Outdated customs and border policies are costing American manufacturers billions of dollars a year in increased operating costs and unfair competition, while also preventing manufacturers from moving their products in and out of the United States efficiently.
Current customs rules that have not fully embraced technological and trade advances are creating bottlenecks at the border that impede the just-in-time manufacturing process, which is critical to the productivity, efficiency and global competitiveness of the U.S. manufacturing sector. The government’s failure to enforce longstanding trade rules is leaving manufacturers found to be injured by unfair trade without the remedy that the law requires. Moreover, America’s innovative manufacturing sector remains under global threat from intellectual property theft and the need for stronger U.S. border protection for counterfeit goods. Finally, many manufacturers are facing tariffs on necessary inputs imported from overseas that are not even produced in the U.S.
While the problems are substantial and costly, concrete and meaningful solutions are at hand if bills passed by the House and Senate can quickly be reconciled. Before July, the House and Senate both passed different versions of the Trade Facilitation and Trade Enforcement Act of 2015, containing many important and needed improvements to customs and related rules. Expectations that the two bodies would quickly work out differences and put into place the first piece of legislation to reauthorize U.S. Customs and Border Protection in more than 10 years have yet to materialize.
But there is still time to get the job done, and manufacturers of every size urge Congress to do so now.
There are several provisions that are critical to grow manufacturing and sustain and create manufacturing jobs in the U.S.; these provisions enjoy strong bipartisan support in both the House and Senate.
First, manufacturers need enacted the new provisions that will modernize CBP processes, cut red tape and facilitate legitimate trade, including provisions on duty drawback modernization, the raising of de minimis thresholds to eliminate unnecessary paperwork and the exemption from duty for container residue. Reauthorizing CBP and promoting trade facilitation initiatives are critical to manufacturers that require access to global markets to grow.
Second, manufacturers also support provisions in the Senate’s Enforcing Orders and Reducing Customs Evasion (ENFORCE) Act, which would create a transparent and regularized process for CBP to review and act to reclassify imports that have been found to be evading trade remedy orders. Manufacturers in the United States that have been found to be injured by unfair imports are increasingly finding that CBP is failing to enforce these rules adequately at the border. Despite years of work, CBP has failed to provide domestic manufacturing industries with an effective system to properly classify unfairly traded imports that are seeking to evade trade remedy rules. It is long past time for the new ENFORCE Act processes with timelines and judicial review to be put into place to ensure that CBP is accountable and is fully enforcing longstanding laws.
Third, manufacturers strongly support the new, transparent and regularized Miscellaneous Tariff Bill process included in the Senate bill to correct distortions in the U.S. tariff code by eliminating tariffs on imported products that are not produced in the U.S. Action on a new MTB process is long overdue, since the last MTB expired in 2012. This lapse has resulted in an annual tax hike on manufacturers of $748 million and a $1.857 billion economic loss to the U.S. economy.
Fourth, manufacturers need the new provisions in both the House and Senate bills that would create new tools to protect and enforce intellectual property theft at the border and new Senate provisions to provide stronger tools to address weak intellectual property protection overseas. Intellectual property is the lifeblood for manufacturers large and small, and the United States needs to be at the forefront domestically and internationally of ensuring strong enforcement of intellectual property in the United States and strong rules and enforcement overseas.
With a weak global economy and growing competitors overseas, exporting has become more competitive than ever before. We need updated and effective policies and accountable government agencies to ensure that manufacturers in the United States are not competing with one or both hands behind their back.
When Congress took action on Trade Promotion Authority, trade preferences and Trade Adjustment Assistance legislation earlier this year, many congressional leaders made promises also to complete work on the trade facilitation and enforcement legislation. That commitment is critical to keep given that modernized, strong customs processes and full enforcement of trade rules are even more important with the U.S. seeking to expand trade with new trade agreements negotiated under TPA and with developing countries through the renewed trade preference programs.
It is time for Congress to keep its promises and help grow manufacturing in the United States by finalizing and passing the Trade Facilitation and Trade Enforcement Act of 2015.
Linda Dempsey is the vice president of international economic affairs at the National Association of Manufacturers. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
