Trade & Manufacturing: News Of Note -- May 2014

by King & Spalding

House Subcommittee Advances Bill Approving LNG Exports To WTO Members

P. Lee Smith and Alex McLamb

On April 9, a House subcommittee voted to advance a bill seeking to expedite the licensing of liquefied natural gas (LNG) exports to World Trade Organization (WTO) members. The House Energy and Commerce Subcommittee on Energy and Power approved H.R. 6, the Domestic Prosperity and Global Freedom Act, on a 15-11 party-line vote.The bill would amend the Natural Gas Act to extend automatic approvals of LNG exports to all WTO members. Under current law, only exports to countries with which the United States has a free trade agreement receive automatic authorization.

Supporters of the bill argue that allowing LNG exports to Europe would reduce Russia's influence in the region. Opponents counter that increased exports could drive up domestic natural gas prices, and that most of the exports would end up in Asian countries with higher prices than Europe. The bill will next be considered by full House Energy and Commerce Committee.

For more information on the debate over LNG exports, see the January 2013 Trade & Manufacturing Alert

Highlights from 2014 National Trade Estimate Report

Ben Popeck and Clint Long

The Office of the U.S. Trade Representative (USTR) published its annual National Trade Estimate Report in March. In this year's report, USTR analyzed trade barriers maintained by dozens of U.S. trading partners and discussed important developments since the 2013 report was published. These developments include:

During the 2013 U.S.-China Joint Commission on Commerce and Trade and in a meeting with Vice President Biden in December, China pledged to increase the protection it provides to owners of intellectual property by implementing and circulating plans on trade secret enforcement and protection for 2014 and by permitting supplemental data for patent applications involving pharmaceuticals.

Mexico published new licensing procedures for imports of certain steel products. The procedures became effective January 27, 2014; however, there have been significant administrative delays in the reviewing and issuing of licenses. The U.S. government has been working with industry stakeholders and Mexican government officials to resolve these issues.

U.S. exports of manufactured goods to South Korea have increased over 3 percent from 2011 to 2013, as a result of the United States-Korea Free Trade Agreement that went into effect on March 15, 2012

Revised WTO Government Procurement Agreement Enters Into Force

Marcus Sohlberg and Erienne R. Kilgore

The revised Government Procurement Agreement (GPA) of the World Trade Organization (WTO) entered into force on April 6. It will benefit businesses in the United States through increased access to foreign public procurement markets.

The new agreement is based on the 1996 GPA, which regulates the procurement of goods and services by the government agencies and public bodies of the WTO Members that have joined the agreement. The GPA is designed to open national procurement markets to foreign competition by increasing the transparency of national government procurement laws, regulations, procedures and practices and by ensuring that the signatories do not protect domestic products or suppliers or discriminate against foreign products or suppliers. In the revised GPA, the text has been modernized to include electronic procurement standards and a new provision to prevent corrupt practices in the procurement process. The revised GPA also reinforces the scope of the 1996 GPA by explicitly providing that signatories may use technical specifications to promote the conservation of natural resources or protect the environment.

It is estimated that the revised GPA will generate about USD 80 billion in increased foreign public procurement opportunities, which is in addition to the USD 500 billion already covered by the existing deal.

A central objective of U.S. trade policy has long been to pursue new opportunities for U.S. goods, services and suppliers in order to allow them to compete on a level playing field for foreign government procurement. U.S. Trade Representative Michael Froman stated that the revised GPA "…unlocks opportunities for American workers and supports American jobs."

The GPA does not bind all WTO Members (currently 159 Members). By virtue of being a plurilateral WTO agreement, the GPA only binds those Members that have specifically signed onto its commitments. To date, 15 Members are part of the GPA: Armenia, Canada, the European Union, Hong Kong, Iceland, Israel, Japan, Korea, Liechtenstein, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland, Chinese Taipei, and the United States. The revised GPA is entering into force at different stages depending on the dates that these Members notified their acceptance to the agreement.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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