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Q4 Regulatory Updates

Generalized System of Preferences (“GSP”) Expires December 31, 2017 

The Generalized System of Preferences (“GSP”), first implemented on January 1, 1976, periodically expires and must be renewed by Congress to remain in effect. The most recent GSP reauthorization (H.R. 1295) expires on December 31, 2017.   Although Congress let the program lapse for two years past the previous expiration date of July 31, 2013, we are not aware of any current effort to end the program. But it nonetheless remains a possibility.

But nonetheless, it remains a possibility.   CBP’s message CSMS #17-000622 (September 29, 2017) provides guidance in the event of a lapse.   Importers are strongly encouraged to continue to flag GSP-eligible importations with the Special Program Indicator “A,” even if they must pay normal trade relations (column 1) duty rates on otherwise GSP-eligible importations.  Importers may not file SPI “A” without duties. Historically, every renewal past the lapse date has allowed for retroactive claims, if GSP was flagged at the time of entry.

USITC Global Safeguard investigations find injury, advance to remedy phase.

On September 22, 2017, the U.S. International Trade Commission (USITC) determined that increased imports of crystalline silicon photovoltaic cells (whether or not partially or fully assembled into other products) are a substantial cause of serious injury to the domestic industry producing competing articles. The determination was made by a 4-0 vote and was in response to a petition filed by Suniva Inc. The USITC will proceed into the remedy phase of the investigation with a public hearing set for October 3, 2017, and a report of the USITC’s injury determinations and remedy recommendations will be submitted to the President by November 13, 2017. For more information, please see the USITC news release here.

Similarly, on October 5, 2017, pursuant to a petition filed by Whirlpool Corporation, the USITC unanimously determined that large residential washers are being imported into the United States in such increased quantities as to be a substantial cause of serious injury to the domestic industry.  The Commission will now proceed to the remedy phase of the investigation. A public hearing on remedy has been scheduled for October 19, 2017.  The USITC will submit its report containing its injury determination, remedy recommendations, certain additional findings, and the basis for them to the President by December 4, 2017.  For more information, please see the USITC news release.

NAFTA Renegotiation Update

The fourth round of negotiations is scheduled to occur in Washington from October 11-15, and with the end of 2017 quickly approaching, many have speculated that negotiations will carry over to 2018. From the start, the participants set an informal goal of concluding before the end of 2017 because both the Mexican presidential election and the United States midterm elections will occur in 2018, and the parties are keenly aware of the political difficulties of talking NAFTA in the midst of a campaign. Even before the negotiations tackle some of the most controversial issues, the negotiations appear to be on a slow path toward compromise.

United States negotiators have proposed controversial audit rules related to the rules of origin requirements aimed at protecting the automobile industry. Canadian officials want to resolve an aerospace dispute between a Montreal-based manufacturer, Bombardier, and United States-based Boeing. Mexican leaders continue to propose a NAFTA alternative by looking to Latin America amid President Trump’s NAFTA threats.