Ways and Means GOP Undecided on MTB/GSP Package, But Say Timely Passage for Both Important

During a Ways and Means Trade Subcommittee hearing on the new MTB process the same day, subcommittee Chairman Dave Reichert, R-Wash., said timely passage of that and GSP renewal is “critical,” adding that enactment of MTB legislation this year is a committee priority. The committee is “preparing” MTB legislation, Reichert said in his opening statement. Industry officials and congressional sources have indicated MTB and GSP renewal bills could be rolled into one package in an effort to get both enacted by the end of 2017 (see 1709120021 and 1706200050).The Senate Finance Committee didn't comment.

Products stand to garner a total of $350 million in tariff benefits in 2018 and $1 billion overall in the next three years if MTB is passed by the end of this year, based on the more than 1,800 relief petitions accepted and classified by the International Trade Commission as eligible to qualify for MTB statutory requirements with or without modification as of August 2017, W.L. Gore and Associates government relations associate Michael Ratchford said in his hearing testimony. Rep. Erik Paulsen, R-Minn., echoed those figures, also noting that the last MTB package active 2010-2014 supported 90,000 U.S. manufacturing jobs, increased U.S. production by $4.6 billion, and expanded U.S. GDP by $3.5 billion. Products that would benefit based on ITC classifications include electric fan motor assemblies and related parts, gasketing material inputs, hunting gear, outdoor footwear, high-tenacity rayon yarn, aspirin, components for implantable medical device coatings, and pepperoncini, either packed in oil or not, hearing witnesses and lawmakers said.

While the new MTB process is significantly more transparent than previous iterations and provides stakeholders ample involvement in the ITC vetting process, it would be more beneficial if petitioners were granted the same level of dialog with CBP that they had with the ITC during that phase, Ratchford said. “The ITC was great; there was an opportunity to have a dialog. As you got down the line, there were issues raised by [CBP] about the ability to administer provisions of it,” he said. “The definitions that are provided are highly technical, and they’re worried about can they enforce this, can they administer it. So as we go forward, increasing that level of transparency, increasing that level of dialog would be two things that I will suggest.” Ratchford added that “we greatly appreciate” efforts of CBP, the Commerce Department, and the ITC to participate in the new MTB process.

Ratchford also noted that the ITC’s petition filing portal was “somewhat rigid,” as it didn’t allow for amendments to filed petitions, requiring petitioners to start a new petition and re-enter the required info. “For the folks who did that, it was sort of a frustrating experience,” Ratchford said. “I’m not blaming anyone. It’s just the way it was constructed. It’s sort of remarkable they got it up and running as fast as they did.” Rep. Pat Meehan, R-Pa., said Ways and Means would take those concerns into consideration. The ITC on Aug. 8 sent to Congress its final report on petitions submitted under the new process (see 1708080068).

Lawmakers expressed broad, bipartisan support for new MTB legislation, with the lone denunciation coming from Rep. Lloyd Doggett, D-Texas. He said several pharmaceutical companies, including foreign ones, would gain a total of $12 million to $13 million in tariff benefits per year if the MTB is approved according to the ITC report. “It looks like kind of a mini-United Nations there,” Doggett said. “I see a company from Japan, a couple from Germany, from Sweden, from Korea, from Switzerland, from the United Kingdom.” One of the more “curious” products destined for benefits is aspirin, and it’s unclear how a pending tariff reduction would help U.S. consumers, especially given that some pharmaceutical companies are engaged in “some of the most outrageous price-gouging in the country,” he said.

Toward the end of the hearing, subcommittee ranking member Bill Pascrell, D-N.J., challenged Doggett’s assertions, noting no objections were filed against the referenced petition during the ITC public comment process. Pascrell also questioned whether maintaining existing tariff levels on products was a prudent way to help consumers, adding that lowering tariffs incentivizes lower costs, and that any impacts on domestic industry would initially be limited to the three years an MTB would remain active, per statutory requirements. “Moreover, aspirin was included in the MTB that we voted on back in 2010. You voted for it, Mister Doggett, and I voted for it,” Pascrell said. “It’s an easy target when we get into the area of trade; it’s such a sensitive issue. Needless to say, pharmaceuticals is a very sensitive issue…. But I don’t think that this is the avenue to deal with that.”