Customs Reauthorization Summary: FTA Enforcement, Export Promotion, Honey Transshipment

(NOTE: This is part three of a four part summary of customs reauthorization. See 1602170074 for part one and 1602230080 for part two. International Trade Today will publish the final part of the summary in the coming days.)

Title V – Small Business Trade Issues and State Trade Coordination

Title V focuses on export promotion and small business. Sections require the federal government to give grants to states to assist small businesses with trade promotion services, and to create a mechanism to include the input of small businesses in trade agreement negotiations. The law also mandates enhanced coordination between federal and state trade promotion efforts.

Small business input for FTAs (Sec. 502). The new law requires formation of an interagency working group shortly after the U.S. enters into negotiations for any free trade agreement to allow small businesses to offer input. A representative sample of small businesses will offer input on negotiating objectives and potential impact to the working group, which will then in turn report its findings to Congress.

State trade promotion grants (Sec. 503). The Small Business Administration is tasked with establishing a State Trade Expansion Program that will make grants to states that will be used to assist small businesses participate in trade missions, trade shows and consulting, among other services.

Other provisions. Other sections of Title V of the Trade Facilitation and Trade Enforcement Act of 2015 require the formation of a working group to coordinate federal and state export coordination efforts and a report on improvement of the government’s Export.gov website (Sec. 504). Members of the Trade Promotion Coordinating Committee, which is now legally required to include representatives of state trade promotion agencies, must draft an export promotion coordination plan and an annual federal-state export strategy (Sec. 505).

Title VI – Additional Enforcement Provisions

Title VI of the Trade Facilitation and Trade Enforcement Act of 2015 includes additional enforcement provisions on top of the antidumping and countervailing duty enforcement provisions in other parts of the bill. These relate to enforcement of trade agreements, as well as efforts to improve country of origin verification for honey, a long-time goal of the U.S. honey industry (see 13062114).

Enforcement of existing trade agreements. The new law’s provisions to improve enforcement of existing trade deals include a framework for prioritizing and enforcing WTO and other trade agreements, as well as monitoring compliance.

Trade enforcement priorities (Sec. 601). The U.S. Trade Representative, working with congressional committees, must set priorities for enforcing provisions of World Trade Organization agreements or other trade agreements that foreign governments are violating. By July 31 of each year, USTR will report to Congress on these priorities, and any efforts to address them. USTR must take action to address the priorities by Jan. 31 of each year, when it holds interim talks with congressional committees to detail its efforts.

Reinstatement of retaliation (Sec. 602). The law allows USTR to reinstate retaliation authorized by the WTO or under other trade agreements upon request from domestic industry. Retaliation had previously been valid only for four years, unless extended.

Interagency trade agreement enforcement center (Sec. 604). The U.S. Trade Representative is required to form an Interagency Center on Trade Implementation, Monitoring, and Enforcement. The new center will assist USTR in investigating potential disputes under the WTO and other trade agreements, as well as enforcement and monitoring compliance with trade agreements.

Retaliation authorized for failure to enforce trade agreements (Sec. 607). Tariffs and other forms of retaliation are authorized if a foreign country fails to enforce its commitments under a trade agreement with the U.S., including when related to trade in goods or services, foreign investment, regulations, and other barriers.

Trade enforcement trust fund (Sec. 611). The Treasury Department will be required to transfer $15 million per year, up to a maximum of $30 million, into a new Trade Enforcement Trust Fund that will support actions to enforce provisions WTO and other trade agreements.

Import monitoring tool (Sec. 603). The law requires a new import monitoring tool be set up on the International Trade Commission website by mid-August. The tool will allow public access to data on the volume and value of goods imported into the U.S. “for the purpose of assessing whether such data has changed with respect to such goods over a period of time.” After the tool comes online, Commerce will have to publish a quarterly report on changes to the volume and value of imports and exports.

Honey transshipment (Sec. 608). CBP is required to consult with private industry, foreign countries and the Food and Drug Administration to compile a database of the characteristics of honey produced in different countries, for use in verification of country of origin markings of imported honey. It also conveys the “sense of Congress” that FDA should establish a national standard of identity for honey.

Special 301 action plan (Sec. 610). The law requires USTR to develop “action plans” for countries that have spent at least one year on the Special 301 Priority Watch List for serial violators of intellectual property rights. The president is authorized to take “appropriate action” if these countries don’t meet benchmarks outlined in the plans.

Other provisions. CBP and Immigration and Customs Enforcement are required to ensure their personnel are trained in detection, identification, detention, seizure and forfeiture of illicitly imported and exported cultural property, archeological or ethnological materials, as well as fish, wildlife and plants (Sec. 606). The law also requires that USTR establish the position of Chief Innovation and Intellectual Property Negotiator (Sec. 609).

Title VII – Engagement on Currency Exchange Rate and Economic Policies

Title VII of the new law would include new provisions meant to address currency manipulation. The law would require a report on the currency exchange rate policies of each major U.S. trading partner, and engage with each country found to have policies with adverse effects on the U.S. (Sec. 701). If consultations don’t bear fruit, the president would be authorized to take the following remedial action:

• Prohibit any new financing by the Overseas Private Investment Corporation in the country
• Prohibit the federal government from procuring goods or services from the country
• Instruct the U.S. Executive Director of the International Monetary Fund to call for additional surveillance
• Instruct the USTR to take the currency manipulation into account when deciding whether to enter into a trade agreement with the country

The law also creates a nine-member private sector advisory committee on international exchange rate policy (Sec. 702).