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October 17, 2011
On October 11, 2011 the U.S. Senate passed S.1619, the Currency Exchange Rate Oversight Reform Act of 2011, which would increase oversight of currency exchange rates to identify "fundamentally misaligned currencies" and impose penalties on countries which fail to address the misalignment. S.1619 calls for an annual report analyzing the relationship between U.S. dollars and the currencies of major economic trading partners. Any country whose currency is found to be in fundamental misalignment, defined as a significant and sustained undervaluation of the prevailing real effective exchange rate, will be required to adopt policies to eliminate the misalignment. Failure to do so will result in a number of actions, including: - Antidumping investigations and reviews will ensure a fair comparison between the export price and the normal value by adjusting the price to reflect the currency misalignment of the exporting country. The bill is aimed at ending or mitigating the practice of currency manipulation by the government of the People's Republic of China, which leads to an artificially weak yuan in comparison to the U.S. dollar, but critics charge it could lead to a trade war between the United States and China. S.1619 will now move the U.S. House of Representatives for consideration.
Last week the Transportation Security Administration (TSA) announced its decision not to proceed with a December 31, 2011 deadline for 100 percent screening of inbound international cargo transported on passenger aircraft. In January 2011 TSA issued a letter to the Air Freight Forwarding and Global Shipping Community requesting comments on a proposal to require 100 percent screening by the end of the year, rather than 2013 as previously planned. According to a press release from the International Air Cargo Association, after careful consideration of the comments received the decision was made not to implement the revised deadline. The industry had warned that a 100 percent screening requirement in 2012 would lead to significant global supply chain disruption and noted that it was critical for many more foreign screening operations to be reviewed and certified into the TSA's National Cargo Security Program (NCSP). A new deadline has yet to be proposed.
Congress Passes Free Trade Agreements and Bill to Renew GSP and Increase MPF On October 12, 2011 the U.S. Congress approved the implementing legislation for the free trade agreements between the United States and South Korea, Colombia and Panama. The House of Representatives also passed the Senate version of H.R. 2832 which retroactively renews the Generalized System of Preferences (GSP) and Trade Adjustment Assistance (TAA) and increases the Merchandise Processing Fee (MPF). All four bills are now ready to be signed by the President. The final version of H.R. 2832 extends GSP to July 13, 2013 and authorizes a refund of duties already paid on GSP-eligible entries imported after December 31, 2010. It also renews Trade Adjustment Assistance, which expired February 12, 2011, and extends it to December 13, 2013. Lastly, the legislation increases the MPF from 0.21 percent to 0.3464 percent until November 30, 2015. The U.S.-Korea Trade Agreement further extends this MPF increase from December 1, 2015 through June 30, 2021. The U.S.-Colombia Trade Agreement legislation included a retroactive renewal of the Andean Trade Preference Act/Andean Trade Promotion and Drug Eradication Act (ATPA/ATPDEA) to July 31, 2013. The full text of H.R. 2832 is available at: Additional information regarding the U.S.-Korea Trade Agreement is available at: Additional information regarding the U.S.-Colombia Trade Agreement is available at: Additional information regarding the U.S.-Panama Trade Agreement is available at:
Tons News, for current and past issues of Tons News by E-mail request from tonsnews@tonslogistics.com or call (310) 338-0337. ________________________________________ Tons News is compiled from a number of public sources that, to the best of Tons knowledge, are true and correct. It is our intent to present only accurate information. However, in the event any information contained herein is erroneous, Tons accepts no liability or responsibility.
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