U.S. Department of Commerce

Exports Increase for Sixth Month in a Row

On December 10, 2009, the Bureau of Economic Analysis of the U.S. Department of Commerce reported that October 2009 exports grew $3.5 billion from September exports of $133.4 billion.  And, using the corrected numbers for the May to October period, exports increased six months in a row, which is an extremely positive trade statistic.  In addition, while there was still a deficit in goods and services, the deficit decreased by about $3 billion, which is another positive statistic.  Economists look at increasing exports as a precursor to an economic recovery.  Like an increase in construction permits, or an increase in the transportation of core materials and inputs, an increase in exports strongly suggests that the economy is coming around.

Office of U.S. Trade Representative

National Trade Estimate Report Cites Barriers to Trade with China

In a report by the Office of the U.S. Trade Representative, entitled the 2010 National Trade Estimate Report, U.S. businesses cited to persistent trade barriers with China including lack of intellectual property protection, high tariffs on imports and the lack of free float of the yuan.  The intellectual property issue was among the highest priority issues, with businesses continuing to report counterfeiting as a major issue despite China’s accession to the WTO and its regular promises to police counterfeits.

The NTE Report is expected to play a key role in the Obama Administration’s future discussions of trade enforcement with China.

U.S. Congress

Miscellaneous Tariff Bill

In the trade arena, Christmas comes once every four or five years, when a massive miscellaneous tariff bill is enacted.  2009 was expected to be one of those years.  There are a large number of bills pending, dealing with duty free treatment, or reduced duties, on various HTS items.   WIMA has received an inquiry from the International Trade Commission regarding continuing duty free treatment on vulcanized rubber erasers.  I am also aware of two other miscellaneous bills dealing with duty free treatment for other consumer products.  Normally, the many bills are rolled into one master miscellaneous tariff bill, often referred to as the MTB.  There was great hope that a MTB would clear the House and move over to the Senate before Congress adjourned in 2009.  The House is now scheduled to adjourn on December 16^th and it remains unclear if the MTB will be passed by the House by that date.  The only way a bill can be enacted this year is if the House quickly passes it, sends it over to the Senate and the Senate passes it virtually unchanged.  Otherwise, the issue moves into 2010, which will be unfortunate for the many companies effected by the MTB, as their duty free treatment will expire on December 31, 2009.

There are as many permutations to this story as there are Representatives and Senators in Congress.  However, I am still optimistic that something will be worked out before Congress adjourns this month – and it may be well past December 16^th.  There are now some suggestions that Congress will be in session through December 23^rd.  If that schedule holds, there would be enough time for both Houses of Congress to consider the issue and pass a MTB.  We will report further on this issue in January 2010.