It appears increasingly unlikely that Congress will pass a Miscellaneous Tariff Bill (MTB) during the lame duck session. Insiders report that talks aimed at a deal between lawmakers in both the House and the Senate have stalled.
As regular readers know, the MTB provides critical import duty relief on hundreds of essential manufacturing inputs that are not available in the U.S., including viscose rayon staple fibers. Unfortunately, these duty relief benefits lapsed at the end of 2012. In early January 2013 before the new Congress was sworn in, new MTB legislation was hastily introduced in the House, but the measure was not passed, thus leaving it to the next Congress. A bill to reinstate the MTB, H.R. 2708, was finally reintroduced in July 2013 during the current Congress, where it languishes. Consequently, U.S. companies have been forced to absorb the additional costs on necessary inputs since the end of 2012, essentially taxing manufacturers to make their products.
H.R. 2708 includes several provisions covering rayon staple fibers and provides a combination of duty suspensions and reductions for various categories of rayon:
HTS Heading 9902.23.33: Staple fibers of viscose rayon, not carded, combed, or otherwise processed for spinning, measuring 1.67 to 16.67 decitex and having a fiber length each measuring 20 mm or more but not over 150 mm; (provided for in subheading 5504.10.00). Reduces the current 4.3% duty to 4.0%.
HTS Heading 9902.23.34: Staple fibers of rayon, carded, combed, or otherwise processed for spinning, the foregoing presented in the form of top (provided for in subheading 5507.00.00). Eliminates the current 5% duty.
HTS Heading 9902.25.59: Staple fibers of viscose rayon, not carded, combed, or otherwise processed for spinning. Reduces the current 4.3% tariff to 3.4%.
HTS Heading 9902.45.35: Staple fibers of viscose rayon, not carded, combed or otherwise processed for spinning, measuring 1 decitex or more but not over 1.3 decitex and having a fiber length each measuring 20 mm or more but not over 150 mm (provided for in subheading 5504.10.00). Eliminates the current 4.3% duty.
HTS Heading 9902.45.36: Staple fibers of viscose rayon, not carded, combed or otherwise processed for spinning, measuring over 1.3 decitex but less than 1.67 decitex and having a fiber length each measuring 20 mm or more but not over 150 mm (provided for in subheading 5504.10.00). Eliminates the current 4.3% duty.
HTS Heading 9902.55.04: Viscose rayon staple fibers having a decitex of less than 5.0 and a multi-limbed cross-section, the limbs having a length-to-width aspect ratio of at least 2:1 (provided for in subheading 5504.10.00). Reduces the current 4.3% duty to 2.1%.
At this point, the current Congress has not indicated whether it will consider reinstating MTB relief. The more likely scenario is that a bill will be introduced during the new Congress, which means January 3, 2015 at the earliest. It is not safe to assume that a new bill will reflect H.R. 2708, as some lawmakers may request that the duty relief provisions be re-vetted because the process has dragged so long and the information may be stale (e.g. there may be new domestic production or the duty revenue lost may now exceed $500,000). Vetting by the International Trade Commission could take up to six months. Further complicating matters, the possibility remains that members may want to revamp the process. Indeed, Senators Claire McCaskill (D-MO) and Rob Portman (R-OH) have sponsored an MTB reform bill, which aims to streamline the MTB process and shift it out of Congressional hands altogether. Considering a new process could even further delay any relief.
As we have said repeatedly, the best way to ensure the MTB’s passage is to emphasize to your representatives in Congress its importance to your company’s competitiveness. It is imperative that lawmakers, particularly newly elected ones, hear that inaction on this measure for almost two years has undermined manufacturing. If you would like to send a message to your Congressional lawmaker encouraging them to support passage of the MTB, contact INDA’s Director of Government Affairs Jessica Franken directly at jfranken@inda.org to request a template letter and instructions for sending it. INDA will continue to keep its members posted about developments as they unfold.
International Trade Data System on Target to be Completed by December 2016
A spokesperson for U.S. Customs and Border Protection (CBP) says that the International Trade Data System (ITDS) is on target to meet the December 31, 2016 deadline set by President Obama’s February 20, 2014 executive order. The ITDS, which is a federal government information technology initiative, is expected to coordinate, standardize, and simplify federal border clearance and other international trade and transportation processes.
The ITDS system will facilitate information processing for businesses and the over 100 federal agencies involved in international trade. With ITDS, traders will submit standard electronic data for imports or exports only once, through a “single window” to ITDS. When fully operational, ITDS will disperse the data to the relevant federal agencies, providing each agency with only the information that is relevant to it.
The goals of ITDS are to:
• Reduce the cost and burden of processing international trade transactions for both the private trade community and the government;
• Provide the trade community with a standard data set and single system for import, export, and in-transit for goods and transportation;
• Improve compliance (e.g., public health, safety, export control, etc.) with government trade requirements; and
• Provide users with access to more accurate, thorough and timely international trade data.
To learn more, go to http://www.itds.gov/xp/itds/toolbox/background/.
Urgent Request for Nonwovens to Help Fight Ebola
INDA charitable partner Good360 is asking INDA members to donate a wide range of nonwovens including isolation gowns, masks, pads, and sanitizing wipes to help international aid groups fight the spread of Ebola in West Africa. You can find the complete list of goods needed here.
Carly Fiorina, former CEO and president of Hewlett Packard, chairs Good360’s board of directors and will make media appearances in the upcoming weeks requesting corporate support for the Ebola initiative and recognizing companies who do donate.
If you have inventory that your company can spare, please consider helping this very important mission. For more information, contact INDA director of government Affairs Jessica Franken at 703-521-0545 or jfranken@inda.org or Good 360’s Vice President of Donor Relations Doyle Delph at 703-299-7532 or doyle@good360.org.
California Governor Signs Plastic Bag Ban Creating New Opportunities for Reusable Bags
California Governor Jerry Brown on September 30 signed SB270 into law, making California the first state to ban single-use plastic bags. The measure prohibits single-use plastic bags at grocery stores and large pharmacies beginning July 1, 2015 and at convenience stores starting in 2016. The California measure allows grocers to charge 10 cents each for paper and reusable bags. It also includes $2 million in loans to help manufacturers shift to the new model.
The bill has been described as one of the most contentious during the last legislative session—supported by environmental groups in an effort to reduce litter on the streets and beaches and opposed by plastic bag-makers and some Republican lawmakers.
A national coalition of plastic bag manufacturers immediately said it would seek a voter referendum to repeal the law. The plastic bag industry has begun spending heavily to collect the more than 500,000 signatures that it needs by December 29 to put the matter on the November 2016 ballot.
Assuming implementation of the law moves forward unencumbered, it is expected to create new opportunities for the makers of nonwoven reusable bags.