Capitol Comments

Miscellaneous Tariff Bill Update

By Jessica Franken, Director of Government Affairs & Dawnee Giammittorio, Associate Director of Government Affairs INDA, Association of the Nonwoven Fabrics Industry | March 20, 2014

FDA proposes rule on antibacterial soaps; global trade initiative on environmental goods; and WTO completes trade facilitation deal.

After more than 400 days without any meaningful action, insiders report that Congress may finally be taking interest in the lapsed Miscellaneous Tariff Bill (MTB). We have reported previously that the most likely path forward for the MTB would be in early January as part of a larger package of trade legislation, including a bill reinstating Presidential Trade Promotion Authority (TPA). While a bill to renew TPA has stalled in the Senate, lawmakers from both sides of the aisle are reportedly working on a deal to move the MTB forward, although the timeline for doing so is still unclear.

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, Congress allowed the duty relief benefits to lapse at the end of 2012, forcing U.S. companies to absorb the additional costs throughout the year and affecting their ability to compete. H.R. 2708, the stalled bill that reinstates MTB relief, includes several provisions covering rayon staple fibers but at this point in time, does not provide for a retroactive refund of tariffs. However, INDA and other industry groups are pushing hard for retroactivity to be included in the final measure.

The best way to insure passage of the bill is for impacted companies to emphasize to Congress the direct effect the MTB is having on their competitiveness. If you would like to send a message to your Congressional lawmakers encouraging them to support passage of the MTB as soon as possible, contact INDA’s director of government affairs Jessica Franken directly at jfranken@inda.org to request a template letter and instructions for sending it. In the meantime, INDA will continue to keep its members posted about developments as they unfold.

FDA proposes rule on antibacterial soaps

The U.S. Food and Drug Administration (FDA) Dec. 17 released a proposed rule that would require manufacturers of antibacterial hand soaps and body washes to demonstrate that their products are safe for long-term daily use and are more effective than non-antibacterial soap and water in preventing illness and the spread of certain infections. The rule is a result of the FDA’s ongoing review of the safety and effectiveness of antibacterial ingredients prompted by the widespread consumer use of antibacterial products, accumulated scientific information and concerns raised by healthcare and consumer groups. The FDA is reevaluating what data are needed to classify the active ingredients in consumer antibacterial products as “generally recognized as safe and effective.” Companies that cannot substantiate the safety and effectiveness of their products will be forced to reformulate or relabel any products they want to continue marketing.

The FDA states that millions of American consumers regularly use antibacterial hand soaps and body washes with the mistaken belief that the products are more effective at preventing illness than washing with plain soap and water. In fact, the FDA asserts the opposite is true—that long-term exposure to certain active ingredients used in antibacterial products, such as triclosan (liquid soaps) and triclocarban (bar soaps), poses health risks, such as creating antibiotic-resistant bacteria and acting as endocrine disruptors. 

This particular rule does not cover wipes, hand sanitizers or antibacterial products used in health care settings but could be a first step towards evaluating other consumer products, including antibacterial wipes. The FDA will accept public comments on its proposal until June 16, and companies will have until December 2014 to submit data and studies. The FDA wants to finalize the rule and determine whether these products are “generally recognized as safe and effective” by September 2016.

More information: www.fda.gov/ForConsumers/ConsumerUpdates/ucm378393.htm

Global trade initiative on environmental goods

The U.S. was joined by the European Union, China and 11 other members of the World  Trade  Organization (WTO) in launching new global negotiations on free  trade  in  environmental   goods . The negotiations, announced January 24 on the sidelines of the annual World Economic Forum in Davos, Switzerland, will build on the September 2012 agreement among members of the Asia-Pacific Economic Cooperation (APEC) forum to reduce tariffs by the end of 2015 on 54 covered  goods. 

The U.S. has been a major proponent for these negotiations for some time, with negotiations on  environmental  goods  and services included as part of the Doha Round of  trade  talks, which have been proceeding in fits and starts since 2001. The Doha Round talks broke down over the number  (400) of environmental goods covered, as well as the definition of an  environmental  good. President Obama resurrected the idea of green trade talks in his June 25 Climate Action Plan and said the U.S. would work toward securing participation of countries that account for 90% of global trade in environmental goods representing roughly $481 billion in annual trade.

The goal of the new global negotiations is to eliminate tariffs on all covered  goods, rather than merely reduce to 5% or less as the APEC agreement does. The 54  environmental  goods  under discussion include renewable and clean energy technologies, such as solar panels and gas and wind turbines; wastewater treatment technologies, such as filters and ultraviolet disinfection equipment; air pollution control technologies, such as soot removers and catalytic converters; solid and hazardous waste treatment technologies, such as waste incinerators and crushing and sorting machinery and  environmental  monitoring and assessment equipment, such as air and water quality monitors. As nonwoven materials are featured in many environmental goods, this initiative could prove quite valuable for INDA members.

In addition to the U.S., the EU and China, others who committed to take part are Australia, Canada, Costa Rica, Hong Kong, Japan, New Zealand, Norway, South Korea, Singapore, Switzerland and Taiwan, with Israel soon expected to join. The agreement will take effect when a “critical mass” of countries responsible for trade in environmental goods take part in the negotiations, but that WTO’s most favored nation (MFN) principle would extend the benefits of the agreement to all WTO members, regardless of whether they took part in the talks.

WTO completes trade facilitation

The World Trade Organization (WTO) announced December 7 at the WTO Ministerial Conference in Bali, Indonesia, the completion of its first global trade agreement since its creation in 1995. The WTO Trade Facilitation Agreement will lower trade barriers and speed up the passage of goods through customs in member countries.

The WTO agreement creates binding commitments among the 159 WTO members to expedite movement, release and clearance of goods, improve cooperation among members on customs matters and help developing countries fully implement the obligations. The agreement would increase customs efficiency and effective collection of revenue and will help small businesses access new export opportunities through measures like transparency in customs practices and reduction of documentary requirements.

More information: www.ustr.gov/about-us/press-office/fact-sheets/2013/December/WTO-Trade-Facilitation-Agreement

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