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A bipartisan group of 14 House lawmakers sent a letter May 11 to U.S. Trade Representative Robert Lighthizer just after his confirmation urging him to work to remove NAFTA drawback and duty deferral restrictions during any renegotiation of the deal. As expected (see 1705100034), the lawmakers wrote that NAFTA and the U.S.-Chile Free Trade Agreement are the only U.S. trade deals that contain such restrictions, which increase production costs and weaken U.S. manufacturing and worker competitiveness. A group calling itself the Duty Drawback Coalition highlighted similar concerns in recent comments to the Commerce Department (see 1704170025).
Expected reviews of U.S. free trade agreements may offer a "once in a generation" opportunity to fix some restrictions on drawback, said David Corn, vice president of Comstock and Holt, during a recent interview. While changes to the restrictions in NAFTA are a priority, there's also some hope that similar restrictions in the U.S.-Chile Free Trade Agreement could also be revised, he said. A group calling itself the Duty Drawback Coalition, which Corn is involved in, submitted comments to the Commerce Department noting the problems created by the NAFTA drawback restrictions (see 1704170025).
CBP is developing a repository of possible deregulatory actions that could serve as offsetting actions for regulatory proposals considered "significant" by the Office of Management and Budget, said Alice Kipel, executive director of CBP's Office of Regulations and Rulings (OR&R), during a May 8 interview. Federal agencies, under a January executive order, are required to repeal two regulations for each new regulation seen as "significant" by OMB (see 1702070048). So far, though, OMB has not flagged any trade-related CBP regulations as "significant," Kipel said. "At this time, with respect to the regulations that CBP has in the interagency review process, I am not aware of any trade regulation that has been deemed 'significant' by OMB and offsetting regulations would not be immediately" necessary if it hasn't been deemed significant, she said.
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CBP won't be able to accept drawback claims filed in ACE under the revised processes that come from the Trade Facilitation and Trade Enforcement Act when they take effect on Feb. 24, 2018, the National Customs Brokers & Forwarders Association of America said in a May 9 email. The agency lacks the funding to complete the TFTEA-related programming and "CBP believes that it needs a full year to program all agency requirements," according to the NCBFAA. Still, CBP is expected to finish necessary regulatory changes by the statutory deadline, even if ACE isn't ready for the TFTEA changes.
Notices of intent to export for drawback must be filed at the port or by fax or email to ensure that the exporter gets proof of timely submission, CBP said in a recent ruling. Though submission by postal service is allowed, the filer risks that the application will not end up in the right hands at the port for processing, it said in ruling HQ H272816 (here). CBP also agreed with CBP San Francisco’s decision to reject an unused merchandise drawback application filed by CITTA Customs Brokerage because the relevant notice of intent was submitted unsigned.
The timing for ACE programming related to changes to drawback from the Trade Facilitation and Trade Enforcement Act is uncertain due to a lack for funding to cover such programming, said Michael Cerny, a lawyer with Cerny Associates. CBP said in its most recent newsletter on drawback progress (here) that the agency discussed TFTEA and ACE during an April 13 teleconference and that similar calls will occur biweekly with a drawback-focused working group that helps advise CBP on drawback in ACE. Cerny, who is also in the drawback working group, said by email that "the trade has concerns about there being enough time for CBP to complete that programming in order to accept claims" by Feb. 24, 2018, as required in TFTEA (see 1603010043).
A termination of NAFTA would cause “all kinds of compliance issues,” mainly for companies operating in Mexico, Drinker Biddle attorney Nicolas Guzman said during an April 28 panel discussion. “So many companies are heavily invested in Mexico, that even if this goes away, they’re going to remain there,” he said during a session at an American Bar Association Section of International Law conference. “So if they’re going to remain there, then I think negative relations would quickly make it important to make sure those operations are being run in an appropriate and compliant manner.” Reports surfaced last week that President Donald Trump was considering withdrawing the U.S. from NAFTA, before he agreed not to terminate the deal (see 1704270007).
International Trade Today is providing readers with some of the top stories for April 17-21 in case they were missed.