Editor: I would like to start by asking each of you gentlemen why you decided to establish your legal career in Washington, DC?
Teague: I have spent almost my entire adult life in Washington, DC beginning with college and law school. I have always been intrigued with public policy, government, which implements policy, and politics, which formulates it. I worked in the Executive Office of the President, on Capitol Hill for a House committee and then for Rep. Jack Kemp, R-NY.Those experiences were quite useful in helping me understand domestic politics and the federal government.
Over time, however, I became ever more interested in the ways the United States interacts with the world and vice versa.My international focus began before college and my international legal practice commenced in the late 1970s as counsel for the Cabot Corp. where I was charged with doing legal work for subsidiaries and affiliates in Europe, Latin America, Asia and Australia. Since then, I have addressed the legal problems of corporations and non-profits in the former Soviet Union, Eastern Europe, Latin America and the Caribbean, the Middle East and Africa.
A Washington-based practice increasingly demands an understanding of the international dimension of legal issues. A corporation's concerns in Washington may reflect an international regulatory problem. Several Washington trade associations are challenging major European Union rulemakings. Just as important, foreign corporations and other entities understand Washington's growing reach.As a result of these trends, a national law firm like ours must have a global focus.
Waite: I am originally from New York, but I came to Washington after graduating from Harvard Law School to serve as an active duty officer in the Air Force's Office of The Judge Advocate General. After four years at Air Force headquarters, including two in the international law division, I decided to enter private practice and specialize in international trade law. This is essentially a regulatory practice that is centered in the nation's capital because the agencies that develop trade policy and enforce the trade laws are here. Within two miles of my office are the U.S. Commerce Department and U.S. International Trade Commission, which administer antidumping, countervailing duty and other trade relief laws; the U.S. Customs Service, which handles the day-to-day business of our trade with the rest of the world; and the Office of the U.S. Trade Representative, the President's primary adviser on trade matters. Many of my clients are foreign manufacturers and exporters that need legal assistance to navigate the maze of U.S. trade regulations and restrictions.
Purcell: My academic career includes an undergraduate degree from American University and a law degree from Catholic University's Columbus School of Law, both in Washington. I fell in love with the city while in school and from that point on I was destined for a Washington legal career. I am primarily a business lawyer, although international corporate transactions make up a substantial portion of my practice. Many of the transactions I work on require international financing or credit enhancements that must be arranged through federal agencies such as the Export-Import (EXIM) Bank of the United States in Washington.
Editor: Are U.S. corporations and small businesses taking advantage of the financing opportunities provided by agencies such as the EXIM Bank?
Purcell: In light of the troubled times in which we live, many U.S. lending institutions, manufacturers and service providers are apprehensive about the risks of conducting business outside the United States. Many of these same lenders and companies are unaware that the U.S. government through agencies such as the EXIM Bank provides a wide array of complementary programs and services to facilitate exports of U.S. goods and services to global markets and to promote the investment of U.S. capital and technology in both developing and industrialized countries. These programs enable U.S. businesses to compete more effectively in international markets through risk mitigation and credit enhancement.
Editor:What does the Export-Import Bank do to help U.S. companies export to overseas markets? How do you structure these transactions?
Purcell: Since it was created 70 years ago, EXIM Bank has supported more than $400 billion in U.S. exports. Major multi-national corporations are significant users of EXIM Bank's programs but a significant percentage of EXIM Bank transactions directly benefit small business. EXIM Bank assists U.S. exporters in a wide range of activities - from the export of consumable agricultural products to the construction of industrial plants. EXIM Bank support includes loan guarantees, credit insurance, pre-export working capital finance, direct loans and limited recourse project finance. Perhaps the most attractive attribute of EXIM Bank program is that U.S. exporters and lenders pay little or nothing to use them. Banking and legal fees can be financed under EXIM Bank programs and the ultimate cost of EXIM Bank's products can be included in the financing package offered to the foreign buyer.
Editor: The growing importance of agencies such as the EXIM Bank, the Overseas Private Investment Corporation, the World Bank and the International Monetary Fund is an important trend in globalization of Washington. What else is transforming Washington's international practice?
Teague: There are several interesting developments. As U.S. regulatory and legislative issues increasingly impact foreign entities, European and Asian corporations and trade groups increasingly have established a beachhead here. European law firms haveestablished branch offices in Washington. The European Union's Washington office has grown tremendously as commercial interests and issues such as antitrust, or competition as it is known in Europe, and intellectual property have emerged as global issues. Recently, the former president of the European Union Parliament visited Washington to announce the creation of a strategic consulting firm with offices here and in Brussels. Decisions in Washington increasingly have an extra-territorial ripple effect. As a result, those impacted need representation here. At the same time, U.S. companies doing business overseas face increased regulatory scrutiny from other countries and international regulators, especially the European Union. One way to address these problems is to take the next flight to Brussels - or London, Paris, New Delhi and even Baghdad.Interestingly, the corporate response, in some cases, is to petition the U.S. government for help with their foreign counterparts. All of these developments have forced Washington lawyers to adopt more creative approaches when helping clients resolve public policy problems.
Editor: Mr. Waite, your specialty is international trade. How much of your representation involves foreign clients needing help in Washington?
Waite:Many of our clients are foreign companies, but we also represent numerous U.S. corporations that import, distribute, or purchase products from overseas. We have counseled numerous foreign manufacturers on U.S. antidumping law and countervailing duty (or anti-subsidy) law and procedures as well as other measures that affect trade, such as the Bush Administration's restraints on steel imports. Recently, we have represented Finnish, South African, Turkish, Russian and Belarusian producers of steel and metal products in anti-dumping investigations, administrative and "sunset" reviews and safeguard proceedings.
With globalization, many foreign and U.S. corporations face an increasingly complex overlay of trade laws, unfair trade cases, and other import restrictions in the United States. In addition, the conditions of competition have become unrelenting as new suppliers - in particular China - enter the marketplace. In this environment, both foreign and domestic companies need assistance to navigate this legal maze. They also need advice on the availability of trade remedies if they believe that their rights under U.S. law or international trade rules have been abridged.
Editor: China looms large in any discussion of public policy and foreign affairs. What is the effect of China on international trade issues in Washington?
Waite: During the past five years, China has been the primary target for antidumping complaints in the United States. With the expiration of the international agreement on textile and apparel trade, China has increased its exports to the U.S. at unprecedented rates, triggering a reaction from U.S. (and some foreign) manufacturers. There is also the impression that some Chinese companies are trying to circumvent U.S. trade restrictions. Many in Washington - especially Members of Congress - argue that China has artificially manipulated its currency for a trade advantage. These and other issues involving China will probably dominate the policy debate on international trade for a long time to come.
Editor: Since 9/11 the Customs Service seems to have concentrated on border security rather than trade facilitation. Is that your impression?
Waite: The old Customs Service is now U.S. Customs and Border Protection and has been transferred from the U.S. Treasury Department to the Department of Homeland Security.Despite the unprecedented demands that have been placed on Customs for enhancing the Nation's security, it is also continuing to discharge its traditional responsibilities to the trade community. Cargo is generally released without undue delay, ruling requests are still answered in a timely manner, and Customs' 317 ports of entry process 24 million freight containers and more than 400 million passengers each year.
Editor: Is customs work a growing part of an international practice?
Waite : Yes. The sheer volume of international trade places a growing burden on exporters and importers to insure that they are fully compliant with Customs regulations.In addition, the post-9/11 requirements on supply chain security and cargo accountability mean that everyone from the foreign manufacturer through the shipping firms and brokerage companies to U.S. importers must understand and adhere to an increasingly complex set of rules. In many cases, importers must police the operations of its suppliers and their agents.In all of these areas, the assistance of experienced international trade and customs counsel is essential.
Randal C. Teague and M. Sean Purcell are Partners and Frederick P. Waiteis Of Counsel in the Washington, DC office of Vorys, Sater, Seymour and Pease LLP.