Zachary Simmons

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The United States has requested dispute settlement consultations with Mexico under Chapter 31 of the United States-Canada-Mexico Agreement (“USMCA”) concerning a range of energy policies adopted by the Government of Mexico that the United States believes discriminate against U.S. interests in violation of the USMCA.  According to a press release issued by the Office of the U.S. Trade Representative Katherine Tai:

Mexico’s policies have largely cut off U.S. and other investment in the country’s clean energy infrastructure, including significant steps to roll back reforms Mexico previously made to meet its climate goals under the Paris Agreement.  Mexico’s policy changes threaten to push private sector innovation out of the Mexican energy market.  To reach our shared regional economic and development goals and climate goals, current and future supply chains need clean, reliable, and affordable energy.

Canadian Trade Minister Mary Ng has indicated that Canada has joined the United States in challenging these actions through the same dispute settlement mechanism.  This is the first time that the United States and Canada have both pursued USMCA dispute settlement consultations with Mexico on policies of mutual concern.…

Continue Reading United States Seeks USMCA Dispute Settlement Consultations With Mexico Over Range of Energy Policies

On April 18, 2022, the Office of Management and Budget (OMB) published new guidance related to the implementation of the Build America, Buy America (BABA) provisions in the Infrastructure Investment and Jobs Act (IIJA). The BABA provisions, which passed in November 2021, require that any infrastructure projects receiving federal assistance – not only those infrastructure projects funded by the IIJA – must use iron, steel, manufactured products, and construction materials that are produced in the US. The new guidance describes how federal executive departments and agencies should implement the “Buy America” preference for federally-financed infrastructure projects and a “transparent process to waive”  the preference, when necessary.  Although the OMB guidance reflects an “initial” approach to implementation, and additional guidance may follow, there are several important takeaways for companies interested in pursuing or currently performing federally-funded infrastructure projects.
Continue Reading New “Buy America” Guidance for Infrastructure Projects Released

Following Russia’s military invasion of Ukraine on February 24, 2022, the United States and other major global economies have taken a range of actions to impose economic costs on Russia and Russian interests.  These actions initially consisted of economic sanctions targeting Russian companies and individuals, but have been expanded to include trade in goods.

On March 11, 2022, the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States), as well as the European Union, issued a statement announcing their intention to impose additional economic costs on Russia in response to its military invasion of Ukraine, including with respect to trade in goods.  The joint statement included a range of commitments aimed at isolating Russia from the world’s major economies and global financial institutions, including revoking Russia’s “Most Favored Nation” (MFN) status, which affords Russian imports access to favorable tariff rates among World Trade Organization (WTO) members, and imposing additional restrictions on exports and imports of “key goods and technologies” to Russia.

As discussed below, the United States, the European Union, and the United Kingdom have each taken steps to effectuate the G7 statement.  In addition to revoking Russia’s MFN status, thereby increasing the cost of Russian imports generally, these jurisdictions have all imposed certain product-specific restrictions on the importation and/or exportation of specific goods from and/or to Russia.  In certain instances, these measures have also been extended to cover trade with Russia’s ally Belarus.

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Continue Reading Major Global Economies Take Aim at Trade with Russia Following Military Invasion of Ukraine

On December 23, 2021, and following strong bipartisan support in Congress, President Biden signed the Uyghur Forced Labor Prevention Act (“UFLPA” or “Act”) into law.  P.L. 117-78 (2021).  The UFLPA builds on previous congressional and executive branch actions aimed at responding to allegations of forced labor and other human rights concerns in China’s Xinjiang Uyghur Autonomous Region (“XUAR”).  In particular, the UFLPA introduces a rebuttal presumption that “any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in” the XUAR were made with forced labor and are therefore ineligible for entry into the United States.  In addition, the UFLPA details Congressional expectations for a whole of government enforcement strategy with respect to allegations of XUAR-related forced labor and expands economic sanctions introduced under the Uyghur Human Rights Policy Act of 2020 to cover “{s}erious human rights abuses in connection with forced labor” in the XUAR.

In recognition of the compliance challenges related to the above-described rebuttable presumption, the Forced Labor Enforcement Task Force (“FLETF”) is soliciting comments on how best to ensure that “goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China are not imported into the United States.”  These comments are due no later than March 10, 2022.  As discussed further below, importers should consider submitting comments to the FLETF concerning this set of issues, which will ultimately inform the enforcement strategy employed by U.S. Customs and Border Protection (“CBP”) at the border.  Additionally, importers should begin top-to-bottom reviews of their supply chains to ensure compliance with the newly-introduced rebuttable presumption prior to its implementation in June of this year.…

Continue Reading Understanding the Uyghur Forced Labor Prevention Act and What Comes Next

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

On May 27, 2021, the U.S. Department of Commerce (Commerce) issued its affirmative final determination in the countervailing duty (CVD) investigation of Passenger Vehicle and Light Truck Tires (PVLT) from Vietnam, in which it concluded that the Vietnamese Dong (VND) was undervalued, and that this undervaluation constituted a countervailable subsidy under U.S. trade law. This is only the second CVD investigation in which currency undervaluation, as a form of countervailable subsidy, has been at issue (the other case being certain twist ties from China, see here), and is the first instance where Commerce made a final substantive decision as to the currency undervaluation issue.  For that reason, PVLT from Vietnam establishes new law in several important areas, and is likely to be used as a template for future Commerce decisions in this area.
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Continue Reading Currency Undervaluation as a Countervailable Subsidy: The United States Takes Its First Step

US and Mexican labor unions and, separately, the US Government, have filed the first labor cases under the Rapid Response Mechanism (“RRM”) of the United States-Mexico-Canada Agreement (“USMCA”).  The RRM was a relatively late addition to the USMCA – the result of negotiations between the Trump Administration and House Democrats – and provides for facility-specific review by an independent panel, and remedies, in response to allegations of a “denial of rights” of free association and collective bargaining.  The USMCA is currently the only US free trade agreement to include a mechanism to address alleged labor rights violations at specific facilities in the territories of the Parties.

On May 10, 2021, the American Federation of Labor and Congress of Industrial Organizations (“AFL-CIO”), Service Employees International Union (“SEIU”), Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios Movimiento 20/32 (“SNITIS”), and Public Citizen announced that they filed the first labor case under the RRM.  The petition alleges that auto parts manufacturer Tridonex, a subsidiary of Philadelphia-based Cardone Industries, has engaged in the following labor violations, including with respect to the current SITPME union that is active as the Tridonex facility:

  • “Tridonex has denied its workers the opportunity to read or obtain copies of the collective bargaining agreement with SITPME.  Tridonex has failed to deposit its CBAs with the Federal Conciliation and Arbitration Board, as required by the Mexican Constitution.”
  • “Tridonex and the SITPME union, acting as an agent of Tridonex, have jointly denied the Tridonex workers the opportunity to ratify their CBA, in violation of Art. 400 Bis of the Federal Labor Law.”
  • “Tridonex and SITPME, acting as an agent of Tridonex, have jointly denied members of SITPME at Tridonex the right to elect their union leaders by personal, free, direct and secret vote, in violation of Art. 358.II of the Federal Labor Law.”
  • “SITPME, acting as an agent of Tridonex, has failed to provide its members with legally-required financial information reports under Art. 373 and Art. 358.IV of the Federal Labor Law.”
  • “Tridonex retaliated against workers who signed petitions to the Local CAB by firing more than 600 workers and compelling them to sign “voluntary” resignations in order to receive severance pay, in violation of Article 47 of the Federal Labor Law, and by denying other workers benefits agreed on through the CBA, in violation of Article 396 of the Federal Labor Law.”

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Continue Reading US and Mexican Unions, Followed by US Government, File First Labor Cases Under USMCA “Rapid Response” Mechanism

On April 20, 2021, the US Department of Energy (“DOE”) revoked a December 2020 Prohibition Order issued by the Trump Administration which banned the acquisition, importation, transfer, or installation of certain bulk-power system (“BPS”) electric equipment manufactured or supplied by “persons owned by, controlled by, or subject to the jurisdiction or direction of the {People’s Republic of China (“China”)}.”  The Prohibition Order was issued pursuant to EO 13920, “Securing the United States Bulk-Power System” (May 1, 2020), which was promulgated to address “foreign adversary countries creating and exploiting vulnerabilities in the United States bulk-power system.”  In response to this alleged exploitation, the EO declared an emergency and authorized the Secretary of Energy to prohibit transactions involving certain BPS electric equipment sourced from “foreign adversary” countries for one year. In the recent revocation notice, DOE cited the need to “create a stable policy environment” while the Department conducts a new review of how best to apply its EO 13920 authorities.
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Continue Reading US Department of Energy Revokes Trump Prohibition Order Restricting Chinese Bulk-Power System Electric Equipment and Seeks Comments on Securing US Critical Electric Infrastructure

International Trade Associate Zachary Simmons authored an opinion piece, “Global LGBTQ+ Rights Could Be Elevated Through Biden’s Trade Policy,” for The Advocate. The article, published on February 24, 2021, advocates for the inclusion of global LGBT rights objectives in US trade policy on various policy and political grounds. As the Biden Administration places particular…

On January 25, 2021, President Biden signed Executive Order (“E.O.”) 14005, “Ensuring the Future is Made in All of America by All of America’s Workers.” The E.O. establishes as policy that the US Government “use terms and conditions of Federal financial assistance awards and Federal procurements to maximize the use of goods, products, and materials produced in, and services offered in, the United States” and “should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America’s workers thrive.”

Under existing law, federal procurements and financial assistance are subject to an array of domestic preference rules, including the Buy American Act (“BAA”) (concerning government procurements of supplies and construction materials), the Trade Agreements Act (“TAA”) (concerning waivers of BAA requirements in certain circumstances), and the Buy America Act (concerning non-federal transit-related procurements using federal funding).

The Biden E.O. is designed to supplement, review, and strengthen these and other applicable US laws and regulations, consistent with the policy objectives of procuring US goods and services to the maximum extent possible.…

Continue Reading Biden’s Made in America Executive Order: Key Takeaways and What Comes Next