Selected Trade and Customs Topics

Pertinent TPA details Congress can approve or disapprove an FTA, but can t amend or filibuster the implementing legislation The President must make a free trade agreement public for 60 days before he signs it The ITC must make a report on economic impact within 105 days after signing, before the President sends implementing legislation to Congress

Fast track isn t fast Once the implementing bills are submitted by the president, Congress has up to 90 legislative days (about 5 months) to vote The process could take years Consider the Colombia, Panama and Korea FTAs they were signed by President Bush but not voted on until 2011

Trade Preferences Extension Act Extended AGOA through September 30, 2025 Extended GSP through December 31, 2017 and made it retroactive to July 31, 2013 (when it previously expired) Importers who filed with SPIs should get refunds automatically; otherwise they must apply for refunds by December 29, 2015 See the notice about refund procedures on CBP s website

Trade Preferences Extension Act Certain travel articles of HTS heading 4202, including luggage and handbags, can now be designated by the president as eligible for GSP Before the president can make such a designation, he must consider the effect on the development of the beneficiary country, whether other developed countries afford similar treatment, the effect on domestic industry and the beneficiary country s competiveness

Tariff Preferences Extension Act Extended Haiti preferences through December 19, 2025 Was supposed to make recreational performance outerwear (jackets and pants used for outdoor sports) duty free; but an error actually increased the duties The error is to be corrected in the still-pending trade facilitation and enforcement bill

Trade facilitation and enforcement This bill is still pending and will is now delayed by the August recess Remaining controversy includes a feature about immigration and climate change and another feature that would reform the MTB process, still opposed by conservative Republicans who consider MTB tariff suspensions to be earmarks

Trade facilitation and enforcement Provides for a robust importer of record program to verify the existence of importers Creates a new importer program new importers would be subject to separate bond and cargo screening requirements Places new responsibilities on brokers to confirm the identities of importers and penalizes them for failing to do so

Trade facilitation and enforcement Requires nonresident importers to designate resident agents in the U.S. to accept service of process (already required in the customs regulations) and penalizes them for failure to do so Contains a watered down currency manipulation feature

Trade facilitation and enforcement Loosens up headings 9802.00.40 and 9802.00.50 to allow fungible articles to be commingled and accounted for with an inventory management method These provisions, for the return of goods exported for repair, are presently limited and hard to use because they do not allow commingling

Trade facilitation and enforcement Liberalizes drawback Allows substitution of merchandise of the same 8- digit HTS rather than merchandise of the same kind and quality (for manufacturing drawback) or commercially interchangeable merchandise (in the case of unused merchandise drawback)

Trade facilitation and enforcement Extends from three to five years the time after importation that imported or substituted merchandise must be exported to be eligible for drawback These changes are expected dramatically to expand duty drawback opportunities

Automated Commercial Environment ACE will be mandatory for entry summaries and cargo release transactions as of November 1 of this year unless CBP extends the deadline There is concern in the industry about whether the transition will cause disruption, expense and delay CBP so far is sticking to the deadline

ACE Originally budgeted at $1 billion and expected to take four years, ACE has been in development for 14 years and its cost is now estimated at about $4.5 billion That amount roughly equals the cost to build a Nimitz class aircraft carrier, or the estimated 2015 GDP of Montenegro, or a little more than $14 for every adult and child living in the United States

ACE GAO says that, by 2010, CBP had used 80 percent of its budget and had only delivered 35 percent of its intended capabilities ACE s so-called FOC (fully operational capacity) date has slipped at least 5 years It s been described as a never ending, over budget ERP rollout

TPP is not finished A ministerial meeting is in progress in Hawaii Remaining issues include intellectual property, market access, pharmaceuticals, agriculture and automobiles It is not clear whether textiles and apparel are resolved or whether there are still open issues concerning rules of origin

Presidential candidates Hillary Clinton: Any trade deal has to produce jobs and raise wages and increase prosperity and protect our security She hasn t committed to TPP, a departure from her previous support Elizabeth Warren: The facts show that, despite all the promises, these trade deals were just another tool to tilt the playing field in favor of multinational corporations and against working families

Presidential candidates Martin O Malley: Join me in opposing TPP Americans deserve to know where leaders stand Bernie Sanders: The president told us that every trade union in America is wrong and Wall Street [is] right [TPP] would continue the process by which we have been shipping good-paying American jobs to low-wage countries overseas and continue the race to the bottom for American workers

Presidential candidates Jeb Bush: [TPP] is a great deal for America free trade is essential to creating the sustained, high rate of growth that we need to create wellpaying jobs, new opportunities for American farmers and businesses, and even greater access to global supply of goods and services Ted Cruz (with Paul Ryan): Promoting American trade will create more opportunity in the country, and so we strongly urge our colleagues in Congress to vote for trade promotion authority

Presidential candidates Bobby Jindal: I m not in favor of giving this president fast track authority I don t trust him This is a president who has broken the law [I]s he going to strangle our economy? Rick Perry (via spokesperson): He believes America can achieve robust economic growth and job creation, similar to what has occurred in Texas, with trade agreements like the Trans Pacific Partnership

Presidential candidates Marco Rubio: [W]e can finish negotiating a pact that will help build a network of Pacific economies based on competition, the rule of law and free markets Rick Santorum: I would say let s put this off until the next administration, until we actually have a president who has some trust built up in Washington

Donald Trump weighs in Free trade only works if you have smart leaders and great negotiators We re checkers players against grandmaster negotiators Will the Republican fringe, steeped in anti-obama vitriol, sacrifice TPA and TPP just so the president gets no credit for it?

TPP prospects With few legislative days left this year, and the publication and notice provisions of TPA, Congress is unlikely to get TPP done before the end of the session TPP negotiations aren t even done Next year is an election year, when there can be no promises about trade legislation at all It s likely we won t see TPP until after the next presidential inauguration in 2017

Jon Fee Alston & Bird LLP 950 F Street, N.W. Washington, D.C. 20004 202 239 3387 jon.fee@alston.com