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Congressional Conference on Customs Reauthorisation Legislation Delayed until Autumn

House Ways and Means Committee Chairman Paul Ryan (Republican-Wisconsin) stated on 29 July that the pending customs reauthorisation measure that passed the House and Senate with slight differences on issues such as currency manipulation and duty evasion could be considered shortly after the congressional summer recess. Ryan said that "since the passage of customs and trade enforcement legislation in the House and Senate, work has taken place to resolve the differences between the two chambers' bills" and this process has yielded "significant progress." Ryan expects the two chambers to move to a formal conference "soon after Congress returns from this district work period" in September.

Key provisions of the customs reauthorisation legislation currently under consideration include the following.

  • The U.S. Department of Commerce would be required to initiate a countervailing duty investigation or review to determine whether currency undervaluation by the government of, or any public entity within, a foreign country is providing a countervailable subsidy directly or indirectly to its exporters or products (this provision is not included in the House version)
  • U.S. Customs and Border Protection would be required to investigate allegations of evasion of antidumping and countervailing duty orders according to certain procedures.
  • There would be enhanced oversight of international exchange rate policy, the U.S. government could pursue specific remedial actions against trading partners that fail to adopt appropriate exchange rate policies, and the U.S. government would have additional tools at its disposal for strengthening trade enforcement.
  • An exemption in current law that allows the United States to import products made with forced, convict or indentured labour if the U.S. does not produce a sufficient amount of those goods to meet domestic consumption levels would be eliminated.
  • The Interagency Trade Enforcement Center would be made permanent.
  • Discretionary action against a foreign country engaging in unreasonable acts, policies or practices relating to the environment would be authorised.
  • CBP would have to establish a new importer programme that requires the agency to adjust bond amounts for new importers based on the level of risk posed to federal revenue.
  • A Commercial Targeting Division would be established within CBP's Office of Trade and would include individual National Targeting and Analysis Groups responsible for targeting imports that may violate customs and trade laws, with particular focus on laws and regulations related to agriculture programmes, AD/CV duties, import safety, intellectual property rights, revenue, textiles and wearing apparel, and trade agreements and preference programmes.
  • A joint import safety rapid response plan would have to be developed by 31 December 2016 setting forth protocols and defining practices for CBP to use in taking action in response to, and co-ordinating federal responses to, an incident in which cargo destined for, or merchandise entering, the United States poses a threat to the health or safety of U.S. consumers.
  • CBP would be required to share unredacted images and samples of suspected infringing merchandise with right holders prior to seizure if it determines that testing or examination by a right holder would assist in determining if the merchandise violates an intellectual property right (CBP could not provide this information if doing so would compromise an on-going law enforcement investigation or national security, however).
  • CBP would have to ensure that its officers are trained to effectively detect and identify infringing merchandise destined for the United States, including through the use of technologies with the cost-effective capability to detect and identify such merchandise at U.S. ports of entry.
  • USTR would have to identify foreign countries that deny adequate and effective protection of trade secrets as part of its annual Special 301 report.
  • Duty-free treatment would be granted to (i) any exported product returned to the United States within three years of being exported and (ii) certain U.S. government property returned to the United States.
  • Residue of bulk cargo (not more than seven percent by weight or volume and with no or de minimis value) contained in instruments of international traffic previously exported from the United States would be exempt from duty.
  • The value of goods that could be imported by one person on one day free of duty and tax would be increased from US$200 to US$800.

An important difference that is delaying passage of the legislation lies in certain duty evasion provisions. The Senate version sets deadlines for CBP to respond to complaints regarding the evasion of trade remedy orders, while the House version does not set any such deadlines, although it also tasks CBP with responding to such complaints. Rep. Ryan indicated in July that the differences between the two versions have been "narrowed," adding that they "all are trying to get to the same objective; it's just a debate about how best to do that, which agency does what."

A pressing issue that lawmakers had sought to resolve during the inter-cameral conference involves controversial language included by Sen. Robert Menendez (Democrat-New Jersey) in the recently enacted Trade Promotion Authority statute that would make Malaysia ineligible for fast-track consideration due to its designation as a "Tier 3" country in the State Department's Trafficking in Persons Report. A compromise amendment included in the House version of the customs reauthorisation legislation would allow the president to certify that certain countries mentioned in the TIP report are making progress and should receive fast-track consideration under the TPA statute. However, the State Department on 27 July conveniently upgraded Malaysia's status from Tier 3 to Tier 2, so the need for the compromise language is less evident.

Meanwhile, approximately 69 members of Congress have signed a letter that calls for the inclusion of miscellaneous trade bill reform language in the final version of the customs legislation. The letter circulated by House lawmakers notes that the language, which was included in the Senate bill but not in the House version, should "establish a predictable and objective process for Congress to consider and enact MTBs in accordance with House and Republican Conference rules" and "work to remove special interest influence by providing a fair consideration of all applicants willing to apply, while also increasing transparency from start to finish."

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