US Trade Representative Lighthizer will meet with tech CEOs.

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According to anonymous sources, U.S. Trade Representative Robert Lighthizer will meet with CEO’s from Google, Microsoft, Qualcomm and Oracle today in Silicon Valley.

The topics likely center around intellectual property protections, the ongoing trade war, reports of bias in news searches, emerging technologies such as 5G, AI and robotics.

Other topics could include the Trump Administration’s plan to increase restrictions on exports of new technologies to China due to national security concerns. The new technologies include AI, quantum computing, and speech recognition.

Check back for more news as they become available.

The NAFTA (USMCA) loyalty oath?

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As has been widely reported, the new NAFTA agreement (USMCA) contains what has been branded a “loyalty oath” among the US, Canada and Mexico.

What is this “loyalty oath”?
In short, the oath says that in the event any USMCA member enters into a free trade agreement (FTA) with a non-market country, the other two remaining countries can leave the agreement and form their own bilateral trade pact.

Why is this clause in the USMCA?
This clause is likely an effort by the US Administration to isolate China economically since neither Canada or Mexico would want to leave the USMCA. This clause is also aimed at limiting the imports from China to Mexico/Canada for shipment into the US duty free.

Is a “loyalty oath” found in other trade agreements?
Currently, no, however this inclusion in the USMCA may be an indication of what will occur in future trade agreements to further isolate China from their trading partners.

Is the “loyalty oath” set in stone?
Right now, no, the disclaimer on the current USMCA text states: “Subject to Legal Review for Accuracy, Clarity, and Consistency Subject to Language Authentication“. Only upon ratification by all countries can we know for sure whether this is in the agreement.

What is a market or non-market economy?
This loyalty oath against non-market economies is likely aimed at China while not specifically named in the agreement. Beijing has asked for recognition as a “market economy” within the World Trade Organization (WTO) since their accession agreement expired in December 2016. If China is branded a “market economy”, this would limit trade remedies such as anti-dumping/countervailing duties to be used against Chinese imports.

What are the non-market economies around the world?
According to the European Union, besides China, the other non-market economies include Vietnam, Kazakhstan, Albania, Armenia, Azerbaijan, Belarus, Georgia, the Democratic People’s Republic of Korea, Kyrgyzstan, Moldova, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan.

Where can I read the full text of the “loyalty oath”
I could not find any news sources that cited the USMCA section.

The exact text of the oath is copied below:

4. Entry by any Party into a free trade agreement with a non-market country, shall allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement).

The official PDF on the US Trade Representative website can be accessed here: (last accessed October 9, 2018).

https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/32%20Exceptions%20and%20General%20Provisions.pdf

See Article 32.10 (4)

If you have any questions about NAFTA or the USMCA and how this may impact your business, call experienced trade attorney, David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Current US Tariff Action Deadlines

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I receive many questions about the deadlines for all the various tariff actions, I thought I’d post all the upcoming deadlines for your convenience.

If you have any questions regarding any 301 or 232 duties or are interested in filing of comments or an exclusion, or need assistance filing a response to comments, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

August 20-23 – Public hearing in DC for List 3

August 23, 2018 – 25% duty effective on List 2

September 6, 2018 – deadline to submit written comments for List 3

September 6, 2018 – deadline to submit post-hearing rebuttal comments

October 9, 2018 – deadline for product-specific exclusions for List 1

14 days after request for exclusion posted on docket – deadline for responses to requests for product-specific exclusion.

7 days after the close of response period – deadline for responses filed during the 14-day response period.

To Be Announced – 10% or 25% duty on List 3

Breaking news – Section 301 Statement by US Trade Rep. Robert Lighthizer and list of Chinese goods impacted by $200 billion in tariffs.

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Robert Lighthizer, official portrait, work of the U.S. Federal Government

U.S. Trade Representative (USTR) Robert Lighthizer released a statement today regarding Section 301 of the Trade Act.

The full statement can be read here.

Here’s a summary of the statement:
1. Last Friday, US started imposing tariffs of 25% on $34 billion worth of Chinese imports.
2. Will eventually cover $50 billion in Chinese imports.
3. Tariffs are against products that benefit from China’s industrial policy and forced technology transfer practices.
4. China retaliated with $34 billion in tariffs and threats on $16 billion more.
5. In resopnse to China’s retaliation, President Trump ordered tariffs of 10% on an additional $200 billion in Chinese imports.

Brief history of the 301 tariffs:
1. Last August (2017), President Trump asked USTR to begin the Section 301 process. The basis of the 301 was due to China’s”abusive trading practices with regard to intellectual property and innovation.”
2. USTR conducted investigation, published 200 page report showing: “China has been engaging in industrial policy which has resulted in the transfer and theft of intellectual property and technology to the detriment of our economy and the future of our workers and businesses. ”
3. The USTR also found these “practices are an existential threat to America’s most critical comparative advantage and the future of our economy: our intellectual property and technology.”

To view the Federal Register notice and list of proposed tariffs on $200 billion of Chinese imports, click here.

If you have any questions how these 301 tariffs may impact your business, or if you would like to submit comments to the US Government, please contact experienced trade attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Trump proposes further tariffs on $200 billion worth of Chinese goods.

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Official Portrait of Ambassador Robert E. Lighthizer

US Trade Representative (USTR), Robert Lighthizer released a statement supporting Trump’s request for the USTR to identify $200 billion worth of Chinese goods for an additional 10% in tariffs.

This follows Trump’s announcement last Friday of a 25% tariff on $50 billion in Chinese goods to counter what Trump claims to be “China’s theft of intellectual property and technology and its other unfair trade practices”.

Lighthizer’s full statement reads:

“I support the President’s action. The initial tariffs that the President asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese. It is very unfortunate that instead of eliminating these unfair trading practices China said that it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers, and businesses. At the President’s direction, USTR is preparing the proposed tariffs to offset China’s action.”

Call David Hsu if you have any questions on how US and Chinese tariffs may impact your business, 832-896-6288 or mail at dhsu@givensjohnston.com.

The Office of the United States Trade Representatives releases special 301 report on Intellectual Property Rights.

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On April 27th, The Office of the United States Trade Representative (USTR) today released their 2018 Special 301 report listing trading partners that do not “adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights”.

The Report singles out several US trading partners to address IP-related issues and places certain countries on a “Watch List” and “Priority Watch List”.

As you may be aware, Section 301 of the U.S. Trade Act of 1974 authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts US commerce. Section 301 actions are unique in that they do not require authorization from the World Trade Organization (TWO) to take enforcement action.

The US Government estimates the Intellectual Property industries directly and indirectly support 30% of all employment in the United States (or about 45.5 million American jobs).

Some highlights of the 2018 Special 301 Report include:

1. The following 12 countries are on the “Priority Watch List” – Algeria, Argentina, Canada, Chile, China, Colombia, India, Indonesia, Kuwait, Russia, Ukraine, and Venezuela.

2. China is included on the “Priority Watch List” for the 14th year in a row and claims China’s technology transfer practices, trade secret theft, counterfeit manufacturing etc.

3. India is also included on the “Priority Watch List” for “longstanding challenges in its IP framework and lack of sufficient measurable improvements, particularly with respect to patents, copyrights, trade secrets, and enforcement, as well as for new issues that have negatively affected U.S. right holders over the past year.”

4. Canada was surprisingly indicated on the “Priority Watch List” instead of their usual “Watch List” status. The USTR cited Customs inability to inspect or detained counterfeit or pirated good shipped through Canada and IP protections for pharmaceuticals among others.

The full Spectial 301 Report can be read here.

If you have any questions about this report, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Renegotiated KORUS FTA results in changes more favorable to US companies.

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According to the Office of the United States Trade Representative website, the Trump administration has negotiated additional favorable terms of the United States – Korea Free Trade Agreement (KORUS) that went into effect in 2012.

Fulfilling part of his campaign promises, President Trump has re-negotiated the KORUS with these (and many more) favorable changes to US companies:

1. Korea will double the number of US automobile exports to 50,000 cars per manufacturer per year.

2. US automobile exports to Korea that meet US safety standards can enter the Korean market without further modification. This lowers the cost of US cars being sold in Korea as additional testing and modifications are not needed before the US cars are sold in the marketplace.

3. Korea will recognize US standards for auto parts to service US vehicles in Korea, this reduces the labeling burden for US parts manufacturers.

4. Korea will amend their Premium Pricing Policy for Global Innovative Drugs to ensure non-discriminatory and fair treatment for US pharamceutical exports.

5. Korea imports of steel products into the US will be subject to a product-specific quota equal to 70% for the average annual import volume of such products during the years 2015-2017, resulting in reduction of Korean steel shipments to the US.

If you have any questions regarding the KORUS or other trade and customs law issues, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Trump Announces Tariffs on at Least $50 billion in Chinese Goods.

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On March 22nd, President Donald Trump signed a memorandum instructing the U.S. Trade Representative to prepare a list of goods imported from China that will be subject to tariffs.

The tariffs are in response to China’s policies of forced technology transfers, forced joint ventures, intellectual property theft and technology licensing restrictions for U.S. companies doing business in China.

Check back here for the list when it is published. It is is estimated the list will include approximately 1,300 tariff lines and the public will have 30 days to submit comments.

If you have any questions how this may affect your imports, call experienced trade and customs attorney David Hsu at 832-896-6288 or email dhsu@givensjohnston.com.