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Domestic Manufacturers And Workers Have No Voice In Crafting U.S. Trade Rules
By Richard McCormack
richard@manufacturingnews.com
The federal agency that is in charge of applying trade rules continues to operate without any input from those most impacted by imports: small- and medium-sized American manufacturers and farmers and American workers. In a Senate bill that will reauthorize the U.S. Customs and Border Protection Agency, retailers, importers, shipping companies, ports, large multinational corporations, import brokers and freight forwarders, and their law firms and lobbyists will gain even greater influence over setting the rules of U.S. trade and the internal operations of the Customs and Border Protection (CBP) Agency.
Senate Bill S-1631 creates a new Office of Trade within the agency. Within that office, a new "Trade Advocate" will also be created to "report directly to the Assistant Commissioner of Customs." This new position will be required to consult regularly with the Commercial Customs Operations Advisory Committee (COAC) and the Trade Support Network, both comprised of members of the private sector. The CBP's Trade Office is responsible for regulations and rules regarding preferential tariff treatment under free trade agreements, "Buy American," and country-of-origin marking laws.
COAC is mentioned repeatedly and prominently in the reauthorization bill. The committee does not have any representation from domestic manufacturers, farmers or workers, groups that have been impacted by the free flow of imports.
In the bill sponsored by Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa), the CBP Commissioner is told that he or she must "solicit and consider on a regular basis input from the private sector including the Commercial Customs Operations Advisory Committee." COAC is directed to provide managers of CBP with "input with respect to the agency's development and implementation of rules, regulations, decisions, notices and abstracts related to the customs and trade laws of the United States." It will assess "the effectiveness of customs facilitation and trade enforcement efforts" and support the creation of an "International Trade Data System," according to the bill.
COAC members will help develop CBP's Joint Strategy Plan, which is aimed at "enforcing the customs and trade laws of the United States." Most of these laws are aimed at COAC members. COAC is asked to help identify "priority trade issues that pose a high risk to public health and safety," and to make "any legislative recommendations to further improve the enforcement of the customs and trade laws of the United States."
The reauthorization bill states that "the individuals appointed to the Advisory Committee shall be broadly representative of the sectors of the United States economy affected by the commercial operations of the U.S. Customs and Border Protection Agency."
The committee will "advise the Secretary of the Treasury and the Secretary of Homeland Security on all matters involving the commercial operations of the U.S. Customs and Border Protection Agency…including advising with respect to significant changes that are proposed with respect to agency regulations, policies and practices."
COAC is given even broader powers to influence the U.S. trade system with language in the bill that states the group can "perform such other functions relating to the commercial operations of the U.S. Customs and Border Protection Agency as prescribed by law or as the Secretary of the Treasury and the Secretary of Homeland Security jointly direct."
The American Association of Exporters and Importers (AAEI), the Washington, D.C., group representing the interests of the trade community, says COAC should be even a more powerful and trade-industry focused entity. In comments submitted to the Finance Committee, AAEI says the bill should include a provision to create a five-member COAC Review Board "to select members of the next COAC." The Review Board should be comprised of two government officials, two outgoing members of the current COAC and "one representative of a trade association representing the private sector stakeholders involved in trade facilitation and their supply chain security matters."
This new board would appoint all of the 20 individuals to COAC, making it even more of an insider's game. "Each individual shall be appointed to the Advisory Committee for a term of up to three years, and may be reappointed to a subsequent two-year term if no candidates representing that industry sector applies to the COAC Review Board seeking appointment to the Advisory Committee," says AAEI.
The trade association asks the Finance Committee to adopt a "sense of the Senate" provision stating that private-sector representatives "principally trade associations who may be registered lobbyists should not be barred from serving on COAC and other International Trade Advisory Committees because of the technical expertise they bring to assist the government implement trade policy."
Finally, AAEI asks that the Senate Finance Committee write into its bill language that would allow foreign interests to be involved in setting U.S. trade policy. AAEI wants the government to create "Bilateral Commercial Advisory Committees with U.S. trading partners." These committees would "ensure that key stakeholders representing the international trade communities on both sides of the border foster cooperation among govern-ments and enhance trade facilitation for the trade lane by eliminating redundant barriers to cross-border trade."
On the COAC Web site at the Department of Homeland Security, Customs Commissioner Ralph Basham says the advice it receives from COAC is "tremendously valuable in the development and deployment of effective CBP programs and policies."
Members of COAC helped derail a proposal last year by the Customs and Border Protection to charge duties based on the "last-sale" price of an imported product before it was loaded onboard a ship or aircraft in an overseas country. Instead, COAC members prevailed by lobbying Congress to reverse that decision, by requiring that duties continue to be calculated on the "first-sale" price of a product as it leaves a foreign factory. This substantially reduces the value of imports, thereby lowering the amount of duties importers have to pay the U.S. government. The rule also means that the federal government's trade import numbers are substantially below what is officially reported, by as much as 15 percent.
Members of COAC include:
• Earl Agron, APL Limited, Oakland, Calif.
• Samuel Banks, Sandler & Travis Trade Advisory Services, Inc., Washington, D.C.
• Adrienne Braumiller, Braumiller Schultz & Co. LLP,Dallas, Texas
• Colleen Clark, Roanoke Trade Services, Itasca, Ill.
• Robert DeCamp, A.N. Deringer, Rouses Point, N.Y.
• William Cook, Chrysler LLC, Auburn Hills, Mich.
• Michael Ford, BDP International, Philadelphia, Penn.
• Donald Huber, General Electric, Ft. Myers, Fla.
• Jevon Jamieson, ABF Freight System, Inc., Fort Smith, Ariz.
• Karen Lobdell, Drinker Biddle & Reath LLP, Chicago, Ill.
• Barry O'Brien, Hasbro, Inc., Pawtucket, R.I.
• Geoffrey Powell, C.H. Powell Co., Linthicm, Md.
• Alison Reichstein, Hewlett-Packard Development Company, West Chester, Penn.
• Kenneth Roberts, Kraft Foods, Washington, D.C.
• Bethann Rooney, Port Authority of N.Y. & N.J., Pomona, N.Y.
• Leigh Schmid, Limited Brands, Columbus, Ohio
• Carol Sheldon, DHL, Southfield, Mich.
• Bradley Shorser, Sears, Hoffman Estates, Ill.
• Barbara Vatier, Air Transport Assn., Wash., D.C.
• Jeffrey Whalen, Nike, Inc., Beaverton, Ore.
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