Button cell battery, that is. And who wants to know? Senator Rockefeller. Our friends at Consumer Electronics Associations (CEA) gave us the scoop that the good Senator from West Virginia is working on a bill – The Button Cell Battery Safety Act of 2011 – which mandates that CPSC create a safety standard to reduce access to cell batteries by children 3 years of age or younger. Mom and apple pie right? Well, what if that standard mandates a tool or screw closure for all products with button cell batteries?! The CEA thinks there may be wiggle room with the “to the greatest extent practicable” language in the bill draft, but is also advocating for a specific safe harbor for a UL standard to support the work that industry is already doing to make products safer. Without that provision, the CPSC standard would be duplicative at best and damaging at worst. Watch this space and http://www.ce.org/ for more developments.
Showdown!
The Administration sharpened its message on trade policy this week – Congress must pass a Trade Adjustment Assistance (TAA) extension before the three pending free trade agreements are sent up for a vote. As we predicted, passing the FTAs is not going to be a walk in the park. Cue the Sergio Leone soundtrack… on one end of the dusty road stands Congress, at the other the Administration. Each is staring the other down, waiting for one to flinch. The Administration wants the Korea FTA. Congress demands all three agreements. The Administration says TAA or bust. Congress expresses its frustration with “pre-conditions” and is nervous about what it will have to do to pay for TAA. On the count of three. 1…2…
So “extended” TAA is the linchpin. And why? To briefly refresh your recollection, dear reader, TAA is a program that provides “a path for employment growth and opportunity through aid to US workers who have lost their jobs as a result of foreign trade.” Individual workers, firms, farmers and communities may benefit from TAA funds. The program has been around for almost 50 years but was majorly revamped in 2009. Those changes included:
- making service sector workers eligible for TAA, and expanding access for manufacturing and secondary workers,
- increasing training funding,
- increasing the TAA for Workers Health Coverage Tax Credit subsidy to 80% percent,
- improving and making permanent the re-employment TAA wage insurance program, and
- tripling authorization funds for TAA, improving the TAA for Farmers program and creating the TAA for Communities program.
TAA is not a new issue, but Democrats are increasingly using it as ballast to enable them to vote for FTAs. Republicans may have to yield a little here if they want to pass the FTAs. The question is how a concession on TAA will influence the rest of the budgetary discussion. As we all know, the House is looking to cut not millions, not billions, but TRILLIONS of federal government spending. TAA cost during 2010 was close to $1 billion, just a drop in the ocean some may say, but in the current environment principles may trump practicality. Is this town big enough for the both of them?
Filed under FTA, Legislation, Politics, Trade
Fragile: Handle with Care
The two Committee hearings in Congress this week showed that while on the one hand there is plenty of optimism for the three pending FTAs to be passed by Congress before the August recess, on the other hand – there are several moving pieces that could derail the process at any time. USTR Ambassador Kirk, USDA Secretary Vilsack, Deputy USTR Sapiro and DOL’s ILAB Under Secretary Polaski all testified at different hearings that the Administration is looking to move forward a larger package of trade policy priorities before the end of the year. This package includes not only the pending FTAs, but also renewal of GSP, ATPA, a robust “TAA” and Russia’s WTO accession. Some Members of Congress are already expressing frustration however, with what appears to be conditions by the Administration in order for it to send the FTAs to Congress for a vote.
The path forward for the FTA will depend on how the Administration and Congress negotiate and set the agenda for moving these broader trade policy issues. For example, Republicans generally oppose TAA because of the costs associated with the program. The “sleeping bags” issue for GSP has not yet been resolved in Congress. Many Members of Congress are also cold to the idea of putting Russia’s WTO accession on top of the agenda. Furthermore, the Administration has said that they would like each FTA to be voted on separately, while key leaders in Congress want to have one vote for all three FTAs. With so many other trade policy issues intertwined and yet to be resolved, passage of the FTAs remains more fragile than we may think and requires to be handled with great care. Stay tuned!
Filed under FTA, Labor, Legislation, Politics, Trade
A Labor of Love
The current Administration continues to keep compliance with labor standards in the forefront not just in trade agreements but also in monitoring compliance. Within the past ten days, the Administration has published in the Federal Register requests for public comment on the USDAs “Voluntary Initiative Guidelines to Reduce Child and Forced Labor in Agricultural Products”; DOL’s “TVPRA Report”; and DOLs “CAFTA-DR Labor Obligations Report”.
The USDA’s guidelines would enable entities to reduce the likelihood that agricultural products or commodities imported into the U.S. are produced by forced or child labor, as required by the 2008 Farm Bill. The TVPRA Report assesses the worst forms of child labor and government efforts to address them in countries that benefit from U.S. trade preferences. In addition, the department prepares the current List of Products Produced by Forced or Indentured Child Labor under Executive Order 13126 of 1999. Finally, the CAFTA-DR Implementation Act requires the President to report biennially to the Congress on the progress made by the CAFTA-DR countries in complying with the labor obligations in the Agreement and implementing recommendations (made by ILO) contained in the “White Paper”.
Comments on the USDA guidelines are due July 11, while DOL comments are due May 20. If you would like to know how to submit comments, please contact Mo Rajan at mrajan@strtrade.com.
Are We There Yet?
Yesterday’s announcement by the Administration that it has requested to Congress to begin discussions on the implementing bills for the three pending FTAs with Korea, Panama and Colombia was much welcomed message. These countries have waited over four years to have their case heard in Congress. While the announcement does not necessarily ensure that the FTAs will be sent for a vote to Congress immediately, it does begin the “walk-through” process that may eventually result in an FTA vote.
The announcement came after the Administration found that the Government of Colombia has met and surpassed their commitments thus far under the Labor Action Plan. For Korea, the Administration secured additional funds to promote US beef in Korea and agreed to bring up formal consultations with the Korean government under the US-Korea beef protocol. For Panama, the tax issue that was problematic in the past is being dealt with through a tax cooperation plan that begun to be implemented last month.
So when exactly will there be an FTA vote? At this point it looks possible to have an FTA vote by August, pending no glitches during the implementation bill drafting or any other major issues arising from Colombia, Korea or Panama in the next few months. The Administration will also be pushing for a commitment from Congress on other trade priorities like TAA, Russia’s WTO accession, and renewal of trade preferences. Republicans have asked for all three pending FTAs to be voted at once, while the Administration has stated that they will likely each be voted separately. The fate of the FTAs will then remain on whether ideology and hard-lines get in the way of pragmatism and compromise. Our professionals will be on the forefront of the battle, so keep monitoring our blog!
Spring Breakdown
Looks like all federal employees may get a vacation they didn’t ask for and they don’t want.
Barring a Congressional miracle (and miracles sometimes happen when the Congress is faced with an angry electorate), it appears the U.S. federal government will be shutting down for an unplanned holiday tomorrow at midnight.
Although some progress appears to have been made, Senate and House leadership still remain too far apart to reach an agreement to continue funding the government in the absence of a 2011 budget. And the disagreements include not only how much spending to cut (somewhere between $30 and $40 billion) and what to cut (include defense spending cuts?), there is also strong disagreement over policy provisions such as a ban on federal funding for abortions in the District of Columbia.
The President has issued a veto threat against H.R. 1363, the latest House proposal which passed the House this afternoon. At this point, the magic 8-ball on our desk continues to float between “Reply hazy, try again” and “Outlook not so good.”
And there are far more questions than answers. Government workers are asking: am I an “essential worker?” (Note: if you have to ask, you probably aren’t essential.) How long will the shutdown continue? (Answer: not long.) If I get furloughed will I get paid? (Hint: probably not.)
The good news is, few in Congress or the White House appear to want a shutdown (with a few exceptions.) There have been about sixteen government shutdowns in the last four decades and most were resolved within days. The most famous shutdown and the longest in recent memory was the three week shutdown in late December 1995 to January 1996. Expect Congress to work through the weekend. Hopefully, cooler heads will prevail.
Now our magic 8-ball says “concentrate and ask again.”
Filed under Uncategorized
Colombia FTA – Progress?
Today President Obama announced a roadmap for Colombia to address labor concerns that have heretofore prevented the U.S-Colombia free trade agreement from moving ahead. However, while the agreement on initiatives finally “sets the markers” that Colombia has to meet in order to move forward, there seems to be no mention of a time frame for sending the FTA to Congress. Equally disappointing is the lack of mention of the ATPA and its renewal.
President Obama and Santos are to meet tomorrow so we hope that they will make some announcement as to the expected time frame for sending the FTA to the Congress. In the meantime, importers that lost benefits when the ATPA expired are still losing and if the FTA moves forward, there may not be a focus on extending ATPA retroactively. Thus there could be a cost that may not be refunded.
Let’s keep our fingers crossed that tomorrow yields a timeframe and the FTA moves quickly. Stay tuned!
[categories trade, FTA, Colombia]
Filed under FTA
Congress Seeks to Address Protectionism in China
A recent U.S. International Trade Commission report on Chinese trade barriers in agriculture and a congressional hearing on China’s indigenous innovation policies served as the latest opportunity for the U.S. Congress to express frustrations with China.
Sens. Baucus, Hatch and Grassley called on China to remove its trade barriers to U.S. agricultural exports following the publication of the USITC report. China is now the top foreign market for U.S. agricultural goods, the report found, and an estimated $3.9-$5.2 billion in sales would be generated if Chinese tariffs and non-tariff barriers were eliminated. Many of those restrictions were also identified in the Office of the U.S. Trade Representative’s latest foreign trade barrier report, issued March 30.
China’s indigenous innovation policy aims to make improvements in the country’s manufacturing sector by requiring government entities to choose products developed domestically over those based on foreign intellectual property rights. In the view of the Chinese government, this policy levels the playing field because currently much of the profit in the sale of Chinese manufactured products ends up in the hands of the foreign firms that have invented and designed them. U.S. members of Congress, on the other hand, don’t think this policy is fair because it prevents U.S. companies from obtaining government procurement contracts in China even though many Chinese companies are getting government contracts in the U.S. Since China has not signed the World Trade Organization’s Government Procurement Agreement, the U.S. cannot use the WTO dispute settlement mechanism to solve the dispute.
Some lawmakers therefore suggest revoking most favored nation status for imports from China or negotiating a special trade agreement with China. Other members, as well as panelists of the hearing, say the best path forward seems to be for the U.S. government to continue engaging in conversations with China. There’s nothing innovative about that approach, so we’ll just have to wait and see how patient the new Congress can be.
[categories trade, protectionism, China]
Filed under Politics
Is That Food Glowing?
The recent tragedy in Japan is no laughing matter and our heartfelt thoughts and prayers go out to the people of Japan. However, there appear to be growing concerns in the US with respect to foodstuffs coming from Japan and whether or not they may be contaminated with radioactive particles.
Yesterday, March 22, 2011, the Food and Drug Administration issued an import alert (99-33) entitled “Detention Without Physical Examination from Japan Due to Radionuclide Contamination.” Under this Import Alert all milk, fruit and vegetable products that come from the Japanese prefectures of Fukushima, Gunma, Ibaraki and Tochigi will be subject to detention. In order to obtain release of the detained goods, FDA will require importers to demonstrate that the goods are free from radionuclide contamination through acceptable laboratory testing.
Today, March 23, 2011, Rep. Rosa DeLauro (D-CT) sent a letter to FDA Commissioner Margaret Hamburg stating “As you are aware, radiation has been found in spinach and milk at farms in Japan located near the damaged Fukushima nuclear reactor. Because the Food and Drug Administration does not track where food production facilities are located in other countries, I strongly urge the agency to act swiftly to set aside for radiological testing all food imports from Japan.”
It is not clear what the ultimate position may be vis-à-vis foodstuffs from Japan but if you are importing these products and are impacted by the existing FDA alert or may be impacted by future detentions and need assistance, please contact ST&R and we can arrange for an appropriate third-party testing laboratory to collect and test samples of the detained goods. If no contamination is present, ST&R can petition FDA and/or CBP for immediate release of these goods.
For assistance, contact Nicole Bivens Collinson nbc@strtrade.com or Edgar Asebey easebey@strtrade.com
Filed under FDA, Food Safety
A Man, A Plan, A…Trade Agreement?
Ambassador Kirk, in his debut performance before the Senate Finance Committee, may have been surprised at the reception. The progress that he and the Obama administration have made in moving the Korea-US trade agreement forward was quickly overshadowed by the lack of movement on the Colombia and Panama FTAs. Colombian ambassador Silva must have been pleased to hear the praise being heaped on Colombia for its progress on labor rights under the Santos administration. Unlike the House, where a Colombia agreement would be faced with mixed reactions by Democrats, the Senate seems to be broadly supportive (with a few notable exceptions). Panama is a similar story. What may cut Ambassador Kirk to the quick is the criticism that the administration has a double standard on trade – reaching out to Russia, for example, to facilitate its entry into the WTO, while pushing away Colombia and Panama. Word on the street says that Kirk and company may not be pushing Colombia and Panama for the simple reason that they don’t want to muddy the waters for Korea. Despite the entreaties of House Republicans, it is highly unlikely that the president will send all three agreements to the Hill at one time. The administration wants to focus on passing the Korea agreement first and foremost. Once that is complete we should start to see the outlines of a plan forward for Colombia and Panama.
Stay tuned for breaking news.
[categories trade, politics]
Filed under FTA
