National : An Introduction
International Trade: Nationwide: An Overview
The U.S. international trade law agenda reflects the full range of challenges affecting the global marketplace, including concerns over food safety and energy prices, heightened border security, efforts to combat terrorism, and conflicts over support for clean technology. A nascent economic recovery in the United States has brought with it a spate of new trade remedy actions, most targeting imports from Asia. The Obama Administration will likely continue to modify economic sanctions to address rapidly changing conditions in the Middle East and elsewhere and should complete an overhaul of export controls in the coming months. Meanwhile, the Administration has stepped up its enforcement activity under World Trade Organization rules to open markets for U.S. exports.
The following summarizes developments in key areas of practice:
The economic rebound is reflected in U.S. import statistics – the total value of imports in FY 2010 increased by 15.79%, and total duties collected by U.S. Customs increased by 7.63%. Given limited agency resources, the rebound in trade growth underscores the necessity for the government to complete the Automated Commercial Environment (ACE), the new automated system for handling imports and exports, incorporating “single window” and fully paperless concepts. While border security remains U.S. Customs and Border Protection’s top priority, there is a growing consensus that the agency must reinvigorate its trade facilitation and commercial enforcement role. Traders can expect to see renewed focus on food and product safety, antidumping and countervailing duty collection, and intellectual property rights enforcement. And Congress is likely to consider giving the agency new tools to address new challenges to border security and trade facilitation, once other pressing legislative issues are resolved.
In the heightened security environment of the last decade, foreign companies have faced significant legal and political uncertainty in deciding whether to acquire a U.S. company or even take a minority stake. Many high-profile deals have, in fact, fallen apart due to public scrutiny and controversy. Much of the attention has been focused on the work of the U.S. Committee on Foreign Investment in the United States (CFIUS), an interagency body chaired by the Treasury Department that is charged with reviewing the national security implications of transactions that will result in foreign control of a U.S. business. If CFIUS concludes that a transaction may present national security risks, then it may block or place conditions on the transaction, or even unwind a transaction that has already closed. CFIUS has the authority to review transactions in any sector, regardless of the size of the deal, and has often found that a transaction will result in foreign control over a U.S. business even when the foreign entity plans to take only a small ownership share. Once CFIUS has approved a deal, however, it will not reopen the examination. A legislative and regulatory overhaul in 2007-2008 has helped make the process more efficient and transparent. However, deal parties continue to notify their transactions for CFIUS review to provide legal certainty and to help inoculate themselves from public accusations that a deal presents national security risks. Given the wide sweep of CFIUS authority, an examination of whether and when to file for a CFIUS review has now become a routine part of the due diligence surrounding proposed deals.
Export Controls and Economic Sanctions
Building “higher walls” around sensitive technology while ensuring the competitiveness of the U.S. defense industrial base remain the twin goals of the Obama Administration’s ongoing export control reform effort. Launched as part of the Administration’s National Export Initiative to double U.S. exports by 2015, these reforms are expected to intensify as officials across three agencies harmonize U.S. export controls and centralize their administration and enforcement. To remain competitive, companies that deal in controlled items must adjust their compliance practices to take full advantage of regulatory changes and to prepare for more coordinated enforcement activity.
Change is also the hallmark of the Administration’s approach to U.S. economic sanctions, which have been modified repeatedly in light of the evolving geopolitical situation. Whereas sanctions against Sudan may be moderated if the peace process proceeds smoothly, more stringent sanctions may be imposed against Syria, Libya and other regimes that the administration believes continue to repress pro-democracy movements. Recent experience with Libya indicates that additional sanctions could include blocking provisions, suggesting that companies should consider measures to protect their assets involving global hot spots. Stepped-up enforcement of extraterritorial sanctions against Iran and associated divestment measures will present challenges for companies in the petroleum and natural gas industries and their business partners.
On the negotiations front, the United States has its hands full. The Obama Administration is currently pursuing with several Asia Pacific countries what it has advertised as a “21st Century trade agreement” at the same time that it is seeking to revive the WTO Doha Round and to win U.S. congressional ratification of three already-concluded trade agreements (with Colombia, South Korea and Panama) . The Trans-Pacific Partnership (TPP) negotiations include four countries with which the United States already has free-trade agreements in place – Australia, Chile, Peru and Singapore – as well as Brunei, Malaysia, New Zealand and Vietnam. U.S. negotiators face significant challenges in the TPP talks, both substantive and logistical, but they have attracted substantial interest among industry groups because, if successful, the TPP could set the terms for Asia Pacific regional integration. Meanwhile, U.S. officials will be working in Geneva to generate meaningful progress on market access for industrial goods and services in the round of multilateral negotiations that has stalled since it was launched in Doha in 2001. Regardless of developments in the Doha Round, Russia hopes to conclude shortly its accession to the WTO, which will have important consequences for Russia’s relationships with the U.S, and indeed with all major trading nations.
Over the past year a growing chorus had pronounced that the trade remedies tool had become obsolete as a means of protecting U.S. industry from import competition – until a half dozen new petitions were filed in Washington within a 24-hour period at the end of March 2011. The filing of a spate of petitions after a long quiet spell may reflect the fact that the U.S. economy’s nascent recovery has brought an increase in imports of both consumer products (such as refrigerators and wood flooring) and of inputs used in the production of goods manufactured in the United States (galvanized wire, chemicals used in paper production). It also suggests that U.S. industries considering the trade remedies option now believe that they can demonstrate a critical prerequisite to obtain relief – namely, that the financial injury they are suffering has been caused by unfair import competition, rather than other sources, such as the economic recession and the collapse of demand.
Meanwhile, the U.S. Department of Commerce’s Import Administration is working through several controversial policy initiatives that reflect its continuing struggle to balance the protection of U.S. industry with the satisfaction of U.S. obligations under the WTO Agreements that discipline the application of trade remedies. These initiatives include an effort to implement the string of unfavorable WTO decisions regarding the United States’ use of the so-called “zeroing” procedures in calculating dumping margins, and a proposal to withdraw the regulation that authorizes the revocation of antidumping duty orders in the situation where a foreign exporter can demonstrate the absence of dumping for three consecutive years.
Trade restrictions and protectionism, in general, have recently become more pronounced due to persistent challenges facing the global economy. In an effort to remove such barriers, governments and companies around the world have continued to turn to WTO dispute settlement to enforce the broad-based international obligations agreed to by the 153 Members of the WTO. The Obama Administration, for instance, has embraced WTO dispute settlement as part of its National Export Initiative. At the same time, other governments have turned to WTO dispute settlement against, among other countries, the United States, to maintain or improve opportunities for their own industries. For instance, the United States launched a dispute in December 2010 against China’s alleged subsidies for wind power equipment, just as the United States was actively defending U.S. programs that were alleged by the European Union to subsidize U.S.-produced large civil aircraft. Similarly, the United States has defended under WTO food safety rules measures challenged by China affecting imports of poultry, just as the United States has moved aggressively against product standards that inhibit access for U.S. products abroad. Industries in developing and developed countries, alike, have derived tremendous benefits from their governments’ recourse to WTO dispute settlement, often with the assistance of outside counsel.
of Paul, Hastings, Janofsky & Walker LLP is a leading light in the FCPA field. He has "exceptional judgment, which is born of strong relationships with the enforcement agencies and deep experience."
He counts Kellogg Brown & Root among his clientele. Berliner, Corcoran & Rowe, LLP is home to Benjamin Flowe
. Peers praise his knowledge of the export controls arena, explaining: "He is the lexicon of knowledge in this area; a walking encyclopedia when it comes to all things export-related."
Sole practitioner Gary Horlick
is an "incredibly bright and inventive attorney who can handle law-changing cases."
He is advising the National Cattlemen’s & Beef Association on market access issues worth $2-3 billion, including negotiating with China, Japan, and Taiwan. The much-admired George Kleinfeld
of Clifford Chance US LLP is a celebrated CFIUS expert, who is also acclaimed for his handling of FCPA and export controls matters. In a highlight, he obtained CFIUS clearance for a global merger of two of the world's largest energy infrastructure firms. Martin Weinstein
of Willkie Farr & Gallagher LLP advises on
FCPA compliance and counseling and represents clients before the SEC and DOJ. He is "diligent, communicative and provides very good counsel on strategies and tactics."
At Alston & Bird LLP, Thomas Crocker
stands out due to his impressive sanctions-related expertise. He provides analysis of US policy regarding major US-Russia bilateral issues to the government of Russia, through the auspices of Ketchum. Josephine LeBeau
leads Wilson Sonsini Goodrich & Rosati's export controls and economic sanctions team. She wins praise for "really understanding the subject matter - she knows when to be conservative and when to make judgment calls." John Scott Maberry
of Sheppard, Mullin, Richter & Hampton LLP "does a very thorough job of analyzing the issues and providing practical advice in very complex areas of the law."
His practice covers trade remedies and FCPA matters, and he is also particularly renowned for his prowess in export controls and sanctions matters. Roger Schagrin
of Schagrin Associates "does a far better job than many of his large-firm competitors,"
say peers. He works exclusively on the petitioners' side in trade remedy disputes. John Greenwald
of Cassidy Levy Kent LLP is described as "an experienced and highly thoughtful attorney"
and wins praise for "building a good rapport with commissioners."
He handles trade policy and trade remedies matters. Export controls and sanctions expert Trip Mackintosh
of Holland & Hart LLP is based in Colorado. He has "an engaging and highly assured manner, which is invaluable when attempting to resolve contentious issues with opposing counsel and government prosecutors."
The hiring of Mark Mendelsohn
, former deputy chief of the criminal division's fraud section at the DOJ, is a major coup for Paul, Weiss, Rifkind, Wharton & Garrison LLP. He is set to develop further as a key player in the FCPA as he develops in private practice. Elliot Feldman
heads Baker Hostetler's international trade practice and is singled out by sources as "a highly inventive and creative attorney who really thinks outside the box when it comes to trade remedies disputes." Amelia Porges
of Law Offices of Amelia Porges is well versed in WTO and bilateral trade disputes, representing both governments and stakeholders. Danforth Newcomb
of Shearman & Sterling LLP is a veteran FCPA expert who earns particular praise for his representation of foreign issuers in both investigations and counseling. Jack Levy
, who recently joined joined Cassidy Levy Kent LLP from Trade Law International, "provides superior written submissions and oral advocacy."
He handles trade remedies and trade policy work. Stuart Rosen
recently left the practice at Weil Gotshal to set up as a sole practitioner. He has experience in all types of trade proceedings. Melvin Schwechter
recently joined Baker Hostetler from the now defunct Dewey & Leboeuf. He focuses on a range of customs and import and export compliance matters. Clients value "his prompt, efficient manner and his thorough knowledge of the OFAC regulations."
Another departing Dewey is Harry Clark
, who now finds himself with Orrick, Herrington & Sutcliffe LLP. He counsels major companies and industry associations on trade remedies matters. He attracts praise from clients for "his conscientious and business-oriented approach."