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Trade Enforcement a Priority in FY 2019 Budget Proposal

Efforts to further strengthen U.S. trade enforcement feature prominently in President Trump’s proposed budget for fiscal year 2019. The president is requesting US$440 million for the DOC’s International Trade Administration to strengthen trade enforcement and compliance (including a new team dedicated to enforcement and administration of Section 232 cases and US$3.6 million in new resources to self-initiate AD and CV duty cases) while rescaling the agency’s export promotion and trade analysis activities (including eliminating the Market Development Cooperator Program and closing overseas offices). A little over US$90 million would be allocated to the ITA’s Enforcement and Compliance unit to expand and enhance efforts such as investigating trade violations and advocating for U.S. businesses facing tariff and non-tariff barriers abroad.

Additionally, the Bureau of Industry and Security’s budget would rise from US$111.7 million to US$120.6 million and 17 new export administration positions would be created to, among other things, enable BIS to handle the increased workload associated with foreign investment reviews as well as investigations of the impact imports may have on U.S. national security.

Specifically, four of the 17 new BIS positions would be created to deal with the increased workload associated with the Committee on Foreign Investment in the United States (CFIUS), the Treasury-chaired inter-agency committee that conducts national security reviews of mergers, acquisitions or takeovers that could result in foreign control of a U.S. business. The budget request notes that CFIUS cases increasingly are focused on areas within BIS-related responsibilities, including the purchase of companies that produce or trade in items subject to the Export Administration Regulations. The additional resources would ostensibly ensure BIS is able to conduct comprehensive reviews of each transaction within the established statutory deadlines and provide expert support and advice on national security issues during policy deliberations on complex cases.

The remaining 13 positions would be created to address the increased workload associated with Section 232 investigations. The budget proposal states that these are time-sensitive investigations that require the DOC to present findings and recommendations to the president for review and action within an intensive 270-day period.

The president’s budget proposal also states that BIS “expects a steady flow of additional defence industrial base assessment requests from other agencies and new Section 232 investigations from various industry sectors, the heads of agencies, and as well as self-initiated investigations by the Secretary.” The document adds that the president’s National Security Strategy “calls for systematic evaluation of the U.S. defence industrial base and the related supply chain essential to national security, with a focus on future investments and workforce skills.”

Other provisions in the proposed budget of potential interest include the following.

  • US$16.7 billion for U.S. Customs and Border Protection, up 2.2 percent from FY 2018
  • extension of the merchandise processing fee from 14 January 2026 to 14 January 2031
  • increase and extension from 30 September 2025 to 30 September 2030 of (i) user fees for commercial lorries, rail cars and vessels, dutiable mail packages, broker permits; etc. and (ii) express consignment courier facilities fee
  • US$63 million for USTR
  • US$87.6 million for the U.S. International Trade Commission
  • a US$213 million reduction (to US$739 million) for the Animal and Plant Health Inspection Service, reflecting the transfer of more responsibility for funding animal and plant health programmes to states, local co-operators and producers
  • a new APHIS user fee to offset costs related to regulation of imports of biotechnology-derived products
  • a new Food Safety and Inspection Service user fee to cover the costs of all import re-inspection for meat, poultry and eggs
  • a US$67 million reduction (to US$19 million) for the Labor Department’s Bureau of International Labor Affairs, primarily the elimination of grants to combat child labour
  • elimination of the Trade and Development Agency, whose mission (primarily supporting U.S. private sector participation in infrastructure projects in middle-income countries) is “more appropriately served by the private sector”
  • transfer of primary jurisdiction over federal tobacco and alcohol anti-smuggling laws from the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives to the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau
Content provided by Picture: HKTDC Research
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