<p dir="ltr">Inside U.S. Trade<br>
Daily News</p>
<p dir="ltr">Ahead Of Customs Conference, Scalise Claims Only Minor Issues Remain<br>
Posted: July 16, 2015</p>
<p dir="ltr">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.</p>
<p dir="ltr">“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.</p>
<p dir="ltr">“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.”</p>
<p dir="ltr">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.”</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.”</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">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.</p>
<p dir="ltr">“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."</p>
<p dir="ltr">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).</p>
<p dir="ltr">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.</p>