AAEI Issues "The Innovation Economy for America" Policy Paper

The American Association of Exporters and Importers (AAEI) has isssued a policy paper entitled “The Innovation Economy for America.” The paper, which was sent to all members of Congress last week, contains a series of ideas that, if adopted, would according to AAEI "greatly increase the likelihood that the next great company with innovative technology and products will be created in the United States and thrive in the global marketplace."

"Our leaders need to better understand what innovation really is," said AAEI President and CEO Marianne Rowden, who authored the document. "Innovation can take many forms now, from new products to new processes. If Congress can improve the business environment for our cutting-edge innovators, then it will have tilled the soil from which new ideas can propel the future of our economy."

The document describes the following four policy areas that will foster innovative thinking and invention:

1. Creating an Environment that is Conducive to and Protects Innovation

2. Implementing These Small and Medium Size Business Enterprises Initiatives and Priorities

• Completing Free Trade Agreements with Colombia, Panama and Korea
• Help Small and Medium Size Business Navigate U.S. Export Controls by providing assistance through the U.S. Small Business Administration and the U.S. Department of Commerce
• Expand Export Financing Opportunities for SMEs

3. Promoting Exports by

• Enacting Duty Drawback Simplification
• Streamlining Export Controls

4. Lower Transaction Costs for Business by

• Passing the Miscellaneous Trade Bill (H.R. 4380)
• Finishing the Automated Commercial Environment (ACE) and International Trade Data System (ITDS)
• Economizing Homeland Security Costs (including C-TPAT, CCSP)
• Harmonizing and Recognizing Authorized Economic Operator Programs
• Promoting International Standards Setting Bodies
• Enacting an Exclusive Forum for Trade-Related Disputes by passing a bill to expand the jurisdiction of hte U.S. Court of International Trade
• Eliminating and Reducing User Fees

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U.S. India High Technology Cooperation Group Meetings to Take Place this Week in DC

The seventh U.S.-India High Technology Cooperation Group (HTCG) will take place this Monday and Tuesday (March 15 and 16) in Washington, DC.

The HCTG was formed in 2002 to provide a forum for discussing U.S.-India high-technology trade issues. The HCTG is co-chaired by the U.S. Department of Commerce's Bureau of Industry and Security (BIS) and the Government of India's Ministry of External Affairs

Neena Shenai, an adjunct scholar at the American Enterprise Institute, and formerly a senior advisor at BIS, has published an article entitled "India, the United States, and High-Tech Trade" that notes that this is the first HCTG under the Obama Administration and describes the three primary issues that will be discussed at the HCTG: export controls, defense trade, and civil nuclear cooperation.

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Import and Export News Briefs

Washington Times reports today on issues holding up confirmation of Undersecretary of Commerce for Industry and Security (BIS).

Compliance with import/export regulations and FCPA among top five corporate compliance challenges in 2010 for technology companies.

Politico reports that the Senate conferees for the pending Iran sanctions legislation have been selected. No word on House conferees yet.

India to press to push for liberalization of U.S. export controls at next week's U.S.-India High Technology Cooperation Group Meeting in Washington, DC.

President Obama issues annual notice advising Congress that the national emergency with respect to Iran will be continued and that comprehensive sanctions against Iran will remain.

Two reports on U.S. citizen Alan Gross who was arrested in Cuba in December 2009 here and here.

In case you missed it, 60 Minutes recently aired a report entitled "Made In The USA" In Iran discussing how U.S. parts and components end up in Iran via third countries.

Washington Post: Obama's ambitious export plan may rekindle free-trade battle.

Compliance Week announces agenda for 5th Annual Conference that will be held in Washington, DC from May 24-26, 2010.

Coalition for Security and Competiveness issues statement welcoming President’s continuing commitment to export control reform.

Census Blog: Make sure your AESDirect company account information is up to date!

Justice Department: Former Haitian Government Official Pleads Guilty to Conspiracy to Commit Money Laundering in Foreign Bribery Scheme

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Secretary Locke Participates in White House Web Chat to Discuss National Export Initiative

Here is the video from today's White House chat session that Commerce Secretary Gary Locke held following the President's speech on the National Export Initiative. Questions were submitted via Twitter (@seclocke), Facebook and email. 

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Text of Executive Order on President's National Export Initiative

NEI Executive Order

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President Announces Details of National Export Initiative at Ex-Im Bank's Annual Conference

In a speech today at the Export-Import Bank of the United States' annual conference in Washington, DC, President Obama provided more details on the National Export Initiative (NEI) and his goal of doubling U.S. exports in the next five years that was announced in his State of the Union Speech in January.

The following is a summary the important points made in today's speech:

• Four aims of NEI are (1) increasing export financing; (2) increasing export advocacy; (3) providing assistance for American businesses to locate, set up shop, and win in new markets; and (4) focusing on making sure American companies have free and fair access to those markets, including enforcing existing trade agreements.

• Signed an Executive Order instructing the federal government to use every available federal resource in support of that mission. That order created an Export Promotion Cabinet, made up of the Secretaries of State, Treasury, Agriculture, Commerce and Labor, along with our U.S. Trade Representative, Small Business Administrator, the Export-Import Bank President, and other senior U.S. officials whose work impacts exports. That cabinet will convene its first meeting in April. 

• Re-launched the President’s Export Council, the principal national advisory committee on international trade. Named Jim McNerney, the President and CEO of Boeing, as its chair; and Ursula Burns, the CEO of Xerox, as vice chair (White House announcement on these appointments here).

• Export promotion efforts will extend throughout the Administration. Secretary Locke is issuing guidance to all senior government officials who have foreign counterparts on how they can best promote our exporters. Secretary Clinton is mobilizing a commercial diplomacy strategy, directing every one of our embassies to create a Senior Visitor Business Liaison who will manage our export advocacy efforts locally.

• Will unleash a battery of comprehensive and coordinated efforts to promote new markets and new opportunities for American exporters. Will bring together the Ex-Im Bank, the SBA, the Departments of Commerce and Agriculture, and the Trade Development Agency to set up one-stop-shops across the country and in the 250 embassies and consulates abroad, to help American businesses gain a foothold in the fastest-growing markets with the most demand. And we’ll provide a comprehensive toolkit of services – from financing to counseling to promotion – to help potential exporters grow and expand.

• Will increase funding for existing promotion efforts, including International Trade Administration at the Department of Commerce, and strengthen the USDA’s ability to connect farmers with new customers overseas.

• Working to reform the U.S. Export Control System for strategic, high-tech industries, which will strengthen our national security. Will concentrate our efforts on enforcing controls on the export of our most critical technologies, making America safer while enhancing the competitiveness of key American industries. Have conducted a broad review of the Export Control System, and Secretary Gates will outline our reform proposal within the next couple weeks.

• Regarding exports, the President announced two specific changes in export control laws that the Administration will work to implement:

1. A new one-time online review process for products containing encryption that is intended to reduce the current 30 to 60 day review process to "30 minutes".
2. Will eliminate unnecessary obstacles for exporting products to companies with dual-national and third-country-national employees by harmonizing the EAR and ITAR standards, making it easier for American and foreign companies to comply with U.S. export control requirements without diminishing national security. 

The video of the speech is below:

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President Announces Two Export Control Reform Initiatives Today (Encryption and Dual-Nationals)

In a speech today on the National Export Initiative made today at the Export-Import Bank of the United States' annual conference in Washington, DC, President Obama announced two specific changes in U.S. export control laws that the Administration plans to implement:

1. A new one-time online review and notification process for products containing encryption algorithms. This new process is intended to reduce the current 30 to 60 day review process to "30 minutes."                                 
2. Will eliminate unnecessary obstacles for exporting products to companies with dual-national and third-country-national employees by harmonizing the EAR and ITAR standards, making it easier for American and foreign companies to comply with U.S. export control requirements without diminishing national security. 

Further details on these reforms will be announced by BIS and DDTC in the near future.

More information on the other aspects of the President's speech today are found in the subsequent post.

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Remarks at Today's State Department Briefing Fail to Clear Up Confusion Over Dealing With BAE Systems

As has been reported there is a great deal of confusion in the U.S. defense trade community about dealing with BAE Systems plc and their U.S. affiliates in light of the company's guilty plea last week to a conspiracy charge in connection with certain statements made to the U.S. Government. The fundamental legal question for U.S. companies is whether they are permitted by section 127.1(c) of the ITAR to continue to engage in defense-related transactions with BAE Systems given that the company appears to be "ineligible" as a result of the guilty plea.

At today's press briefing State Department spokesman P.J. Crowley was asked by a reporter about the BAE Systems licensing issue and, not surprisingly, his answer did not go very far in resolving this issue.  As noted below, Mr. Crowley noted that the State Department is "assessing the implications that the plea will have on the statutory debarment and resulting policy of denial" and that "it would be inappropriate for [State] to make decisions on pending export applications at this time." He noted that this meant that "applications for export will be delayed if those applications involve BAE Systems PLC or any of its subsidiaries." The complete text of the exchange is below:

QUESTION: A question on export licenses. In reference to a specific company, I got a query from someone from another bureau about an export license being put on hold for a defense contract. Does the State Department have a particular hold on all export licenses at the moment? I know you guys are reviewing – you have an interagency review on export controls. Is that affecting the application for export licenses?
MR. CROWLEY: Export licenses writ [sic] large?
QUESTION: Yeah, that’s what I’m wondering. I mean, this was in reference to a specific defense contractor, a British defense contractor.
MR. CROWLEY: Well, so, is your question about that specific contractor?
QUESTION: Yes. Can I ask about the (inaudible)?
MR. CROWLEY: (Laughter.) No, you’ll say – I got the impression that we were holding --
QUESTION: Well, I’d like to ask about BAE’s application for --
MR. CROWLEY: Sure.
QUESTION: -- an export license being put on hold, and then specifically, is this something that is affecting everybody or just them?
MR. CROWLEY: Let me talk more specifically. I’m not aware of any blanket hold on all export licenses. On March 1^st, BAE Systems plc pled guilty in U.S. District Court for the District of Columbia to conspiracy involving violations of several U.S. laws, including the Arms Export Control Act. The State Department is studying the judgment and the plea agreement between the Department of Justice and BAE Systems plc, which BAE entered into to settle issues related to violations of the export – Arms Export Control Act. We are assessing the implications that the plea will have on the statutory debarment and resulting policy of denial. Though no final determinations have been reached, our analysis indicates it would be inappropriate for us to make decisions on pending export applications at this time. But for further information on the plea agreement, I refer you to the Department of Justice.
QUESTION: Can you explain what that means? You said we’re assessing implications the plea will have on the statutory something-something. What was that?
MR. CROWLEY: What this means is only that their applications for export will be delayed if those applications involve BAE Systems plc or any of its subsidiaries.
QUESTION: Thank you.

Until this issue is resolved once and for all by the State Department's Directorate of Defense Trade Controls, U.S. companies should consult section 127.1(c) of the ITAR and their export controls counsel for guidance on how to proceed.

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Secretary of State Clinton Addresses Export Control Reform During House Foreign Affairs Committee Hearing

The following is an excerpt of a brief exchange between Representative Don Manzullo (R-IL) and Secretary of State Hillary Rodham Clinton on export controls at last week's House Foreign Affairs Committee on the FY 2011 international affairs budget. 

Rep. Manzullo is co-chair of the Congressional Export Control Working Group and has played an active role on export controls reform issues.


Export Controls Excerpt from Lauren Airey on Vimeo.

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GSP Import Benefits at Stake for Certain Countries and Products

DUTY-FREE IMPORT BENEFITS AT STAKE FOR CERTAIN COUNTRIES AND PRODUCTS

March 25 Deadline for Comments on GSP Eligibility

U.S. importers, trade associations and foreign governments have until 5:00 p.m. on March 25 to submit comments to the Office of the U.S. Trade Representative concerning the eligibility of certain goods for duty-free treatment under the Generalized System of Preferences. These comments may seek to preserve, reinstate or revoke this treatment.

The U.S. GSP program includes provisions, known as competitive need limitations, that trigger the removal of duty-free treatment if imports of a covered product from a beneficiary developing country exceed certain limits. For calendar year 2009, these limits are (a) 50% of the value of total U.S. imports of the product from all countries or (b) $140 million. Once the president determines that a CNL has been exceeded, GSP duty-free treatment for the subject article must be terminated no later than July 1 of the next calendar year.

However, CNL waivers are permitted for products that are imported in de minimis quantities. In addition, duty-free treatment may be reinstated for products that no longer exceed the CNL.

USTR is therefore accepting comments from interested parties on the following potential modifications to GSP eligibility, based on import data for calendar year 2009.

De Minimis Waiver - The president may waive the 50% CNL with respect to an eligible article imported from a BDC if the value of total imports of that article from all countries did not exceed $19.5 million.

Redesignation Request - If imports of an eligible article from a BDC ceased to receive duty-free treatment due to exceeding a CNL in a prior year, the president may redesignate that article for duty-free treatment if imports in the 2009 did not exceed the CNL.

Potential Revocation of a Current CNL Waiver - A CNL waiver remains in effect until the president determines that it is no longer warranted due to changed circumstances. However, the president should revoke any CNL waiver that has been in effect with respect to an article for five years or more if the BDC's exports of that article to the U.S. exceeded (a) $210 million (1.5 times the applicable CNL value limit) or (b) 75% of the value of total U.S. imports of that article.

A list of products that may qualify for one of these actions can be found on USTR's Web site.

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Deadline for NCITD International Trade Scholarship is Approaching

Update: Application deadline extended to April 15, 2010.

The National Council on International Trade Development (NCITD) has established a scholarship for students of international trade.

Scholarships awarded (minimum $1,000) will be paid directly to the institution, in the name of the awardee(s).

Awardee(s) will also receive a one-year NCITD membership and will be welcome to attend monthly meetings

Criteria for Eligibility:

Applicants must have at least "junior" status for 2010-2011 in an accredited U.S. college or university with at least a 3.0 Grade Point Average or equivalent "B" average.

Applicants must be currently enrolled and pursuing either an undergraduate or graduate degree in International Trade studies, such as political science, international relations, economics, international business, international law, international finance, etc. (including study abroad programs affiliated with a U.S. university).

Application Process:

Applicants must complete and submit:

* The NCITD Scholarship application form;

* A copy of the most current transcript from the college or university;

* A letter of recommendation from a sponsoring NCITD member; or from a work colleague or professor;

* A brief (2500 words or less) narrative from the applicant explaining his/her interest in international trade and why the applicant should be awarded this scholarship, including merit and financial need.

Criteria for Selection, in Order of Importance:

* Proven interest or experience in international trade, e.g., education, work or volunteering;

* Current academic standing and performance, including honors and extracurricular activities;

* Strength of the narrative submission and recommendations by NCITD member, professor or work colleague;

* Preference will be given to candidates sponsored by employees of NCITD member firms.

Selection Process:

For consideration for the 2010-2011 academic terms, all applications must be submitted by April 15, 2010.

The Application, transcript, recommendation and narrative essay should be mailed in a single package OR emailed to:

ATTN: Scholarship Applications
c/o Christina Filipovic
NCITD
1707 L Street N.W.
Suite 570
Washington, DC 20036
Email: christina@ncitd.org

The NCITD Scholarship Committee will select the winner(s) and determine the award no later than April 15, 2010.

The winner(s) will be notified by e-mail and letter.

The scholarship(s) will be presented at the June 9, 2010 Compliance Meeting in Washington, DC.

The scholarship application form is available here.

For information contact Christina Filipovic at the NCITD Secretariat at 202-872-9280.

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