Senate Majority Leader Chuck Schumer, in a letter to colleagues, said it's "likely" that the Senate will consider the National Defense Authorization Act this week, and the China package that passed the Senate in June may be attached to it. That bill, the U.S. Innovation and Competition Act of 2021, included a renewal of the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill (see 2106090041). Schumer said “there seems to be fairly broad” bipartisan support for adding USICA to the National Defense Authorization Act, which would allow a USICA negotiation with the House “to be completed alongside” the NDAA before the end of the year. The House plans to write its own version of USICA.
David Spooner, Washington counsel for the U.S. Fashion Industry Association, said that while the U.S. trade representative's China policy speech was underwhelming, he doesn't think the possibility of renewing 549 exclusions that expired at the end of last year will be the only olive branch to importers hurt by the China trade war. "Will we see other [expired] exclusions open to renewal? A new window open for exclusions? I hear 'yes.' When that will happen, and what that will look like, remains unclear," Spooner said at a virtual USFIA conference Nov. 9.
A bill that would flip the burden of proof on forced labor to say that goods either made in Xinjiang or made by a company that accepts workers transferred from Xinjiang are made with forced labor unless proven otherwise has been attached to the National Defense Authorization Act in the Senate. That means the Uyghur Forced Labor Prevention Act is more likely to pass the Senate before the end of the year.
Sen. Jeff Merkley of Oregon, the co-chair of the Congressional Executive Commission on China, said that in order to transition as soon as possible to renewable energy without doing so "on the backs of slave labor," the House of Representatives "must pass and the president must sign into law the Uyghur Forced Labor Prevention Act." The Senate passed a version of this bill in July; a House version was included in the EAGLE Act, which passed out of the House Foreign Affairs Committee, and Merkley's co-chair, Rep Jim McGovern of Massachusetts, said he felt the Senate approach was not strong enough (see 2107290018). Merkley and McGovern are both Democrats.
The House is not clamoring to take up the Senate-passed Uyghur Forced Labor Prevention Act, as Democrats weigh the fact that aligning with the Senate may mean a bill becomes law sooner, with their view that the House approach is stronger.
Importers of goods that were made in Xinjiang, or contain inputs that were mined or grown in Xinjiang, would have to prove to CBP's satisfaction that the goods were not made with forced labor, starting 300 days after the signing of the Uyghur Forced Labor Prevention Act if the Senate version is the one that becomes law. The Senate bill, which passed unanimously the evening of July 14, directs the Department of Homeland Security, after consulting with the Office of the U.S. Trade Representative and the departments of Labor and State, to solicit public comments “on how best to ensure that goods made with forced labor in the People’s Republic of China, including by Uyghurs, Kazakhs, Kyrgyz, and members of other persecuted groups in the Xinjiang Uyghur Autonomous Region of the People's Republic of China, are not imported into the United States.” That public notice would have to follow within 45 days of enactment. The public would have at least 60 days to comment, and a public hearing would follow within 45 days of the end of that period.
Concerns about apparel shipments being detained due to a withhold release order were the biggest worry for U.S. Fashion Industry Association Virtual Washington Trade Symposium attendees, and USFIA customs counsel John Pellegrini told them he had no news to allay their fears.
This year's version of the Senate Uyghur Forced Labor Prevention Act, harmonized with the House version, passed the Senate Foreign Relations Committee June 24 by a unanimous voice vote. The bill, sponsored by Sens. Marco Rubio, R-Fla., and Jeff Merkley, D-Ore., would create a rebuttable presumption that all goods produced in China's Xinjiang region were made with forced labor. Before the vote, Rubio said that there are 1,500 companies located in or near more than 100 mass detention facilities. "This is slavery. As simple as that. American companies argue that their supply chains are clean. What this bill says is: 'Prove it. Especially if it's coming out of Xinjiang.'" Rubio said he expects it will be impossible to prove there's no forced labor involved in the goods in most cases.
Although the Senate Finance Committee's bipartisan amendment to the China package received 91 votes, some prominent Democrats on trade in the House aren't sure how its provisions could move in their chamber, if Republicans don't agree to calling them up under suspension, which requires a two-thirds vote for passage.
Co-chairs of the Congressional-Executive Commission on China, Sen. Jeff Merkley, D-Ore. and Rep. Jim McGovern, D-Mass. are asking Apple to engage with CBP to ensure that the company's supply chains are free of forced labor, and that they do not hire suppliers that accept "labor transfer" workers. According to press reports, Uyghur workers are being transplanted to other parts of China, in addition to their conscription at local factories and fields. CBP didn't comment.