The recent midterm elections have sparked hope that a Democratic White House and a Republican-controlled Congress will advance a number of long-stalled customs and trade initiatives. To help lawmakers brighten the holiday season before they adjourn for the year, we put together the following list of bills to boost domestic employment, expand foreign markets, align policy with existing business practices, aid developing countries, and lower consumer prices.

Miscellaneous Trade Bill

The U.S. Job Creation and Manufacturing Competitiveness Act of 2013 (H.R. 6727) was introduced July 17, 2013, by House Ways and Means Committee Chair Dave Camp, R-Mich., and Ranking Member Sandy Levin, D-Mich., along with Trade Subcommittee Chair Kevin Brady, R-Texas, and Ranking Member Jim McDermott, D-Wash. It includes more than 2,000 provisions that would temporarily reduce or eliminate import tariffs on goods no longer made in the U.S., many of which are used by U.S. manufacturers in the production of value-added goods.

These provisions have been fully vetted by the U.S. International Trade Commission, the departments of Commerce, State, Agriculture and the Treasury, the U.S. Trade Representative’s Office and any other government agency that might have oversight of the covered products.

Many of these provisions were previously in place but expired, leaving U.S. companies to pay duties for nearly two years on goods that are no longer made domestically or are not controversial. This has resulted in an approximate $748 million tax on U.S. manufacturers and an estimated $1.86 billion economic loss over a three-year period.

Customs Reauthorization

The Trade Facilitation and Trade Enforcement Reauthorization Act of 2013 (S 662) was introduced in March 2013 by then-Senate Finance Committee Chair Max Baucus, D-Mont., and Ranking Member Orrin Hatch, R-Utah. This bill would reauthorize U.S. Customs and Border Protection for the first time since 2000 and update mechanisms that bind the agency’s hands at U.S. borders.

Each of these bills has languished in Congress while they could have been helping U.S. workers.

There have been significant changes over the past 14 years in government policies and priorities as well as the manner in which business is conducted, and this bill is designed to give CBP the necessary tools to reflect those changes.

For example, one provision in the bill would benefit e-commerce companies by easing requirements and eliminating additional duties for returned goods that cross borders. Other provisions would instruct CBP on how to better address the business community, prevent circumvention of trade remedies and move goods more effectively. An addendum to the bill introduced in July 2014 (H.R. 5291) includes further changes to the tariff schedule governing CBP’s conduct to reflect business practices that have continued to evolve.

Tariff Preference Levels

The Central America-Dominican Republic Free Trade Agreement includes a provision that allows a certain amount of trousers made in Nicaragua of non-U.S.-origin fabrics to enter the U.S. duty-free each year as long as an equal number of trousers made from U.S. fabric made from U.S. yarns (made from U.S.-grown cotton) is also shipped to the U.S. This TPL has not only bolstered U.S. exports of fabric to Nicaragua but has also helped build an apparel industry in that country, thus contributing to economic and social stability in the least-developed of the CAFTA-DR partners. However, the TPL expires at the end of 2014 and there has not yet been any movement on either of the two Senate bills that would extend it, one of which is bipartisan.

Similarly, the Bahrain FTA includes a TPL allowing apparel and home furnishings to be imported into the U.S. under the FTA without regard to the origin of the fabric or yarn. This TPL represents less than 0.1 percent of all apparel imports into the U.S., but at the same time it plays a critical role in the ability of a U.S. company in Florida that further processes such inputs from Bahrain to keep its 200+ employees on the job. It is also important to Bahrain, which is home to the U.S. Navy’s Fifth Fleet and an expanding number of U.S. military personnel and is a key partner in maintaining U.S. geopolitical interests in the Middle East. Bahrain’s three apparel manufacturers and one home furnishing manufacturer employ about 1,000 Bahrainis and 6,000 expats, but if the TPL expires in 2015 those jobs could be lost, possibly sparking economic and social unrest.

In The Spotlight

African Growth and Opportunity Act

AGOA was enacted in 2000 to emphasize trade over aid for Africa. In the ensuing 14 years AGOA has been extended many times, but each time only for a year or two. There has been some question as to why this program has not resulted in significant penetration of the U.S. market by African nations, and the reasons include many African nations not being ready to capitalize on program benefits as well as U.S. companies pursuing easier opportunities before looking at Africa.

Now, however, there is a convergence in some African countries of a preparedness to enter the global market in a meaningful way, with full support of the government and the rule of law, and U.S. companies ready to invest. However, consequential investment will not be made unless there is sufficient time for investment depreciation, so supporters are looking to extend AGOA for at least ten years.

Most members of Congress in both parties see renewal as a logical step to help Africa help itself, but no legislative action has yet been taken. In the meantime, AGOA expires in about 10 months, a short period in congressional terms, and lawmakers have shown an increasing proclivity to let trade programs expire, as in the case of GSP, the Andean Trade Preference Act and the miscellaneous trade bill.

Generalized System of Preferences

GSP offers unilateral duty-free access to the U.S. market for approximately 5,000 products from most of the world’s developing countries. GSP had been in place since the 1970s but expired July 31, 2013. The amount of trade covered by GSP in 2013 amounted to less than one percent of total U.S. imports but has significant impact on U.S. consumers as well as beneficiary countries. Several different bipartisan bills to renew GSP have been introduced in the 113th Congress but none have moved.

Educational Toys

The Elimination of Tariffs on Education for Children Act (H.R. 4748), which has 27 cosponsors from both parties, including 20 members of the House Ways and Means Committee, would eliminate the import tariff on electronic educational toys for children. While Congress removed tariffs on toys and computers decades ago, computerized toys designed to teach children are not considered a toy (because they do more than provide amusement) and are not considered a computer (because they cannot be programed as can regular computers) and thus fall into an “other” category under the Harmonized Tariff Schedule of the U.S. that is subject to import duties.

Each of these bills has languished in Congress while they could have been helping U.S. workers. Taking no action on those whose provisions expire soon will jeopardize even more U.S. jobs. Both Democrats and Republicans have identified trade as an issue on which they can work together, so it’s time to put that to the test and get these bills passed by the new year.

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Nicole Bivens Collinson
About The Author Nicole Bivens Collinson
Nicole Bivens Collinson is a well-known international trade authority in Washington, DC and has over 25 years of experience in government, public affairs and lobbying. She leads Sandler, Travis & Rosenberg’s international trade and government relations practice.




www.strtrade.com


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