Vazquez Tercero y Asociados

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VAZQUEZ TERCERO Y ASOCIADOS
US CUSTOMS AND INTERNATIONAL TRADE UPDATE
Prepared by:
SERKO & SIMON LLP
Customs & International Trade Law
August 1, 2004
CUSTOMS and BORDER PROTECTION (“CBP”)
• Full Enforcement of the Bioterrorism Act Begins August 13, 2004: The eight-month phasein
period of the “Public Health Security and Bioterrorism Preparedness and Response Act of 2002”
(“Bioterrorism Act”) will give way to full enforcement on August 13, 2004. Prior Notice of arrival
of any food product must be transmitted to the U.S. Food and Drug Administration (“FDA”) at
least 2 hours prior to arrival by truck, 4 hours prior to arrival by air or rail, and 8 hours prior to
arrival by water. All violations of the Prior Notice requirements may be subject to monetary
penalties and the merchandise will be refused entry into the U.S. Penalties will be assessed on the
domestic value of the goods involved and may also be filed against parties involved in aiding or
facilitating any violation. Subsequent violators may be assessed penalties of up to $5,000.
Participation in the C-TPAT program will be considered a mitigating factor for subsequent
violators, whose penalties may be reduced to $500.
• CITA Accepts Petition on Chinese Socks: The Committee for the Implementation of Textile
Agreements (“CITA”) accepted for review a petition it received from the domestic industry against
imports of cotton, wool and man-made fiber socks from China. Comments are due by August 23,
2004, after which CITA will have 60 days to make a determination. If CITA determines that
Chinese imports are hurting the domestic industry, China will be required to cap any increase in
exports to 7.5% for one year.
• Potential Major Changes for Protests and 520c Petitions: The House of Representatives
recently passed the Customs Border Security Act of 2004 (H.R. 4418). Among various technical
amendments, the bill: extends the protest period to 180 days from 90 days; eliminates the one year
“clerical error, mistake of fact or other inadvertence” (19 USC 1520 (c)) petition which presently
allows certain corrections within one year from liquidation; provides for “clerical errors, mistake of
fact, or other inadvertence” to be protestable under the 19 USC 1514 protest mechanism (180 day
timeframe). Before the bill becomes law, it must be passed by the Senate and signed by the
President.
• President Signs AGOA III: President Bush recently signed into law the African Growth and
Opportunity Acceleration Act of 2004 (“AGOA III”) (H.R. 4103). AGOA III extends the
standard AGOA benefits to September 30, 2015 and expands its benefits by allowing non-AGOA
incidentals such as collars, cuffs, waistbands, etc. to be integrated in the apparel without
disqualifying the finished good from preferential treatment.

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TRADE TALK
• Recent Free Trade Developments: Congress overwhelmingly approved the recently negotiated
Free Trade Agreements (“FTA”) with Australia and Morocco; President Bush notified Congress
of his intent to negotiate a FTA with Bahrain; the U.S. signed a bilateral Trade and Investment
Framework Agreements (“TIFA”) with Mongolia and Oman. TIFA’s are used to deepen bilateral
trade and resolve trade issues and can eventually lead to a FTA. A future FTA with Bahrain will
join FTA’s with Israel, Jordan and Morocco in anchoring the envisioned Middle East-wide Free
Trade Area by 2013.
• Nigeria Eligible for AGOA Benefits: Effective July 14, 2004, preferential treatment will be
available for eligible imports from Nigeria. As a “least developed country,” textile and apparel
articles may be integrated with eligible “third-country” components without the loss of preferential
treatment.
• Recent ITC Actions : The International Trade Commission (“ITC”) recently determined that the
domestic industry is being injured by imports of certain polyethylene retail carrier bags from
China, Malaysia and Thailand that are being sold below fair market value. The ITC will postpone
its preliminary AD determination on certain tissue paper and related products from China to
August 25, 2004.
WORLD TRADE ORGANIZATION (“WTO”)
• WTO Reaches Framework Agreement: Working with an end-of-July deadline, WTO
negotiators hammered out a “framework” agreement on reducing trade barriers, thus moving
forward the WTO Doha Round. Negotiators for developing countries secured promises of
sweeping changes in farm subsidies by the wealthiest nations in return for promising big reductions
in tariffs for industrialized goods. The EU agreed to completely eliminate their farm export subsidies
while the U.S. agreed to 20% cut in farm subsidies the first year after the successful completion of
the Doha Round with additional subsidy cuts coming at later dates. Poor African countries also
secured promises of subsidy reductions on cotton by the wealthier nations. The exact formulas and
amounts of tariff reductions will be negotiated at the next WTO ministerial meeting starting in
September.
• U.S. Seeks WTO Help on Unfair Mexican Duties: The U.S. asked the WTO to review
Mexico’s discriminatory taxes on U.S. corn-based sweeteners. Following a WTO ruling against
Mexico’s AD duties on U.S. non-cane-sugar sweeteners, Mexico imposed a 20% duty on all
products that contain non-cane-sugar sweeteners to protect its sugar cane industry, resulting in a
97% drop of U.S. exports to Mexico.
• Phaseout of Textile and Apparel Quotas: Over 100 chief executive officers of textile and
apparel companies recently lobbied Congress to save their industry by halting the phaseout of
quotas on Chinese textile and apparel on January 1, 2005. Organizations in 49 countries are urging
their governments to act against the quota phaseouts while only Mauritius has filed a petition with
the WTO to stop the phaseouts.
In a move to limit preferential treatment, the EU will make changes to its list of “poor countries” so

as to eliminate that designation from China and India. Countries on the list enjoy a 20% discount on
duties on goods exported to the EU.
• China Agrees to Eliminate Discriminatory Tax: Acting upon a complaint brought to the WTO
by the U.S. against a tax rebate which discriminates against importers of semiconductors, China
agreed to eliminate the rebates by next year. China imposes a tax of 17% on the sale and import of
semiconductors but gives back 14% in rebates to its domestic producers.
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BUSINESS BRIEFS
• Recent Consumer Product Developments: The Consumer Product Safety Commission
(“CPSC”) announced the following voluntary recalls: certain oscillating fans whose oscillating
motion can fray the cord and pose a fire hazard; certain LG-branded counterfeit cell phone
batteries which lack a safety device to prevent overcharging; certain DC power supply units used in
lighting control systems which may overheat and pose a fire hazard; certain toy trucks whose
components may detach and pose a choking hazard.
The CPSC announced that it has provisionally accepted a civil penalty of $500,000 from a
company whose electric drip coffeemakers posed an overheating and ignition hazard from loose
electrical components.
• New Processes Developed in Creating Nanotubes: Scientists at the Cambridge-MIT Institute
discovered a procedure allowing the creation of nanotubes and spinning them into continuous fibers
as they are created without the need for post-processing steps. Textiles created from nanotubes
are extremely strong in nature and can carry electrical currents.
• U.S. Works to Protect Mexican Workforce: In a joint declaration, the U.S. Department of
Labor (“DOL”) and Mexico’s Foreign Affairs Ministry will work to improve the “compliance and
workplace laws and regulations” in order to protect Mexican workers in the U.S. The
administration noted that it is committed to “worker safety and full and fair compensation.”
LEGISLATIVE ACTION
• Rayon Staple Fibers: A bill (S. 2521) was recently introduced in the Senate that would
temporarily suspend duties on certain viscose filament rayon fibers.
• Mercury Tainted Toys: A bill (H.R. 4828) was introduced in the House that calls on the CPSC
to ban children’s toys containing mercury.
COURT CASES
• Appeals Court Strikes Down New Truck Rules: The U.S. Court of Appeals for the
District of Colombia vacated the Federal Motor Carrier Safety Administration’s (“FMCSA”)
newly enacted final rule that overhauled rules governing commercial truck driving. One of the
major components of the new rules allowed truckers to be on the road 11 hours per day, up
from 10 hours. The court found the rules to be “arbitrary and capricious” as they failed to
assess the impact on drivers’ health when the rules were formulated. The rules will remain in
effect while the FMCSA decides its next step.

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E-mail address: serko-simon@customs-law.com On the internet at: http://www.customs-law.com
Note: This information is not, nor is it intended to be, legal advice, which can only be
provided by Serko & Simon LLP on a case-by-case basis. ©2004
Seminars on Essential Issues
One Element of Serko & Simon’s Service to the International Trade Community is Helping
Companies Identify and Solve Problems Themselves and to Ask the Right Questions When Specialized
Outside Counsel is Needed.
We offer half-day, 1 day and 2 day Seminars, both in-house and in conjunction with various seminar
organizations, on a variety of International Trade issues, including:
1. Importing Products of the Chemical
and Pharmaceutical Industries
2. Importing Apparel and Textiles
3. Introduction to Customs Law
4. Customs – Trade Partnership
Against Terrorism (“C-TPAT”)
5. U.S. Customs Focused Assessment
Program
6. Import Documentation &
Procedures
7. International Trade Law Issues in E-
Commerce
8. Tariff Classification Under the
Harmonized System for Importers &
Exporters
9. Export Operations
10. Importer Self Assessment (“ISA”)
11. What Every General Counsel
Should Know About Customs and
International Trade Law
12. Special In-House Tutorial on the
Essentials of Importing and
Exporting

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Upcoming: Two-Day Seminars
Importing Products of the Chemical and Pharmaceutical Industries
August 10 & 11, 2004 – Tuesday & Wednesday
Classification & Valuation
Sept. 7 & 8, 2004 – Tuesday & Wednesday
Customs Law
Sept. 21 & 22, 2004 – Tuesday & Wednesday
We also invite interested parties to attend our half-day C-TPAT & ISA Seminar on the
afternoon of August 18 and September 15 presented at our Midtown Manhattan
office.
The registration fee is $95.00 for the half-day seminar and $450.00 for the two-day
seminars.