Brexit: Where Do We Stand at the End of January?

The UK is scheduled to leave the EU on March 29, 2019.  At this time, however, the UK has failed to ratify a Withdrawal Agreement, risking a “no-deal” exit.  Whether the UK will leave with or without a deal remains unclear, and the analysis changes on a near-daily basis.  Regardless of outcome, however, the nature of the UK’s future trading relationship with the EU will need to be determined in a relatively short period, and the product of those negotiations will form the basis of the UK’s future trading relationships with the rest of the world, including the United States.  The UK will also have the opportunity to act in other areas post-Brexit – such as tax policy, immigration, and supervision of regulated industries.  These developments will significantly impact many global supply chains.
Our colleagues on both sides of the Atlantic, in particular Ambassador Matthew Kirk and Donald Moorehead,  have prepared an in-depth analysis of the current status of Brexit.  More information can be found in the attached briefing.

Bill Creating Council to Address Threats to Supply Chain Security Passed in the Senate

On December 18, 2018, the Senate unanimously passed a bill which would create a council responsible for addressing federal supply chain security. Because the bill was not presented for a vote in the House of Representatives, it will begin the legislative process again in the current Congress.
The Senate bill provided for the establishment of the Federal Acquisition Supply Chain Security Council, which would be comprised of a number of individuals from different departments and agencies. The council would work with the private sector to create criteria that could be used to identify products that present risks to the supply chain including terrorism, piracy, and theft. It would also establish protocols for sharing information between federal and non-federal bodies. Further, the council would develop rules regarding the issuance of exclusion or removal orders that prohibit the purchase of particular products. Such orders, issued either by the Department of Homeland Security, Secretary of Defense, or Director of National Intelligence, could be challenged in the D.C. Circuit.
The Congressional Budget Office estimated that the council would spend $2 million annually.

Free Trade Agreement Takes Effect Without U.S.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement, went into effect on December 30, 2018 for six countries: Australia; Canada; Japan; Mexico; New Zealand; and Singapore.  The CPTPP became effective for Vietnam on January 14, 2019, and four additional countries (Brunei, Chile, Malaysia and Peru) plan to ratify and enact the Agreement.  Combined, the eleven member countries’ economies represent over 13% of the global GDP.
The CPTPP, a version of the Trans-Pacific Partnership reworked following the United States’ withdrawal in early 2017, facilitates free trade amongst its member parties.  The CPTPP repeals tariffs on an estimated 95% of goods in a variety of markets, with some tariff cuts implemented immediately.  Japan will reduce tariffs on beef, Mexico on fish and poultry, and Canada on dairy products. Tariffs on imported passenger cars will be reduced or eliminated in Canada and Vietnam. The footwear and apparel industry will embrace a reduction in import duties. The CPTPP also imposes regional intellectual property protection and labor standards.
These dramatic changes present exciting opportunities within the member countries.  In contrast, the Petersen Institute for International Economics has estimated that, in addition to losing out on the benefits of the TPP, the U.S. may lose as much as $2 billion annually from the reduced competitiveness of its exports within CPTPP member countries.
Another free trade deal to keep an eye on is the EU-Japan Economic Partnership Agreement, which is expected to come into force on February 1st.

Cross-Post from the frESH Blog – Latest News and Perspectives on California Prop 65

Under California’s Proposition 65 (Prop 65), any business with 10 or more employees that manufactures, sells, or distributes any consumer product containing a listed substance in California – directly or indirectly – must label the product with a clear and reasonable warning.  As such, understanding and complying with Prop 65, including the new regulations that became effective on August 30, 2018, is critical to companies with supply chains involving California.
Our colleagues Kendra Sherman and Danelle Gagliardi recently posted important updates on Prop 65.  Of particular note, the article contains an update on proposed amendments to clarify how parties in the supply chain can warn or pass along warning information to parties downstream.  You can read the article on our frESH Blog here.

Brexit: The Next Three Months

Under Brexit, the UK is likely to leave the EU at the end of March 2019 – a development that will impact many global supply chains.  Whether the UK will leave pursuant to an orderly arrangement, or whether it will leave without a deal is still unclear, and will likely remain unclear for the next several weeks and perhaps months.  Even if the UK leaves the EU in an orderly manner, the nature of its future trading relationship with the EU will need to be determined in a relatively short period, and the product of those negotiations will form the basis of the UK’s future trading relationships with the rest of the world, including the United States.
Our colleagues have prepared a summary briefing analyzing the likely impacts of BREXIT.  The key point is that, although there is likely to be short-term disruption, BREXIT is likely to give rise to a significant number of opportunities, including in supply chain operations, and it is important to anticipate these developments and plan for them now rather than later.  For example, both the US and UK governments are now actively laying the groundwork for a new free trade agreement.
More information can be found in the attached briefing.

Quoted in Bloomberg Law: Human Trafficking Case Could Lead to Expanded Supply Chain Liability

In Ratha v. Phatthana Seafood Co. Ltd., Cambodian plaintiffs sued various companies under the Trafficking Victims Protection and Reauthorization Act (TVPRA), alleging that the companies benefitted from human trafficking in the shrimp and seafood industries in Thailand.
A California district court found that the claims against certain defendants failed because those companies did not knowingly participate in or benefit from human trafficking; that decision is now on appeal to the Ninth Circuit.
Bloomberg Law’s Federal Contracting News examines the significance of the case for government contractors and large companies with overseas business.  Sarah Rathke provides comments on the substantial risks that companies with global supply chains could be subject to if there is a finding of passive TVPRA liability.
You can read the article here: Human Trafficking Case Could Increase Supply Chain Stress.

Taxation in a Global, Digital Economy: Recent Developments

In the most recent edition of the Tax Strategy & Benefits Newsletter, our colleagues address international efforts to find a consensus on the tax challenges arising from digitalization of the global economy.
The G20/OECD Base Erosion and Profit Shifting (BEPS) Project has so far failed to find an international consensus.  That delay and lack of progress has led others to explore alternative paths. The European Union, in particular, has sought to lead the way in defining the problems and formulating the answers.  The Tax Strategy & Benefits Newsletter considers the status of the EU’s interim and long-term proposals, and discusses the reasons for, and nature of, the opposition to those proposals that are emerging, primarily from the US.  The Newsletter also covers developments in three other jurisdictions – Spain, the UK and Australia – each of which have shown a willingness to act unilaterally to tax digital businesses.  Finally, our colleagues provide a brief overview of the likely road ahead, emphasizing that while interim measures may ameliorate immediate public concern in the short-term, they will not resolve the long-term issue of identifying the optimal location for taxation in an ever-changing global economy.
The newsletter may be accessed on our website or by clicking the link below:

Midterm Election Analysis

On Tuesday, November 6, voters across the US cast ballots in the first major referendum since the election of President Donald J. Trump in 2016. As a result of the most expensive midterm elections in history, Democrats will be in charge of the House of Representatives and Republicans will expand their control of the Senate when the 116th Congress convenes on January 3, 2019. Given this divide, many pundits already are predicting that nothing will be done in Washington for the next two years.
However, our Public Policy team disagrees with that analysis. Rather than focus on headlines about House Democrats drawing up subpoenas to demand documents from the Trump Administration, we discuss potential areas of compromise that could lead to substantial legislation in the run up to the 2020 elections.
In our 2018 Midterm Elections Analysis, our colleagues discuss the prospects for Congress to adopt a comprehensive privacy and cybersecurity bill, and envision possible scenarios where Congress could find common ground with President Trump in the areas of infrastructure and immigration reform. Further, we share our perspectives on a host of other issues, such as US tax and trade policy.
Read the full analysis here.

Webinar: Bid Protest Process – Don't Be Late!

The US federal government contracts bid protest process and timing is different based on the type of procurement and contract vehicle involved. You could be left without much of a remedy if you miss a critical deadline.
To help lessen the anxiety, some of our legal experts from our government contracts team – Karen Harbaugh, Jeremy Dutra and John Sharp – are offering a webinar that covers the ins and outs of the bid protest process. We will explain the complexity and potential pitfalls. A protest gone wrong could cause valuable business opportunities or disrupted relationships. We would like to help you get ahead of the situation and avoid those panic-inducing moments. 
The webinar will be held from 11 a.m. to Noon EST on December 5, 2018.  Please click here to register.  Webinar login instructions will be provided following registration.

2018 US Midterm Elections Overview

As the past few years have made very clear, political issues have the potential to impact supply chains.  Squire Patton Boggs’ Public Policy Practice has created a 30-day outlook for the upcoming US Midterm Elections. The overview—which includes updated polling, party funding comparisons, and a discussion of races that are considered “toss ups”—is now live on our web site, accessible through the following link:  This overview will be updated periodically leading up to the November 6 election to provide real-time information.

 View our 30-day outlook.

2018 US Midterm Elections Overview

October 2018

Our best-in-class Public Policy Practice provides exceptional expertise and unparalleled levels of political analysis to make sure you stay informed and are heard at the right time by the right people. In the US and globally, we help clients understand the political environment and key stakeholders in each, and what government policies and regulations may impact their goals and objectives. Our presence in nearly all major world capitals spans six continents.
Since May 2018, our preeminent Public Policy team has carefully tracked and compiled data to display current trajectories for the US midterm elections in November 2018. Our 2018 Midterm Elections Overview highlights competitive Senate and House races which will define the 116th Congress, but does not attempt to predict the outcome.
The Senate overview provides recent polling and political rankings from Real Clear Politics, Cook Political Report and Sabato’s Crystal Ball, while the House overview imparts a general look into more competitive races. Information regarding both chambers is supplemented by previous voter trends in congressional and presidential elections. Our congressional midterm analysis further leverages unique political insight from former Senate Majority Leader Trent Lott (R) and Senator John Breaux (D), co-chairs of our Public Policy Practice.
Additionally, Republicans currently hold a majority in both gubernatorial and attorney general positions throughout the country. We profile several key races for each position and illustrated President Trump’s respective endorsements to target where and if the Republican advantage will remain intact.
This overview will be updated periodically leading up to the November 6 election to provide real-time polling information.
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Bret K. Boyles

Austin Harrison

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