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 Volume 23, Number 218                         Monday, November 3, 2014

Trade Reports International Group


Discord on TF/Food Security  

Geneva – Chief trade envoys on Friday remained divided in their responses to three “scenarios” presented by World Trade Organization Director General Roberto Azevêdo concerning the current impasse on trade facilitation and public stockholding programs – including the drawing-up of the post-Bali work program and “non-multilateral” options, WTD has learned (WTD, 10/31/14).

 At an informal trade negotiations committee meeting, Mr. Azevêdo offered a grim report to members in which he reviewed three scenarios based on his consultations with members – “finding a solution for the impasse quickly” and finalizing the post-Bali work program in December; continuing the search for a solution to the current impasse while working on the other Bali decisions, and seeking alternative options, such as a plurilateral agreement – either within or outside the WTO – to implement the Trade Facilitation Agreement in the absence of a solution.

 “We truly are at a watershed moment for this organization, whether we like it or not,” the Director General stated.  “There is real pressure on us over the next few weeks.  ...  It is obvious in my conversations that everyone wants to make progress and move beyond the current impasse.  He added – “if it is in your power to find a solution, please do it now.”

 While most industrialized countries seem open to the Director General’s options, developing countries want him to work towards finding a solution to the current impasse while rejecting the “non-multilateral” option to implement the Trade Facilitation Agreement, several trade envoys told WTD.

Plurilateral Agreement

 Mr. Azevêdo admitted that while a plurilateral agreement outside the WTO does not have much support, “there is a whole spectrum of possible ways” – including “a traditional, stand-alone plurilateral agreement” – to implement the Trade Facilitation Agreement inside the trade body.  “This option could leave the other Bali decisions and the post-Bali work program behind, he suggested.

 The Director General hastened to add that nobody is proposing the latter, but “members could take an approach where the terms of the TFA are simply put in place by those parties who are willing to do so on an MFN basis.”

 Special and differential treatment flexibilities – including financial and technical assistance – could be available to developing countries that want to participate, Mr. Azevedo suggested.

 In a hard-hitting statement, the European Union charged some individual members with not adhering to consensual decisions taken by trade ministers in Bali.  “What is particularly troubling today,” said EU Ambassador Angelos Pangratis, “is to see those very members who are at the heart of the current crisis trying to divert attention from the essence of the current stalemate and to convince others to forget about the compromise achieved in Bali, to dismiss the deal reached and to pretend to go back to business as usual while in fact nothing can move forward.”

 “This is simply not possible,” the EU ambassador emphasized.

 Although Brussels is fully committed to the multilateral system and ready to work on development decisions, it is considering other options should the current impasse continue, the Ambassador stated.

 The EU, along with other WTO members, will evaluate the options and see how best to move forward and “how best to salvage the years of work that went into the preparation of the Trade Facilitation Agreement,” the EU envoy maintained.

 The United States said it offered flexibility to break the impasse on public stockholding, but it was rejected by India.  That member said it would take a step forward to find a solution, but it has not done so, the United States told the meeting according to participants.

 Japan said patience is wearing out.  Canada and Australia maintained that they will soon look for other options if the stalemate continues.

Developing Countries

 Developing countries – including India, Brazil, South Africa, the least-developed countries, the Group-of-33 developing country coalition and the Africa Group – vowed to reject any plurilateral approach to implement the Trade Facilitation Agreement.  They agreed with Mr. Azevêdo’s first scenario – to find a solution quickly and then complete the post-Bali work program by December.

 South African Ambassador Xavier Carim said resolution is not out of reach.  “We would encourage the central players to engage directly to find a durable solution that – in the first place – serves the food security needs of millions of poor people around the world.”  The ambassador went on to say that “the proliferation of plurilateral and regional arrangements already marks a retreat from multilateralism, and this organization should not be entertaining discussions that would encourage non-multilateral and non-inclusive outcomes.”

 India Ambassador Anjali Prasad urged her industrialized-country counterparts to abjure the temptation of exploring alternative approaches to implement the TFA.  She warned against the “systemic” implications to the Marrakesh Agreement if the Trade Facilitation Agreement is implemented on a plurilateral basis.

 Brazil joined other developing countries in saying it wanted to see expeditious work on the resolution of the TFA/food security crisis and then move ahead to advance the other post-Bali initiatives.

 China rejected a plurilateral agreement outside the WTO.

 The African Group said it opposed the “plurilateralization” of the multilateral trading system – or what has been termed “non-multilateral implementation of agreements within the WTO.”

 The Group of Least-Developed Countries said industrialized nations must focus foremost on addressing issues raised by the poorest countries – particularly on their request for a services waiver.  The ACP countries called for resolving the outstanding issues of the Bali agenda in agriculture and development and then converting them into legally binding agreements.


Court Backs COOL Program

 The US Court of Appeals for the District of Columbia on Friday again upheld the US country-of-origin labeling rules by denying a request for a rehearing of an injunction to block their implementation (WTD, 10/19/14).

 The American Meat Institute and other groups had sought an injunction to stop the Agriculture Department from carrying out its 2013 program.

 A recent World Trade Organization Dispute Settlement Body ruling found the rules do not comply with international trade commitments.  The panel did, however, find that the United States has the right to provide consumers with information about the origin of the meat they buy.

 The American Meat Institute said in a statement is was disappointed with the decision.  “We continue to maintain that the country-of-origin rule harms livestock producers and the industry and provides little benefit to consumers.”

 On the other side, the National Farmers Union praised the decision, noting that it was the fourth time that US courts have sided with the labeling program.


EU vs Russia on Tariffs

 Geneva – The European Union on Friday notified the World Trade Organization it is launching a complaint against Russia regarding its tariff treatment of certain agricultural and manufacturing goods.

 Brussels alleges that Russia is applying duties in excess of "bound" rates in several ways.  The EU mentions in particular the duty rates applied to paper and paperboard, palm oil and its fractions, refrigerators and combined refrigerator/freezers.

 Brussels made a request for consultations, which formally initiates a dispute in the WTO.  After 60 days, if consultations fail, the EU can request establishment of a dispute settlement panel.

 Separately, the EU also on Friday said it has asked the WTO to rule on a dispute concerning certain Brazilian discriminatory taxes.  Brussels says Brazilian tax measures give an unfair advantage to domestic producers and go against WTO rules.

 The taxes are applied in several sectors – including automobiles, information technologies and machines used by industry and professionals.

 The EU also argues that Brazil restricts trade by requiring Brazilian manufacturers to use domestic components as a condition to benefit from tax advantages.

 Consultations held earlier in the year failed to resolve the dispute, according to the EU.


Around the Globe

 ●         The U.S. has blocked China’s efforts to use a leaders’ summit to begin negotiations on a free-trade zone spanning the Pacific, say people close to the matter, as the world’s two largest economies tussle over influence in the region and billions of dollars in trade, the Wall Street Journal reported (WTD, 10/15/14).  China, the host of the Asia-Pacific Economic Cooperation forum this year, has sought to highlight its expanding international role by pressing for the trade pact, known as the Free Trade Area of the Asia Pacific.

 Beijing’s free-trade zone has been on the agenda of APEC for years – and was initially pushed by the U.S. – but has been relegated to the back burner as the U.S. has poured its energies into the Trans-Pacific Partnership, a trade pact it is negotiating with 11 nations that include Japan but not China.  For Beijing, the FTAAP would offer a way to ensure that it continues to get preferential access to some of its largest trading partners. According to an estimate by the Peterson Institute for International Economics, in Washington, a TPP deal would cost China about $100 billion a year in lost exports as the partners trade more among themselves and less with China.

 “China wanted to reinvigorate” FTAAP, said Alan Bollard, executive director of APEC, an association of 21 economies including the U.S., China, Russia and Japan, whose leaders meet annually and whose decisions are taken by consensus. The APEC leaders’ summit on Nov. 10-11 is the first major international conference held in Beijing since Xi Jinping took power as Communist Party chief.  Under U.S. pressure, Beijing dropped two provisions from the draft of an APEC communiqué to be released at the end of the leaders’ session, negotiators said. The statement no longer calls for an FTAAP “feasibility study” – trade lingo for starting negotiations – and doesn’t have a target date to finish the deal. China had wanted a 2025 end date.

 A U.S. Trade Representative spokesman said the U.S. and China are working on a “constructive proposal” for how APEC can further FTAAP under what the spokesman called a “long-term vision” that builds on other trade deals.

             ●        Agriculture Secretary Tom Vilsack announced Friday that China is lifting its suspension of red and golden delicious apple imports from Washington State (WTD, 12/24/13).  The Chinese market for Washington apples was valued at $6.5 million in calendar year 2011.

 In 2012, China's General Administration of Quality Supervision, Inspection and Quarantine suspended access for Washington red and golden delicious apples due to the repeated interception of three apple pests AQSIQ considers significant: speck rot, bull's-eye rot, and Sphaeropsis rot. To lift this suspension, the Animal and Plant Health Inspection Service worked with the US apple industry to develop additional safeguarding measures that address China's concerns about these pests. Some of these new measures include cold storage of apples and visual inspection of apples prior to shipping to ensure there is no evidence of disease.

 This market access success comes as the United States and China continue to work to normalize trade in apples. Ongoing efforts include negotiating access for all US apples to the Chinese market, as well as the safe US importation of apples grown in China.

             ●          Officials from Canada, Mexico and the United States met Friday in Ottawa to discuss North American competitiveness (WTD, 10/31/14).  Canadian International Trade Minister Ed Fast, Commerce Secretary Penny Pritzker, and Mexican Secretary of Economy Ildefonso Guajardo participated in the discussions.

 At the news conference concluding the trilateral meeting of cabinet members responsible for international trade and commerce, Mr. Fast pointed to North American economic and trade cooperation that has helped each country maximize its capabilities and has made economies more innovative and competitive. Now, Canadians, Americans and Mexicans increasingly produce things together for customers inside and outside North America, he said.

 The United States and Mexico are both priority countries under Canada's pro-trade and pro-export Global Markets Action Plan. Canada is focused on building up its economy by tearing down trade barriers. Canada's leadership and capability in this regard is clear, as evidenced by the recent conclusion of Canada's comprehensive trade agreement with the European Union and the fact that Canada now has trade agreements with 43 countries around the world.

             ●          A truce in the contentious softwood lumber dispute is entering its final year and there are signs this historic trade grievance is set to return with a vengeance, the Canadian Press news service reported (WTD, 3/27/14).  A recent dispute over “country of origin labelling” for meat products underscores the fact that Canada and the US still have their share of trade disputes.

 Yet lurking in the background is a massive trade issue that you haven't heard about for a while: softwood lumber, the granddaddy of all Canadian-U.S. trade disputes. Canada exported $7.4-billion worth of lumber in 2013, the highest amount since 2006. The United States is the destination for the bulk of that wood, and U.S. lumber producers have for decades demanded the U.S. government collect tariffs on Canadian lumber. After decades of dispute, Canada and the U.S. agreed to a nine-year truce in 2006. Under the agreement, the U.S. agreed to return more than $5-billion in duties collected from Canadian lumber companies, and a ceasefire in trade litigation.

 If you thought we've achieved lumber peace in our time, you might be premature. We've now entered the final year of that truce, which is set to expire on Oct. 12, 2015. There are signs this historic trade grievance is set to return with a vengeance. U.S. housing starts are heating up. As U.S. construction grows, demand for Canadian lumber increases, something that will inevitably antagonize U.S. lumber producers who have long argued that Canada's industry is unfairly subsidized.

             ●        South Korea posted a record trade surplus in October as demand from the U.S. boosted exports of products such as steel pipes and computers, Bloomberg news service reported. The $7.5 billion surplus was the highest for any month, the trade ministry said in an e-mailed statement today, and was was $2.5 billion more than the median estimate in a survey of economists by Bloomberg News. Exports rose 2.5 percent from a year earlier, while imports dropped 3 percent.

 The record surplus was driven by a jump in exports to the U.S., which climbed 25 percent from a year earlier. Shipments to China, S. Korea's biggest trading partner, rose 3.7 percent, while those to Japan dropped 1.4 percent.

             ●         According to provisional data published by the Turkish Statistical Institute (TurkStat) produced in the cooperation with the Ministry of Customs and Trade, in September 2014 exports were $13.66 billion, and imports were $20.59 billion, a 4.6 percent increase a 0.2 percent decrease compared with September 2013, the Daily Sabah reported.  In the same month, the foreign trade deficit decreased by 8.4 percent from $7.56 billion to $6.925 billion.  In September 2014, exports coverage of imports was 66.4 percent, a slight increase from the 63.3 percent of September 2013.

   —  —

On the Web......



Apples.  Agriculture Department announcement of lifting of import ban by China on Washington apples.  (available at:  http://www.usda.gov/wps/portal/usda/usdahome?contentid=2014/10/0245.xml&contentidonly=true )  issued:  10/31/14.

COOL.  National Farmers Union statement on Country of Origin Labeling.  (available at:    http://www.nfudc.org )  issued:   10/31/14.


Economy.  Pacific Economic Cooperation Council report on the economy of the region.  (available at:  http://www.pecc.org/research/state-of-the-region )  issued:  10/31/14.

TPP.  Business Software Alliance statement on data flows in the TransPacific Partnership.  (available at:  http://www.bsa.org/news-and-events/news/2014/october/en10312014housetpp )  issued:  10/31/14.


Doging Business 2015.  World Bank report on Doing Business 2015.  (available at:  http://www.doingbusiness.org )  issued:  10/14.


Foreign Investment.  Commerce Department statement on foreign investment with Canada.  (available at:  http://www.commerce.gov/blog/2014/10/31/secretary-pritzker-and-canadian-partners-discuss-increasing-investments-both-sides-b )  issued:  10/31/14.

NAFTA.  Canadian statement on closer economic cooperation within the North American Free Trade Agreement.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/10/31b.aspx?lang=eng )  issued:  10/31/14.

US Relations.  Canadian government statement on US economic relations.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/10/30b.aspx?lang=eng )  issued:  10/30/14.


Apples.  Agriculture Department announcement of lifting of import ban by China on Washington apples.  (available at:  http://www.usda.gov/wps/portal/usda/usdahome?contentid=2014/10/0245.xml&contentidonly=true )  issued:  10/31/14.


ACE.  October update on the ACE program of CBP.  (available at:  http://apps.cbp.gov/csms/csms.asp?srch_argv=14-000574&srchtype=all&opt=1 )  issued:  10/31/14.

European Union

Commission.  European Union statement on the new Juncker Commission.  (available at:  http://europa.eu/rapid/press-release_IP-14-1237_en.htm )  issued:  11/1/14.

Economy.  Johns Hopkins School of Advanced International Studies report on the transAtlantic economy.  (available at:  http://transatlantic.sais-jhu.edu )  issued:  10/14.

TTCIP.  Johns Hopkins School of Advanced International Studies report no the TransAtlantic Trade and Investment Partnership.  (available at:  http://transatlantic.sais-jhu.edu )  issued:  10/31/14.

Export Controls

Myanmar.  Treasury Department announcement of sanctions against Myanmar.  (available at:  http://www.treasury.gov/press-center/press-releases/Pages/JL2680.aspx )  issued:  10/31/14.

Export-Import Bank

Texas.  US Export-Import Bank announcement of loan to Texas small business.  (available at:  http://www.exim.gov/newsandevents/releases/2014/ExportImport-Bank-Small-Business-Success-HoustonTexas.cfm )  issued:  10/31/14.

Foreign Investment

Canada.  Commerce Department statement on foreign investment with Canada.  (available at:  http://www.commerce.gov/blog/2014/10/31/secretary-pritzker-and-canadian-partners-discuss-increasing-investments-both-sides-b )  issued:  10/31/14.

Japan, Kazakhstan.  Japanese statement on new foreign investment treaty with Kazakhstan.  (available at:  http://www.meti.go.jp/english/press/2014/1023_02.html )  issued:  10/31/14.

Securities.  Treasury Department announcement of holdings of foreign securities.  (available at:  http://www.treasury.gov/press-center/press-releases/Pages/jl2681.aspx )  issued:  10/31/14.


Dumping.  World Trade Organization annual report on antidumping.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128240,128244,128258,128238,128250,128243,128239,128259,128251,128234&CurrentCatalogueIdIndex=4&FullTextSearch= )  issued:  10/31/14.

Import Licensing.  World Trade Organization report on the committee on import licensing.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128240,128244,128258,128238,128250,128243,128239,128259,128251,128234&CurrentCatalogueIdIndex=3&FullTextSearch= )  issued:  10/31/14.

Intellectual Property Rights

WTO.  Summary of October 28, 29 meeting of the World Trade Organization TRIPS Council meeting.  (available at:  http://www.wto.org/english/news_e/news14_e/trip_28oct14_e.htm )  issued:  10/31/14.


TPP.  Business Software Alliance statement on data flows in the TransPacific Partnership.  (available at:  http://www.bsa.org/news-and-events/news/2014/october/en10312014housetpp )  issued:  10/31/14.


Kazakhstan.  Japanese statement on new foreign investment treaty with Kazakhstan.  (available at:  http://www.meti.go.jp/english/press/2014/1023_02.html )  issued:  10/31/14.


Japan.  Japanese statement on new foreign investment treaty with Kazakhstan.  (available at:  http://www.meti.go.jp/english/press/2014/1023_02.html )  issued:  10/31/14.

Korea (South)

KorUS.  Questions and answers on the US-Korea free trade agreement.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128257,128254,128245,128247,128216,128229,128226,128228,128230,128231&CurrentCatalogueIdIndex=0&FullTextSearch= )  issued:  10/31/14.


Sanctions.  Treasury Department announcement of sanctions against Myanmar.  (available at:  http://www.treasury.gov/press-center/press-releases/Pages/JL2680.aspx )  issued:  10/31/14.

North American Free Trade Agreement

Canada.  Canadian statement on closer economic cooperation within the North American Free Trade Agreement.  (available at:  http://www.international.gc.ca/media/comm/photos/2014/10/31b.aspx?lang=eng )  issued:  10/31/14.

Competitiveness.  Statement by the United States, Canada and Mexico on the North American Free Trade Agreement.  (available at:  http://www.commerce.gov/news/press-releases/2014/11/01/statement-canada-united-states-and-mexico-north-american-competitiven )  issued:  11/1/14.

Small Business

Ex-Im Bank.  US Export-Import Bank announcement of loan to Texas small business.  (available at:  http://www.exim.gov/newsandevents/releases/2014/ExportImport-Bank-Small-Business-Success-HoustonTexas.cfm )  issued:  10/31/14.


Texas.  US Export-Import Bank announcement of loan to Texas small business.  (available at:  http://www.exim.gov/newsandevents/releases/2014/ExportImport-Bank-Small-Business-Success-HoustonTexas.cfm )  issued:  10/31/14.

Washington.  Agriculture Department announcement of lifting of import ban by China on Washington apples.  (available at:  http://www.usda.gov/wps/portal/usda/usdahome?contentid=2014/10/0245.xml&contentidonly=true )  issued:  10/31/14.

Travel and Tourism

WTO.  World Tourism Organization statement on world tourism.  issued:  10/31/14.

World Trade Organization

Bali.  Summary of informal heads of delegation meeting on the post-Bali agenda.  (available at:  http://www.wto.org/english/news_e/news14_e/tnc_infstat_31oct14_e.htm )  issued:  10/31/14.

Import Licensing.  World Trade Organization report on the committee on import licensing.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128240,128244,128258,128238,128250,128243,128239,128259,128251,128234&CurrentCatalogueIdIndex=3&FullTextSearch= )  issued:  10/31/14.

Imports.  World Trade Organization annual report on antidumping.  (available at:  https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=128240,128244,128258,128238,128250,128243,128239,128259,128251,128234&CurrentCatalogueIdIndex=4&FullTextSearch= )  issued:  10/31/14.

TRIPS.  Summary of October 28, 29 meeting of the World Trade Organization TRIPS Council meeting.  (available at:  http://www.wto.org/english/news_e/news14_e/trip_28oct14_e.htm )  issued:  10/31/14.

What we’re covering this week –

    Not much is happening this week here in Washington because of the Thanksgiving Day holiday.  But there will be a lot of activity in Geneva, where things are heating up again at the World Trade Organization.  Meanwhile, US Trade Representative Michael Froman is in New Delhi for the US-India trade policy forum.

 Here’s some of what we’ll be following this week”

             ●          On Monday, World Trade Organization Director General Roberto Azevedo holds an informal heads of delegation meeting to launch a week of consultations on implementing the Bali outcomes.

             ●          Tuesday, USTR Froman participates in the US-India trade policy forum.

             ●          The DC Bar sponsors a program on complying with sanctions against Russia and Ukraine.  Deputy Assistant Secretary of State Peter Harrell is among the speakers.

             ●          On Wednesday, the WTO General Council meets to adopt the Trade Facilitation Agreement protocol of accession and a revised food stockholding initiative.

             ●          Friday the WTO Dispute Settlement Body meets.  The dispute over the US country-of-origin labeling rule is on the agenda.


Our  Blog

Updated:  10/27/14


Friday Afternoon


Straight talk.   

Click the highlighted text to hear snippets from WTD’s straight talk.

•  Canadian Ambassador to the United States Gary Doer comments on Trade Promotion Authority and the TransPacific Partnership on October 9 at the Financial Services Roundtable.

•  House Ways and Means Committee Chairman Dave Camp speaks to WTD about prospects for Trade Promotion Authority legislation on September 18.

•  Visiting South African President Jacob Zuma was asked at the National Press Club on August 4 what impact has President Obama’s color had on US relations with Africa.

•  Comments by Senate Finance Committee Chairman Ron Wyden to the press on trade and transparency on July 16.

•  Australia News Network interviews World Trade Organization Director General Roberto Azevedo during his visit to the G-20 meetings in Sydney on July 17.

•  New House Majority Leader Kevin McCarthy on June 22 tells Fox News Sunday why the US Export-Import Bank should end.

•  Here’s why Congressional ignorance can be very dangerous when it comes to willy-nilly support for free trade agreements, according to consumer advocate Ralph Nader.

 •  Here’s what’s at stake with Trade Promotion Authority and why Louisiana Republican Rep. Charles Boustany can’t sleep at night.

 •  Here’s what Wisconsin Republican Rep. Tom Petri said on the House floor April 10 about TTIP and Bratwurst.

 •  Here’s a brief interview with the Heritage Foundation’s Foundry report with House Financial Services Chair Rep. Jeb Hensarling (R-Texas) on the dangers of renewing the US Export-Import Bank given April 17.

 •  Here’s a brief snippet from remarks April 8 by Senate Finance Committee ranking Republican Orrin Hatch saying he is befuddled over why the President says he supports Trade Promotion Authority but doesn’t do anything about.

 •  Here’s Aspen Institute scholar and former Reagan Administration Assistant Secretary of Commerce speaking about with WTD on the many iterations of a US-European Union free trade agreement after a recent Hudson Institute event.

 •  Here’s what veteran House Democrat Richard Neal (Mass) – one of four cochairs of the new House TTIP Caucus – told WTD during a reception celebrating the caucus creation on April 3.

 •  Here’s what World Trade Organization chief spokesperson Keith Rockwell said in Washington on how and why the WTO is back.

 •  Here’s what Council of Economic Advisors Chair Jason Furman told the Joint Economic Committee last week about why there is so little mention of trade in the Economic Report of the President.

 •  This is why the European Union is wrong when it says it will never allow imports of US hormone-treated beef, Agriculture Secretary Vilsack tells WTD.