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United States: Senate Finance Committee approves bills

Published date:
Tuesday, 24 July 2012

The Senate Finance Committee approved several bills including: renewal of the third-country fabric provisions of the Africa Growth and Opportunity Act (AGOA) and modification of the textile and apparel rules of origin under the Central America Free Trade Agreement (CAFTA); U.S. Customs and Border Protection requirements relating to dumping and countervailing duty orders; and citrus, cotton, and wool trust funds.

These bills were in addition to unanimous approval of legislation granting permanent normal trade relations to Russia and Moldova.

The legislation approved by the Committee might not be considered by the full Senate before the August recess because it is a revenue measure and needs to be considered by the House first.

Rep. Camp (R-Mich.), chairman of the Ways and Means Committee, introduced legislation similar to the Finance Committee version and announced plans for the Ways and Means Committee to consider it during the week of July 23.

During the Finance Committee meeting, the Committee rejected an amendment offered by Sen. Thune (R-S.D.) to renew Trade Promotion Authority (fast-track). The amendment would have extended fast-track negotiating authority that expired in ’07 for one year to apply to the Trans-Pacific Partnership (TPP) negotiations.

There were a number of other amendments filed prior to the mark-up, including one by Sen. Coburn (R-Okla.) to terminate funding for the Market Access Program but it was not formally proposed or debated during the mark-up.

By voice vote, the Committee approved a bill known as the Enforcing Orders and Reducing Customs Evasion Act (ENFORCE) Act, which would set deadlines for Customs and Border Protection (CBP) to consider industry allegations that certain antidumping (AD) and countervailing duty (CVD) orders are being circumvented.

The Committee also approved legislation that extends the third-country fabric provision as part of the preferences provided by the AGOA. AGOA's third-country fabric provision will expire at the end of September. The third-country fabric provision gives apparel from AGOA-eligible countries made with fabric produced anywhere in the world duty-free access to the US market. The measure extends the third-country fabric provision through Sept. 30, 2015, and adds the Republic of South Sudan to the list of AGOA-eligible beneficiary countries.

Negotiators from the CAFTA-DR countries previously have agreed to make several noncontroversial modifications to the rules of origin under CAFTA-DR. The legislation approved by the Finance Committee would implement these changes. In addition to the United States and the Dominican Republic, the CAFTA-DR countries are Costa Rica, Honduras, Guatemala, Nicaragua and El Salvador.

Legislation approved by the Committee also revives the Pima cotton trust fund, which expired in ’09, through ’15. If enacted, the legislation would restart the fund, which can receive payments of up to $16 million per fiscal year in duty refunds to US cotton spinners and shirt manufacturers that use imported fabric. The fund is designed to assist US manufacturers and growers while preserving some US apparel jobs because duties on certain high quality shirting fabrics containing extra-long staple cotton are lower in competitor countries like Canada making it difficult for US shirt manufactures to compete. It also provides funds to an organization promoting the use of Pima cotton grown in the United States.

The legislation is a high priority for Sen. Menendez (D-N.J.) who threatened to block the AGOA legislation if the Pima trust fund was not added as an amendment. Ultimately, Sen. Menendez agreed to the Committee mark-up, without a commitment from Chairman Baucus that the Pima trust fund bill would be moved on specific legislation.

The Committee also approved a modification to the wool trust fund to ensure sufficient funds are available until its scheduled expiration on Dec. 31, 2014. The modification was necessary to resolve a shortfall that has occurred since 2010. The Committee approved a new citrus trust fund of up to $30 million generated from duties on imports of citrus and citrus products to fund research against pests that adversely impact the U.S. citrus industry.

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