Weekly Trade Briefing: April 12-16, 2021

Trade Update • APRIL 19, 2021

Aweekly roundup of news reports, government announcements, and other information about current and emerging developments in international trade and customs compliance.

Textile Groups Call for End to de Minimus for Section 301 Goods

The National Council of Textile Organizations this week sent a letter to the Office of Management and Budget urging the agency to reconsider and approve a proposal to direct CBP to collect Section 301 penalty duties on billions of dollars of Chinese goods currently shipped duty-free under Section 321 de minimis waivers. Facing an “exponential growth” of shipments qualifying for Section 321 duty-free treatment, the group says that U.S. manufacturers “increasingly find their markets and workforce threatened by this tariff avoidance scheme.” NCTO President and CEO Kim Glas called on the Biden administration to develop policies that mitigate the “damaging impact” of Sec. 321, starting with the denial of Sec. 321 benefits to imports from China covered under the existing Sec. 301 tariffs.

CIT Issues Briefing Schedule in Section 301 Tariff Refund Case

The U.S. Court of International Trade issued a Scheduling Order this week in response to the joint status report filed the previous day by the plaintiffs and the U.S. government in the ongoing litigation involving more than 3,700 complaints challenging the legality of duties implemented on certain imports from China pursuant to Section 301 of the Trade Act of 1974. According to the status report, the parties remain strongly opposed over the issue of interim relief for liquidated entries of duties already paid under Section 301. The government argues that any liquidated entries have “become final and conclusive” and that relief is not available even if the plaintiffs ultimately prevail in the case. The plaintiffs continue to argue that recent court decisions support the availability of such refunds.

Canada Issues Advisory on Doing Business with Myanmar-Related Entities

The Government of Canada this week issued an advisory for Canadian companies doing business with Myanmar-related entities, in which it stated that it “expects Canadian companies active abroad, in any market or country, to respect human rights, operate lawfully, conduct their activities in a responsible manner and adopt voluntary best practices and internationally respected guidelines.” In light of the recent coup by Myanmar’s military and the resulting economic sanctions and other measures now in place, the Government recommends that companies active in Myanmar “assess their operations, take any appropriate action to comply with Canadian sanctions measures and export controls, and uphold high standards of human rights and responsible business conduct.”

DoD Seeks Input Regarding Supply Chain Risks for Critical Materials

The Department of Defense is seeking public comments by April 28, 2021, to assist with the DoD’s mandated report identifying risks and policy recommendations regarding the supply chain for strategic and critical materials. The Apr. 13 Federal Register notice notes “the need for resilient, diverse, and secure supply chains to ensure U.S. economic prosperity and national security.” In addition to a desire for general commentary from “both consumers and producers of strategic and critical materials and downstream products containing these materials,” the DoD lists a number of specific topics it would like to see addressed including: supply chain transparency; diversification of sourcing; promotion of environmental, health and safety, labor, and fair trade in supply chains; and exposure to various risks including price volatility, supply disruption/shocks, and human rights violations and forced labor.

Lawmakers Urge Tai to Open Vietnamese Market for Pork Exports

While USTR Katherine Tai addresses concerns with Vietnam on trade issues raised in Section 301 investigations launched during the Trump administration, a bipartisan group of lawmakers is urging the administration to pressure it to remove tariffs on U.S. pork exports. Vietnam currently subjects U.S. frozen pork to its MFN rate of 15%, while competitors in the European Union and Trans-Pacific Partnership member countries such as Canada are better positioned, according to a draft letter being circulated in Congress. The lawmakers say Vietnam is a critical, under-tapped market for U.S. pork producers that are now dealing with an unsustainable surplus owing to the pandemic and other factors.

ISO Publishes New Guidelines for Compliance Management Systems

The International Organization for Standardization this week published its new standard ISO 37301, Compliance Management Systems – Requirements with Guidance for Use, which the group says “provides everything an organization needs to know to develop, implement, maintain and improve an effective compliance management system.” The new standard is said to be applicable to all types of organizations regardless of the type, size, and nature of the activity, as well as whether the organization is from the public, private or non-profit sector. The benefits of implementing ISO 37301 are expected to include not only a reduced risk of fines due to non-compliance, but enhanced reputation and credibility, providing greater confidence to clients and other stakeholders, and increased business opportunities.