Duty-free access for some Nicaraguan apparel is set to expire on Dec. 31, and industry executives say the tariff preference levels (TPL) are poised to be the next victim of congressional inaction on trade. An omnibus trade bill or smaller legislative package is still the most likely way to renew the tariff preferences, they said. But movement on the trade agenda during the coming lame duck session is far from guaranteed, and realistically not even likely, they added.
International Trade Today is providing readers with some of the top stories for Oct. 6-10 in case they were missed.
The U.S. and Indonesia struck compromise on Oct. 3 in a long-running dispute over a U.S. sales ban on clove cigarettes, the World Trade Organization announced (here). The WTO’s dispute arm faulted the U.S. for the ban, which stems from the Family Smoking Prevention Tobacco Control Act of 2009. Indonesia floated its retaliation plans in 2013, and after the U.S. objected, the two sides agreed to re-arbitrate the dispute. The U.S. ban on flavored cigarettes does not include menthol cigarettes, one part of the law that Indonesia argued is discriminatory.
CBP issued the following releases on commercial trade and related issues:
The following lawsuits were filed at the Court of International Trade during the week of Sept. 29 - Oct. 5:
President Barack Obama on Oct. 3 officially removed Russia from the list of countries that benefit from the Generalized System of Preferences (GSP). Russia has economically advanced and developed its trade competitiveness to a point that no longer justifies its inclusion in the preference program, said Obama. The Trade Act of 1974 will be modified and the Harmonized Tariff Schedule will be amended to reflect the removal of Russia, Obama said in the statement. Obama told Congress in May that he intended to remove Russia from the program (see 14050805). The termination is effective Oct. 3. The GSP program has been expired for more than a year.
The European Union issued the following trade-related releases Sept. 24-25 (notices of most significance will be given separate headlines):
U.S. companies are facing mounting costs and sometimes irreversible losses as the Generalized System of Preferences remains expired, but there is still no clear path forward on renewal of the program, said Coalition for GSP Vice President Dan Anthony on Sept. 16. Lawmakers and analysts are losing touch with the ill-effects of expiration as the “action-forcing event” of expiration has long passed, he said. U.S. companies pay nearly $2 million daily in higher import duties, and since expiration, companies have paid roughly $700 million in duties on goods that GSP allows to enter the U.S. duty-free, according to a study released on Sept. 16 by the coalition (here).
A court challenge may be brewing on CBP’s controversial decision to prohibit the filing of protests to claim duty preferences under several free trade agreements, say customs lawyers. A lawsuit could soon be brought by an importer denied the ability to claim preferences by the new policy, although that would require the importer have enough money at stake to justify filing suit, said several lawyers. Another lawyer proposes that importers and trade groups band together to challenge the policy in its entirety as an illegally-issued regulation. Pressure against the change could also come from countries with agreements that are affected by the change, as well as smaller importers that make their voices heard at CBP headquarters.
CBP posted a document to its website that provides side-by-side comparisons of 20 U.S. free trade agreements and preferential trade programs. This updated version removes references to use of protests under 19 USC 1514 for making preference claims under agreements not covered by statute in 19 USC 1520(d). CBP recently advised the ports that importers will only be able to claim duty preference after importation through post summary corrections or post entry amendments for these FTAs (see 14081320).