Senate Appropriations Approves FY 2011 Bill for ITA, BIS, USTR, and ITC

Although the Senate Appropriations Committee has approved S. 3636, it is not yet in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate, and then the bill must be approved (enacted) by the President.

The following are highlights of the trade-related provisions in the Senate Appropriations Committee's (Committee's) bill (S. 3636) and report² (S. Rept. 111-229).

ITA Would Receive $77M Increase

S. 3636 would provide the International Trade Administration with $524 million in FY 2011, $77.5 million more than was appropriated in FY 2010.

Of this amount, the Committee is recommending $55 million for Manufacturing and Services; $55 million for Market Access and Compliance; $72 million for the Import Administration; and $314 million for Trade Promotion and U.S. Foreign Commercial Services.

NEI and enforcing trade agreements. The Appropriations Committee recognizes the importance of the National Export Initiative (NEI) and supports a large majority of the request for this new trade campaign especially since the Administration followed the Committee's direction to enhance the U.S. Foreign Commercial Service. An additional key component of the NEI, which DOC is directed to set as an added priority, is better enforcement and compliance of existing trade agreements to ensure U.S. exporters can overcome trade barriers overseas.

Staffing for NEI. The Committee states that the ranks of the U.S. Foreign Commercial Service (FCS) have remained stagnant for several years. Now, the FCS will serve as the personnel backbone of the NEI, and the Committee directs the Commerce Department to increase FCS's role overseas. However, the Committee also cautions the Commerce Department to better plan for the how ITA will reasonably grow the FSC and incorporate such a large influx of new personnel.

The Committee notes that a preliminary Government Accountability Office (GAO) report recently indicated that ITA lacks key planning elements including a clear sense of strategic direction to determine its workforce needs for the NEI. To avoid cost overruns associated with personnel, ITA is directed to provide the Committee with a report within 30 days of enactment that will include a detailed workforce plan and tighter cost estimates, as well as a specific management plan to how the agencies will manage FSC's financial and workforces resources.

Byrd Amendment. The Committee is aware of the World Trade Organization (WTO) Appellate Body's January 16, 2003, ruling regarding the Continued Dumping and Subsidy Offset Act (CSDSOA, aka the Byrd Amendment). The Committee directs the Department of Commerce, in consultation with the Office of the U.S. Trade Representative, to conduct negotiations within the WTO to seek express recognition of the existing right of WTO Members to distribute monies collected from antidumping (AD) and countervailing (CV) duties as they deem appropriate. The agency shall consult with and provide regular reports, every 60 days, to the Senate Appropriations Committee on the negotiations.

WTO talks. In addition, the Committee directs that negotiations be conducted within the WTO consistent with the negotiating objectives contained in the Trade Act of 2002 (Public Law 107-210) to maintain strong U.S. trade remedies laws, prevent overreaching by WTO Panels and the WTO Appellate Body, and prevent the creation of obligations never negotiated or agreed to by the U.S.

USTR Would Receive $3M Increase

S. 3636 would provide $50.8 million for the Office of the U.S. Trade Representative (USTR), a $3 million increase over what was enacted in FY 2010. According to the Committee’s report, the Administration’s Government-wide request for the NEI failed to include USTR. While the Committee has generally supported the NEI, several existing mandates within USTR are worth advancing for the new initiative to succeed, including:

Outstanding FTAs, TPP. The Committee recommends additional funding to resolve outstanding issues related to pending free trade agreements with Korea, Panama, and Colombia, and negotiations shall be conducted to reach an ambitious conclusion to the Trans-Pacific Partnership free trade agreement negotiations.

IPR and labor. The Committee also recommends that the USTR work to enforce international trade obligations undertaken by U.S. trading partners, including those relating to labor and intellectual property rights issues.

2011 APEC Meeting. Within the funding that would be provided, the USTR is directed to utilize resources to successfully host the 2011 Asia-Pacific Economic Cooperation Meeting of Ministers Responsible for Trade Ministerial.

BIS Would Receive $12M Increase

S. 3636 would provide the Bureau of Industry and Security (BIS) with $113 million, a $13 million increase over the FY 2010 enacted level.

ATF Would Receive $48M Increase

S. 3636 would provide $1.2 billion for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), $48 million above what was enacted for FY 2010.

ITC Would Receive $5 Million Increase

S. 3636 would provide $87 million for the International Trade Commission (ITC), an increase of $5 million over what was enacted in FY 2010.

General Provisions

S. 3636 contains the following trade-related general provisions:

Contract ban for “Made in America” labeling violations. If it has been finally determined by a court or Federal agency that any person intentionally affixed a label bearing a Made in America' inscription, or any inscription with the same meaning, to any product sold in or shipped to the U.S. that is not made in the U.S., the person shall be ineligible to receive any contract or subcontract made with funds made available in this Act, pursuant to the debarment, suspension, and ineligibility procedures described in 48 CFR sections 9.400 through 9.409.

Funding restrictions. S. 3636 would restrict the use of certain funding from being used:

Firearm exports to Canada - in connection with requiring an export license for the export to Canada of components, parts, accessories, or attachments for firearms listed in Category I, 22 CFR 121.1 (as it existed on April 1, 2005) with a total value not exceeding $500 wholesale in any transaction, provided that certain conditions are met by the exporting party for such articles. The bill would also instruct District Directors of Customs and postmasters to permit the permanent or temporary export without a license of any unclassified articles specified above to Canada for end use in Canada or return to the U.S. or temporary import of Canadian-origin items from Canada for end use in the U.S. or return to Canada for a Canadian citizen.

The bill further states that the President may require export licenses on a temporary basis if the President determines, upon publication in the Federal Register, that the Government of Canada has implemented or maintained inadequate import controls for the articles specified above, such that a significant diversion of such articles has and continues to take place for use in international terrorism or in the escalation of a conflict in another nation. The President shall terminate the license requirements when reasons for the temporary requirements have ceased. (See Section 520 of S. 3636 for complete details on this provision.)

Patents in new trade agreements - to include in any new bilateral or multilateral agreement the text of (i) paragraph 2 of article 16.7 (patents) of the U.S.-Singapore Free Trade Agreement (FTA); (ii) paragraph 4 of article 17.9 (patents) of the U.S.-Australia FTA; or (iii) paragraph 4 of article 15.9 (patents) of the U.S.-Morocco FTA.

U.S. origin curio or relics firearms - to deny any application submitted pursuant to 22 USC 2778(b)(1)(B) and qualified pursuant to 27 CFR 478.112 or .113 for a permit to import U.S. origin "curios or relics" firearms, parts, or ammunition.

AD/CV negotiating objectives - in a manner that is inconsistent with the principal negotiating objective of the U.S. with respect to trade remedy laws to preserve the ability of the U.S.:

• to enforce vigorously its trade laws, including AD, CV duty, and safeguard laws;
• to avoid agreements that (a) lessen the effectiveness of domestic and international disciplines on unfair trade, especially dumping and subsidies; or (b) lessen the effectiveness of domestic and international safeguard provisions, in order to ensure that U.S. workers, agricultural producers, and firms can compete fully on fair terms and enjoy the benefits of reciprocal trade concessions; and
• to address and remedy market distortions that lead to dumping and subsidization, including overcapacity, cartelization, and market-access barriers.

Tobacco sales, exports - to promote the sale or export of tobacco or tobacco products, or to seek the reduction or removal by any foreign country of restrictions on the marketing of tobacco or tobacco products, except for restrictions that are not applied equally to all tobacco or tobacco products of the same type.

(All of the above funding restrictions were also contained in various House- and Senate-passed Commerce FY 2010 appropriations bills.)

¹FY 2011 is from October 1, 2010 through September 30, 2011.

²Although reports such as S. Rept. 111-229 do not have statutory force and departments and agencies are not legally bound by their declarations, they do explain congressional intent, and executive branch agencies take them seriously because they must justify their budget requests annually to the Appropriations Committees.

(See ITT’s Online Archives or 07/23/10 news, 10072317, for BP summary announcing that the Senate Appropriations Committee had reported S. 3636. See ITT’s Online Archives or 07/22/10 news, 10072216, for BP summary of the Senate Appropriations Committee’s Commerce, Justice, Science, and Related Agencies Subcommittee’s approval of the FY 2011 appropriations bill for Commerce, etc.

See ITT”s Online Archives or 07/07/10 news, 10070725, for BP summary of the House Appropriations Committee’s Commerce, Justice, Science, and Related Agencies Subcommittee’s approval of its FY 2011 appropriations bill for Commerce, etc.)