Transcript BARNES, RICHARDSON & COLBURN

TRADE AND CUSTOMS DEVELOPMENTS
2008
THE CHANGING LANDSCAPE OF
WASHINGTON
Matthew T. McGrath
International Trade Club of Chicago
October 24, 2008
LEGISLATIVE DEVELOPMENTS
> Renewal of Preferential Trade Programs
> Free Trade Agreements and Trade Negotiating
authority
> Duty suspensions and miscellaneous trade
measures
> Customs reauthorization and Duty Drawback
> What’s happening in the Lame Duck session?
ADMINISTRATIVE DEVELOPMENTS
> 10 + 2 reporting requirements
> Lacey Act implementation
> Origin Rules proposal
> Commerce Department administration of
countervailing duty law against China
> Other -- Consumer Product Safety
Improvements Act implementation
EXECUTIVE BRANCH DEVELOPMENTS
> Doha Round of WTO trade negotiations
> FTA negotiations
> WTO Trade Disputes
> Impact of the Financial Rescue program on
trade
THE DIFFERENCES BETWEEN THE
CANDIDATES
> Multilateral Trade negotiations
> FTAs – Implementation of Agreements,
negotiation of new agreements
> NAFTA
> Enforcement Activity
> I tell you who will win
Legislative – Trade Preference Renewal
> One year extension of GSP, AGOA, ATPDEA
> Signed October 16, 2008
> Permanent GSP reform still under discussion
between Congress and Administration
> Andean Program extended a full year for
Colombia and 6 months for Bolivia (drug
interdiction) and Ecuador (investor treatment)
Legislative – Trade Preference Renewal
> 2 for 1 textile apparel allowance program for
Dominican Republic
> Repeal of Abundant Supply provision for
AGOA, which created technical
impediments to LDDCs
> Reinstatement of LDC AGOA status for
Mauritius (lapsed in 2005)
> New administration – no effect
Legislative – Free Trade Agreement Approval
> Pending legislative approval: Colombia,
Korea, Ecuador, Panama
> Colombia FTA issues – labor union
treatment
> KORUS issues – beef import restrictions,
automotive tariff treatment
> Lame duck session – could include FTA
approval as part of stimulus package
Legislative – Tariff Suspensions and
Miscellaneous Trade Measures
> MTB partially advanced in 2008 – must be reintroduced
> Miscellaneous customs modifications and reliquidations
> Legislative suspension process
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Ways & Means and Finance Committees
Revenue limits
Non-controversial
“Administrable”
Administrative review and report
4 year, renewable
Legislative – Tariff Suspensions and
Miscellaneous Trade Measures
> Miscellaneous customs measures
> Reliquidations for CBP or importer error
> Process for introduction and limitations
> Administrative review of legislative proposals
> Procedure unlikely to change in new
Administration; priority will drop for either
Legislative – Trade Promotion Authority
> Congressional consideration of trade
agreements reached by the President under
fast track procedures, 60 day up-or-down
vote, without amendment
> Expiration: July 2007
> Terms of renewal likely to change
Legislative – Customs Reauthorization
> Duty Drawback simplification will be included in
the bill
> CBP goals to make administration of drawback
easier, “protect the revenue”, and be consistent with
automation efforts
> Claimant’s goals of simplifying the claims
documentation process
> Terms unlikely to change in new Administration
Legislative – Duty Drawback (cont.)
> Drawback may be claimed under proposed new
law if
> imported and exported article have the same 8digit HTS, or
> Imported and exported article have different 8
digit HTS, and the claimant provides a bill of
materials showing how imported article is
incorporated into exported article
Legislative – Duty Drawback (cont.)
> Main distinctions between current and proposed law:
> “same kind and quality” replaced by 8 digit HTS
match
> “commercially interchangeable” replaced by simple
tracking at the 8 digit level
> Tracking of substitution at the invoice level replaced
by BOM bridge record
> 5 year limitation, from import to claim
Legislative – Duty Drawback (cont.)
> Additional distinctions between current and proposed
law:
> No requirement for rulings or approvals under new
law
> Receipt and use requirement eliminated – claimant
need not “use” imported merchandise
> Therefore, no distinction between unused
merchandise and manufacturing drawback
Legislative – Duty Drawback (cont.)
> Drawback for 8-digit substitution calculated
on lesser of average duties paid per unit on
entry line item, or average duties paid using
the declared export value
> Drawback for change in HTS calculated on
average duties per unit on import entry line
item
Administrative – Importer Security Filing
> 10 + 2 – Data elements to be required prior to
loading of vessel for transport to the US
> Implementation of the SAFE Ports Act of 2006
> Publication and comment period completed in
2008
> Publication expected in the next few weeks, in
force within 60 days
Administrative – 10 + 2
> Importer data elements
> Name and address of manufacturer
> Name and address of seller
> Name and address of buyer
> Ship-to
> Container stuffing location
> Consolidator name and address
Administrative – 10 + 2 (cont.)
> Importer data elements
> Importer or FTZ identification number
> Identity of consignee
> Country of origin
> HTSUS classification
Administrative – 10 + 2 (cont.)
> Carrier data elements
> Vessel stow plan
> Container status messages showing any
change in status of container in transit
> CBP will send acceptance code to importer
Administrative – 10 + 2 (cont.)
> Incomplete or inaccurate filing will result in
no load message, delays, potential penalties
up to value of cargo
> Data mining used to identify higher risk
cargo; 10+2 may result in fewer inspections
> Procedure to correct errors
> Unaffected by change in Administration
Administrative – Lacey Act Amendments
> Amendments to Farm Bill, law designed to
restrict illegal logging and taking of wild
plants.
> Import declaration required
> Scope: “any wild member of the plant
kingdom, including roots, seeds, parts or
products thereof”
Administrative – Lacey Act Amendments
> Potential coverage: lumber, wood furniture, textile
and apparel products of rayon, paper products,
cellulose fiber-containing products,
pharmaceuticals, printed matter, other products
with wood or plant components.
> Effective date – Technically December 15, 2008;
enforcement commencing after electronic
declaration implementation, April 1, 2009
Administrative – Lacey Act Amendments
> Declaration must contain:
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Scientific name of plant
Value
Quantity
Country from which plant was taken (as opposed to
article’s county of origin) (special focus on Indonesia,
Russia, and Brazil)
> Percentage recycled material (paper and paperboard)
Administrative – Lacey Act Amendments
> Specific exclusions:
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Common cultivars (not yet defined)
Common food crops
Scientific specimens for research
Plants for re-planting
Packaging material used to support, protect or carry
another item. But it does include hangtags, labels,
and instruction booklets.
Administrative – Lacey Act Amendments
> Implementation team: APHIS, CBP, Fish &
Wildlife, DOJ, State, USTR
> APHIS FR notice 10/8/08: Enforcement phase in
schedule:
> April 1 – Ch. 44 (wood and articles of wood); Ch. 6
(live trees and plants)
> July 1 – Ch. 47 (wood pulp), 48 (paper and articles of
paper), 92 (musical instruments), 94 (furniture)
Administrative – Lacey Act Amendments
> APHIS notice (cont.)
> After September 30, 2009 – “including but not limited
to” Ch. 12 (seeds and fruits), Ch. 13 (gums, lacs,
resins), 14 (vegetable plaiting materials), 45 (cork), 46
(basketware), 66 (umbrellas), 82 (tools), 93 (guns), 95
(toys and games), 96 (brooms and pencils), 97 (works
of art).
> No deminimis level
Administrative – Lacey Act Amendments
> Oct. 10 Sponsor and leadership letter
interagency group:
> Highlights agency discretion to define
inclusions and exclusions
> Paperless processing is critical for trade
> Legacy F&W system is available for
certification
Administrative – Lacey Act Amendments
> Approve delayed enforcement and phasein
> Suggest further limitation of coverage, consider risk
> Suggests 6 month phases: (1) wood (2) furniture and
flooring (3) paper, blinds, billiard cues, instruments
> Proposed exemption for the first two years:
beverages, cosmetics, footwear, textiles and apparel,
rubber and cork
> Exclude tags, labels, manuals as excluded
“packaging materials”.
Administrative – Origin Rules
> CBP proposed application of NAFTA origin
marking rules to all non-preferential trade
> This change has been debated for 15 years,
since NAFTA was implemented
> Would replace substantial transformation
test with a tariff shift rule of origin
Administrative – Origin Rules
> Would change origin in some instances,
overturning rulings and court decisions
> Would require significant resources to document
“reasonable care” by classifying all articles, as
well as upstream articles, to prove “tariff shift”
> Impact of new administration questionable
Administrative – Trade Remedies
> Department of Commerce assessment of
countervailing duties against China
> DOC antidumping calculation methodology:
“zeroing” increases margins
> DOC antidumping methodology: targeted
dumping increases incidence of zeroing
Administrative – Other
> Consumer Product Safety Improvements Act –
August 14, 2008
> Importer and manufacturer must have
Certification of compliance with specific rules of
Consumer Product Safety Act applicable to
article, based on reasonable testing program, for
articles covered by CPSC rules
> check website for regulated and excluded articles
Administrative -- CPSIA
> Applies to goods manufactured after
November 12, 2008
> Lower lead content levels applicable to
goods manufactured after February 14,
2009
> Tracking labels and registration for
children’s products
Administrative -- CPSIA
> Independent third party testing for children’s
products
> State attorneys general may enforce CPSC
laws through civil enforcement action
> Implementation underway at CPSC
> Views from staff – children’s products
defined as 12 or younger – label intent
Executive – Doha Round Negotiations
> Trade Promotion Authority – under what
conditions will it be renewed?
> Scope of Doha/DDA – more ambitious than
past rounds
> The impact of new major players
> The role of FTAs
Executive – Doha Round Negotiations
> Status of the Round through June 2008
> Standoff at the Ministerial meeting July 2008
> The issues in Agriculture
> The issues in NAMA
> Other issues
> Next steps
Executive – FTA Negotiations
> Thailand
> Malaysia
> P4 – US, New Zealand, Singapore and
Chile
The Candidates’ Positions on Trade Issues
> FTA approval – sooner vs. later
> Obama – no quick votes on Colombia and
Korea – wants progress on anti-union violence
in Colombia and improvement on automotive
sector provisions in KORUS
> McCain – prefers earlier consideration but
realizes Congress is run by the opposition
The Candidates’ Positions on Trade Issues
> Trade Adjustment Assistance – a difference
of perception
> Obama – expand TAA to include service
workers and job loss due to non-FTA trade
> McCain – fold TAA into single, non-import
dependent job relief program
The Candidates’ Positions on Trade Issues
> Doha Round – the sunset of multilateralism
> Obama – US was right to reject the deal
proposed in July, consistent with majority view
that current deal is beyond rescucitation. No
agriculture subsidy cuts proposed.
> McCain – Doha should be closed quickly. US
agriculture subsidies should be cut, but avoids
listing which cuts.
The Candidates’ Positions on Trade Issues
> Enforcement focus vs. new agreements
> Obama – shift focus from new agreements to
enforcement of existing deals. WTO disputes
underway; add dispute or legislation on
Chinese currency manipulation
> McCain – Renew TPA immediately, avoid
adding new labor and environment conditions
The Candidates’ Positions on Trade Issues
> NAFTA renegotiation – past as prologue
> Prior revisions to NAFTA – investors rights,
origin rules, tariff acceleration; ruling on
reduced value not expropriation
> Obama – labor, environment, investment, and
energy provisions on trilateral basis.
> McCain – opposes NAFTA renegotiation
> Obama for COOL, McCain opposed