December 14, 2015

U.S. House Easily Passes Broadest Rewrite Of U.S. Customs Law In 20 Years

U.S. House and Senate negotiators reached a deal last week on a long-pending customs reauthorization bill. While the final bill (H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015) includes the Enforcing Orders and Reducing Customs Evasion (ENFORCE) Act, which MSCI supported, it does not include Senate-passed language that would require executive branch agencies to address currency manipulation, which MSCI also had championed. (The ENFORCE Act provides basic due process and time-limited procedures subject to judicial review for Customs and Border Protections (CBP) to investigate allegations of the evasion of trade remedy rules. Read more about it in this story from last week’s Connecting the Dots.) 

After the agreement was announced, House Ways and Means Ranking Member Sander Levin (D-MI) said he and other Democrats would oppose the measure because the Senate currency language did not make it in the bill. 

However, House Ways and Means Chairman Kevin Brady (R-TX), who was a member of the conference committee that shaped the final deal, spoke on the House floor in support of the measure and highlighted alternative efforts to address currency manipulation included in the final draft. Specifically, the bill requires the “Secretary of the Treasury to submit to Congress a report on the macroeconomic and currency exchange rate policies of each country that is a major trading partner of the United States and to take specific steps if it finds that a currency is undervalued.” The legislation also directs the Treasury Secretary to “conduct enhanced bilateral engagement with each country for which an enhanced analysis of macroeconomic and currency exchange rate policies is included in the report submitted by the Secretary to Congress” and allows the secretary to refrain from enhancing a bilateral trade agreement if he or she “determines that commencing enhanced bilateral engagement would have an adverse impact on the U.S. economy greater than the benefits of such engagement or would cause serious harm to the national security of the United States.” Finally, the bill “authorizes the President to take certain remedial actions regarding a country that fails to adopt appropriate policies to correct the identified undervaluation and surpluses, including: 1) restrictions on U.S. government financing; 2) restrictions on U.S. government procurement; 3) additional efforts at the International Monetary Fund; or (4) by taking into account such currency policies before initiating or entering into any bilateral or regional trade agreement negotiations.” 

 Rep. Brady also noted the bill:

  • Ensures that CBP focuses on its trade-related mission;
  • Modernizes CBP’s automated systems and attempts to reduce paperwork burdens;
  • Gives CBP new tools, including a new investigation process with strict deadlines and judicial review, to act against evasion of antidumping and countervailing duties;
  • Says trade agreements should not include immigration- or greenhouse gas-related provisions;
  • Allows for greater oversight of executive branch trade nominees and oversight of trade deal negotiations;
  • Helps fight human trafficking; and
  • Permanently bans states and localities from taxing Internet access or Internet commerce.

A full summary of the bill and the bill’s language can be found here

The House passed the bill Friday on a 256 to 158 vote. Only three Republicans voted against the legislation while 24 Democrats supported it. 

House Speaker Paul Ryan (R-WI) praised the measure, noting it was the most comprehensive reform of U.S. customs law in a generation. Speaker Ryan said, “Our job is to foster an environment in which American workers can thrive and compete on a level playing field. The bill we just passed does exactly that by removing barriers to legitimate trade, making our exports more competitive, and facilitating small business competition in the global marketplace.” 

 The Senate is expected to debate and pass the bill this coming week.