vestiges" of the apparel industry won't ask for antidumping investigations because they are held hostage by their customers, who import the bulk of what they sell, the submission said.
South Dakota-based Daktronics, a manufacturer of LED display systems for large-screen digital signage, wants U.S. Trade Representative Robert Lighthizer to impose 25 percent tariffs on imports of Chinese LED display screens and “the main assemblies” of LED panels and modules, the company said in a March 23 letter to Sen. John Thune, R-S.D., which Thune forwarded to the USTR’s office. The letter posted Friday in docket USTR-2018-0005 predated by about two weeks release of the USTR’s list of products targeted for the tariffs. The list included LEDs and LED-related components, but not LED display screens or modules. In the past decade, “we have seen increasing unfair competition from Chinese imports and a decrease in USA manufacturers,” Daktronics said. U.S.-based manufacturers of “complete video display systems” number only about five companies, but in China, “there are several thousand,” it said. “This seemingly government-backed excess capacity in China drives the product prices down and makes it feasible to import their products into the USA,” but at “artificially low prices,” and of questionable quality, it said. The tariffs would benefit U.S. display makers because “our investments in Development and Capacity stay here in the USA,” it said. “We need to move quickly, there aren't many of us left!” Thune asked USTR to “give careful consideration to the proposed tariffs set out in the company's letter.” Comments on the proposed tariffs are due Friday as a prelude to a May 15 hearing.
Mexico's auto industry is against the U.S. proposal to require higher-wage work as part of the NAFTA rules of origin that make it possible for Canadian and Mexican assembly plants to sell cars into the U.S. duty free. The Wall Street Journal recently quoted the head of the Mexican auto parts manufacturers' trade group, Eduardo Solis: "'The U.S. proposal isn’t acceptable. The percentage, the transitions, the restrictions. You have to understand the U.S. proposal is like putting padlocks on padlocks,' Mr. Solis said of the two-layered rule of origin. 'Imagine a car that does comply with the percentage, but doesn’t comply with all the core parts. Or you comply with core parts but don’t meet the steel and aluminum requirements. Or you comply with the first three but you don’t meet the wage requirements.'"
Element Electronics, which bills itself as the only company assembling LCD TVs in the U.S., wants the Office of the U.S. Trade Representative to stand firm in its proposal to levy 25 percent tariffs on finished flat-panel sets imported from China, the company said in comments. Element’s support for keeping TVs imported from China under the HTS 8528.72.64 subheading on the USTR’s proposed tariffs list puts the company at odds with Best Buy (see 1804240062), the Consumer Technology Association (see 1804260053) and Roku, all of which oppose the tariffs and are asking the office to remove that TV product line item from the list.
The Office of the U.S. Trade Representative's annual review of countries' intellectual property practices added Canada and Colombia to a "priority watch list," as other countries remained on it, including China, for 12 nations total, one more than in 2017 (see 1704280026). Canada remains the only G7 country identified in the "Special 301" report and its "downgrade" is amid "significant concerns" like "poor border and law enforcement with respect to counterfeit or pirated goods" and "deficient copyright protection," USTR reported. "Canada does not provide customs officials with the ability to inspect, detain, seize, and destroy in-transit counterfeit and pirated goods entering Canada destined for the United States." That country's embassy didn't comment to us, nor did that of Colombia or China. China is on the priority watch list for the 14th consecutive year, USTR announced. "Longstanding and new IP concerns merit increased attention, including China’s coercive technology transfer practices, range of impediments to effective IP enforcement, and widespread infringing activity -- including trade secret theft, rampant online piracy, and counterfeit manufacturing."