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Volume 16, Issue 114
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Tuesday, June 9, 2009
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Legislative Update: Panama FTA Delayed, Food Safety Gets Second Look
The legislative agenda on trade issues took another turn recently when the Obama administration decided to delay submitting to Congress legislation to implement the U.S.-Panama Free Trade Agreement. Other issues remain alive, however, including imported food safety, trade preferences and the miscellaneous trade bill.
FTAs. The Obama administration, which had actively pushed for congressional consideration of the Panama FTA over the past few months, has reportedly decided to put the issue on hold in order to avoid contention that could have dimmed the prospects for enacting legislation on the higher priority issues of health care and climate change. Observers do not now expect the FTA to move forward until President Obama gives a speech outlining what deputy U.S. trade representative nominee Sapiro called “a new framework for trade that embeds it in his overall economic policy.” According to Inside US Trade, however, that may not happen until the president “can highlight progress on health care and other measures, such as expanded Trade Adjustment Assistance (TAA), as a new domestic framework that ensures that U.S. workers can better face the impact of international trade.”
Senate Finance Committee Chairman Max Baucus, D-Mont., who is among the Democrats who support the pending FTAs with Panama, Colombia and South Korea, told Sapiro in a recent confirmation hearing that he was upset that the White House has not consulted with Congress on the decision to put the Panama FTA on hold or its broader trade policy framework. Baucus said he learned of the Panama decision in the press, which he argued was inconsistent with USTR Ron Kirk’s pledge to maintain “close consultation” with Congress on potential FTAs. He proposed that in the future USTR and the Finance Committee hold regular meetings to “minimize misunderstandings and avoid surprises.” Sapiro responded that she personally would consult with Baucus “as much as you would like” and that she would raise the idea of regular discussions with Kirk.
Food Safety. A revised version of a bill to overhaul the imported food safety system is circulating in the House of Representatives, and the House Energy and Commerce Committee held a hearing on the measure June 3. Among other things, this bill would require all importers of foods, drugs and medical devices to register annually with the Food and Drug Administration and pay an annual registration fee of $1,000, increase the frequency of food facility inspections, strengthen criminal penalties, and establish an system to expedite certain imports.
The bill is generating some adverse reaction from both government and industry. New FDA Commissioner Margaret Hamburg told the House Energy and Commerce Subcommittee on Health that the amount of resources required to achieve the inspection goals outlined in the bill “would far exceed even the historic increases in the President’s FY 2010 budget” for the FDA and that it would be “difficult, if not impossible, for FDA to hire and train thousands of additional staff so quickly-even while relying on inspections by state, local, and other federal and foreign government officials.” Hamburg suggested that lawmakers change the inspection frequencies set forth in the bill, provide for additional modifications to those frequencies based on risk information, and allow the FDA to explore the use of a third-party certification system.
For its part, the National Customs Brokers and Forwarders Association of America is opposing provisions in the draft bill that would greatly expand penalties and require customs brokers to register with the FDA and pay a registration fee. “These provisions surfaced only last week, were preceded by no consultation with our industry and, we are told, may go to Subcommittee mark-up next week,” said NCBFAA President Mary Jo Muoio in a June 4 letter to Energy and Commerce Committee Chairman Henry Waxman, D-Calif. “A customs broker must rely on the commercial documents and other information supplied by his client, the U.S. importer,” Muoio wrote. “The customs broker is not in a position to independently verify this information. And yet the committee’s draft holds the customs broker strictly liable for the importer-supplied information – with truly debilitating fines and consequences if the information turns out to be inaccurate in any respect. This is a serious flaw in the committee’s draft that must be addressed.”
Trade Preferences. A number of actions to revise and expand unilateral U.S. trade preferences remain possible this year. Sen. Dianne Feinstein, D-Calif., introduced May 21 a bill (S. 1141) that would grant preferential trade benefits equivalent to those under the African Growth and Opportunity Act to 14 least-developed countries – Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Laos, Maldives, Nepal, Samoa, Solomon Islands, East Timor, Tuvalu, Vanuatu and Yemen – as well as Sri Lanka through Dec. 31, 2019. A measure to extend trade preferences to Afghanistan and Pakistan could be attached to a foreign relations authorization bill recently approved by the House Foreign Affairs Committee or incorporated into the LDC bill. The Andean Trade Preference Act is scheduled to expire Dec. 31, and businesses involved in trade with ATPA beneficiary countries are advised to begin efforts to ensure that these preferences are not allowed to expire.
In related news, a new bill (H.R. 2702) in the House would suspend Generalized System of Preferences benefits for Brazil until that country complies with its obligations toward the U.S. under the Hague Convention on the Civil Aspects of International Child Abduction, which according to a CQ Today article “requires signatories to respect child custody decisions of each others’ courts.” The article states that Rep. Chris Smith, R-N.J., introduced this measure in response to “the case of a U.S. father trying to reclaim his son from a Brazilian stepfather.”
MTB. Supporters are working to maintain momentum toward congressional passage this year of a miscellaneous trade bill that lowers or suspends tariffs on imports of key manufacturing and production inputs that are not made in the U.S. or where there is no domestic opposition. Click here for more information on how your company can get involved in this process, which could result in substantial duty savings.
Other. Other trade-related bills that have been introduced recently include the following. (Note that the text of these bills can be found on the Library of Congress’ Web site.
• H.R. 2707 – to establish a program to improve freight mobility in the United States and to establish the National Freight Mobility Infrastructure Fund
• H.R. 2719 – to extend the temporary suspension of duty on certain ceiling fans
• H.R. 2742 – to authorize the extension of non-discriminatory treatment (normal trade relations treatment) to the products of Azerbaijan
• H.J. Res. 56 – a joint resolution approving the renewal of import restrictions contained in the Burmese Freedom and Democracy Act of 2003
• H.R. 2654 – to extend temporarily the suspension of duty on polyethylene HE1878
• H.R. 2670 – to require reports on the effectiveness and impacts of the implementation of the Western Hemisphere Travel Initiative
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