3 July 2015
Congress Approves Trade Bills as House Passes Chemical Reform Legislation
The Senate on 24 June voted 60-38 to approve the stand-alone Trade Promotion Authority bill (H.R. 2146) that was passed by the House of Representatives a week earlier. The legislation has been forwarded to the White House for the president's signature. TPA approval by Congress is expected to jumpstart the Trans-Pacific Partnership negotiations with a group of 11 countries in the Asia-Pacific region, which could now be wrapped up in the coming months.
While congressional approval of TPA legislation was viewed by most observers as a prerequisite for the United States to finalise TPP, officials have cautioned that a number of sensitive issues must still be resolved before the talks can be brought to a successful conclusion and that this process, which will likely involve decisions at the highest political level, may take some time. Press sources indicate that once a deal is reached leaders could sign the agreement during the United Nations General Assembly in mid-September or at the 18-19 November Asia-Pacific Economic Cooperation leaders meeting in the Philippines.
Congress also approved on 24-25 June a separate bill (H.R. 1295) to (i) extend Trade Adjustment Assistance, (ii) reauthorise the Generalised System of Preferences for two years and (iii) extend through 2025 the African Growth and Opportunity Act and uni-lateral trade preferences for Haiti. H.R. 1295 includes the following provisions of potential interest to Hong Kong and mainland Chinese exporters.
- the president is authorised to designate cotton articles classified under HTSUS 5201.00.18, 5201.00.28, 5201.00.38, 5202.99.30 and 5203.00.30 as GSP-eligible for least-developed beneficiary developing countries
- textile and leather travel goods could be designated as eligible for GSP benefits
- the definition of athletic footwear in the Harmonised Tariff Schedule of the United States has been amended to clarify that it includes certain outdoor performance footwear
- tariff classifications specific to "recreational performance outerwear" have been created but duties on these products remain unchanged
In addition, H.R. 1295 streamlines and strengthens the process for addressing unfair dumping of foreign products by (i) providing the U.S. Department of Commerce flexibility to select appropriate facts available or adverse facts available when a foreign party fails to co-operate with the agency's request for information in a proceeding; (ii) clarifying the relevant data that the U.S. International Trade Commission may examine to analyse the effects of dumped and subsidised imports on a domestic industry and improving the USITC's ability to accurately assess captive production issues; (iii) providing that where a particular market situation exists that distorts pricing or cost in a foreign producer's home market the DOC has flexibility in calculating a duty that is not based on distorted pricing or costs; (iv) removing the requirement that a party allege that a foreign producer has made sales below its costs before the DOC initiates an investigation of sales below cost and clarifying that the DOC can disregard prices or costs of inputs that foreign producers purchase if it has reason to believe or suspect that the inputs in question have been subsidised or dumped; and (v) clarifying the DOC's authority to select and limit voluntary respondents.
The Senate also approved on 24 June a motion to go to conference with the House on H.R. 644, the customs reauthorisation legislation, which includes numerous provisions of potential interest to Hong Kong and mainland Chinese exporters. The conference could begin the week of 6 July.
Finally, the House on 23 June approved bi-partisan legislation (H.R. 2576) to reform the Toxic Substances Control Act. As previously reported, this legislation is intended to modernise the decades-old TSCA to improve chemical safety while encouraging continued innovation and economic growth, provide the public greater confidence in the safety of U.S.-made chemicals and the products that contain them, and facilitate interstate and global commerce. H.R. 2576 includes the following provisions.
- provides the Environmental Protection Agency with the tools to ensure chemicals in commerce are safer for consumers
- creates a new system for the EPA to evaluate and manage risks associated with chemicals already on the market in accordance with the following guidelines: (i) either the EPA or a manufacturer who is willing to pay the cost would be able to designate a chemical for risk evaluation, (ii) the risk evaluation would have to stand up to rigorous scientific standards set out in the legislation, and (iii) if unreasonable risk is determined the EPA would be required to immediately draft a rule to manage the risk
- sets deadlines for the EPA to take action, including by requiring risk evaluations to be completed within three years and risk management rules to follow completion of risk evaluations by 90 days
- ensures user fees paid to the EPA for specific purposes are used just for those purposes (user fees would be deposited in a separate fund in the Treasury Department and the fees charged and collected would match the cost of carrying out the specific purposes)
- provides limited pre-emption of state law; specifically, once the EPA makes a final decision on a chemical such action would apply in all states, although prior state laws that do not conflict with TSCA and private rights of action under tort or contract law would be preserved
- maintains protection of confidential business information