[CTC] Ahead Of Customs Conference, Scalise Claims Only Minor Issues Remain

[Arthur Stamoulis]

Inside U.S. Trade
Daily News

Ahead Of Customs Conference, Scalise Claims Only Minor Issues Remain
Posted: July 16, 2015

Republican Majority Whip Steve Scalise (R-LA) on Wednesday (July 15) said
members of the House and Senate have agreed on the major differences
between their versions of the customs and enforcement bill and are now only
working out minor issues ahead of a conference on the legislation, H.R.
644, expected later this month.

“There are some details that still have to be worked out on differences
between the House and Senate, but all of the big provisions that were part
of those negotiations that got our members to the right place have been
agreed upon by both sides,” Scalise said at a July 15 luncheon hosted by
the Emergency Committee for American Trade.

“They're right now mostly finalizing some minor negotiations that are
important to all this. But I feel good about where they're headed and
[House Ways & Means Chairman Paul Ryan (R-WI)] feels good about it as well.”

However,  Rep. Ron Kind (D-WI) indicated that the two sides still have a
number of outstanding differences ina draft letter to conferees circulated
earlier in the week. A spokeswoman for Kind's office said the letter
referred to a “majority of the details remaining to be worked out.”

In the letter, Kind specifically pointed to four aspects of the Senate
legislation that he would like to see included in the final customs bill to
help garner the support of other House Democrats: the full ENFORCE Act, the
STRONGER Act, a change to Section 301 of U.S. trade law known as “Green
301,” and the codifying and funding of the Interagency Trade Enforcement
Center.

It is unclear at this stage what other issues lawmakers have agreed upon.
In an interview this week, Rep. Kevin Brady (R-TX), a former House Ways &
Means trade subcommittee chairman, indicated that immigration and climate
change provisions included in the House-passed version of H.R. 644 --
opposed by Democrats -- are still Republican priorities in the conference.

These provisions would amend the Trade Promotion Authority (TPA) law to
make it a negotiating objective for trade agreements not contain
obligations related to global warming or climate change, or require changes
to U.S. immigration laws or obligate the U.S. to grant more visas. In his
letter, Kind singled out those provisions as “troubling policy riders” that
he is seeking to drop from a final bill.

The House-passed customs bill includes the PROTECT Act, which Kind claims
has “major shortcomings in combating duty evasion -- including a lack of
enforceable timelines and shift of jurisdiction to an agency ill-equipped
to enforce duty evasion.” The ENFORCE Act requires U.S. Customs and Border
Protection to respond to duty evasion tips, while PROTECT would give that
responsibility to the Department of Commerce.

Kind also endorsed the STRONGER Act, which “would create an enforcement and
capacity building fund using a portion of penalties paid by foreign trade
cheats.” He said this would support the enforcement efforts of the Office
of the U.S. Trade Representative and other agencies.

On Green 301, Kind said the Senate provisions would help prevent foreign
governments from discriminating against American companies through the
uneven enforcement of environmental laws. The Green 301 provision would
authorize USTR to take discretionary action against a country if a Section
301 investigation found a persistent pattern of failing to protect the
environment.

One trade lobbyist said the House and Senate are aiming for a “pro forma”
conference, which would require little, if any, negotiations because the
issues would have been worked out ahead of time by staff. The lobbyist also
said that House and Senate staffers are currently working on the remaining
“minor issues.”

One of the issues that has been worked out, according to the lobbyist, is
the correction of a drafting error in the trade preferences bill passed by
Congress last month that changed the tariff classifications for
recreational performance outerwear. The drafting error caused the tariffs
on those products to increase in most cases.

When asked what the outstanding issues on the customs bill were and whether
it related to the expectedremoval of Malaysia from the most egregious State
Department list of human trafficking offenders, Scalise responded only by
saying that he felt good about the direction the negotiations were headed.

Previously, sources said they saw language in the customs bill on human
trafficking as the major factor creating urgency behind the bill.
Currently, the TPA law disqualifies any trade deal from fast track if it
involves a country on State's “Tier 3” black list of nations failing to
address human trafficking, which last year included Malaysia, a party to
the Trans-Pacific Partnership. The House-passed customs bill would amend
that language to allow State to submit a waiver if the country has made
progress toward addressing these failings.

But signals that State intends to upgrade Malaysia have called into
question whether this amendment is really critical any more. Brady, in the
interview, said that regardless of the administration action on Malaysia
there is still momentum and appetite to get the customs bill done.

“My sense is they'll move soon to bring it to the House, and that the
conference … could finish before we leave for August. There's still a
number of issues, but both parties seem determined to keep the promises
that were made on TPA through customs and work out the remaining problems,”
Brady said. “So I'm pretty optimistic."

The Texas Republican said he expects the House to vote on a motion to go to
conference on H.R. 644 “very soon,” although he deferred the specific
timing to Majority Leader Kevin McCarthy (R-CA).

McCarthy for the second week in a row put the "possible" consideration of
that motion on the House floor schedule, but as of press time no such
motion had been made. His office did not respond when asked what is
accounting for the delay in advancing a conference that Ryan previously
said would be quick.
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