FTZ’ine February 2021
February 2, 2021
FTZ’ine April 2021
March 31, 2021
Trade Takes A Back Seat
We understand there is still a pandemic going on. Even so, with international trade likely a key part of the global economic recovery, it was disappointing to learn last month that trade did not make the list of President Biden’s top priorities.
That is not to say that nothing happened in the world of trade in February. President Biden nominated Katherine Tai to fill the role of United States Trade Representative, and her confirmation is expected shortly. The World Trade Organization welcomed a new Director-General from Africa.
Britain and the EU are trying to work out the kinks in a complicated Brexit trade arrangement.
Despite not being named a public priority, the White House did take on some major trade initiatives during the month. President Biden reinstituted Section 232 tariffs on aluminum from the United Arab Emirates, signaling his willingness to use trade remedy tariffs to achieve policy goals. The President also announced a sweeping Supply Chain initiative targeting ways to restore American capabilities in industries like pharmaceutical manufacturing where foreign-trade zones play a key role.
Top Story: New USTR Pick
Late last month the Senate Finance Committee held a confirmation hearing for Katherine Tai, President Biden's choice to become the next U.S. Trade Representative. During the hearing, Tai suggested a revamp of global trade rules to eliminate the "gray areas" exploited by China and end the "race to the bottom" that she said had hurt workers and the environment.
"For a very long time our trade policies were based on the assumption that the more we traded with each other, and more liberalized our trade, the more peace and prosperity there would be," Tai said, adding that trade liberalization in the past too often led to less prosperity, and lower labor and environmental standards.
Tai is the Yale and Harvard Law School educated daughter of U.S. immigrants from Taiwan. During her testimony, she called China "an extremely formidable competitor where the state is able to conduct the economy almost like a conductor with an orchestra."
Tai told her confirmation hearing before the Senate Finance Committee that she would make an assessment of issues such as China's use of forced labor in the Xinjiang province a top priority.
"The use of forced labor is probably the crudest example of the race to the bottom"," Tai said. “I know firsthand how critically important it is that we have a strategic and coherent plan for holding China accountable to its promises and effectively competing with its model of state-directed economics,″ Tai said.
Tai said the longstanding dispute between the U.S. and EU over aircraft subsidies had contributed to the collapse of the World Trade Organization's dispute settlement system.
"If confirmed, I would very much be interested in figuring out, pardon the pun, how to land this particular plane because it has been going on for a very long time," she testified.
Tai also signaled a willingness to “prioritize rebuilding our international alliances and partnerships, and re-engaging with international institutions″ to present Beijing with “a united front of U.S. allies.″
Fluent in Mandarin, Tai served several years as head of China enforcement at the USTR’s office.
Tai dodged politically sensitive questions on whether the Biden administration would revive former President Barack Obama's Trans-Pacific Partnership.
The Senate is expected to confirm Tai easily. In an unusual sign of bipartisan agreement, the top Democrat (Rep. Richard Neal of Massachusetts) and Republican (Rep. Keven Brady of Texas) on the House Ways and Means Committee appeared before the Senate panel to support her.
Tech Tip
The new e214 amendment process has been in production since Sept 2020, and like many things in 2020, it was not without it’s challenges. FTZs across the country are still reporting a significant delay in the time between submitting a Post Admission Correction (PAC) request and receiving an indication back if the request is approved (JAP message) or denied (JDE message.)
Some FTZs are still being told that their port officers are not able to find specific PAC requests. These zones are being asked to send an email with the admission number to help the port find the appropriate messages for action. Some ports are also asking for that courtesy email to include details about the PAC for evaluation of the approval, even though the PAC itself would already contain all the information needed.
CBP HQ was made aware of this situation during the recent NAFTZ Virtual Legislative Summit, and the FTZ’ine will keep you informed as we learn more. If you are having trouble with your admissions or PAC, please contact us at Info@iscm.co.
Trade Doesn’t Make Cut For White House Priorities
Last month President Biden announced six immediate priorities for his administration. They include:
Aluminum Becomes First Major White House Trade Test
Early last month the U.S. Court of International Trade ruled that the tariffs placed on steel and aluminum under Section 232 of the 1962 Trade Expansion Act are a permitted use of the provisions of the law.
The request to overturn the tariffs was made in 2019 by New Jersey importer Universal Steel Products, which alleged that the Commerce Department report that labeled the metal a national security threat was “procedurally deficient.”
Shortly after the Court confirmed the President’s ability to impose such tariffs, President Biden, in one of his first trade actions, reinstated a 10 percent duty on aluminum imports from the United Arab Emirates.
The UAE is one of the world's biggest aluminum producers. Former President Trump removed the Section 232 tariffs just one day before leaving office, concurrent with a deal for the United States to sell the UAE 50 F-35 jets and up to 18 armed drones.
This quick action is certainly a sign that the Biden Administration will not hesitate to use trade remedy tariffs to enforce policy.
"I consider it is necessary and appropriate in light of our national security interests to maintain, at this time, the tariff treatment applied to aluminum article imports from the United Arab Emirates," President Biden said in a new proclamation.
The new President's decision to reverse the UAE's tariff reprieve cast doubt over hopes in the U.S. and European business community that President Biden would roll back most, if not all, of the tariffs on steel and aluminum imports.
"In my view, the available evidence indicates that imports from the UAE may still displace domestic production, and thereby threaten to impair our national security," President Biden stated in the proclamation.
WTO Formally Elects New Director General
Dr. Ngozi Okonjo-Iweala, a native of Nigeria, was officially appointed as the new Director-General of the World Trade Organization last month, and started her role as the first female head of the trade organization yesterday.
Okonjo-Iwaela nodded to the historic nature of her appointment in a statement, saying it is the first time WTO members "are selecting a woman and an African as Director-General."
"This is groundbreaking and positive," she said. "I am grateful for the trust you have in me, not just as a woman and an African, but also in my knowledge, experience, and, as some of you have said, possessing the courage and passion to work with you to undertake the wide-ranging reforms the WTO needs to reposition itself for the future."
"A strong WTO is vital if we are to recover fully and rapidly from the devastation wrought by the COVID-19 pandemic," Okonjo-Iwaela stated. "I look forward to working with members to shape and implement the policy responses we need to get the global economy going again. Our organization faces a great many challenges but working together we can collectively make the WTO stronger, more agile and better adapted to the realities of today."
Okonjo-Iwaela's first term, which is renewable, ends on Aug. 31, 2025.
New Supply Chain Initiative Could Foretell Trade Tariffs
Late last month President Biden signed an Executive Order aimed at reshoring the supply chains for four critical technologies.
In a statement, the Biden Administration noted that the initiative was spurred at least in part by last year’s shortages of personal protective equipment (PPE) for front-line U.S. healthcare workers.
“While we cannot predict what crisis will hit us, we should have the capacity to respond quickly in the face of challenges. The United States must ensure that production shortages, trade disruptions, natural disasters and potential actions by foreign competitors and adversaries never leave the United States vulnerable again.”
The Executive Order launches a comprehensive review of U.S. supply chains and directs federal Departments and Agencies to identify ways to secure U.S. supply chains against a wide range of risks and vulnerabilities.
The order directs an immediate 100-day review across federal agencies to address vulnerabilities in the supply chains of four key products.
(1) Active Pharmaceutical Ingredients (APIs) are the part of a pharmaceutical product that contain the active drug. In recent decades, more than 70 percent of API production facilities supplying the U.S. have moved offshore.
(2) Critical minerals are an essential part of defense, high-tech, and other products. From rare earths in our electric motors and generators to the carbon fiber used for airplanes—the United States needs to ensure we are not dependent upon foreign sources or single points of failure in times of national emergency.
(3) Semiconductors and Advanced Packaging. The United States is the birthplace of this technology, and has always been a leader in semiconductor development.
(4) Large capacity batteries, such as those used in electric vehicles: As we take action to tackle the climate crisis, we know that will lead to large demand for new energy technologies like electric vehicle batteries. While the U.S. is a net exporter of electric vehicles, we are not a leader in the supply chain associated with electric battery production. The U.S. could better leverage our sizeable lithium reserves and manufacturing know-how to expand domestic battery production.
The 100-day review will identify near term steps to address vulnerabilities in the supply chains for these critical goods.
FTZ Board Activity
- Miraclon Corporation received authorization of production activity for flexographic/aluminum printing plates and direct/thermo imaging layer film within FTZ 106 in Weatherford, Oklahoma. MORE
- Juno Therapeutics, Inc. submitted a notification of proposed production activity for biopharmaceuticals within FTZ 5 in Bothell, Washington. MORE
- XPO Logistics submitted a notification of proposed production activity for wearable electronic communication/data device kitting within FTZ 72 in Clayton, Indiana. MORE
- Bosch Security Systems, LLC submitted a notification of proposed production activity for surveillance, detection, evacuation, and management systems within FTZ 38 in Greer, South Carolina. MORE
- Celgene Corporation submitted a notification of proposed production activity for biopharmaceuticals within FTZ 49 in Warren and Summit, New Jersey. MORE
- Deepwater Riser Services received authorization of limited production activity for offshore drilling riser systems and equipment within FTZ 279 in Houma, Louisiana. Production was authorized subject to a restriction requiring Kevlar straps for fins be admitted to the zone in privileged foreign status. MORE
- Zinus USA Inc. received authorization of production activity for foam bedding within FTZ 26 in McDonough, Georgia. MORE
- Eastman Chemical Company submitted a notification of proposed production activity for plastics within FTZ 204 in Kingsport, Tennessee. MORE
- Enovix Corporation submitted a notification of proposed production activity for lithium-ion metal batteries within FTZ 18 in Fremont, California. MORE
- Coating Place, Inc. received authorization of production activity for pharmaceuticals within FTZ 266 in Verona, Wisconsin. MORE
- Teijin Carbon Fibers, Inc. received an extension of the rebuttal comment period for its application of production authority within FTZ 38 in Spartanburg County, South Carolina. MORE
- Celgene Corporation submitted an application for subzone status for its facilities within FTZ 49 in Warren and Summit, New Jersey. MORE
- Tricida Inc. received authorization of production activity for pharmaceutical products within FTZ 176 in Rockford, Illinois. MORE
- Wacker Polysilicon North America, LLC submitted a notification of proposed production activity for hydrophilic fumed silica within FTZ 134 in Charleston, Tennessee. MORE
- PPC Broadband, Inc. received authorization of limited production activity for fiber optic cables within FTZ 90 in Dewitt, New York. Production was authorized subject to restrictions requiring that tight buffered fiber be admitted to the zone in privileged foreign status and that aramid yarn, swellcoat blockers or equivalent be admitted to the zone duty paid. MORE
- Port Arthur LNG, LLC received approval to operate its facility in Arthur and Jefferson County, Texas as Subzone 116F. MORE
- West Virginia Economic Development Authority submitted an application to reorganize FTZ 240 under the alternative site framework in Martinsburg, West Virginia. MORE
- Bauer Manufacturing LLC, d/b/a NEORig submitted a notification of proposed production activity for water well drilling rigs within FTZ 265 in Conroe, Texas. MORE
- Abbott Laboratories received approval to expand Subzone 22F in Itasca, Illinois. MORE
- AbbVie, Inc. submitted a notification of proposed production activity for pharmaceutical products within FTZ 22 in North Chicago and Lake County, Illinois. MORE
Trade Takes A Back Seat
We understand there is still a pandemic going on. Even so, with international trade likely a key part of the global economic recovery, it was disappointing to learn last month that trade did not make the short list of President Biden’s current priorities.
That is not to say that nothing happened in the world of trade in February. President Biden nominated Katherine Tai to fill the role of United States Trade Representative, and her confirmation is expected shortly. The World Trade Organization welcomed a new Director-General from Africa. Britain and the EU are trying to work out the kinks in a complicated Brexit trade arrangement. Despite not being named a public priority, the White House did take on some major trade initiatives during the month. President Biden reinstituted Section 232 tariffs on aluminum from the United Arab Emirates, signaling his willingness to use trade remedy tariffs to achieve policy goals. The President also announced a sweeping Supply Chain initiative targeting ways to reshore American capabilities in industries like pharmaceutical manufacturing where foreign-trade zones play a key role.