January was a busy month for international trade initiatives in Washington. The Obama Administration made proposals aimed at creating a special trade enforcement center and increasing supply chain security. The proposals contain minimal details. Nevertheless, each proposal gives some insight into the Administration’s trade priorities.
During the State of the Union address the President indicated he intended to create an Interagency Trade Enforcement Center (“ITEC”) to pursue unfair trade practices around the world. Some of the details of ITEC are set forth in the Executive Order issued February 28, 2012. The Center brings together representatives from the United States Trade Representative’s office (“USTR”), Departments of State, Justice, Agriculture, Commerce, Homeland Security, and Office of the Director of National Intelligence. The Order indicates that the Center should use United States law to quickly and efficiently challenge trade policies that the Administration believes are unfavorable to U.S. companies.
The challenged trade policies include a broad range of intellectual property violations and unfair trade practices resulting in illegal subsidies abroad. The Order lists eight specific laws, but also leaves open the possibility to pursue cases under other laws as well. It is likely that China is one of the main targets of ITEC activity.
Taken together, the departments and laws in ITEC represent the “more aggressive whole-of-government approach to addressing unfair trade practices” promised by Commerce Secretary Bryson when ITEC was proposed. However, it should be noted that ITEC requires budget approval to start operations. While the amounts in question are small by government standards—$24 million for Commerce, $2 million for USTR—it is not clear that ITEC will receive sufficient support in Congress. In addition, there is no indication that ITEC would address antidumping fraud on entries into the United States. Over the last few years, this sort of activity has been one of the major complaints among U.S. manufacturers, and has been the object of several bills introduced in Congress.
The White House also recently released its National Strategy for Global Supply Chain Security. This document sets forth two overarching goals for the future of the global supply chain. The first is to promote the efficient and secure movement of goods. The second: to foster resiliency in the global supply chain. Interestingly, the strategy does not so much propose a federal program to achieve these goals as a framework for various groups to “integrate and spur efforts” to meet these goals.
At this point, there do not appear to be specific supply chain security measures proposed by the government. In part this makes sense, since the sorts of threats the strategy is meant to address include not just intentional, man-made disruptions like terrorist attacks, but also natural disasters like Hurricane Katrina, the eruptions of Iceland’s Eyjafjallajökull volcano, and the earthquake and tsunami in Japan last year. The goal of a resilient supply chain is meant to address these types of events as much as terrorist disruptions.
Ultimately, the national strategy as proposed by the Administration is likely to rely heavily on information sharing, risk assessment, layered defense, and targeted security. For such a strategy to work it will be necessary for new and improved means of communication to be opened between the government and the trade. In addition, the government will have to share information across borders, as well as create a means to quickly evaluate whether information can be shared without compromising national security sources. This balance of communication, while evaluating national security needs, has historically been a difficult one for the government to strike. For more information on the national strategy, copy and paste http://www.barnesrichardson.com/?t=40&an=10748&format=xml&p=3731
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