International Trade Commission Initiates Investigation to Assess the Effect of the Miscellaneous Tariff Bill Process on the U.S. Economy

Clint Long

As we reported previously, the U.S. Congress reinstituted the Miscellaneous Tariff Bills (“MTB”) process when it passed the American Manufacturing and Competitiveness Act of 2016 (the “Act”). Under the process set up by the Act, U.S. firms can ask Congress to reduce or eliminate the import duties (in an amount up to $500,000 per year for a period of three years) paid by the firms on imported articles that are not otherwise available in the United States. As a result of this process, the Congress approved the reduction or elimination of import duties on thousands of imported products. President Trump signed the resulting bill into law on September 13, 2018.

Under the Act, the U.S. International Trade Commission (“ITC”) is required to submit a report on the effects of these duty reductions and suspensions on the U.S. economy to the House Ways and Means Committee and the Senate’s Committee on Finance by October 18, 2019. The ITC is currently conducting a fact-finding investigation in order to prepare the report. As part of this investigation, the ITC is issuing questionnaires to beneficiaries of the MTB process in order to obtain their views on the process. The ITC will also hold a public hearing in the investigation on April 8, 2019, and the agency will accept prehearing and posthearing briefs and statements. The process presents an opportunity for beneficiaries of the MTBs process to encourage Congress to continue the process in the future.

The World Trade Organization Discusses Preferential Treatment for Developing Countries and the Impasse over WTO Appellate Body Appointments at the February 28, 2019 General Council Meeting

Saud Aldawsari

On February 28 and March 1st, 2019, the World Trade Organization’s (“WTO”) General Council held a meeting at which the WTO’s General Council discussed two controversial issues facing the international organization: preferential treatment for developing countries and the impasse over WTO Appellate Body (“AB”) appointments. Both issues have been subject to debate for some time at the WTO.

In the case of preferential treatment for developing countries, there have been disagreements among WTO members since the inception of the WTO. In a prior communication to the General Council, for example, the United States criticized the principle as a “simplistic and clearly outdated construct of ‘North-South’ division, developed and developing countries.” In contrast, countries like China and India defend the principle, with China insisting that the “persistence of the enormous development divide between the developing and developed Members of the WTO is reflected on a wide range of indicators.”

As for the debate over the impasse over appointments to the WTO’s Appellate Body, the United States continues to express significant concerns over the activism of the AB. Other WTO members, including the European Union, continue to seek a resolution of the matter. There appears to be only a limited likelihood that this particular issue will be resolved in the near future, given the strong concerns expressed by the United States over the AB’s decision-making process.

Treasury Imposes Additional Sanctions on Venezuelan Entities, Increasing Economic Pressure on Maduro Regime

Alexis Early

The Trump Administration continues to place pressure on the Maduro regime in Venezuela and its allies. On January 28, 2019, the Treasury Department imposed sanctions on Petroleos de Venezuela (“PdVSA”), the company that controls Venezuela’s vast oil reserves. Among other things, PdVSA exports significant amounts of oil to U.S. Gulf Coast refiners, and it owns U.S.-based CITGO. As a result of the sanctions, U.S. persons and companies cannot engage with PdVSA or its subsidiaries unless Treasury authorizes their transactions by issuing a general or specific license allowing them to do so.

On the same day, Treasury announced nine general licenses to allow U.S. persons (including U.S. employees of foreign companies) and U.S. companies to maintain or wind down certain PdVSA-related activities. Depending on the activity and the PdVSA entity involved, the general licenses expire in one to six months from January 28. As a result of these actions, U.S. companies that manufacture products for the energy, oilfield services, and shipping sectors will need to be careful to avoid activities that could indirectly provide services to or benefit PdVSA.