BIS Expects Section 232 Exclusion Rule by End of Year
The head of the Bureau of Industry and Security told senators that the agency expects to put out a rule by the end of the year adjusting how Section 232 exclusions are granted.
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Commerce Undersecretary Alan Estevez noted they received 98 comments (see 2202090012). He was responding to a complaint during a July 14 hearing from Sen. Robert Menendez, D-N.J., that hard quotas on Korean steel exports have added warehousing costs for one of his constituents, and asked why the goods could not be subject to a general exclusion, and therefore be exempt from the quota.
Mike Dankler, a principal at Michael Best Strategies in government affairs, said common themes among the comments to BIS were that, from an exclusion requester's perspective, the process still isn't working that well. "Objectors can still swoop in and object, and there isn’t very much verification being done," he said.
By verification, he means that if a domestic company says it can produce the quantity and quality an exclusion requestor is seeking to import within, for instance, 30 days, that assertion is accepted by BIS. It's up to the requestor to prove it's wrong as it rebuts the objection. In the past, some companies were able to do so by showing an email record of asking for a steel product from domestic companies and getting replies that they could not fill the order in the near future. But, Dankler said, "It seemed like a lot of people weren’t willing to put it in writing all of a sudden."
Dankler said the hard quota on Korean steel products continues to be "a real issue," even though there are some exclusions for quotas.
Dankler said his firm submitted comments on tin plate, which is a product used in canning. Traditionally, canned goods producers have imported about half the tin plate used for soup, canned fruits, vegetables, etc. Buyers of tin plate are arguing it should get a general exclusion, because production is declining even after the industry has had Section 232 protection for four years. But, Dankler said, since the Biden administration came in, tin plate exclusions have been granted more than 70% of the time, whereas during the previous administration, they were rejected about 75% of the time.
He said he doesn't know how the BIS rule will change the Section 232 landscape. He said he is concerned that it could change to favor domestic producers more than the current approach does.
"It’s been a problem since the very beginning. It’s a fight and it doesn’t always work out too well," he said, adding, "I appreciate that the Commerce department has a tough job to do."