WTO Members to Meet to Discuss COVID-19 Action Plan, Reforming the International Body

WTO

A group of World Trade Organization nations known as the Ottawa Group will hold a ministerial-level virtual meeting on June 8 to discuss how the 13 governments might produce a COVID-19 action plan on trade.

Canadian Trade Minister Mary Ng mentioned the meeting during an online discussion last week hosted by the Washington International Trade Association. An action plan related to the pandemic would look at transparency, digital trade and trade in medical devices, as well as the impact of COVID-19 on businesses and enhancing engagement from outside the government.

The Ottawa Group formed in October 2018 in the nation’s capital to find ways to overhaul the WTO. The initiative is led by Canada and includes Australia, Brazil, Chile, the European Union, Japan, Kenya, Mexico, New Zealand, Norway, Singapore, South Korea and Switzerland.

WTO Deputy Director-General Alan Wolff warned on Wednesday that a failure to overcome challenges facing the trading system could undermine social and economic gains made possible by the system following World War II.

“The next and most serious near-term challenge will be a likely series of second waves of the coronavirus with the potential for additional national restrictions placed on the availability of vaccines and pharmaceutical remedies outside of the country of invention and/or production,” Wolff said.

Any COVID-19 initiatives, most of which have been proposed by mid-size countries, that don’t get endorsed by the U.S., China and EU “might not prove reliable,” he added.

NAFTA Backs U.S. Softwood Lumber Decision, B.C. Hopes for Final Win

lumber

A NAFTA panel has backed the U.S. International Trade Commission’s decision regarding softwood lumber imports from Canada, but British Columbia’s industry group still hopes for an ultimate victory.

The U.S. Lumber Coalition says the decision affirms the USITC determination from December 2017 that the imports “materially injured” American producers and workers.

It says in a news release that the harm is caused by the Canadian government providing its lumber industry “massive subsidies” and dumping those products into the U.S. market.

The BC Lumber Trade Council says it is disappointed by Friday’s decision, saying it remains convinced that the determination that the U.S. industry is injured by Canadian lumber imports is “flawed and without merit.”

Despite the decision, it said Canada still has pending World Trade Organization and NAFTA challenges to the U.S. Department of Commerce’s underlying countervailing duty and anti-dumping duty determinations that have yet to be resolved.

Council president Susan Yurkovich says the group representing provincial producers is confident those proceedings will again support Canada’s position and rule the duties are unwarranted.

U.S. Bar and Restaurant Sales Increased by 25% As Lockdowns Lifted

takeout salad

Sales across U.S. bars and restaurants increased by 25% in the week ending with May 16 as some states eased coronavirus lockdown measures, according to a Nielsen CGA report.

While total sales rose 25% in the seven-day period compared to the week ending 9 May, overall velocity – the rate of change – now stands at a decline of 54%, compared to the pre-COVID-19 norm of more than an 80% decrease.

Nielsen noted that some states witnessed huge improvement in velocity trends as lockdown measures were lifted. In Texas, velocity is now at a drop of 32% below the pre-coronavirus norm. Velocity has grown week-over-week by 30% (May 9) and 21% (May 16).

While on-trade outlets remain closed to in-house dining and drinking in New York, California and Illinois, Nielsen said that sales velocity continues to improve on a weekly basis as consumers continue to embrace new forms of dining, including curbside pickup and delivery options.

New U.K. Tariff List Ramps Up Urgency of Canada-U.K. Trade Talks

London

The United Kingdom has revised its global tariff strategy, laying out for Canada and other trading partners the rates that will apply to their exports as of Jan. 1, 2021 — and in the process, setting out Britain’s starting position for future bilateral trade talks.

The new list published Tuesday replaces a temporary regime announced a year ago that would have cut tariffs on nearly all (an estimated 95 per cent) of what the U.K. imports — a hastily-developed scheme designed to the cushion the blow to British consumers of a sudden no-deal Brexit that, in March of 2019, appeared possible.

Under the new regime, Most Favoured Nation (MFN) tariff rates higher than zero will apply to about half of the products imported by the U.K. from around the world, or about 60 per cent of the value of its global trade, once it completes its transition out of the European Union trading bloc. The U.K. continues to negotiate the final terms of this exit.

Many trading partners, Canada included, want clarity on exactly how future trade between the EU and its former member will work before proceeding with their own bilateral talks with the U.K. Canada has had preferential trading terms with the U.K., its third-biggest export market, under its Comprehensive Economic and Trade Agreement (CETA) with the EU.

The CETA will continue to apply until the end of this year, but beyond that, the terms of Canada–U.K. trade are uncertain.

CBSA Revised Final Safeguard Surtax Rates to Heavy Plate, Stainless Steel Wire

steel

Canada Border Services Agency introduced Final Safeguard Measures in connection with the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods (Exclusions), as well as on the Surtax on the Importation of Certain Steel Goods Remission Order (Surtax Remission Order), which came into effect on August 23, 2019.

Customs Notice 19-08 provides instructions, exemptions, and a schedule of rates with respect to the heavy plate and stainless-steel wire covered by these orders. 

To see the full list of rates, tariff quotas, and schedule, as identified in Notice 19-08, click here.

The Surtax rates will be reduced during the scheduled period on imported goods absent a specific permit, or once imports of the goods exceed the applicable Global Affairs Canada tariff rate quota.

CBP Updates Guidance on Section 232 and 301 Claims, Extensions, and Corrections

shipping containers

Earlier this month, U.S. Customs and Border Protection issued Cargo Message 19-000260, which provides updated guidance on seeking retroactive product exclusions from the administration’s Section 232 and Section 301 trade enforcement measures. Click here to view.

Section 232 and Section 301 product exclusions may be retroactive for unliquidated entries and for entries that are liquidated but where the liquidation is not final and the protest period has not expired.

If a product exclusion has been granted, an importer of record may request a refund by filing a post summary correction for unliquidated entries or file a protest for entries that have liquidated but where the liquidation is not final and the protest period has not expired.

When a product exclusion is granted, an importer may submit a correction to request a refund on unliquidated entries up to 15 days prior to the scheduled liquidation date (generally within 300 days from the date of entry summary filing). If an entry summary is set to liquidate in less than 15 days or has already liquidated, the entry summary is beyond the filing period for correction. However, the importer may file a protest so long as it is filed within the 180-day period following liquidation of the impacted entry summaries.

Approved requests extend the liquidation of an entry summary for one year. When a product exclusion is granted, an importer may submit a PSC to request a refund on the entry summary(ies). If a product exclusion is not approved, no further action is taken, and the entry summary will liquidate as entered one year later than the originally scheduled liquidation date.

The status of Section 232 exclusion requests can be checked at the U.S. Department of Commerce here. 

Section 301 exclusions are posted by the USTR here.

Automakers Reopen Across North America While Bracing for Challenges Ahead of CUSMA/USMCA

auto manufacturing

Auto manufacturing plants are resuming operations across North America, however, they are anticipating challenges to come from a new socially distant workplace and heavy reliance on partners in Mexico and Canada to succeed.

Mexico said it would allow the auto industry to resume on June 1, but would let companies start sooner if they have the approved safety measures in place.

Mexican officials say the country is experiencing its peak of virus transmission, with the total number of confirmed cases surpassing 45,000. Still, the country this week will ease lockdown measures in areas where there are no confirmed cases of the virus and plans to do a wider reopening on June 1.

Production of autos, including trucks, has plummeted during the pandemic. In April, the output of autos and parts fell by more than 70 percent, according to the Federal Reserve’s latest figures. Industry leaders expect figures from May and early June to be more telling on the state of the industry, and those will determine if they need some form of stimulus from the government to get past the fallout from the pandemic.

Automakers are also bracing for additional stress to come in July, when CUSMA/ USMCA goes into effect. The North American auto industry has repeatedly asked for some flexibility with implementing the new rules, which will require costly and time-consuming changes.

Auto industry officials are awaiting regulations they will have to follow in order to qualify for reduced tariffs in the region, which are expected to be published by June 1.

Fourth Round Of Exclusions For China Section 301 List 4A Includes Medical Products

dentist

The U.S. Trade Representative (USTR) granted a fourth round of exclusions from Section 301 List 4A tariffs on Chinese imports, which cover three 10-digit Harmonized Tariff System subheadings, and five specially-prepared product descriptions, several of which are related to medical products involved in the COVID-19 response.

The excluded HTS subheading are as follows:

3306.20.0000 – Preparations for oral or dental hygiene, including denture fixative pastes and powders; yarn used to clean between the teeth (dental floss), in individual retail packages: Yarn used to clean between the teeth (dental floss);

6506.10.6030 – Other headgear, whether or not lined or trimmed: Safety headgear: Other – Motorcycle helmets; and

8512.10.4000 – Electrical lighting or signaling equipment (excluding articles of heading 8539), windshield wipers, defrosters and demisters, of a kind used for cycles or motor vehicles; parts thereof: Lighting or visual signaling equipment of a kind used on bicycles: Visual signaling equipment.

The exclusions with specially-prepared product descriptions include:

  • Plastic tumblers used in healthcare facilities (3924.10.4000)
  • Plastic disposable identification wristbands worn by medical patients (3926.90.9990)
  • Plastic manually-operated pill or tablet crushers (8479.82.0080)
  • Bluetooth tracking devices (8517.62.0090)
  • Wireless communication apparatus capable of receiving audio data to be distributed to wireless speakers (8517.62.0090)

These exclusions will apply from September 1, 2018, through September 1, 2020, and apply to any product that satisfies the description in the annex of the Federal Register notice, regardless of whether the company using the exclusion filed the request.

If you have any questions about this latest round of tariff exclusions, including determining whether your products qualify, please reach out to Carson.

Get in touch:

Tyler Carson, President, tyler@carson.ca
Dave Pentland, VP, dwpentland@carson.ca
Matt Earish, COO, matt@carson.ca

Revised Lacey Act Provisions for Importing into the United States

essential oil

The Food, Conservation, and Energy Act of 2008 amended the Lacey Act to provide, among other things, that importers submit a declaration at the time of importation for certain plants and plant products. Enforcement of the declaration requirement began on April 1, 2009, and products requiring a declaration are being phased-in. 

The Lacey Act, first enacted in 1900 and significantly amended in 1981, is the United States’ oldest wildlife protection statute. The Act combats trafficking in illegally taken wildlife, fish, or plants. The Food, Conservation and Energy Act of 2008, effective May 22, 2008, amended the Lacey Act by expanding its protection to a broader range of plants and plant products.

Phase VI of the enforcement schedule, will take effect on October 1, 2020. As part of the enforcement schedule, the USDA has added 29 new HTS codes that will require information upon import into the United States.

Product categories covered under this phase of the plan include:

  • Essential Oils
  • Trunks, Cases, Suitcases
  • Wood and Articles of Wood
  • Musical Instruments
  • Miscellaneous Manufactured Articles

The USDA is inviting public comment on the products covered under this phase of the plan, as well as on whether any additional Harmonized Tariff Schedule (HTS) chapters should be included in the current phase-in schedule. Should there be additions to phase VI, the USDA will provide at least 6 months’ notice to persons and industries affected by those changes to facilitate compliance with the new requirements.

To view the full list of new HTS codes and learn how to submit public comment on the products covered under phase VI of the enforcement plan, click here.

Department of Homeland Security Criticized for Lack Of USMCA Enforcement Implementation

shipping containers

Democrats on the House Ways and Means Committee are urging the Trump administration to comply with all the requirements in the USMCA implementing bill, after DHS failed to meet an April 28 deadline to establish a task force aimed at enforcing the forced labor prohibition.

Earlier on Monday, Brenda Smith, CBP executive assistant commissioner for the Office of Trade, said in a call with reporters that the agency is excited to talk to its Mexican and Canadian counterparts on how they can use customs authority to tackle the “need to remove forced labor from supply chains.” CBP and USTR did not immediately respond to requests for comment on the Ways and Means letter.

Democrats are particularly sensitive to enforcement of USMCA given that it was central in their negotiations with the Trump administration all of last year. They’ve repeatedly vowed to have strong oversight over the implementation process, which has been moving quickly as the deal is set to go into effect on July 1.