TEXTILE DEVELOPMENT MEMO
(Prepared by Brenda A. Jacobs and Pete Kasperowicz, Sidley Austin LLP)
Administration's 2010 Trade Agenda Focuses on Enforcement
The Office of the U.S. Trade Representative today released a trade agenda for 2010 that suggests the Obama Administration will focus heavily on trade enforcement as a way of shoring up U.S. jobs. While the agenda says the Administration supports further trade liberalization, it puts the onus on advanced developing countries like China and India to make better offers in the World Trade Organization, and similarly says Panama, Colombia and Korea need to make more commitments before the free trade agreements with those countries can be finalized.
The report is due annually to Congress and includes both a forward looking agenda and a look back at what the Administration did during the prior year.
Enforcement can be expected to play a major part in 2010, during which the USTR says it will strengthen monitoring and enforcement of trade commitments and will bring new WTO dispute settlement cases as necessary. The agenda says support for the multilateral system "can occur through better enforcement of existing rights," and says WTO dispute resolution is a "vital avenue" for member countries. The report also says enforcement is one way the Administration will try to achieve its goal of doubling U.S. exports over the next five years, which was announced as the Administration's National Export Strategy in February. According to the report, the Administration has created an export promotion cabinet that will advocate for U.S. exports.
Highlighting "accomplishments," the USTR-drafted report focuses extensively on China, noting that the U.S. imposed a safeguard on Chinese tires, saw a WTO victory in an IPR/distribution case, and brought a case against Chinese raw materials export restraints.
This year, USTR expects to "report and act on new measures instituted [by foreign governments] in 2009," because new market barriers are springing up in areas such as consumer protection and food safety. Notably, USTR says it will examine human rights commitments more closely, and will seek a "regular, high-level dialogue" with China, India, Mexico, Canada and the European Union to elevate trade and labor discussions.
The agenda also says USTR will try to make the U.S.-China Joint Commission on Commerce and Trade "more effective" by focusing on current market issues, and indirectly noted China’s indigenous innovation policy (which favors local innovation over foreign innovation) as one likely topic for discussion. USTR also wants to focus on innovation policy in India, along with services and agricultural market access and investment. USTR wants to set up a framework for discussing trade formally with Brazil, and says it is awaiting signals that Russia is serious about joining the WTO.
The agenda insists the Administration wants to conclude Doha, but says advanced developing nations like China, India and Brazil need to do more, and that the question is whether these countries "will accept responsibility" commensurate with their growing economic influence. USTR gives the Obama Administration credit for trying to save the talks by starting bilateral negotiations and considering sectoral agreements in certain areas.
The lengthy document does little more than summarize the state of play related to the Administration’s plan to participate in the Trans-Pacific Partnership trade agreement (TPP), and, with respect to the three outstanding FTAs with Panama, Colombia and Korea, the report states only that if the remaining issues can be dealt with, the Administration would seek congressional approval. But the agenda stopped far short of saying these agreements would be advanced.
In other areas, the agenda called for increased regulatory cooperation with Mexico and Canada related to NAFTA, and said officials are still trying to conclude an overhaul of the model bilateral investment treaty (BIT) so BIT negotiations can resume with China, India, Vietnam and Mauritius.
CPSC Will Consider Final Civil Penalty Rule in Open Meeting Wednesday
The Consumer Product Safety Commission (CPSC) on Wednesday is expected to vote on a final rule identifying how the agency will interpret the factors to be considered when seeking civil penalties for violations of the laws it administers.
Under the law, the factors the Commission is required to consider in determining the amount of a civil penalty to seek include: the nature, circumstances, extent and gravity of the violation, including the nature of the product defect or of the substance, the severity of the risk of injury, the occurrence or absence of injury, the number of defective products distributed or the amount of substance distributed, the appropriateness of the penalty in relation to the size of the business of the person charged, including how to mitigate undue adverse economic impacts on small businesses, and such other factors as appropriate.
The interpretation of these factors takes on increased significance in light of the higher civil penalties established under the Consumer Product Safety Improvement Act. The maximum penalties per violation increased from $8,000 to $100,000, and up to $15 million for any series of product safety violations.
An interim final rule has been in place since September 2009. The new proposed final does differ in some places from the interim final rule, in response to public comments that the CPSC received. For example, the CPSC revised the final rule to acknowledge that not all violations will involve a "product defect." Where "product defect" or "defective product" does not apply, the other statutory factors will be considered.
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