Economy

Customs Bill: What’s Next?

June 18, 2015

There has been some confusion over the customs bill that was passed by the House last week. The bill, HR 644 – Trade Facilitation and Trade Enforcement Act of 2015, was not part of the TAA/TPA package (HR 1314).

Passage of the House bill will send it to committee where it will be reconciled with the bill the Senate passed called ENFORCE (Enforcing Orders and Reducing Customs Evasion). The version that emerges from Committee will need to be voted on again by both the House and Senate.

However, according to Squire Patton Boggs, a law firm that follows trade policy closely, the customs bill was used as leverage to gain support for TPA and contains controversial amendments to TPA. Although it technically stands alone, it most likely will not be signed until the TPA package passes. Since TPA and TPP are in the same package and only TPA received enough votes for passage, the HR 1314 could not move forward last week. The House had the option of re-voting on TAA to complete the package or to put the TPA to another vote as a stand alone measure.

Today, Thursday, June 18, the TPA was re-voted on in the House as a stand alone bill and passed by 218 to 208. It now goes back to the Senate for discussion and another vote. This could be good news for the customs bill.

There are some differences in the customs bills passed by the House and Senate. One difference concerns the “enforce act,” a provision that creates a new procedure for industries to petition against exporters circumventing already established custom duties. The Senate version allows “good-faith” allegations of trans-shipment and evasion of antidumping and countervailing duty orders to be addressed to the US Customs and Border Protection for enforcement as opposed to petitioning the ITC and DOC.

AISI has been advocating for more effective remedies against imports that are dumped or subsidized. The Senate bill “would have enforceable deadlines and, if an agency ignored its obligations, you’d be able to go to a court to tell the agency to obey its mandate,” said AISI President Thomas Gibson.

“AISI has long supported the Senate version of the bill and we will continue to push for adoption of that approach in conference,” said Gibson. “The bottom line is, the steel industry is one major step closer to getting trade remedy provisions signed into law.”

Sen. Sherrod Brown’s (D-OH) office told SMU the controversial Schumer/Brown currency manipulation provisions were removed from the House bill. Brown’s “Leveling the Playing Field Act” is included in both the House and Senate bills, as well as a provision to end the import of certain products produced with child labor or forced labor.

Section VII of the House bill does address currency manipulation, although without much bite. Subtitled the Currency Undervaluation Investigation Act, it outlines how currencies should be evaluated, provides definitions, and remedial action. A country suspected of currency manipulation would be been advised by the President to “adopt appropriate policies to correct the undervaluation and surpluses with respect to that country.”

Remedial action would take place a year later if a country fails to make changes. Remedial actions include: a) prohibiting overseas private investment from approving any new financing in that country, b) prohibiting government procurement of goods from the offending country, c) Increasing surveillance of the macroeconomic and exchange rate polices and initiating formal consultations on findings of currency manipulation, and d) assessing whether or not to enter into bilateral or regional trade agreements with the country. Exceptions would be made for countries that have a free trade agreement with the United States or agreements for government procurement.

Passing legislation on currency manipulation has been a problem in the Senate and House. The issue is controversial in part due to the fear it could be applied to quantitative easing by governments.

The House Customs Bill—The Trade Facilitation and Trade Enforcement Act of 2015—can be read in its entirety in the June 12, 2015, Congressional Record for the House. Squire Patton Boggs also said it would be happy to answer reader questions about the trade legislation currently underway. Questions may be directed to Mr. Frank R. Samolis, Partner at Squire Patton Boggs and an adviser on international trade policy.

This issue will be discussed during our Steel Summit Conference as we have Kevin Dempsey, Executive Vice President and General Counsel for the American Iron and Steel Institute along with trade attorney Lewis Leibowitz, Principal of The Law Office of Lewis E. Leibowitz.