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Frequently Asked Questions — Responsible sourcing of minerals originating conflict-affected and high-risk areas: towards an integrated EU approach

March 13, 2014 Comments off

Responsible sourcing of minerals originating conflict-affected and high-risk areas: towards an integrated EU approach
Source: European Commission

Profits from the extraction of and trade in minerals sourced from unstable regions affected by armed conflict can play a role in intensifying and perpetuating violent conflict. This can take various forms including where armed groups or their affiliates illegally control mines and mineral trading routes, use forced labour or commit other human rights abuses, or tax or extort money or minerals.

As a result, armed groups and security forces in conflict regions can finance their activities from the proceeds of mining and trading of minerals which later enter the global supply chain. Companies further down the production chain run the risk of supporting armed activities and have an interest in sourcing from such regions responsibly.

The best documented and known case relates to the problems in the eastern Democratic Republic of Congo (DRC) where the United Nations frequently reports on the devastating instability created by foreign and national armed groups generating revenues through their control over natural resources. The Heidelberg Institute for International Research estimates that, together, natural resources and conflict account for roughly 20% of global conflicts.

Under the US Dodd-Frank Act, section 1502, ‘conflict minerals’ are defined as minerals containing tin, tantalum, tungsten and gold originating in the DRC and the adjoining countries. The Organisation for Economic Co-operation and Development’s (OECD) Due Diligence guidance is based on the same four minerals but is not geographically specific. The EU proposal uses the same basis as OECD.

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CRS — Generalized System of Preferences: Agricultural Imports

March 11, 2014 Comments off

Generalized System of Preferences: Agricultural Imports (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Generalized System of Preferences (GSP) provides duty-free tariff treatment for certain products from designated developing countries. Agricultural imports under the GSP totaled $2.5 billion in 2012, nearly 13% of the value of all U.S. GSP imports. Leading agricultural imports include processed foods and food processing inputs, sugar and sugar confectionery, cocoa, processed and fresh fruits and vegetables, beverages and drinking waters, olive oil, processed meats, and miscellaneous food preparations and inputs for further processing. The majority of these imports are from Thailand, Brazil, India, Indonesia, and Turkey, which combined account for nearly two-thirds of total agricultural GSP imports.

Some in Congress have continued to call for changes to the program that could limit GSP benefits to certain countries, among other changes. Opinion within the U.S. agriculture industry is mixed, reflecting both support for and opposition to the current program. Starting in 2014, the European Union is implementing additional reforms to its own GSP program.

CRS — Country-of-Origin Labeling for Foods and the WTO Trade Dispute on Meat Labeling

March 11, 2014 Comments off

Country-of-Origin Labeling for Foods and the WTO Trade Dispute on Meat Labeling (PDF)
Source: Congressional Research Service (via University of North Texas Digital Library)

Most retail food stores are now required to inform consumers about the country of origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules are required by the 2002 farm bill (P.L. 107-171) as amended by the 2008 farm bill (P.L. 110-246). Other U.S. laws have required such labeling, but only for imported food products already pre-packaged for consumers. The final rule to implement country-of-origin labeling (COOL) took effect on March 16, 2009.

Both the authorization and implementation of COOL by the U.S. Department of Agriculture (USDA) have been controversial, particularly the labeling rules for meat and meat products. A number of livestock and food industry groups continue to oppose COOL as costly and unnecessary, and they and the main livestock exporters to the United States—Canada and Mexico—view the requirement as trade-distorting. Others, including some cattle and consumer groups, maintain that Americans want and deserve to know the origin of their foods.

CRS — Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy (updated)

March 6, 2014 Comments off

Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Free trade areas (FTAs) are arrangements among two or more countries under which they agree to eliminate tariffs and nontariff barriers on trade in goods among themselves. However, each country maintains its own policies, including tariffs, on trade outside the region.

In the last few years, the United States has engaged or has proposed to engage in negotiations to establish bilateral and regional free trade arrangements with a number of trading partners. Such arrangements are not new in U.S. trade policy. The United States has had a free trade arrangement with Israel since 1985 and with Canada since 1989, which was expanded to include Mexico and became the North American Free Trade Agreement (NAFTA) effective in January 1994.

CRS — EU-U.S. Economic Ties: Framework, Scope, and Magnitude

March 6, 2014 Comments off

EU-U.S. Economic Ties: Framework, Scope, and Magnitude (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The United States and the European Union (EU) economic relationship is the largest in the world—and it is growing. The modern U.S.-European economic relationship has evolved since World War II, broadening as the 6-member European Community expanded into the present 28- member European Union. The ties have also become more complex and interdependent, covering a growing number and type of trade and financial activities. The United States and the EU have embarked on negotiations to establish a free trade agreement—the Transatlantic Trade and Investment Partnership (TTIP).

In 2012 (latest data available), $1,500.5 billion flowed between the United States and the EU on the current account, the most comprehensive measure of U.S. trade flows. The EU as a unit is the largest merchandise trading partner of the United States. In 2012, the EU accounted for $265.1 billion of total U.S. exports (or 17.1%) and for $380.8 billion of total U.S. imports (or 16.7%) for a U.S. trade deficit of $115.7 billion. The EU is also the largest U.S. trade partner when trade in services is added to trade in merchandise, accounting for $193.8 billion (or 30.7% of the total in U.S. services exports) and $149.7 billion (or 35.4% of total U.S. services imports) in 2012. In addition, in 2012, a net $150.0 billion flowed from U.S. residents to EU countries into direct investments, while a net $105.9 billion flowed from EU residents to direct investments in the United States.

Policy disputes arise between the United States and the EU, generating tensions which sometimes lead to bilateral trade disputes. Yet, in spite of these disputes, the U.S.-EU economic relationship remains dynamic. It is a relationship that is likely to grow in importance assuming the trends toward globalization and the enlargement of the EU continue, forcing more trade and investment barriers to fall. Economists indicate that an expanded relationship would bring economic benefits to both sides in the form of wider choices of goods and services and greater investment opportunities.

CRS — Transatlantic Trade and Investment Partnership (TTIP) Negotiations

March 5, 2014 Comments off

Transatlantic Trade and Investment Partnership (TTIP) Negotiations (PDF)
Source: Congressional Research Service (via National Agricultural Law Center)

In February 2013, U.S. and European Union (EU) leaders announced plans to negotiate a comprehensive and high-standard free trade agreement (FTA) between the United States and the EU, referred to as a proposed Transatlantic Trade and Investment Partnership (TTIP). Formal negotiations commenced in July 2013, and three rounds of negotiations have been held to date, and a fourth round is scheduled for March 2014. If concluded as envisioned, TTIP could be the largest FTA in the world in terms of economic size and serve a number of strategic U.S. policy goals.

USPS OIG — Inbound China ePacket Costing Methodology

March 3, 2014 Comments off

Inbound China ePacket Costing Methodology (PDF)
Source: U.S. Postal Service, Office of Inspector General

The Postal Service did not isolate the cost of China ePackets, which limits its ability to establish effective pricing strategies. Although China Post sorts and dispatches ePackets separately from other mailpieces, the Postal Service did not calculate ePacket cost data separately from other letter post mailpieces or report it separately in the annual performance report to the Postal Regulatory Commission.

ePacket volume and revenue have increased, but the Postal Service still lost at least $39 million during FYs 2011 and 2012. Until accurate costs for ePackets can be identified and used as a basis for pricing, the risk of revenue loss for ePackets remains high.

The Postal Service could also pursue a product classification change for inbound letter post packets, which could increase revenue from China Post and other business partners in emerging global markets.

Promising Agricultural Technologies for Feeding the World’s Poorest

March 3, 2014 Comments off

Promising Agricultural Technologies for Feeding the World’s Poorest
Source: International Food Policy Research Institute

Increased demand for food due to population and income growth and the impacts of climate change on agriculture will ratchet up the pressure for increased and more sustainable agricultural production to feed the planet. A new report by the International Food Policy Research Institute (IFPRI) measures the impacts of agricultural innovation on farm productivity, prices, hunger, and trade flows as we approach 2050 and identifies practices which could significantly benefit developing nations.

CRS — U.S. – Colombia Free Trade Agreement: Background and Issues (updated)

February 25, 2014 Comments off

U.S. – Colombia Free Trade Agreement: Background and Issues (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

The U.S.-Colombia Trade Promotion Agreement entered into force on May 15, 2012. It is a comprehensive free trade agreement (FTA) between the United States and Colombia, which will eventually eliminate tariffs and other barriers in bilateral trade in goods and services. On October 3, 2011, President Barack Obama submitted draft legislation (H.R. 3078/S. 1641) to both houses of Congress to implement the agreement. On October 12, 2011, the House passed H.R. 3078 (262-167) and sent it to the Senate. The Senate passed the implementing legislation (66-33) on the same day. The agreement was signed by both countries almost five years earlier, on November 22, 2006. The Colombian Congress approved it in June 2007 and again in October 2007, after it was modified to include new provisions agreed to in the May 10, 2007, bipartisan understanding between congressional leadership and President George W. Bush.

CRS — U.S. – Japan Economic Relations: Significance, Prospects, and Policy Options

February 25, 2014 Comments off

U.S. – Japan Economic Relations: Significance, Prospects, and Policy Options (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

Japan and the United States are two major economic powers. Together they account for over 30% of world domestic product, for a significant portion of international trade in goods and services, and for a major portion of international investment. This economic clout makes the United States and Japan potentially powerful actors in the world economy. Economic conditions in the United States and Japan have a significant impact on the rest of the world. Furthermore, the U.S.-Japan bilateral economic relationship can influence economic conditions in other countries.

CRS — Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions

February 25, 2014 Comments off

Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The United States has led the international community in imposing economic sanctions on Iran, in an effort to change the government of that country’s support of acts of international terrorism, poor human rights record, weapons and missile development and acquisition, role in regional instability, and development of a nuclear program.

This report identifies the legislative bases for sanctions imposed on Iran, and the nature of the authority to waive or lift those restrictions. It comprises two tables that present legislation and executive orders that are specific to Iran and its objectionable activities in the areas of terrorism, human rights, and weapons proliferation. It will be updated if and when new legislation is enacted, or, in the case of executive orders, if and when the President takes additional steps to change U.S. policy toward Iran.

Other CRS reports address the U.S.-Iran relationship, including a comprehensive discussion of the practical application of economic sanctions: CRS Report RS20871, Iran Sanctions, by Kenneth Katzman. See also CRS Report R43333, Interim Agreement on Iran’s Nuclear Program, by Kenneth Katzman and Paul K. Kerr; CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman; and CRS Report R40094, Iran’s Nuclear Program: Tehran’s Compliance with International Obligations, by Paul K. Kerr.

CRS — The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress (updated)

February 19, 2014 Comments off

The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress (PDF)
Source: Congressional Research Service (via National Agricultural Law Center)

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. U.S. negotiators and others describe and envision the TPP as a “comprehensive and high-standard” FTA that aims to liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO). The broad outline of an agreement was announced on the sidelines of the Asia-Pacific Economic Cooperation (APEC) ministerial in November 2011, in Honolulu, HI. If concluded as envisioned, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries. Congress has a direct interest in the negotiations, both through influencing U.S. negotiating positions with the executive branch, and by passing legislation to implement any resulting agreement.

New From the GAO

February 11, 2014 Comments off

New From the GAO
Source: Government Accountability Office

Report

1. U.S.-China Trade: United States Has Secured Commitments in Key Bilateral Dialogues, but U.S. Agency Reporting on Status Should Be Improved. GAO-14-102, February 11.
http://www.gao.gov/products/GAO-14-102
Highlights - http://www.gao.gov/assets/670/660823.pdf

Related Product

U.S.-China Trade: Detailed Lists of Commitments in Key Bilateral Dialogues (GAO-14-224SP, February 2014), an E-supplement to GAO-14-102, February 11.
http://www.gao.gov/products/GAO-14-224SP

Statement for the Record

1. Personnel Security Clearances: Actions Needed to Ensure Quality of Background Investigations and Resulting Decisions, by Brenda S. Farrell, director, defense capabilities and management, before the House Committee on Oversight and Government Reform. GAO-14-138T, February 11, 2014.
http://www.gao.gov/products/GAO-14-138T
Highlights - http://www.gao.gov/assets/670/660831.pdf

CRS — Status of the WTO Brazil-U.S. Cotton Case

February 11, 2014 Comments off

Status of the WTO Brazil-U.S. Cotton Case (PDF)
Source: Congressional Research Service (via National Agricultural Law Library)

The so-called “Brazil cotton case” is a long-running World Trade Organization (WTO) dispute settlement case (DS267) initiated by Brazil—a major cotton export competitor—in 2002 against specific provisions of the U.S. cotton program. In September 2004, a WTO dispute settlement panel ruled that (1) certain U.S. agricultural support payments for cotton distorted international agricultural markets and should be either withdrawn or modified to end the market distortions; and (2) U.S. Step-2 payments and agricultural export credit guarantees for cotton and other unscheduled commodities were prohibited under WTO rules and should be withdrawn.

CRS Memo — Applicability of Federal Export Requirements to Natural Gas Liquids and Condensate

February 11, 2014 Comments off

Applicability of Federal Export Requirements to Natural Gas Liquids and Condensate (PDF)
Source: Congressional Research Service (via Senate Committee on Energy and Natural Resources)

You have asked us which federal laws and regulations governing fossil fuel exports would apply to the export of Natural Gas Liquids (NGLs) and petroleum condensate, and whether and how these laws and regulations differ from the laws and regulations applicable to crude oil exports. This memorandum provides basic background information on federal laws and regulations applicable to natural gas and fossil fuels and considers whether the laws and regulations applicable to those exports, or any other laws and regulations, apply to fossil fuel exports. Based on a review of the relevant laws and regulations, it appears that for the most part, NGLs are not classified as “crude oil” but rather come under a broader designation as “petroleum products” and are thus exportable without specific federal authorization . However, condensate is classified as “crude oil” and therefore cannot be exported unless the export qualifies for an exemption to the general crude oil export prohibition and is authorized by the federal government.

CRS — Mexico: Background and U.S. Relations

February 11, 2014 Comments off

Mexico: Background and U.S. Relations (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Congress has maintained significant interest in neighboring Mexico, a close ally and top trade partner whose political and economic situation has significant ramifications for the United States. On December 1, 2012, the Institutional Revolutionary Party (PRI) retook the Mexican presidency after 12 years in the opposition. Analysts are divided on how differently PRI President Enrique Peña Nieto will govern than his PRI predecessors who ruled Mexico from 1929 to 2000. Supporters maintain that Peña Nieto heads a “new PRI” government that is free from corruption and is enacting reforms that proved elusive for his two National Action Party (PAN) predecessors. Skeptics question the government’s commitment to transparency and human rights and whether the reforms that have been enacted will be implemented effectively.

President Peña Nieto’s first year in office has brought mixed results for Mexico. The economy faltered (GDP growth fell from 3.7% in 2012 to 1.2% in 2013) and violent crime remained elevated. Nevertheless, Peña Nieto’s “Pact for Mexico” agreement with the conservative PAN and leftist Party of the Democratic Revolution (PRD) facilitated the passage of significant financial, education, telecommunications, and fiscal reforms. Although the PRD recently withdrew from the Pact, Peña Nieto ended the year on a high note, signing historic constitutional reforms to open Mexico’s energy sector to private investment on December 20, 2013.

See also: Status of Mexican Trucks in the United States: Frequently Asked Questions (PDF)

Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports

February 10, 2014 Comments off

Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports (PDF)
Source: U.S. House of Representatives, Energy and Commerce Committee (GOP)
From press release:

The House Energy and Commerce Committee today released a policy paper entitled “Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports.” Over the past year, the committee has analyzed the effects of exporting U.S. liquefied natural gas (LNG) through a series of hearings and an international forum. This report is the culmination of these efforts, detailing the economic and geopolitical benefits of U.S. LNG exports and outlining the actions necessary to realize them.

The committee concludes that LNG exports offer the opportunity for the U.S. to improve the domestic economy while providing our allies and trading partners an affordable and secure energy source. According to the report, “Our friends and allies around the globe desperately need a more stable, reliable, and affordable supply of natural gas, and American consumers and manufacturers need continued robust demand to bring additional resources into competitive production. The U.S. has the opportunity to be the world’s preferred supplier, and the case for mutually beneficial trade is very strong.”

Trade barriers and disputes with the United States continue to damage Canadian interests

February 5, 2014 Comments off

Trade barriers and disputes with the United States continue to damage Canadian interests
Source: Fraser Institute

Less than a week before President Obama’s fifth State of the Union address, the state of Canada-U.S. relations remains marked by trade barriers that hurt Canadian producers and consumers, and high-profile disputes, notes a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Since 2007, in both merchandise and services trade, Canada has seen a relative decline in competitiveness with the United States, which may surprise many Canadians who believe Canada has been doing better than the U.S. over the past few years,” said Alexander Moens, senior fellow in American policy at the Fraser Institute and co-author of Canada’s Catch-22: The State of Canada-U.S. Relations in 2014.

For example, Canadian merchandise exports to the U.S. decreased by 27 per cent in 2009, in the midst of the Great Recession, and by 2012 had not fully recovered, totalling $278 billion.

CRS — International Trade and Finance: Key Policy Issues for the 113th Congress, Second Session

January 31, 2014 Comments off

International Trade and Finance: Key Policy Issues for the 113th Congress, Second Session (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The U.S. Constitution grants authority over the regulation of foreign commerce to Congress, which it exercises through oversight of trade policy, including the consideration of legislation to approve trade agreements and authorize trade programs. Policy issues cover such areas as: U.S. trade negotiations; tariff and nontariff barriers; worker dislocation from trade liberalization, trade remedy laws; import and export policies; international investment, economic sanctions; and trade policy functions of the federal government. Congress also has an important role in international finance. It has the authority over U.S. financial commitments to international financial institutions and oversight responsibilities for trade- and finance-related agencies of the U.S. Government.

The 112th Congress approved U.S. bilateral free trade agreements with Colombia, Panama, and South Korea, extended the Trade Adjustment Assistance (TAA) programs through December 31, 2013, and reauthorized the Generalized System of Preferences (GSP) through July 31, 2013. It also authorized permanent normal trade relati ons (PNTR) status for Russia and Moldova, reauthorized the U.S. Export-Import Bank, and approved full U.S. participation in general capital increases for the World Bank and four regional development banks. The 113th Congress may revisit these issues and address new ones

CRS — The U.S. Export Control System and the President’s Reform Initiative (updated)

January 28, 2014 Comments off

The U.S. Export Control System and the President’s Reform Initiative (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

The 113th Congress may consider reforms of the U.S. export control system. The balance between national security and export competitiveness has made the subject of export controls controversial for decades. Through the Export Administration Act (EAA), the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), and other authorities, the United States restricts the export of defense items or munitions; so-called “dual-use” goods and technology—items with both civilian and military applications; certain nuclear materials and technology; and items that would assist in the proliferation of nuclear, chemical, and biological weapons or the missile technology used to deliver them. U.S. export controls are also used to restrict exports to certain countries on which the United States imposes economic sanctions. At present, the EAA has expired and dual-use controls are maintained under IEEPA authorities.

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