On 2 October 2020, India and South Africa submitted to the Council for Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) of the World Trade Organization (“WTO”) a proposed waiver from the implementation, application and enforcement of intellectual property (“IP”) rights under the WTO TRIPS Agreement (“COVID Waiver”) insofar as these rights relate to the prevention, containment, and treatment of COVID-19.  In essence, the COVID Waiver would allow WTO Members to forgo some protections of IP rights set out in the TRIPS Agreement in the hope that this waiver could speed up the production of affordable medical products including COVID diagnostic kits, vaccines, medicines, personal protective equipment and ventilators.

The proposed COVID Waiver has divided the WTO Membership.  While a majority of WTO Members have expressed support for the COVID Waiver, some developed countries (such as the EU, Korea, Japan, Australia and Singapore) have expressed reservations as to whether the COVID Waiver is necessary and whether it would actually help achieve the aim that it is intended to serve.

Continue Reading Tensions Between Consensus and Voting in WTO Decision-Making – Part II: The Proposed Waiver on TRIPS and COVID-19

On 17 November 2021, in the wake of the Glasgow Climate Change Conference (COP26), the European Commission (“Commission”) presented its Proposal for a Regulation that aims to curb deforestation and forest degradation driven by European Union (“EU”) consumption and production (“Proposed Regulation”). The wider goal of the rule is to reduce greenhouse gas (“GHG”) emissions and global diversity loss, by minimising the consumption of products from supply chains associated with deforestation or forest degradation.

Already announced in 2019, the Proposed Regulation fits in the wider context of the European Green Deal, the Commission’s flagship initiative to transform the EU from a high- to a low-carbon economy. It follows similar initiatives in the United States (“U.S.”) and United Kingdom (“UK”), as discussed in more detail here.

The Proposed Regulation complements and expands on existing EU legislation, such as the EU Timber Regulation (“EUTR”) and the Forest law Enforcement, Governance and Trade Regulation (“FLEGT Regulation”), and would be complementary to the Commission’s legislative initiative on Sustainable Corporate Governance (“SCG”). Of note, it would integrate and improve the framework created by the EUTR, which would be repealed by the adoption of the Proposed Regulation.

Continue Reading The European Commission’s Proposed Ban on Products Driving Deforestation and Forest Degradation

On October 6, 2021, Senator Brian Schatz (D-HI) and Representatives Earl Blumenauer (D-OR) and Brian Fitzpatrick (R-PA) introduced the Fostering Overseas Rule of Law and Environmentally Sound Trade (“FOREST”) Act of 2021 to “deter commodity-driven illegal deforestation around the world.”

The FOREST Act aims to disincentive illegal deforestation by restricting certain commodities and derivative products originating from illegally deforested lands from accessing the U.S. market.  If the FOREST Act is passed by Congress, foreign producers of “covered commodities,” such as: palm oil, soy, cocoa, cattle, rubber, and wood pulp, as well as foreign companies that produce products that are wholly or partially derived from these commodities will be affected by the new legislation.

A similar deforestation proposal has been introduced in the United Kingdom, and another is expected to be published by the European Commission under a proposed Regulation on November17, 2021.  As some of the largest consumers of agricultural commodities, the introduction of deforestation legislation in the United States, the United Kingdom, and the European Union could be the start of a larger global effort to address one of the most environmentally harmful practices using trade measures.  Depending on their terms and how they are implemented, the FOREST Act and its counterparts in the EU and UK could have negative implications for foreign producers and primary exporting countries of the commodities, if passed into law in any of these three jurisdictions.

Continue Reading Potential Implications of the FOREST Act of 2021 and Related Developments in Other Jurisdictions

On October 30, 2021, the United States and the European Union (“EU”) reached an agreement to replace the tariffs imposed under Section 232 of the Trade Expansion Act of 1962  (“Section 232”) on EU imports of steel and aluminum with a tariff-rate quota (“TRQ”) that is scheduled to take effect on January 1, 2022.  The deal allows a certain volume of EU steel and aluminum to enter the United States each year without the application of Section 232 tariffs.  Imports over that volume will be subject to Section 232 tariffs, which are currently 25 percent for steel imports, and 10 percent for aluminum imports.

According to details released by the Department of Commerce (“Commerce”), the TRQ is based on historical import values and will be allocated by product and by EU Member State.  For steel, the TRQ will be broken down into 54 product categories, with the total annual amount set at 3.3 million metric tons per year, starting in 2022.  The annual amount for the aluminum TRQ will be 18,000 metric tons for unwrought aluminum and 366,000 metric tons for semi-finished (wrought) aluminum.  The quota levels for unwrought aluminum will be subdivided into two product categories, and the quota levels for semi-finished aluminum will be subdivided into fourteen product categories. The United States will conduct annual reviews to adjust the steel TRQ amount based on US demand using data from the World Steel Association, but at this point there is no similar provision to adjust the levels of the aluminum TRQ.

Continue Reading Client Alert: US and EU Reach Agreement Regarding Section 232 Tariffs on Steel and Aluminum Imports

The Final Rule published by the U.S. Department of Commerce (“DOC”) on September 20, 2021, makes substantial modifications to the DOC’s regulations on scope proceedings to be conducted under antidumping and countervailing duty (“AD/CVD”) orders.  These new rules amend the scope inquiry process in a number of places, including, among others: giving the DOC discretion to self-initiate a scope inquiry; requiring more detailed information for a scope inquiry application; eliminating the informal scope inquiry procedure; establishing new time limits for the scope inquiry; and giving interested parties additional time to submit comments.  Perhaps most importantly, these new regulations accelerate the timeline for imposing provisional relief against imports believed to fall within the scope of an AD/CVD order, and permit the imposition of an AD/CVD cash deposit requirement on entries made prior to the initiation of a scope inquiry.

Continue Reading Revisions to the Department of Commerce’s Antidumping / Countervailing Duty Regulation: Scope Proceedings

At the request of the US Senate Finance Committee, the US International Trade Commission (“ITC”) is investigating the trade and economic effects of foreign censorship practices on US businesses under Section 332 of the Trade Act of 1930 (“Section 332”).

A Section 332 investigation is only a fact-finding investigation, and does not itself lead to the imposition of tariffs or other trade restrictive measures.  However, if the ITC concludes at the end of an investigation that certain policies have burdened or restricted US commerce, the ITC’s conclusions could be used as the basis for further trade action, such as under Section 301 of the Trade Act of 1974, which could result in the imposition of restrictions on trade.

Continue Reading The Trade and Economic Effects of Foreign Censorship Studied by the US International Trade Commission

Momentum is building for the United States to pursue a plurilateral digital trade agreement (or possibly a series of bilateral agreements) with trading partners in the Indo-Pacific region, as part of the Biden administration’s strategy to reengage with the region and counter Chinese economic influence.  This sentiment has been expressed in public statements from U.S. Trade Representative (“USTR”) Tai and National Security Council Indo-Pacific Coordinator Kurt Campbell.  Furthermore, USTR Tai, Secretary of State Anthony Blinken and Vice President Kamala Harris have all discussed the issue of digital trade with foreign counterparts in the region over the past several months.

In addition to Biden Administration officials, other key stakeholders have announced their support for U.S. participation in a digital trade agreement in the Indo-Pacific.  Key members of Congress as well as allies and partners in the region have expressed interest in a U.S.-led digital trade pact.  U.S. industry also appears to be on board.  For example, more than a dozen industry and business groups – including the U.S. Chamber of Commerce, the Semiconductor Industry Association and the Information Technology Industry Council – wrote a letter to USTR Tai stressing that developing digital trade rules with partners in the Indo-Pacific should be “a critical element” of the U.S. trade agenda, particularly in the face of rising digital protectionist measures globally.  The apparent buy-in from all key actors and stakeholders strongly suggests that a digital trade agreement in the Indo-Pacific is a serious possibility.

This alert discusses what a potential digital trade agreement might look like, based on existing precedent, and also hypothesizes what the alternatives to such an agreement might be.

Continue Reading The US Appears Poised to Pursue a Digital Trade Agreement in Asia – What Does that Mean?

The United States is currently considering proposals to extend cultural property agreements with the Governments of the Republic of Cyprus and Peru, respectively. Each agreement identifies various types of art and antiquities that have been found to be in jeopardy of pillage. Similarly, the United States received a request from the former government of the Islamic Republic of Afghanistan seeking emergency assistance with the protection of their cultural property. The extension proposals and the emergency request all seek United States import restrictions intended to protect the items by closing the US art purchasing market to these pilfered and illicitly traded items.

On October 5th, the Cultural Property Advisory Committee met to review the proposals and emergency request. At a later date, it will make a recommendation to the Biden Administration as to whether it ought to extend the agreements with Cyprus and Peru and whether to offer emergency protection to the former government of the Islamic Republic of Afghanistan.

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Under the Enforce and Protect Act of 2015 (“EAPA”), U.S. Customs and Border Protection (“CBP”) is authorized to determine whether covered merchandise has entered the United States through evasion, resulting in the reduction or elimination of otherwise applicable antidumping (“AD”) or countervailing duties (“CVD”) on the merchandise.  19 U.S.C. § 1517.  Under the statute, if CBP “is unable to determine whether the merchandise at issue is covered merchandise,” i.e., subject to an AD or CVD order, CBP may “refer the matter to the {U.S. Department of Commerce (“Commerce”)} to determine whether the merchandise is covered merchandise” pursuant to Commerce’s authority to make AD/CVD scope determinations.  In Commerce’s new regulations, the agency establishes procedures that will govern its handling of these covered merchandise referrals from CBP.  19 C.F.R. § 351.227.  In doing so, Commerce formalizes what has been an ad hoc approach to these covered merchandise referrals under its existing regulations and establishes covered merchandise inquiries as a distinct proceeding segment alongside scope and anti-circumvention inquiries, which seek to answer similar questions regarding coverage of AD/CVD orders.

As relevant background, CBP’s EAPA investigations focus on the specific question of whether certain imports by particular companies are unlawfully evading applicable ADs and/or CVDs.  These investigations follow allegations of evasion (e.g., fraudulent country of origin markings, misclassification, transshipment, etc.) by interested parties (e.g., other U.S. importers of the covered merchandise, a U.S. producer of the domestic like product, or a trade association) and can result in the imposition of various remedies by CBP.  For example, if CBP determines that there is reasonable suspicion that covered merchandise entered the United States through evasion, it may impose “interim measures” including the suspension of liquidation of unliquidated entries, extension of the period for liquidating unliquidated entries, and an array of other measures (e.g., requiring a single transaction bond or the posting of cash deposits).  Continuation of these remedies is available to CBP following a final determination as to evasion, and CBP may also pursue other recourse (e.g., penalty actions) against the companies subject to investigation.

Continue Reading Revisions to the Department of Commerce’s Antidumping / Countervailing Duty Regulations: Covered Merchandise Referrals

The Final Rule published by the Department of Commerce (“Department”) on Monday, September 20, 2021, makes certain modifications to the Department’s regulations on new shipper reviews of antidumping and countervailing duty order. Among other changes, the new regulations increase the burden for parties requesting new shipper reviews by requiring more documentation supporting the sales under review and by requiring certifications from unaffiliated customers.  These changes are intended to enhance the Department’s ability to assess whether new shipper review requests are based on “bona fide” sales.  Several of the more burdensome requirements contained in the proposed version of the rule, issued last August, did not ultimately survive the notice and comment process.  Even so, the additional requirements imposed by this regulatory amendment will likely make it more difficult for parties to seek and obtain new shipper reviews, and could give the Department greater leeway in rejecting such requests.

Provided for by Section 751(a)(2)(B) of the Act, a new shipper review allows a foreign exporter or producer that did not export subject merchandise to the United States during the period of the original antidumping (AD) or countervailing duty (CVD) investigation, and is not affiliated with an exporter or producer that did export, an opportunity to obtain its own dumping or countervailing duty margin after it makes its first U.S. sale on an expedited basis.  Regulations for new shipper reviews are outlined in 19 CFR Section 351.214.

Continue Reading Revisions to the Department of Commerce’s Antidumping / Countervailing Duty Regulations: New Shipper Reviews