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Congress Approves FTA Implementing Bills, GSP/TAS Package; Senate Backs China Currency Legislation

Sandlers Travis & Rosenberg PA /

Congress approved on Oct. 12 four pieces of legislation that are expected to have a considerable impact in the short-to-medium term on U.S. trade flows and the U.S. trade community at-large. On the one hand, the House and Senate both approved three separate bills to implement the pending free trade agreements with Korea, Colombia and Panama. The Colombia FTA implementing legislation also includes language to retroactively extend the lapsed Andean Trade Preferences Act. The House also endorsed on Oct. 12 legislation previously approved by the Senate to extend the Generalized System of Preferences and the Trade Adjustment Assistance programs. Like the ATPA, the GSP program will be retroactively reinstated through July 31, 2013.

Expectedly, a large majority of Democrats in the House voted against the Colombia FTA due to ongoing concerns about labor rights protections in that country. In an attempt to assuage those concerns, the Office of the U.S. Trade Representative issued a fact sheet this week highlighting the most recent advances made by Colombian authorities in implementing the bilateral Action Plan Related to Labor Rights. These include, among others, the elimination of the use of associated worker cooperatives by two of Colombia’s largest supermarket chains and the country’s largest textile manufacturer. Colombia has also enacted a 20-fold increase in fines for the use of fake cooperatives that deny labor rights and major Colombian business associations have organized well-attended seminars to familiarize companies with the new labor laws and regulations.

Of particular importance to U.S.-China trade relations was an Oct. 11 move by the Senate to approve legislation (S. 1619) to address the alleged undervaluation of the yuan by reforming and enhancing U.S. oversight of currency exchange rates. The measure passed the Senate by a relatively comfortable 63 to 35 margin, with 16 Republicans (Sens. Brown, Burr, Chambliss, Cochran, Collins, Crapo, Graham, Grassley, Hoeven, Isakson, Johanns, Portman, Risch, Sessions, Shelby and Snowe) voting for the legislation and only four Democrats (Sens. Cantwell, Inouye, McCaskill and Murray) opposing it.

Republican leaders in the House remain opposed to the China currency legislation but Democratic supporters are nonetheless trying to garner the support of rank-and-file Republicans who backed previous efforts on this front. Perhaps as a sign of things to come, Rep. Levin attempted a procedural maneuver right before the votes on the FTA implementing bills that sought to attach a House version of the China currency bill (the Currency Reform for Fair Trade Act) to the Colombia FTA implementing legislation, but that maneuver was not successful. The Chinese government has voiced strong opposition to the currency legislation, claiming that it violates World Trade Organization rules and that it will not help resolve the economic challenges facing the United States. Chinese officials have also warned that the legislation could result in a trade war of uncertain consequences.

Congress Passes President Obama’s Trade Measures to Support American Jobs and Exports

The White House /

Last night, Congress passed four significant trade initiatives President Obama has advanced to will help increase U.S. exports that support additional American jobs, and help American workers who need retraining and assistance when their jobs are affected by global competition. The trade agreements with Korea, Colombia, and Panama – which we at USTR worked hard to make better at the President’s insistence – will strengthen and expand ties with strategic partners in Asia and Latin America even as they support tens of thousands of jobs here at home, from shop floors to farms to service firms across our country. And the renewal of Trade Adjustment Assistance (TAA) reforms will ensure that workers get retraining and assistance for the 21st-century jobs they want and need.

As I mentioned last week, when the President sent the legislation to Congress, there have recently been questions about whether trade supports jobs, and how. We have a saying at USTR: “more exports, more jobs.” Because every $1 billion of exports of American goods is estimated to support more than 6,000 additional jobs here at home. And every billion dollars of services exports is estimated to support more than 4,500 jobs. Since these trade agreements are estimated to increase U.S. goods exports alone by a combined total of at least $12 billion, they will support tens of thousands of real jobs and put more money in the pockets of hard-working Americans across the country.

Furthermore, the U.S.-Korea trade agreement will open Korea’s $580 billion services market to highly competitive American companies – creating additional jobs for American service providers in sectors from delivery and telecommunications services to distribution, and energy and environmental services. The Colombia and Panama agreements open up services sectors to American companies selling into those markets as well.

Of course, American manufacturers will benefit each of these agreements. For example, more than 80 percent of American exports of industrial goods become immediately duty free upon implementation of the U.S.-Colombia trade agreement, including almost all products in agriculture and construction equipment, aircraft and parts, auto parts, fertilizers, agro-chemicals and information technology equipment.

Let’s not forget about American ranchers and farmers who stand to gain significantly more sales opportunities from each of these agreements. For example, Panama will immediately eliminate duties on high-quality beef, frozen turkeys, most oilseeds and products, almost all fruit and fruit products, wheat, and many processed products once the U.S.-Panama trade agreement is implemented.

And let’s also remember, too, the many American companies that support jobs right here at home by taking what they import from these trading partners and using it to produce new, made-in-the-USA goods.

By insisting on the renewal of strengthened TAA, the President made sure to keep faith with American workers facing increased global competition. The Trade Adjustment Assistance legislation that President Obama fought for and Congress ultimately approved reflects many improvements made to TAA in 2009: it helps displaced workers in America’s services sector as well as in manufacturing with job re-training, lower health insurance premiums, and assistance that keeps families on their feet.

Taken together, the trade agreements and TAA are the leading edge of a job-creating trade agenda that will open markets, level the playing field for U.S. businesses and workers, and champion America’s working families in an age of tough global competition. The simultaneous passage by Congress of key preference programs – the Generalized System of Preferences and the Andean Trade Preference Act – upholds our commitment to partner with the world’s poorest countries for economic growth. These bills deserved the historic and widespread support they received in Congress last night. And at USTR, we’re continuing our work to meet President Obama’s goal of doubling American exports by the end of 2014, to support at least two million additional jobs for Americans whose work is tied to trade.

Ambassador Ron Kirk is the United States Trade Representative

Pending Legislation in the White House as of October 13, 2011

These are bills that the President may sign in the coming days: Pending Legislation

CBP Intercepts Multiple Khapra Beetles at N.Y./N.J. Ports

U.S. Customs & Border Protection /

Newark, N.J. – U. S. Customs and Border Protection intercepted the khapra beetle again. For the CBP Agriculture Specialists at the Port of New York/New Jersey this is their 10th Khapra Beetle interception in the last 30 days.

On Sept. 20, CBP inspected a shipment manifested as bags of safflower seeds arriving from India to the Port of New York/New Jersey. They found one live and three dead larvae, which were later confirmed as the khapra beetle, Trogoderma granarium everts (Dermestidae), a very destructive agricultural pest.

“CBP Agriculture Specialists continually demonstrate their vigilance in intercepting these extremely destructive pests that could wreak significant damage to our agricultural and economic interests”, said Robert E. Perez, director of field operations for CBP's New York Field Office.

These pests were found by CBP on the bags of safflower seeds; specimens were sent as an urgent interception to the USDA for identification after CBP closed the container for safeguarding. Once the specimens were identified as the khapra beetle, CBP issued an Emergency Action Notification to the importer. Due to the impermeable nature of the bags used for the safflower seeds re-exportation or destruction of the product are the only available options.

The khapra beetle is an extremely serious pest of grain and other stored products. This pest may also show up in a variety of locations that are not obvious food sources such as burlap bags, corrugated boxes (where they feed on the glue) and animal hides. Native to India, the khapra beetle has spread to other countries in Africa, the Middle East, the Near East, pockets of Europe and Eastern Asia. It has been nominated as one of the 100 worst invasive species worldwide.

Tomato Imports From Korea Allowed

Sandler Travis & Rosenberg PA /

The Department of Agriculture’s Animal and Plant Health Inspection Service has issued a final rule that, effective Nov. 14, will allow the importation of commercial consignments of tomatoes with stems from South Korea. The conditions for such imports will include requirements for pest exclusion at the production site, fruit fly trapping inside and outside the production site, and pest-excluding packinghouse procedures. The tomatoes will also be required to be accompanied by a phytosanitary certificate issued by the national plant protection organization of South Korea with an additional declaration confirming that the tomatoes have been produced in accordance with these requirements.

Dulles CBP Seizes Cocaine-Filled Bed Post Knobs

U.S. Customs & Border Protection /

Sterling, VA — They could have been part of a very expensive bed, but the cocaine-filled bed post knobs seized by Customs and Border Protection officers at Washington Dulles International Airport Thursday night will instead be destroyed.

The bed post knobs were in a group of goods carried by courier aboard a Taca Airlines flight that arrived at about 11 p.m. from El Salvador. CBP agriculture specialists passed the commercial goods through an x-ray during a secondary examination. That x-ray detected an anomaly inside the knobs.

Officers dug into the knobs and discovered a white, powdery substance that field-tested positive for the presence of cocaine. Total weight was 245 grams, or about 8.64 ounces; street value was estimated at approximately $17,000.

“This seizure shows great cooperation between CBP officers and agriculture specialists. They each focus on different targets – insect pests, and plant and animal diseases for agriculture specialists; violations of any one of 400 federal laws and regulations for officers -- but who each execute a very similar mission. That mission is to protect Americans against potentially harmful things,” said Christopher Hess, CBP port director for the Port of Washington, D.C. “CBP employees remain steadfastly committed to keeping our nation and our citizens safe against bad people and bad things.”

The knobs were allegedly destined for an address in New York.

CBP released the courier to return to El Salvador.

CBP routinely conducts random inspection operations on arriving and departing passengers searching for narcotics, currency, weapons and other prohibited or illicit products.

Treasury Sanctions Five Individuals Tied to Iranian Plot to Assassinate the Saudi Arabian Ambassador to the United States

U.S. Treasury of the Department - Office of Foreign Assets Control (OFAC) /

WASHINGTON – The U.S. Department of the Treasury today announced the designation of five individuals, including four senior Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) officers connected to a plot to assassinate the Saudi Arabian Ambassador to the United States Adel Al-Jubeir, while he was in the United States and to carry out follow-on attacks against other countries’ interests inside the United States and in another country. As part of today’s action, Treasury also designated the individual responsible for arranging the assassination plot on behalf of the IRGC-QF.

Designated today pursuant to Executive Order (E.O.) 13224 for acting for or on behalf of the IRGC-QF were: Manssor Arbabsiar, a naturalized U.S. citizen holding both Iranian and U.S. passports who acted on behalf of the IRGC-QF to pursue the failed plot to assassinate the Saudi ambassador; IRGC-QF commander Qasem Soleimani; Hamed Abdollahi, a senior IRGC-QF official who coordinated aspects of the plot and oversaw the other Qods Force officials directly responsible for coordinating and planning this operation; Abdul Reza Shahlai, an IRGC-QF official who coordinated this operation; and Ali Gholam Shakuri, an IRGC-QF official and deputy to Shahlai, who met with Arbabsiar on several occasions to discuss the assassination and other planned attacks.

Arbabsiar and Shakuri were named by the U.S. Attorney for the Southern District of New York in a criminal complaint unsealed today connected with the IRGC-QF plot. Among the charges brought against them was conspiracy to engage in foreign travel and use interstate and foreign commerce facilities in the commission of murder-for-hire. According to the criminal complaint, Arbabsiar arranged for $100,000 to be sent from Tehran to the U.S. as a down payment for the assassination of the Saudi ambassador. Two wire transfers totaling approximately $100,000 were sent from a non-Iranian foreign bank to a bank in the United States, to the account of the person recruited by Arbabsiar to carry out the assassination.

“Iran once again has used the Qods Force and the international financial system to pursue an act of international terrorism, this time aimed against a Saudi diplomat,” said David S. Cohen, Under Secretary for Terrorism and Financial Intelligence. “The financial transactions at the heart of this plot lay bare the risk that banks and other institutions face in doing business with Iran.”

As a result of today’s designations, U.S. persons are prohibited from engaging in transactions with these individuals, and any assets they may hold in the U.S. are frozen.

Manssor Arbabsiar

Arbabsiar met on a number of occasions with senior IRGC-QF officials regarding this plot and acted on behalf of senior Qods Force officials – including his cousin Abdul Reza Shahlai and Shahlai’s deputy Gholam Shakuri – to execute the plot. During one such meeting, a $100,000 payment for the murder of the Saudi ambassador was approved by the IRGC-QF. After this meeting, Arbabsiar arranged for approximately $100,000 to be sent from a non-Iranian foreign bank to the United States, to the account of the person he recruited to carry out the assassination.

Qasem Soleimani

As IRGC-QF Commander, Qasem Soleimani oversees the IRGC-QF officers who were involved in this plot. Soleimani was previously designated by the Treasury Department under E.O. 13382 based on his relationship to the IRGC. He was also designated in May 2011 pursuant to E.O. 13572, which targets human rights abuses in Syria, for his role as the Commander of the IRGC-QF, the primary conduit for Iran's support to the Syrian General Intelligence Directorate (GID).

Hamed Abdollahi

Abdollahi is also a senior IRGC-QF officer who coordinated aspects of this operation. Abdollahi oversees other Qods Force officials – including Shahlai – who were responsible for coordinating and planning this operation.

Abdul Reza Shahlai

Shahlai is an IRGC-QF official who coordinated the plot to assassinate the Saudi Arabian Ambassador to the United States Adel Al-Jubeir, while he was in the United States and to carry out follow-on attacks against other countries’ interests inside the United States and in another country. Shahlai worked through his cousin, Mansour Arbabsiar, who was named in the criminal complaint for conspiring to bring the IRGC-QF’s plot to fruition. Shahlai approved financial allotments to Arbabsiar to help recruit other individuals for the plot, approving $5 million dollars as payment for all of the operations discussed.

Shahlai was designated by Treasury in September 2008 pursuant to E.O. 13438 for threatening the peace and stability of Iraq and the Government of Iraq.

Ali Gholam Shakuri

Shakuri is an IRGC-QF officer and deputy to Abdul Reza Shahlai who acted on behalf of Shahlai in support of this plot. Shakuri provided financial support to Arbabsiar and met with Arbabsiar several times to discuss the planned assassination and other attacks. With Shakuri’s approval, Arbabsiar arranged for the $100,000 down payment to be sent from a non-Iranian foreign bank to the United States.

Background on Iran's Islamic Revolutionary Guard Corps-Qods Force

The IRGC-QF is the Government of Iran’s primary foreign action arm for executing its policy of supporting terrorist organizations and extremist groups around the world. The IRGC-QF provides training, logistical assistance and material and financial support to militants and terrorist operatives, including the Taliban, Lebanese Hizballah, Hamas, Palestinian Islamic Jihad and the Popular Front for the Liberation of Palestine-General Command.

IRGC-QF officers and their associates have supported attacks against U.S. and allied troops and diplomatic missions in Iraq and Afghanistan. The IRGC-QF continues to train, equip and fund Iraqi Shia militant groups – such as Kata'ib and Hizballah – and elements of the Taliban in Afghanistan to prevent an increase in Western influence in the region. In the Levant, the IRGC-QF supports terrorist groups such as Lebanese Hizballah and Hamas, which it views as integral to its efforts to challenge U.S. influence in the Middle East.

The Government of Iran also uses the IRGC and IRGC-QF to implement its foreign policy goals, including, but not limited to, seemingly legitimate activities that provide cover for intelligence operations and support to terrorist and insurgent groups. These activities include economic investment, reconstruction, and other types of aid to Iraq, Afghanistan and Lebanon, implemented by companies and institutions that act for or on behalf of, or are owned or controlled by, the IRGC and the Iranian government.

The IRGC-QF was designated by Treasury pursuant to E.O. 13224 in October 2007 for its support for terrorism, and was listed in the Annex to E.O. 13572 of April 2011 as the conduit for Iran's support to Syria’s GID, the overarching civilian intelligence service in Syria which has been involved in human rights abuses in Syria.

New Agreement Filed with FMC

Sandler Travis & Rosenberg PA /

The FMC has issued notice that the following agreements have been filed. Interested parties may submit comments by Oct. 24.

• New York Terminal Conference Agreement – Red Hook Container Terminal LLC would be substituted for American Stevedoring Inc. as a party to the agreement.

• Transpacific Stabilization Agreement – The agreement would modify the voting requirement for TSA actions from a unanimous vote to a three-fourths vote.

• HMN/Hanjin Reciprocal Space Charter Agreement – Korea would be removed from the geographic scope of the agreement and Hyundai’s corporate address would be updated.

• CMA CGM/OOCL Victory Bridge Space Charter Agreement – The agreement would increase the amount of space purchased by OOCL from CMA CGM.

• Grand Alliance/Zim/HMM Transpacific Vessel Sharing Agreement –The geographic scope of the agreement would be expanded to include Taiwan.

• Hapag-Lloyd/NYK-Hanjin Shipping Slot Exchange Agreement – The agreement would authorize the parties to slot charter space on their services in the trade between the U.S. Pacific Coast and Korea, China, Taiwan, Thailand, Vietnam and Singapore.

• CSAV/CCNI Venezuela Space Charter Agreement – The agreement would authorize the parties to charter space on vessels in the trade between U.S. Gulf ports and ports in Venezuela.

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