Companies doing business in the US or dealing with American trading partners will soon be affected by the implementation of a new set of laws governing intellectual property (IP), environment and labour standards.

The Trade Facilitation and Trade Enforcement Act of 2015 was recently passed into law by the US Congress, with the aim of bolstering trade enforcement efforts and making it easier for the American government to make its trading partners accountable.

It is also expected that the act will help to pave the way for the implementation of new trading standards agreed as part of the Trans-Pacific Partnership, making it important for businesses to become acquainted with its stipulations as soon as possible.

New tools for accountability

Under the terms of the Trade Facilitation and Trade Enforcement Act, a new Interagency Center on Trade Implementation, Monitoring, and Enforcement will be established to aid the monitoring and enforcement of US trade agreements, with a Trade Enforcement Trust Fund to be set up to provide $15 million (£10.76 million) annually to support trade enforcement efforts.

 

The aim of this will be to improve the government's ability to crack down on trading partners seeking to evade US antidumping or countervailing duty orders, while making it easier to protect IP rights by making it easier to seize circumvention devices and suspect merchandise.

 

Additionally, a strategic multi-year plan for trade enforcement will be mandated under the new laws, with centres of excellence to be established to bolster trade enforcement at ports of entry. A move towards more open work with IP holders and international partners will be a key component of these efforts.

Improved ethical and environmental standards

The act is also intended to ensure that international trade to and from the US can be conducted to high ethical and environmental standards. As such, the prohibition on importing goods made by forced labour will be strengthened, while customs and border patrol staff will be trained to recognise and confiscate cultural property, archaeological or ethnological materials, and fish, wildlife and plants that are taken illegally.

Moreover, the US will benefit from unprecedented new measures to address unfair currency practices via a binding mechanism to confront countries that engage in such behaviour, with penalties to be levied on those that fail to comply.

Paving the way for the TPP

The introduction of these laws will make it easier for the US government to hold its trading partners accountable to tough standards following the implementation of the TPP deal, which was agreed in October 2015.

Led by the US and also encompassing Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, the partnership is based around greater IP protection, restrictions on state-owned enterprises that unfairly compete against private business, labour and environmental commitments, and rules of origin to ensure TPP benefits go to member countries.

The Trade Facilitation and Trade Enforcement Act has put into place a number of mechanisms to ensure these goals can be achieved when the TPP is passed into law.

A broad strategic approach to enforcing trading standards

According to US trade representative Michael Froman, this new legislation comes as part of a wider effort by the US government to strengthen the legal framework supporting its international trade efforts, as exemplified by the recent finalisation of the TPP agreement.

He said: "Coming on the heels of negotiating TPP, the highest-standard trade agreement in history, this bill will further boost enforcement of the groundbreaking intellectual property, labour, environment and many other fully enforceable commitments we've secured.

Mr Froman added: "We have made tremendous progress in trade policy over the last year, including the passage of Trade Promotion Authority, the renewal of the African Growth and Opportunity Act and Generalized System of Preferences, and the completion of the TPP negotiations. In the next year, we look forward to working with Congress as we seek to pass TPP into law and advance the rest of our trade and enforcement agenda."