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Budget Proposed by Trump Administration Reflects Trade Enforcement Priorities

President Trump’s fiscal year 2018 budget proposal includes additional resources for the U.S. Department of Commerce’s International Trade Administration that would be focused on self-initiating antidumping and countervailing duty cases. Meanwhile, trade enforcement, the Automated Commercial Environment and cargo inspection are some of the priorities in the proposed budget for U.S. Customs and Border Protection.

The ITA has the authority to self-initiate AD and CV duty investigations whenever it determines, based on the information available to it, that a formal investigation is warranted and that special circumstances exist to justify a self-initiation. However, U.S. law requires evidence of dumping or the necessary legal elements of a countervailable subsidy as well as evidence that the U.S. industry is suffering injury caused by the dumped or subsidised imports, requirements that can take substantial resources to meet. The ITA’s enforcement and compliance division is therefore working to build capacity to more fully utilise self-initiation when it may be appropriate; e.g., when shifting production sources, duty evasion or circumvention, fragmented domestic industry, or the threat of retaliation by the exporting country might make it more difficult for U.S. companies to bring AD or CV duty cases on their own.

The proposed budget would aid this effort by giving E&C an additional US$4.5 million to fund 22 new full-time equivalent positions dedicated to identifying potential industries and products on which AD and CV duty investigations could be self-initiated as well as gathering, analysing and developing the required factual information and legal justification. The additional funding would also help E&C increase the number of individual companies it may examine and conduct more and more vigorous on-site verifications, thus increasing the division’s ability to “detect and expose” practices foreign companies employ to circumvent or evade AD and CV duties.

On the other hand, the ITA’s overall budget would be reduced from US$483 million to US$442.5 million and 157 FTE positions would be eliminated. The global markets programme would see a loss of US$43.5 million and 136 FTE positions as about 35 smaller international posts and ten U.S. Export Assistance Centers are closed and headquarters staff is reduced to rescale export promotion, investment and trade analysis efforts. The industry and analysis programme would lose US$3.7 million and 17 FTE positions as the Office of Trade Promotion Programs is eliminated and other offices and functions are streamlined.

The proposed FY 2018 budget includes the following funding amounts for CBP.

  • US$29.8 million to fund 140 positions to provide for new services mandated by the Trade Facilitation and Trade Enforcement Act in a timely manner, including with respect to investigating claims of AD duty evasion, using donations of technology from the private sector for enforcing intellectual property rights, and simplifying drawback processing to spur domestic manufacturing and exports
  • an increase of US$45.1 million for ACE core functionality that would support the infrastructure and software needed to sustain the ACE/single window system, a disaster recovery capability to support redundancy from the cloud and decommissioning of the legacy Automated Commercial System
  • an increase of US$14.5 million for 93 additional positions for the National Targeting Center, which would be dedicated to traveller vetting, cargo vetting and counter-network operations
Content provided by Picture: HKTDC Research
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