Contrary to some assertions, investor-state dispute settlement (ISDS) mechanisms in trade agreements don’t favor large corporations, deplete U.S. national sovereignty or cramp governments’ abilities to regulate, Stimson Center distinguished fellow Bill Reinsch said in an opinion column countering criticism of ISDS in trade deals (here). “To attack ISDS in the name of sovereignty is to take the world back to the law of the jungle that is not rule of law based,” Reinsch said. “That may save us an occasional loss, but it will leave our companies defenseless in many countries, which will do far more damage, both to us -- and everybody else.” Furthermore, small businesses file most ISDS claims under free trade agreements, and dispute arbitration panels can’t compel countries to change their laws, Reinsch noted. Writing careful language into trade deals can address other ISDS criticisms, such as lack of transparency, tendencies for biased or unqualified arbiters, and overlap with outside judicial systems, he said. Myriad environmental groups (see 1606070038), including the Sierra Club (see 1503160010), as well as the EU (see 1501140016), labor union leaders (see 1410210028) and several left-leaning politicians -- like presidential candidate Hillary Clinton, Sen. Bernie Sanders, D-Vt. (see 1605060026), and Reps. Rosa DeLauro, D-Conn. (see 1504090057), and Sandy Levin, D-Mich. (see 1503300013) -- have expressed opinions not in support of trade agreements’ ISDS provisions, ranging from skepticism to vehement opposition.

The American Apparel and Footwear Association sent a letter to the four top presidential candidates asking them to end the U.S. government’s requirement to source from Federal Prison Industries (UNICOR) any products that can be made by the government-owned company, which employs over 12,000 prisoners to produce uniforms (here). "The U.S. government rightly prohibits the importation of goods manufactured by prison laborers, but then turns around and buys hundreds of millions of dollars from local U.S. prison factories,” AAFA CEO Rick Helfenbein said in a statement accompanying the letters to Democratic candidate Hillary Clinton, Republican candidate Donald Trump, Libertarian candidate Gary Johnson and Green Party candidate Jill Stein (here). “This duplicity and double dealing must cease. We need to put America's workers first and stop the federal reliance on prison labor." The letter adds that UNICOR’s manufacturing, which largely includes uniforms, undermines “Made-in-USA” initiatives. The campaigns didn’t comment.

Over 100 trade organizations doubled down on a calls for the Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) to start early discussions on either a contract extension or a new West Coast ports contract, as the current one is set to expire in 2019. In a letter to PMA and ILWU (here), the groups say a contract extension is vital to ensure stability and predictability at West Coast ports, and call for both parties to make sure that negotiations don’t spur additional port disruptions, advocating the maintenance of arbitration mechanisms in the existing contract throughout negotiations, even if the current contract expires before reaching a new deal. “We fully believe that agreeing early to a contract extension or a new long-term contract will provide the stability and predictability that is needed for global competitiveness that will benefit all stakeholders (labor, terminal operators, cargo owners, etc.) who rely on West Coast ports,” said the groups, which include the National Customs Brokers & Forwarders Association of America, the American Association of Exporters and Importers, and the American Apparel & Footwear Association. A similar industry coalition sent a letter to PMA and ILWU in March also calling for an early start to West Coast port contract negotiations (see 1603160031).

U.S. companies skirted billions in tax liabilities in recent years by inflating the costs of imported products, according to a study (here) from Florida International University College of Business professor John Zdanowicz. Zdanowicz, who also runs an international trade consultancy called International Trade Alert, reviewed all transactions from 2003 through 2014 to seek out abnormal pricing of imports or exports potentially used to reduce tax exposure. Between those years, overvalued imports cost the U.S. more than $900 billion in missed tax revenue, the study said. "The inclusion of over-invoiced imports and under-invoiced exports in business or individual tax returns artificially lowers taxable income and federal income tax liability," the study said. While the customs duties paid on imports might offset some of that, the U.S. corporate tax rate is usually far higher than the duty rate, Zdanowicz said in an interview. Such pricing can also provide for criminal money laundering in addition to tax evasion, he said. Zdanowicz analyzed transactions that include quantifiable products with units of measure and used Internal Revenue Service regulations to determine abnormality and the amount of tax revenue lost. Based on the data, "abnormal pricing in international trade grew from $168.31 billion in 2003 to $230.58 billion in 2014, a more than 30 percent increase," an FIU press release on the study said (here). The efforts by CBP and the IRS to go after such misreporting are inefficient and a lowered tax rate in the U.S. will be the only way to really address this problem, Zdanowicz said. CBP didn't comment.

The Obama administration should continue to consider China a non-market economy for antidumping purposes beyond Dec. 11, the 15th anniversary of its accession to the World Trade Organization and the date that Beijing claims it should no longer be subject to such a status, the National Council of Textile Organizations said (here). “China’s chronic misallocation of investment to expand its state-owned enterprises in the textile supply chain and in other industrial sectors where there is an excess of global capacity invariably leads to Chinese dumping and other non-free-market economic practices,” NCTO CEO Augustine Tantillo said in a statement. The Commerce Department didn't comment.

U.S., Canadian and Mexican officials attending the North American Leaders’ Summit in Ottawa June 29 should work to dismantle onerous customs procedures that can slow automobile and auto parts commerce between the three nations, vehicle associations from the three countries said in a June 28 statement (here). The call came more than a month after the groups -- the American Automotive Policy Council, the Canadian Vehicle Manufacturers’ Association, and the Mexican Automotive Industry Association -- sent a letter to the governments’ top trade ministers calling for closer trade policy coordination, as all three countries negotiate separate trade agreements with the EU (here). The groups in their statement also urged attending officials to discuss non-tariff barriers and rules of origin, including "cumulation," to ensure trade agreements strengthen the North American automotive supply chain and boost North American vehicle exports. The Office of the U.S. Trade Representative did not comment.

The Trans-Pacific Partnership would lead to new markets for e-commerce and improved customs processing, said Brian Huseman, vice president of public policy at Amazon, in a June 23 blog post (here). "That's why we support the Trans Pacific Partnership trade agreement and encourage Congress to approve it," he said. "The agreement makes important progress on areas such as business localization, cross-border data flows, intermediary liability and customs simplification." As Amazon grows, "we want reasonable policies that allow for the movement of goods across borders and that enable anyone in the world to have access to a unique and vast selection," he said. "We also want policies that do not unduly limit the growth of cloud computing by erecting digital trade barriers." Still, TPP is imperfect and the administration and Congress should work to improve provisions on cross-border data flows and copyright, he said.

The National Association of Manufacturers (NAM) and Coalition for Green Trade are attending the 14th Round of World Trade Organization Environmental Goods Agreement (EGA) negotiations in Geneva this week to push all sides to develop a lofty agreement that eliminates tariffs on a wide range of environmental goods and technologies by the September G-20 Summit in Hangzhou, China, NAM said (here). NAM pointed out that the Organization for Economic Cooperation and Development (OECD) ministers called for this ambitious timeline, singling out China as being particularly important to securing any meaningful progress. The manufacturing association is seeking tariff elimination on products including air pollution equipment, catalytic incinerators, energy efficiency materials, environmental monitoring equipment, renewable energy products and equipment, turbines for electrical power generation and water treatment equipment, it said. “An ambitious EGA is a high priority for the global business community,” NAM said. “The NAM urges all 17 WTO negotiating members to roll up their sleeves this week and forge a path to enable a successful September conclusion of this no-brainer agreement.”

The Trans-Pacific Partnership promotes the free flow of information in “unprecedented” ways for a binding international trade agreement, balances the interests of copyright holders and the public’s interest of creative works, and bans discrimination against foreign internet services, Google Senior Vice President Kent Walker said in a blog post (here). Small businesses will especially benefit from these elements of the agreement, but future agreements should include more “balancing provisions,” and “all stakeholders” should be allowed to provide input in future trade negotiations, Walker said.

Footwear producer trade associations expressed support for optimized customs procedures, immediate reciprocal tariff elimination, rules of origin flexibility, mutual recognition, and an end to other non-tariff barriers within the Transatlantic Trade and Investment Partnership framework, according to a joint statement from the groups (here). Quantities of EU shoe exports to the U.S. increased 9 percent, and values climbed 19 percent, between 2014 and 2015; additionally, quantities of U.S. exports to the EU rose 14 percent and values spiked by 27 percent in the same time frame, said the leaders of the American Apparel and Footwear Association, the European Confederation of the Footwear Industry, and the Footwear Distributors and Retailers of America. “The T-TIP can foster greater footwear industry partnerships, consumer value, and job creation by eliminating high footwear tariffs (which can range up to 67.5 percent),” the groups’ presidents said. “In addition, the T-TIP provides an opportunity to streamline customs procedures and harmonize product safety and labelling regulations, which will confer important trade benefits as well.”