Details of Draft FTA Bills’ MPF Increase, GSP & ATPDEA Renewal
On July 7, 2011, the House Ways and Means and Senate Finance Committees held “mock” mark-ups and approved without amendment draft implementing bills for the Korea, Colombia, and Panama free trade agreements, which also include an increase in the merchandise processing fee for formal entries and retroactive renewal of the Generalized System of Preferences (GSP) and Andean Trade Preference Act (ATPA)/Andean Trade Promotion and Drug Eradication Act (ATPDEA) preference programs.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Would Renew GSP and ATPDEA Retroactively
Both versions of the draft Colombia FTA implementing bills included provisions to renew GSP and ATPDEA, as follows:
GSP. The draft bills would renew GSP through July 31, 2013, effective 15 days after enactment.
The draft bills lay out procedures for the retroactive application of GSP (and reimbursement of duties paid) for articles that entered after December 31, 2010 (its date of expiration), but before the date of renewal.
ATPDEA. The draft bills would also renew ATPDEA through July 31, 2013, effective 15 days after enactment.
The draft bills lay out procedures for retroactive application of ATPDEA (and reimbursement of duties paid) for articles that entered after February 12, 2011 (its date of expiration), but before the date of renewal.
The draft bills would also extend the ATPDEA regional fabric tariff preference level (TPL) and brassiere provision through July 31, 2013. Authority for the President to take certain bilateral emergency tariff actions with respect to ATPDEA apparel would also be extended through July 31, 2013.
Would Increase MPF for Formal Entries; Extend MPF for Formal, Informal Entries
The draft Korea (KORUS) bills would increase the merchandise processing fee (MPF) on formal entries to .3464% ad valorem (House) or .343% ad valorem (Senate), from the current rate of .21% ad valorem. According to the Ways and Means Committee, this would be the first increase in the MPF since 1994.
The draft Colombia and KORUS bills would also extend the MPF for formal and informal entries through certain dates in 2020 or 2021.
Would End Fee Exemption for Canada, Mexico, Caribbean Passengers
The draft Colombia FTA bills would amend Consolidated Omnibus Budget Reconciliation Act (COBRA) section 13031 to eliminate the current exemption from customs user fees for air and sea passengers arriving from Canada, Mexico, and the Caribbean. The amendment would leave in place the exemption for travelers arriving from U.S. territories and possessions.
According to various press reports, Canadian industry and government have urged the U.S. Congress to rethink its plans to eliminate the current exemption.
Would Extend COBRA Passenger and Conveyance Processing Fees
The draft Colombia, Panama, and KORUS bills would extend the passenger and conveyance processing fees authorized under COBRA Section 13031 through certain dates in 2020 and 2021.
Senate Draft KORUS Bill Would Modify, Renew TAA
The Senate Finance-approved draft KORUS bill contains a provision to modify and renew Trade Adjustment Assistance1. The House Ways and Means-approved version does not.
House Ways and Means Chair Offers to Mark Up FTA and TAA Bills on Same Day
In his opening statement at the “mock” mark-up, House Ways and Means Committee Chair Camp (R) noted that the White House has said that reaching an agreement on TAA is necessary for it to send the pending FTA implementing bills to Congress. Therefore, Camp stated that if the Administration formally sends up the FTA implementing bills to Congress without TAA, he intends to formally mark up those bills and TAA on the same day.
Senate Finance Chair is Open to Other Options for Extending TAA
In his opening remarks, Senate Finance Chairman Baucus (D) noted that he included TAA in the KORUS draft implementing bill for the “mock” mark-up, but that he remains open to other options for extending TAA, as long as they provide certainty that the bipartisan TAA deal will be enacted in tandem with the FTAs.
See future issues for details on the provisions in the draft bills to establish the necessary conditions for the FTAs to enter into force.
1The Senate Finance Committee’s draft KORUS bill contains a number of non-trade-related offsets that are not in the House Ways and Means draft bill due to the TAA provision.
(See ITT’s Online Archives or 07/07/11 news, 11070717, for BP summary of “mock” mark-ups with links to additional summaries.)
Senate Finance draft FTA implementing bills available here
House Ways and Means draft FTA implementing bills available here
Camp opening statement available here