Michelle Schulz and Elsa Manzanares 2017-12-20 05:19:35
The 2016 election cycle propelled international trade issues into the spotlight. Since President Donald J. Trump took office, there have been many noteworthy developments that have kept international trade practitioners on their toes. On Trump’s third full day in office, the United States withdrew from the Trans-Pacific Partnership, or TPP, agreement. The remaining 11 TPP parties remain committed to concluding an agreement without U.S. involvement. Canada, Mexico, and the U.S. are currently renegotiating the North American Free Trade Agreement, or NAFTA. The ultimate outcome of the renegotiations remains to be seen. The parties abandoned their plan to complete talks by the end of the year and have now extended talks into the first quarter of 2018. As of this writing, the chapters on small-and medium-sized businesses and competition are essentially complete, but there has been no agreement on more controversial topics such as the Trump administration’s proposals for a five-year sunset clause, an increase in the NAFTA country content requirements for automobiles, and a U.S.-origin content requirement. Following the fourth round of talks in October, the parties announced that “significant conceptual gaps” remain. Trump also proposed withdrawal from the U.S.-Korea Free Trade Agreement, and the U.S. trade representative concluded special sessions with the Korean trade minister to consider amendments to the agreement. Meanwhile, the Transatlantic Trade and Investment Partnership between the European Union and the U.S. has been stagnant since 2016. As part of the administration’s trade policy agenda to address unfair trade practices that harm American workers, the secretary of commerce initiated a rarely used trade remedy provision to review whether imports of aluminum and steel threaten U.S. national security. Likewise, a domestic producer of solar cells brought a complaint before the U.S. International Trade Commission to assess whether such imports are a substantial cause of serious injury to the domestic industry. Remedies in both reviews may include increased tariffs or quotas on these imports. The area of sanctions and embargoes saw an overall increase in restrictions in 2017. In August, Congress passed the Countering America’s Adversaries Through Sanctions Act. The act limits the president’s authority to terminate, waive, or modify the Russia sanctions without Congressional approval. The act also modifies and expands existing directives in the financial and energy sectors and requires the president to block assets and bar from the U.S. any person undermining cybersecurity on behalf of the Russian government. On the Cuba sanctions, Trump issued a presidential memorandum that rolled back certain authorizations granted during the Obama administration. The revised rules prohibit direct financial transactions with listed entities linked to the Cuban military, limit some people-to-people travel, and provide for stricter enforcement of authorized travel. In September, Trump issued an executive order targeting those who do business with North Korea. Under the order, the U.S. Department of the Treasury’s Office of Foreign Assets Control will designate persons who operate in various sectors in North Korea, such as construction and energy, those who own or operate ports in North Korea, and those who have had one significant import from or export to North Korea. All assets belonging to those on the list and found in the U.S., or controlled by U.S. persons, will be frozen. Regarding Iran, in October, the president refused to certify to Congress that Iran was compliant with the nuclear deal reached in 2015 and called on Congress to draft legislation amending the act. With many developments on the horizon, international trade is expected to generate even more headlines in 2018. Companies doing business abroad should be sure to incorporate sufficient resources into their trade compliance programs for risk mitigation. MICHELLE SCHULZ is a trilingual international trade attorney who represents Fortune 500 companies, oil and gas companies, aerospace companies, manufacturers and distributors, defense contractors, and other entities in all aspects of international trade compliance and enforcement. She is co-chair of Gardere Wynne Sewell’s international and international trade practice groups and is a cleared adviser who was present throughout two rounds of NAFTA negotiations. ELSA MANZANARES is an experienced international trade attorney who advises clients on U.S. and international regulations governing the import and export of goods, services, software, and technology. She is co-chair of Gardere Wynne Sewell’s international trade practice group.
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