This bulletin has been prepared especially for clients of A. N. Deringer, Inc. by:

June 26, 2006

• AD/CVD Developments: The U.S. Commerce Department recently took the following action:

• New Trade Officials: The U.S. Senate confirmed Susan C. Schwab as the 15^th USTR. Among other newly appointed trade officials are Daniel Pearson and Shara L. Aranoff, designated by President Bush as the chairman and vice chairman, respectively, of the ITC.

• Doha Round in Jeopardy: A group of 50 trade ministers are meeting in Geneva this week to try and resolve their differences in reaching an agreement under the Doha Round of trade negotiations to boost global trade and alleviate poverty in many countries. Diplomats point to an ever-closing timetable to assure success of the talks as the U.S. President will lose his trade promotion authority in June 2007, after which it will be increasingly difficult for any agreement to garner enough Congressional support for passage. The major points of contention are the differences between the U.S. and EU regarding cutting their respective farm subsidies.
• Report on EU Customs Practices: The WTO Dispute Settlement Body (DSB) issued its findings on a complaint filed by the U.S. over the differing customs procedures throughout the EU-member states. While the DSB found that the U.S. did not prove its case on a number of points, it did require the EU to conform to WTO procedures regarding the classification of blackout drapery lining, certain liquid crystal display monitors with digital video interfaces, and the requirement of prior approval with respect to the successive sales provision for customs valuation.
• Separate Textile Proceedings for WTO Talks: It has been reported that the USTR might agree to a proposal asking the WTO to negotiate any reform in the textile industry separate from other negotiations. Proposed by several poorer nations, this stance seeks to protect some of the advantages these countries now have over China and India for one of their most important industries.

• CSI: Jamaica agreed to join the Container Security Initiative (CSI) program.

• Patent Notes:

• Cartel Fines: The European Commission recently fined seven European companies almost $490 million for running a cartel in bleaching chemicals, notably hydrogen peroxide. The seven companies were found to have "exchanged commercially important and confidential information, limited production, allocated market shares and customers and fixed and monitored prices." Some of the companies had their initial fines increased 50% because they were repeat offenders. In addition, some of the same companies fined were recently investigated by the U.S. Justice Department and agreed to pay fines totaling $73 million.

• Vietnam PNTR: Legislation granting Vietnam Permanent Normal Trade Relations (PNTR) was introduced in both houses of Congress. Vietnam can only join the WTO if the U.S. grants it PNTR. It is not certain if Congress will pass this legislation before the summer break.

• CIT Upholds Constitutionality of Cotton Fee: The U.S. Court of International Trade (CIT) recently affirmed the constitutionality of CBP’s collection of the cotton fees assessed on most imported merchandise containing cotton. In Cricket Hosiery, Inc. et al., v. U.S. and F.T.B. Farms, et al., the plaintiffs challenged the Cotton Research and Promotion Act (cotton fee) arguing that it violated their constitutional right to free speech and free association by forcing them to fund the message put forward by the Cotton Board. The court stayed its action pending the U.S. Supreme Court’s decision in Johanns v. Livestock Marketing Association which similarly contested the constitutionality of the Beef Promotion and Research Act of 1985. Although the Supreme Court in United States v. United Foods previously upheld the constitutionality of the mushroom promotion fee, in Johanns v. Livestock Marketing Association it ruled that the speech emanating from the beef promotion fees were not unconstitutional because "the message set out in the beef promotions is from beginning to end the message established by the Federal Government" and that "government speech" does not infringe on individuals free speech. Following the Supreme Courts assessment that the promotion fees are "government speech," the CIT ruled that the cotton fees are also "government speech" and does not infringe on an individual’s free speech. The CIT also found that the plaintiff’s right to free association was not impeded as no importers are required to become members of the Cotton Board, and rejected the plaintiff’s due process argument. An appeal of the CIT’s ruling must be filed by June 26, 2006. It is not known at this point how this decision might affect similar checkoff programs for pork, milk, eggs, soybeans, etc.
• Suit Filed Over Teflon Cookware: Owners of Teflon-coated cookware are suing the manufacturer over claims that the company knew, or should have known, the potential dangers associated with heating the cookware. Perfluorooctaconic acid (PFOA), used in the manufacture of Teflon, was recently labeled as a "likely" carcinogen by the EPA. The suit seeks to stop the sale of Teflon-coated cookware, an end to the manufacturer’s continued claims of safety, a warning label, and replacement of their cookware.