Global:

How about Coach and the $8 Million Jury Verdict? That $8 million jury award to Coach sure got a lot of attention. [See article below.] We fielded a number of your calls, comments and questions at our offices. So I thought I’d take a few minutes to respond in general to the 3 most asked questions – right after the article.

Designer Handbag Maker Wins $8 Million Jury Verdict in L.A. Lawsuit
City News Service - April 13, 2013
Counterfeiters in China allegedly conspired with officials at El Monte-based Celco to import and distribute Coach knock-offs. A Los Angeles federal jury has awarded $8 million to fashion firm Coach Inc. in a counterfeiting case, according to court papers obtained Friday. The New York leather goods company filed suit against customs brokerage Celco Customs Service Co. in December 2011, alleging unfair competition and trademark infringement.

Customs brokerage firms are hired to handle paperwork required for the import or export of goods. According to the complaint, counterfeiters in China allegedly conspired with officials at El Monte-based Celco to import and distribute Coach knock-offs. The case stems from 2009, when US Customs and Border Patrol officials informed Coach that agents had seized a large shipment of counterfeit handbags and wallets bearing the company's trademark at the Port of Los Angeles.

After an investigation by attorneys representing the fashion house, it was determined that Celco created and filed fraudulent customs entry documents to allow the counterfeit products to be shipped to the US, according to the lawsuit. The Power of Attorney granting entry authority was issued by the foreign forwarder. The importer name listed was the result of an identity theft scheme and the broker was found guilty for failing to take a single step to verify the authenticity of the Power of Attorney. After a three-day trial before US District Judge Margaret M. Morrow, the jury rendered a verdict in favor of Coach, awarding the company $8 million.


Click Here for Full Story

3 Frequently Asked Questions on this topic:
First, Byrnes has a long history and reputation for exercising proper diligence especially in asking our “Additional Questions” designed to make certain that business is conducted accurately to protect clients (and ourselves) in dealing with complex international trade regulations and laws.

Q1. How does a broker get away with this? Why do they try this stuff?
A. This may not make you feel any better but here goes: Just as there are in the general population, we’ll find bad apples in the brokerage business, people who will take short cuts and who may be in the brokerage business solely for the dollar gains – but not for the service and the point of pride of completing valid international transactions that grow our economy. A lot of trade is purely document based (paper or electronic) so many in the supply chain never really know or see the other parties in the chain of transactions. Buyers and sellers and providers in between may simply be looking for the lowest price /lowest cost PERIOD – with no regard for the value of global trade to an economy or area.

Q2. What’s being done to control this?
A. There are laws and regulations so I won’t go into those; but call or write us if you want that kind of detail. At Byrnes, we rely on our long term partners with whom we have a personal, face-to-face, and regular relationship and with whom we share and document certain values and ethics. It’s a form of peer pride and peer pressure. More it’s layered responsibility and layered security that creates long-standing trust and honesty. We invest in those relationships to be sure of consistency and constancy.

Q3. How do I / or How does Byrnes avoid this situation?
A. As with most things, there is no 100% guarantee against criminal activity. We think we are different in the level of details that we target for customization and safety. We quite religiously follow the mantra: “know your customers/know the supply chain providers.” This is why we will ask you more questions, for more details and maybe even for more documents upfront. And, we do the same with others that we deploy and encounter in the supply chain of activity for your transactions.

It’s one of the reasons we created a comprehensive form and procedure for all New Clients; it includes questions about the privacy of your data on ocean shipments. We then file the required letter to protect the release of your information - data that could be used for identity theft, helping prevent one of the problems noted in the Coach case.

Sometimes it takes a bit more effort; so as we are acting on your behalf and our own good name, we are also ensuring that our partners and providers are acting on your behalf and their good names. By doing so, we create strong circles of trusted entities and add layers of surety and security. We know you see and value our service difference because your names aren’t in these kinds of headlines nor are you handing over punitive fees.

Finally, we at Byrnes make time available at all levels within the Company to work directly with US Customs and other US Government Agencies that regulate the import and export of goods. It helps us stay informed and understand the nuances of rules and regulations that other providers may miss. We do not want to overlook anything that could raise doubt or a question.

We have a commitment to be involved and to make a difference, and we take pride when you our clients and partners appreciate the difference it makes for all of us.

John A. Leitner
President
W.J. Byrnes & Co.

Global:

Troika Recommends Carvalho de Azevêdo to be the next WTO Director-General
World Trade Organization - 08 May 2013
At an informal meeting of the Heads of Delegation on 8 May 2013, the three facilitators in the process of selecting the next WTO Director-General recommended Ambassador Roberto Carvalho de Azevêdo (Brazil) as the candidate who can gain consensus approval of WTO members.

With regard to the organization of work, the Facilitators and I conducted consultations from 1 to 7 May. Each Member was asked the same precise question, “What is your preference? Our role has always been ‘to encourage and facilitate the building of consensus among Members, and assist them in moving from the initial field of candidates to a final decision on appointment’.” I am pleased to inform you that all 159 Members came forward to express their preferences.

Mr. Azevêdo carried the largest support by Members in the final round, consistently did so in each round; and he enjoyed support from Members from all levels of development and from all geographic regions and has done so throughout the process. I therefore intend to convene a special meeting of the General Council on 14 May 2013, where the sole item on the agenda will be the appointment of the next Director-General of the WTO for a period of 4 years starting 1 September 2013.

Amb. Azevêdo has been quoted as saying the WTO needs a leader “who can roll up his sleeves, sit down with members and engage with them on an equal footing” and that “to do that, you need to know the system. If elected “I’m not going to be there defending Brazilian interests or Brazilian trade policy,” which some have criticized as being protectionist in the wake of the global economic downturn. Full Details


NZ Minister Slams TPP Exceptions for Japan
The Japan Times - Apr 25, 2013
New Zealand trade minister Tim Groser said all trade products should be subjected to liberalization under the Trans-Pacific Partnership without exception, including farm products Japan is now trying to protect by maintaining tariffs. “We will not handle these sensitivities in agriculture, autos or whatever, by exclusions from trade liberalization,” Groser told the Japan National Press Club in Tokyo.

His remarks came after Japan won the backing of all 11 participating countries over the weekend to join the TPP negotiating table. Amid strong domestic calls to protect rice, beef and other farm products, Japan has been seeking to negotiate exceptions to the TPP’s general rule on tariff elimination. But Groser said making exceptions will lead other countries to call for the same, complicating negotiations and possibly causing the envisioned trade pact to fall apart.

He added, however, that TPP members will deal with sensitive areas in a “sympathetic, responsible and reasonable way.” Groser also said his country is “delighted” that Japan will be part of the TPP family, adding it makes the TPP “a far more interesting and important initiative.” With Japan’s expected entry, the TPP countries would account for nearly 40 percent of global economic output and about a third of world trade, even without China.

The decision came amid concern that participation in the tariff-cutting pact could trigger an influx of cheaper farming products from overseas, ravaging Japan’s heavily protected farm sector. To quell such fears, Prime Minister Shinzo Abe’s government, which has promised to craft its economic growth strategies by June, aims to raise agricultural productivity at home and enhance global competitiveness in the field by opening up new markets abroad. Full Story



Huge Success for WCO’s at Global Congress on Combating Counterfeiting and Piracy
World Customs Organization - 08 May 2013
The WCO hosted the 7th Global Congress on Combating Counterfeiting and Piracy in Istanbul, Turkey It introduced the new mobile version of the Interface Public-Members (IPM), its online tool which serves as an interface between frontline Customs officers and the private sector. Since its 2010 launch, over 50 countries have joined IPM and around 3,000 Customs officers are now connected to the system.

WCO presented the new version of IPM, enriched with features such as the possibility to use mobile devices to scan GS1 barcodes found on millions of products, making it possible to search multiple databases providing trusted sources of product information in a more time-efficient manner. It allows control ensuring Customs obtain more detailed information throughout the entire supply chain cycle

All participants present at the Congress agreed that faced with the complex and growing phenomenon that is counterfeiting, global action is necessary. In this respect, the WCO took advantage of the Congress to launch IPM Connected, a global network of track&trace and authentication solutions interfaced with IPM, making them available to Customs officers in the field around the world.　

"IPM, globally recognized by our private sector partners for its proven efficiency, is used by more and more Customs officers worldwide. The tool’s new functionalities make it even more accessible and accurate. Customs officers can rapidly obtain up-to-date information on products, helping and training them to distinguish genuine from fake products" said Secretary General Kunio Mikuriya. Details　


EU Economy: Slowly Recovering from a Protracted Recession
The European Commission - 03 May 2013
The economy is projected to return to growth in the second half of 2013. However, annual GDP is forecast to contract by 0.1% in the EU and 0.4% in the eurozone. Following the recession that marked 2012, the EU economy is forecast to stabilise in the first half of 2013. GDP is expected to start growing again in the second half of the year, slowly at first, but picking up speed in 2014.

Demand within the EU is still held back by several factors including the reduction of the debt overhang and a shortage of credit. The main driver of growth this year is therefore likely to be net exports. Private consumption and investment in the EU look set to pick up modestly next year. This forecast is based on the assumption that continued policy efforts will prevent the sovereign-debt crisis from worsening.

Annual GDP this year is forecast to contract by 0.1% in the EU and 0.4% in the eurozone. For 2014, economic activity is projected to expand by 1.4% in the EU and 1.2% in the eurozone. Due to the slow rate of recovery of economic activity joblessness will not be reduced in the short run. Unemployment is forecast to reach around 11% in the EU and 12% in the eurozone in 2013 and to stabilise there in 2014. There will continue to be large differences between EU countries.

Inflation has continued to slow down as the impact of past energy-price rises has faded. It is projected at 1.8% in the EU and 1.6% in the eurozone in 2013, stabilising at 1.7% and 1.5%, respectively, in 2014. Fiscal deficits are set to continue falling in 2013 - to 3.4% of GDP in the EU and 2.9% in the eurozone. The pace of structural consolidation is expected to be slower this year than in 2012. Debt-to-GDP ratios are forecast to reach 89.8% in the EU and 95.5% in the eurozone. Full Details

National:

USTR Releases Annual Special 301 Report on Intellectual Property Rights
United States Trade Representative - 05/01/2013
Acting USTR Demetrios Marantis announced today that the Office of the USTR released its annual “Special 301” Report on the adequacy and effectiveness of US trading partners’ protection and enforcement of intellectual property rights (IPR) and market access for persons that rely on IPR protection. Significant actions in this year’s report include the following:

• The USTR designates Ukraine a Priority Foreign Country (PFC) under the Special 301 statute due to severe deterioration of enforcement in the areas of government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorization and operation of copyright collecting societies;

• USTR reports grave concerns about misappropriation of trade secrets in China, and incremental progress on a few of China’s many other significant IPR and market access challenges;

• USTR adds Barbados, Bulgaria, Paraguay, and Trinidad and Tobago to the Watch List due to specific problems identified in the report;

• USTR announces that while El Salvador and Spain are not listed in the Report, USTR will conduct reviews to assess progress on IPR challenges identified in this year’s reviews of those countries;

• Canada moves from the Special 301 Priority Watch List to the Watch List in recognition of significant progress on copyright issues, while USTR continues to work with Canada to address several remaining IPR concerns; and

• Brunei Darussalam and Norway move off of the Special 301 Watch List.

“This year’s Special 301 Report demonstrates US resolve to take strong action to support critical jobs and exports in IP-intensive industries,” said Acting USTR Marantis. “I regret that the Government of Ukraine has earned the first new Priority Foreign Country designation in 11 years due to its severely deteriorating climate for IPR protection and market access, and call upon that government to reverse recent backsliding and swiftly resolve the problems identified. I am encouraged that other countries, notably Canada, have made long-awaited progress on concerns identified; I hope Canada will sustain and build upon that progress, and that other listed countries will make similar progress.”

“The actions reflected in this year’s report send a message to all trading partners on the Priority Watch List and the Watch List that the United States is prepared to use the Special 301 process to its full effect, both to recognize positive action and, where necessary and appropriate, to identify deterioration of the IPR protection and enforcement systems that play such a vital role in international trade.” Full Details


Deputy USTR, Ambassador to WTO Michael Punke Regarding Senior Officials Meeting
United States Trade Representative - 05/01/2013
Deputy USTR and Ambassador to the WTO Michael Punke issued the following statement with regard to the ongoing meetings to discuss the future of negotiations toward an agreement at the 9th Ministerial Meeting of the WTO this December. Ambassador Punke is expressing these views to gathered senior officials, which seek to advance talks toward a “small package” outcome at Bali.

“At the most recent meeting of the WTO’s Trade Negotiating Committee on April 11, the United States asked that every delegation engage in immediate, intensive consultations with its capital to convey the seriousness of the situation in Geneva with regard to negotiations for a ‘small package’ outcome for the WTO’s 9th Ministerial Meeting and to explore each Member’s demonstrable readiness to contribute to breaking the current deadlock. We said then that, absent a course correction, the current path of talks would lead directly to failure at Bali. And if Bali fails, it is hard to imagine how Doha can succeed.” Full Details


“3 Key Trade Trends the US Can’t Ignore”
US News & World Report - April 30, 2013
When America debated NAFTA in 1993, Groundhog Day – a film about doing the same things over and over – was a box office hit. Since then, our trade debates have often been like that movie. But it’s worthwhile to consider what America might learn from more recent trade developments – especially those currently happening outside the United States. Three trends in global trade highlight why it's more vital than ever that America continue to play a strong role in writing robust rules for trade.

1 - America's not the only game in Town. As America works to conclude a TPP trade deal and trade talks with the EU, remember that other major economies are also pursuing a bevy of new trade deals.

2 - Not everyone shares America's priorities. America traditionally seeks comprehensive agreements: expanding market access, advancing rules to protect US investments and IPR, eliminating non-tariff barriers and promoting important ideals like labor rights and environmental protection.

3 - Other Countries lack America's leverage. Over the last two decades, America has concluded comprehensive trade deals with 20 countries. We've significantly opened up foreign markets and advanced US commercial interests – and key values – by employing our significant leverage. Full Story

Operational:

Big Changes Proposed for Certificates of Compliance with Product Safety Rules
Sandler & Travis Trade Advisory Services - May 13, 2013
The Consumer Product Safety Commission has proposed significant changes to its regulations on the certificates of compliance required to be submitted for imported and domestically-made consumer products. Interested parties have until July 29 to submit questions and comments.

The Commission is proposing to amend the regulations to make the following changes:
Who must certify Importers would continue to have the obligation to certify finished products manufactured outside the US that are not delivered directly to US consumers.
Certificates only required for finished products A children’s product certificate or a general conformity certificate would only be required for finished products
Required information Three additional pieces of information would have to be included in a certificate of compliance: date of initial certification, scope of products covered with applicable product safety rules, and attestation that the covered products are compliant with the applicable rules.
Electronic filing Importers of regulated finished products manufactured outside the US and imported for consumption or warehousing would have to file the GCC or CPC electronically with US Customs at the time of filing of the entry (or the entry and entry summary if both are filed together). Full Release

Links:

• Office of the US Trade Representative: www.ustr.gov
• US Export Portal: www.thinkglobal.us
• US Department of Commerce: commerce.gov
• International Trade Administration: www.ita.doc.gov
• US Foreign Agricultural Service: www.fas.usda.gov
• US Census: www.census.gov
• Federal Trade Statistics: www.fedstats.gov
• US Department of State: www.state.gov
• California Institute for Federal Policy Research: www.calinst.org
• California Chamber of Commerce: www.calchamber.com

tradeinfocus is a summary of news and events on the trade policy front for clients, trade & legislative colleagues, and professional friends of W.J. Byrnes & Co.