TPCC I NTERAGENCY T RADE O FFICER T RAINING M ARKET A CCESS & T RADE A GREEMENT E NFORCEMENT John Liuzzi Office of Trade Agreements and Compliance / Trade

TPCC INTERAGENCY TRADE OFFICER

TRAINING

MARKET ACCESS & TRADE AGREEMENT

ENFORCEMENT

John LiuzziOffice of Trade Agreements and

Compliance / Trade Compliance Center

September 27, 2012

How a Tariff Re-classification by the EU Threatened U.S. exports of

Jojoba Esters

An Example

BCIU/Interagency Trade Officer 27Sept12

The Scenario

• In March 2007, the International Jojoba Export Council approached the Department of Commerce, through the USEAC, and Customs and Border Protection (CBP) looking for assistance with the European Union’s re-classification of Jojoba esters from a 0% tariff line (HS 3404.9090) to a 7.7% tariff line (HS 1518.0099).

• Jojoba and its by-products are used in the manufacture of makeup and skincare products. This new classification would increase costs and result in significant damage to U.S. as well as other countries’ exports to the EU.


Some Questions

• What is the scientific basis for the EU’s re-classification?

• Are there third countries that have the same concerns?

• What possible avenues are available to address this issue?


Key Players

• DOC/ITA:– Arizona USEAC

– MAC’s Trade Compliance Center

– MAC’s Office of the European Union

– MAS Industry Analyst

– U.S. Mission to the European Union

– Office of General Counsel

• Customs and Border Protection

• Industry Representative


Key Factors

• U.S. argued that the EU’s reclassification was incorrect because the science underpinned the classification of jojoba esters in HS 3404 as having the chemical and physical properties of wax, not HS 1518 as an animal fat or oil.

• The Harmonized System (HS) Code is harmonized up to the six-digit level. The WCO’s Harmonized System Committee can rule on HS Code classification disputes to ensure uniform classification.

• Because the WCO decision would be based on a vote, CBP and ITA undertook outreach to third countries who were possible allies for the U.S. position, such as Argentina, Australia, Chile, Egypt, Mexico, and Peru.


What is our Goal for Success?

• Make a sale – we help a company now (Good)

• Reduce or eliminate the barrier – help an industry now and in the future (Better)


christine brown

Not sure why this slide is here. Seems to break up the flow.

Action!

USG concerns raised in various fora:

• European Commission

• World Customs Organization Harmonized System Committee

• Third country outreach to build support for U.S. position


Successful Resolution

• After failing to resolve this issue bilaterally, the USG raised the classification dispute at the World Customs Organization Harmonized System Committee for a vote.

• In the March 2008 meeting, the U.S. position was supported with a vote of 18-16. The EU appealed the vote in May 2008.

• On March 11, 2009, the issue was debated and voted on again. This time the U.S. position was upheld by a vote of 24-12.

• In June 2010, at ITA’s urging, the EU took the final step for compliance by updating its customs classification database, thus enabling U.S. suppliers to export using the appropriate duty-free classification.

• The success was a result of a coordinated third country outreach effort by Commerce, CBP and the IJEC.


DOC/ITA

International Trade Administration

Market Access and

Compliance

Commercial Service

Manufacturing and Services

Office of Trade Agreements and

Compliance

Advocacy Center

USEACs and

Overseas Posts

Office of Standards Liaison

Import Administration



A/S for Market Access and Compliance

Trade Agreements and Compliance

Europe Western Hemisphere

Asia Africa, the Middle East, and South Asia

Trade Compliance Center

Office of Intellectual Property Rights

Office of Multilateral Affairs

ITA/MAC


Trade Agreements Monitoring and Compliance at Commerce

• State of the Union Address National Export Initiative (NEI)

• Special trade barrier emphasis areas – NEI Priority Countries– Next Tier Markets– Mature Markets

• Bilateral Trade Agreements


What is Trade Agreements Compliance and why is it important?

• Ensures foreign trading partners honor their obligations under trade agreements they have signed with the United States.

• Promotes U.S. exports and supports U.S. jobs by eliminating horizontal barriers to trade in order to increase exports.

• Creates confidence and support among stakeholders for future trade agreements to open other markets.


The Trade Compliance Center

• Coordinates Commerce’s monitoring of and ensuring compliance with U.S. trade agreements – The ITA Trade Agreements Compliance Program

• 3 Elements: Pro-active Monitoring Barrier Investigation Outreach

Compliance, Trade Enforcement and ITA

“Trade enforcement is a spectrum of activities”- USTR GC Tim Reif

• Informal trade enforcement = Compliance • USG uses diplomatic engagement to get partners to

voluntarily honor their trade agreement obligations.

• Formal trade enforcement = binding dispute settlement under WTO or FTA dispute settlement provisions.


The Program’s Contribution to Trade Enforcement in Perspective…or the Iceberg

Formal Dispute Settlement Proceedings initiated by USG under multilateral,

bilateral, and regional trade agreements:

Cases opened by DOC under the ITA Trade Agreements

Compliance Program:

From 2009 to August 15, 2012…

12

825



Outreach, Training, & Monitoring to Identify Cases

Proactive Monitoring

MAC Compliance

Liaison ProgramOutreach

and Training

Congress

State Organizations

Foreign Service Officers

U.S. Export Assistance Centers

ITA Trade Agreement Specialists

Other Agencies and Officers at Posts

District Export Councils

Direct Contact from Company

MAC Officers and Trade Compliance Center

Stop Fakes Website www.stopfakes.govTCC Complaint Hotline

www.export.gov/tcc

ITA Trade Agreements Compliance Program

MAC Country Desk Officers

Trade Associations

MAS Industry Specialists


The Most Common Trade Barriers

• Excessive tariff and customs barriers

• Discriminatory rules of origin, certificates of origin, or import licensing requirements

• Burdensome standards, testing, labeling, or certification requirements

• Lack of Intellectual Property Rights protection

• Non-transparent government procurement contracts


Other Agencies

Country Desk Officer

Trade Agreement Specialist

General Counsel

Officers at Embassies/Consulates

Trade Specialist at U.S. Export Assistance Center

Market Access and Compliance

Team

Industry Specialist

The ITA Case Team

Identifies issue as

unfair treatment or

potential violation

Gathers additional facts and verifies

information

Determines specific trade

agreement obligation, if

any

Analyzes evidence

and investigates

Examining the Issue



Sets success goal

identifying company’s

desired outcome(s)

Crafts Action Plan,

outlining general

strategy to successfully resolve issue

Involves other

interagency resources,

as appropriate

Presses for resolution as quickly as possible, short of dispute settlement

Initiates Case

Working to Resolve


The Process

Diplomatic/Advocacy Tools: Meetings with foreign officials Phone calls and letters Non-papers Demarches Visits by Washington officials

Trade Agreement Tools: Bilateral discussions Multilateral/ WTO fora FTA negotiations

Implementation of Action Plan

Team escalates the issue as appropriate and employs the full weight of the U.S Government to resolve the issue

Team may recommend referral to the USTR and the interagency for WTO Dispute Settlement Body as appropriate


Resolution

Success!

Goal is reached and company is satisfied

with USG assistance.

Company agrees that no further USG action

is possible or desirable.

Company withdraws active support or

resolves case some other way.

Team determines and informs company that no further USG action

is possible

Inter-Agency Coordination

• TPCC

• Outreach Opportunities

• Interagency Compliance Task Force



Colombia – Import Restrictions on Textiles, Apparel and Footwear

• U.S. industry expressed concern over a new Colombian decree restricting imports according to the importer’s net worth and limits the number of different textile products a single importer can import.

• The WTO generally prohibits import restrictions other than duties, taxes or other charges.

• After U.S. officials raised the decree in FTA negotiations, Colombia agreed to modify the decree to make it significantly less trade restrictive.

Kazakhstan - SEDs

• In 2007, the Government of Kazakhstan amended its customs code to require importers to provide confidential Shipper’s Export Declaration information, which caused $70 million in U.S. goods to be held up at the border.

• DOC (both FCS and HQ), State (both Post and Main) and CBP worked together to engage GOK.

• Kazakhstan first exempted U.S. goods, then amended the code to delete the problematic requirement.



Monitoring – Issues Which May Indicate Trade Barriers

• Rules and practices not transparent.

• Treatment not predictable.

• Access to information, opportunity not equal.

• Anything discriminatory or more favorable to locals or other nationalities.

• Decisions based on nationality.


www.export.gov/tcc

• ITA’s “Trade Complaint Hotline”• Checklist of common trade concerns• 270+ trade and related agreements• Exporter Guides: quick, concise explanations of

individual trade agreements• Market Access News• WTO Standards Notifications—Notify U.S. • Mailing List: Subscribers receive weekly “What’s

New” e-mail update on trade-related news

Resources

http://www.trade.gov/tcc


Your Role?

• Be on the lookout for unfair trade barriers and let us know what you find.

• Refer clients to ITA’s Market Access and Compliance Online Hotline at www.export.gov/tcc.

• Help us get out the word out on USG assistance on market access problems and trade agreements compliance issues.

http://www.export.gov/tcc


TCC Contact Information

• Main Line: 202-482-1191• Fax: 202-482-6097• [email protected]• www.export.gov/tcc• Cables slugged for USDOC/TCC/4110

John Liuzzi(202) 482-0539

[email protected]

Documents

TPCC I NTERAGENCY T RADE O FFICER T RAINING M ARKET A CCESS & T RADE A GREEMENT E NFORCEMENT John Liuzzi Office of Trade Agreements and Compliance / Trade