Ways and Means Members Urge New Customs Provisions in NAFTA, Caution on Steel and Aluminum Reviews
Lawmakers urged U.S. Trade Representative Robert Lighthizer to streamline customs procedures in the upcoming NAFTA renegotiation during a June 22 hearing at which House Republicans also joined their Democratic colleagues in calling for discretion in the Trump administration’s ongoing Section 232 metals investigations. During a House Ways and Means Committee hearing on Trump administration trade policy, Lighthizer said trade facilitation would be part of the negotiations. While acknowledging the possibility for "technical" disagreements on customs provisions, he said he “can’t imagine” that NAFTA parties would differ in "direction” on customs talks. Committee Chairman Kevin Brady, R-Texas, in his opening statement called for updates to NAFTA to reflect “modern realities” of customs barriers, digital commerce, intellectual property and state-owned enterprises, among other areas.
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Rep. David Schweikert, R-Ariz., said it would be important for the parties “to embrace a common platform for technology. And I don’t care if it’s based in a distributive ledger, where you have GPS tags "or radio frequency identification readers. Lighthizer said how to maximize the efficiency of cross-border transactions and customs movements is “such an important question.” NAFTA should provide streamlined mechanisms for transmitting information including certification, ownership and value documents, so “there aren’t these great gaps that you have to wait twenty-five years for the next major negotiation to fill,” Schweikert said. Lighthizer said the parties should build processes into the agreement that allow painless tweaks to the agreement if there is a “huge directional change.” He added: “This is something that we’re cognizant of, and perhaps we haven’t thought enough about it, but certainly will. We want to work with Congress to do it.”
As for the administration’s ongoing Section 232 investigations on steel and aluminum imports, Brady, as well as Republican Reps. Pat Tiberi of Ohio, George Holding of North Carolina and Jackie Walorski of Indiana coming from different angles, called for the administration to exercise caution in terms of scope and timing. Congressional Democrats in a June 20 letter to Lighthizer and Commerce Secretary Wilbur Ross urged transparency and due process in the administration’s reviews (see 1706210047). The first initiated review, on steel, is expected to conclude by the end of this month.
If the reviews are “done improperly, we cut off supply that our companies need to stay competitive,” Brady said. “Done hastily, we raise costs and prove to our partners that we aren’t reliable. Done indiscriminately, we harm countries that trade fairly and send a protectionist signal to those looking for an excuse to do the same. It will encourage others to restrict our exports, even in unrelated sectors, which only hurts the growth of jobs and paychecks here at home.” While Tiberi expressed concern about the influx of oil country tubular goods imports from South Korea since the U.S.-South Korea Free Trade Agreement entered into force in 2012, he said many employers in his district have signaled concern that some U.S. trading partners could retaliate against any national security-related import measures assessed as a result of the investigations. Holding said the administration should recognize the “very special relationship” with the United Kingdom, especially in terms of national security, before taking action to restrict steel and/or aluminum imports from the country, which he added should potentially be exempted from any adverse action.
Walorski’s constituents have expressed anxiety about the prospect of tariffs and quotas on aluminum inputs to make trailers, RVs and “all sorts of other products,” she said. “I’ve already been contacted by some of these manufacturers, and they’re already being impacted by price differences, and they’re very, very uncertain as to what’s going to happen, as am I.” Lighthizer agreed to convey Walorski’s request to the administration to undertake the investigations “thoughtfully, thoroughly, transparently” to determine any trade actions pursuant to the 232 investigations. Lighthizer said the administration is being mindful of retaliation possibilities, adding that the investigations started with the “proposition” that there is “extraordinary” excess steel and aluminum capacity around the world, mostly spurred by China.
Border measures are insufficient to deal with the glut of imports in those metals to the U.S., and it was reasonable to initiate the investigations under the 232 tool at the administration’s disposal, Lighthizer said. “We’re always worried about retaliation,” he said. “But if we don’t defend ourselves because of the fear of retaliation, then we are just going to be the residual of what nobody else wants. So we can’t let unfair trade go forward just for that reason. But certainly, it’s a reasonable thing to think about and try to control.”