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This Week In Trade

Japan TPP, Export Controls, CBP's Role In Trade

Posted: February 06, 2012

The Trans-Pacific Partnership (TPP) negotiations, the administration’s export control reform initiative and striking the balance between trade facilitation and security at U.S. Customs and Border Protection (CBP) are three topics in the forefront of the trade debate this week.

On TPP, U.S. and Japanese officials will meet tomorrow (Feb. 7) and on Feb. 21-22 in Washington to discuss Japan's interest in joining the negotiations. This will be the first meeting since U.S. private-sector stakeholders filed comments on the issue last month.

For this week’s meeting, the United States will be represented by Assistant U.S. Trade Representative Wendy Cutler while the Japanese delegation will be led by Ministry of Foreign Affairs (MOFA) Director General Takeshi Yagi.

Relevant to Japan’s potential participation in TPP, the National Cattlemen’s Beef Association this weekend passed a policy resolution at its 2012 Cattle Industry Convention that calls for the removal of tariff and non-tariff barriers in TPP countries. Japan currently only imports U.S. beef from cattle 20 months of age or younger.

The policy resolution makes clear that NCBA wants all participants, including countries that may join the talks in the future, to fully abide by guidelines of the World Organization for Animal Health. According to these guidelines, beef from cattle of all ages from the United States and other countries considered to be a controlled risk for bovine spongiform encephalopathy is safe for human consumption.

Separately, TPP could be on the agenda of a meeting today (Feb. 6) between U.S. Trade Representative Ron Kirk, Deputy USTR Demetrios Marantis and Singaporean Second Minister of Trade and Industry S. Iswaran. Singapore is one of the countries participating in the TPP talks.

The administration’s export control reform initiative will fall under scrutiny this week from one its key congressional critics, House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen (R-FL), at a hearing of her committee scheduled for tomorrow (Feb. 7).

The hearing features only private-sector witnesses, but Ros-Lehtinen may well provide further insight into her opposition to the scope of the reform initiative.

The reform seeks to limit the U.S. Munitions List (USML) to those items most critical to U.S. military and intelligence superiority while easing restrictions on others by moving them to the Commerce Control List (CCL).

Ros-Lehtinen is critical of the process overall, which she views as overly ambitious, and is also worried that the administration's notification process for items moving from the USML to the CCL will not be sufficiently robust. The administration must notify all list transfers to her committee and its Senate counterpart; so far, Ros-Lehtinen and Ranking Member Howard Berman (D-CA) have opposed efforts by top Pentagon brass to ease the procedures for the notification requirements.

The administration will not formally begin the notification process under section (38f) of the Arms Export Control Act until it has issued all proposed list rewrites, published a rule on transition licensing arrangements, and finalized a definition for the term “specially designed” that will apply to parts and components for military items still on the USML or items transferred to the CCL (related story).

CBP's balance of trade facilitation and security will be on the agenda of a Feb. 7 hearing held by a House Homeland Security subcommittee that features CBP Acting Assistant Commissioner in the Office of Field Operations Kevin McAleenan, Department of Homeland Security (DHS) Assistant Secretary David Heyman and others.

Importers and others dealing with CBP have long charged that its security focus leaves little room for trade facilitation, although they say some improvement occurred during the tenure of Alan Bersin as CBP commissioner. Bersin was never confirmed by the Senate and, because he was a recess appointment, had to leave that slot in December, although he was subsequently appointed DHS assistant secretary of international affairs. CBP Deputy Commissioner David Aguilar has replaced Bersin as acting commissioner.

CBP’s trade and security balance is one of the issues meant to be addressed in a customs re-authorization bill, which congressional aides say their principals want to advance this session of Congress.

But informed sources say it faces an uncertain future in both chambers. In the Senate, staff for Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) have been unable to agree to a version of the bill, and Baucus is showing little interest in moving ahead on his own. The Ways and Means Committee has been slower than the Senate to tackle this issue.

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