U.S. lawmakers in the Senate has passed a US Customs and Border Protection bill that will streamline import duties on goods destined to be re-exported and allow articles exported from the country to be commingled for the first time. The bill also toughens U.S. trade law enforcement and rules against currency manipulation.
The Senate passed the legislation in a 75-20 vote, after the bill had stalled because of an internet tax ban included in its final language. The legislation now heads to the White House before becoming law.
It is the fourth and final trade bill that congressional Republicans have vowed to pass. It’s also the first overhaul of Customs in roughly 15 years and one that many have said is long overdue.
It marks a “a major step forward” for the U.S. in international trade, said Senators, Orrin Hatch; R-Utah; Ron Wyden, D-Ore.who helped spearhead the legislation.
“This bill is about coming down hard on the trade cheats who are ripping off American jobs and, the truth is, past trade policies were often too old, too slow or too weak for our country to fight back,” Wyden said.
Overall, the bill reauthorizes the U.S. Customs and Border Protection agency, streamlines trade rules that aim to keep importers from avoiding U.S. antidumping and countervailing duties, adds new protections for intellectual property rights and provides more tools to identify and address currency manipulation.
Drawback or the amount of excise or import duty remitted on imported goods that the importer re-exports rather than sells domestically, has also been streamlined under the bill.
The legislation will standardize the timeframes for filing drawback and modernize claimant record keeping requirements. Drawback claimants will have to retain records for five years after liquidation. Drawback claims will have to be filed electronically and no later than five years after the date on which the merchandise is imported or, if the claim is based on merchandise imported on more than one date, the earliest date.
“It really tries to streamline and simplify the drawback system and modernize it so more people can take advantage of it,” President and CEO of the American Association of Exporters and Importers, Marianne Rowden said in December when the bill passed the House.
The legislation also grants duty-free treatment to any exported product returned to the U.S. within three years of being exported and certain U.S. government property returned to the country. Articles exported from the U.S. are also allowed to be commingled and the origin, value and classification of such articles may be accounted for using an inventory management method for the first time.
It should be especially beneficial to North America trade, Rowden said, where “some people use warehouses or distribution centers in Canada and Mexico along the border and goods are moving in and out all the time.”
The bill also increases the threshold on the value of goods that can be imported by one person on one day free of duty and tax, something which should benefit e-commerce.
The bill stops short of sanctions on currency manipulation, but does allow the U.S. to bar countries from trade deals and government procurement contracts if they artificially devalue their currencies to gain a competitive advantage through cheaper exports.
Many inside the trade industry hope the legislation will ring in a new era, in which U.S. lawmakers are more attentive to changes and evolutions in international trade.
After September 11, 2001, Customs was moved under the Department of Homeland Security, and the debates over whom and what group had authority over the agency stalled any progress to update important Customs practices and guidelines.
“Modernizing CBP operations is essential in the ever-increasing global economy,” senior Vice President for government relations at the National Retail Federation, David French wrote in a letter to Congress supporting the latest Customs bill. The bill, he said “will provide CBP with the tools needed to ensure companies can continue to compete in the global economy.”
Many in the industry hope the legislation will mark a return to the practice of reauthorizing Customs every two years. Given Congress’s recent rate of success with trade bills, there has even been some discussion that lawmakers could include reauthorization in its next session or even a supplemental bill within the next year.
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