Important Bipartisan Trade Legislation with Focus on China Is Introduced in the US Senate

Ray Bucheger, FBB Federal Relations

While the package is expected to ultimately clear the Senate, the House has yet to begin work on its own China bill. Work in the House could take several weeks, which would be followed by negotiations between the House and Senate to reconcile what are likely to be many differences between the two bills.\

It is not yet clear if/how the House will incorporate the trade-related items into their own China bill. We are staying in touch with House Ways and Means Committee staff and will keep you updated as we learn more.

Summary of the provisions in the Wyden-Crapo Amendment

Section 301 Exclusion Process

The Wyden-Crapo legislation would require three primary actions with respect to the imposition of tariffs pursuant to an investigation under Section 301 of the Trade Act of 1974:

The legislation requires USTR to initiate an exclusion process for tariffs imposed pursuant to USTR’s Section 301 investigation into Chinese technology transfer, intellectual property, and innovation, and requires a process for renewing any exclusions granted by USTR under this process. Factors that USTR must consider when evaluating an exclusion request include:
1. Whether the article or a reasonable substitute is commercially available in the U.S.;
2. Whether the imposition of tariffs would unreasonably increase consumer prices for day-to-day items consumed by low- or middle-income families;
3. Whether the imposition of tariffs would have an unreasonable impact on U.S. manufacturing;
4. Whether the imposition of tariffs would have an unreasonable impact on the ability of an entity to fulfill contracts or to build critical infrastructure; or
5. Whether the failure to grant the exclusion is likely to result in a particular entity or entities having the ability to abuse a dominant market position.

The legislation requires USTR to reinstate all exclusions that expired on December 30, 2021 and refund duties paid on entries filed on or before December 31, 2022, with retroactivity for certain liquidations and reliquidations.

The legislation generally creates a new process for USTR to follow when it imposes tariffs pursuant to a Section 301 investigation, including a new requirement that USTR establish an exclusion process unless USTR certifies to Congress that such a process would impair its ability to resolve the underlying issue or it is impractical due to the low value of duties. USTR will need to publish regulations for administering the new process, subject to certain criteria included in the legislation.

Provisions Related to Forced Labor

The Wyden-Crapo legislation formally establishes a Forced Labor Division in CBP’s Office of Trade and requires it to provide quarterly briefings to Congress. The legislation also requires CBP, in consultation with the Department of State and the Department of Labor, to prioritize certain investigations, including instances of forced labor in which a government is complicit.

Generalized System of Preferences (GSP)

The Wyden-Crapo legislation extends GSP until January 1, 2027 and includes a retroactivity provision allowing importers to get refunds on duties paid since the previous GSP expired on December 31, 2020. The legislation also makes countries ineligible for GSP unless they meet certain criteria on human rights and the environment; and requires the President to take into account a number of new factors when designating a country as a GSP beneficiary, including factors related to the environment, women’s economic empowerment, rule of law, and digital trade.

Miscellaneous Tariff Bill (MTB)

The Wyden-Crapo legislation reduces or eliminates duties on certain imports through December 31, 2023 as part of the Miscellaneous Tariff Bill (MTB) process and reauthorizes the American Manufacturing Competitiveness Act (AMCA), which was first passed in 2016 and gives the USITC authority to conduct the MTB petition, review, and recommendation process.

Ray Bucheger
FBB Federal Relations
Affiliated with Lindsay Hart, LLP
cell: 202-236-5101
http://FBBFederalRelations.com


Important Bipartisan Trade Legislation with Focus on China Is Introduced in the US Senate Ray Bucheger, FBB Federal Relations While the package is expected to ultimately clear the Senate, the House has yet to begin work on its own China bill. Work in the House could take several weeks, which would be followed by negotiations between the House and Senate to reconcile what are likely to be many differences between the two bills.\ It is not yet clear if/how the House will incorporate the trade-related items into their own China bill. We are staying in touch with House Ways and Means Committee staff and will keep you updated as we learn more. Summary of the provisions in the Wyden-Crapo Amendment *Section 301 Exclusion Process* The Wyden-Crapo legislation would require three primary actions with respect to the imposition of tariffs pursuant to an investigation under Section 301 of the Trade Act of 1974: The legislation requires USTR to initiate an exclusion process for tariffs imposed pursuant to USTR’s Section 301 investigation into Chinese technology transfer, intellectual property, and innovation, and requires a process for renewing any exclusions granted by USTR under this process. Factors that USTR must consider when evaluating an exclusion request include: Whether the article or a reasonable substitute is commercially available in the U.S.; Whether the imposition of tariffs would unreasonably increase consumer prices for day-to-day items consumed by low- or middle-income families; Whether the imposition of tariffs would have an unreasonable impact on U.S. manufacturing; Whether the imposition of tariffs would have an unreasonable impact on the ability of an entity to fulfill contracts or to build critical infrastructure; or Whether the failure to grant the exclusion is likely to result in a particular entity or entities having the ability to abuse a dominant market position. The legislation requires USTR to reinstate all exclusions that expired on December 30, 2021 and refund duties paid on entries filed on or before December 31, 2022, with retroactivity for certain liquidations and reliquidations. The legislation generally creates a new process for USTR to follow when it imposes tariffs pursuant to a Section 301 investigation, including a new requirement that USTR establish an exclusion process unless USTR certifies to Congress that such a process would impair its ability to resolve the underlying issue or it is impractical due to the low value of duties. USTR will need to publish regulations for administering the new process, subject to certain criteria included in the legislation. *Provisions Related to Forced Labor* The Wyden-Crapo legislation formally establishes a Forced Labor Division in CBP’s Office of Trade and requires it to provide quarterly briefings to Congress. The legislation also requires CBP, in consultation with the Department of State and the Department of Labor, to prioritize certain investigations, including instances of forced labor in which a government is complicit. *Generalized System of Preferences (GSP)* The Wyden-Crapo legislation extends GSP until January 1, 2027 and includes a retroactivity provision allowing importers to get refunds on duties paid since the previous GSP expired on December 31, 2020. The legislation also makes countries ineligible for GSP unless they meet certain criteria on human rights and the environment; and requires the President to take into account a number of new factors when designating a country as a GSP beneficiary, including factors related to the environment, women’s economic empowerment, rule of law, and digital trade. *Miscellaneous Tariff Bill (MTB)* The Wyden-Crapo legislation reduces or eliminates duties on certain imports through December 31, 2023 as part of the Miscellaneous Tariff Bill (MTB) process and reauthorizes the American Manufacturing Competitiveness Act (AMCA), which was first passed in 2016 and gives the USITC authority to conduct the MTB petition, review, and recommendation process. Ray Bucheger FBB Federal Relations Affiliated with Lindsay Hart, LLP cell: 202-236-5101 http://FBBFederalRelations.com
CBFANC Newsletter - May 2021 - Info Expeditor