Articles Posted in Trade Agreements

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During his visit to China, President Trump raised concerns about the trade deficit between the United States and China as well as China’s trade practices. One longstanding concern in this regard has been technology/intellectual property (IP) transfer requirements in China—an issue the U.S. Trade Representative is currently investigating through a rarely used tool under U.S. law. In their recent alert on the topic, colleagues Nancy A. Fischer, Stephan E. Becker and Sahar J. Hafeez examine the issue and its potential trade implications.

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On April 18, 2017, President Trump signed the “Presidential Executive Order on Buy American and Hire American.” While there is no immediate impact, the Executive Order (“EO”) sets the stage for executive agencies to perform reviews of compliance with Buy American laws and could potentially lead to changes in how these laws are implemented.  Note that although there is a “Buy American Act” the term “Buy American” is also used as a generic term to describe a variety of laws and regulations that impose domestic content requirements.

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“We will follow two simple rules: buy American and hire American.” While world leaders are pondering what these words from President Trump’s Inaugural Address mean for international trade, a different question looms for U.S. Government contractors—what is on the horizon as far as the Buy American Act and similar protectionist regulations?

  • Any new infrastructure spending bill that provides funding for state and local public works projects likely will incorporate domestic preference requirements similar to those incorporated in 2009’s American Recovery and Reinvestment Act.
  • The process for issuing new waivers when a particular item is not available in commercial quantities from U.S. producers may be further restricted, and some existing waivers could be cancelled.
  • Even if no new rules are implemented, contractors should be prepared for increased enforcement.

The Buy American Act, Balance of Payments Program, Cargo Preference Act, Berry Amendment and similar regulations all require U.S. Government contractors to exclusively use, or give a preference to, U.S. suppliers. Further, the Trade Agreements Act prohibits U.S. Government purchases of products from many foreign countries. Continue reading →

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In a development that may have important implications for companies selling products to the U.S. government, on December 7, 2016, the Court of International Trade (CIT) issued a decision holding that the assembly in the United States of a flashlight using imported components did not qualify as “U.S. origin” under the Trade Agreements Act. The court’s decision potentially may alter the manner in which government agencies determine whether a product with foreign content is eligible to be purchased.

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Donald Trump’s victory in the 2016 Presidential election put the Republican Party in charge of the White House and Congress for the first time in a decade. President-elect Trump ran as an anti-establishment candidate who departed from many traditional Republican positions and promised bold and in some respects controversial reforms. How his administration will govern and the extent to which its policies will be supported in Congress are key questions facing companies and investors.

This report comments on aspects of international trade, sanctions and export control policies that are currently at the forefront of discussion.

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On October 5, the trade ministers of the 12 nations participating in the negotiations announced that they had successfully concluded the Trans-Pacific Partnership (TPP) free trade agreement. Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam are the member countries. There is a long way to go before the TPP is ratified and implemented (and the prospects for ratification in certain countries are not certain), but the agreement represents a major accomplishment for negotiations that began in 2009.

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On June 24, after weeks of legislative wrangling and extensive lobbying by influential interest groups, the U.S. Senate passed the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, better known as the Trade Promotion Authority (“TPA”) legislation. The House approved identical legislation last week, so the President now can sign TPA into law.

Although enactment of TPA is technically not a prerequisite for Congress to consider pending free trade agreements (“FTAs”), the “fast track” procedures contained within the TPA legislation offer the President critical leverage to finalize negotiations for several key FTAs and provide assurances to trading partners that Congress will not reopen the negotiations after the agreement has been finalized. In particular, the TPA bill mandates the use of several procedures to accelerate Congressional consideration of legislation to implement a trade agreement. These expedited procedures include:

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This afternoon the House of Representatives approved a rule that extends time for a second vote on Trade Adjustment Assistance legislation which the House failed to pass on Friday.  By a vote of 236-189, the House voted to allow for reconsideration of the trade legislation before July 30th.  The next six weeks promise to be full of interesting legislative twists and turns as supporters of the trade agenda seek a path forward.

 

 

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President Obama and Republican House leaders are regrouping in an effort to put key trade legislation back on track after House Democrats voted against Trade Adjustment Assistance (TAA) for workers displaced by global trade, a key part of the President’s trade agenda.

The development threatens ultimate passage of the Trans-Pacific Partnership (TPP), a proposed trade agreement with 12 nations along the Pacific Ocean.  A legacy priority for the Obama Administration, the TPP would eliminate Non-Tariff Barriers (NTBs) to trade, lower tariffs, and harmonize regulations in countries representing 40 percent of the global economy.  Continue reading →

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Japanese Prime Minister Shinzo Abe’s visit last week to the United States was a huge success. Through the visit, President Obama and the Prime Minister affirmed the importance of the Trans-Pacific Partnership (TPP) as a trade agreement, but also as a strategic security tool for the Asia Pacific region. The Prime Minister also made his mark as the first Japanese prime minister to address a joint meeting of Congress.

Unfortunately for TPP supporters, opposition forces in Congress have taken the wind out of the sails of the Prime Minister’s successful state visit.  Controversy continues to brew in Congress over the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, legislation to grant the President Trade Promotion Authority (TPA) to negotiate international deals that Congress can approve or disapprove, but which Congress cannot filibuster or amend.  TPA is seen as essential to completing a treaty like TPP which is being negotiated with 12 countries. Continue reading →