June Legislative Update
June 24, 2013

House Passes Homeland Security Appropriations Bill for Fiscal Year 2014
The House approved the appropriations bill for the Department of Homeland Security for the fiscal year 2014, which includes funds for Customs and Border Protection. The final vote was 245-182 on the bill sponsored by Rep. John R. Carter (R-TX), with 25 Democrats in support of the legislation and 10 Republicans in opposition. According to a tentative schedule circulated by the Senate Appropriations Committee, the Homeland Security bill is scheduled for subcommittee mark-up on July 16 and full committee mark-up on July 18.

The legislation authorizes $38.9 billion in discretionary funds for the Department. This includes $8.275 billion for the funding of CBP’s expenses and the salaries of border agents, of which $3.274 million will be derived from the Harbor Maintenance Trust Fund. Of the total funds, $140 million will also go towards the development of the Automated Commercial Environment (ACE), CBP’s system for facilitating the entry of goods and the collection of duties. The version of the bill can be found here.

Senate Bipartisan Group Introduces Currency Legislation
A bipartisan group of Senators introduced the Currency Exchange Rate Oversight Reform Act of 2013 (S.1114), a bill that targets currency manipulation by foreign countries. Sponsored by Sen. Sherrod Brown (D-OH), the bill proposes to “provide for the identification of misaligned currency” and “require action to correct the misalignment.”

Announcement of the bill came shortly prior to a visit by Chinese President Xi Jinping to the United States, where he met with President Barack Obama. The U.S. Census Bureau reported that the U.S. trade deficit with China was $315 billion at the end of 2012. U.S. lawmakers have argued that China’s fixed currency rate gives Chinese companies an unfair advantage and contributes to the gap in trade between the two countries.

The legislation requires the Secretary of the Treasury to semiannually designate a list of currencies that are “fundamentally misaligned.” If the Department determines that the country has failed to adopt policies or to take action to eliminate the misalignment, S. 1114 authorizes adjustments under U.S. antidumping law. If the foreign country demonstrates “persistent failure to adopt appropriate measures” to correct the currency misalignment, the bill provides that the U.S. Trade Representative will take action at the World Trade Organization. A bill related to S. 1114, the Currency Reform for Fair Trade Act (H.R. 1276), was introduced in the House by Rep. Levin (D-MI) earlier this year. Similar currency legislation was introduced in the House in 2010 and in the Senate in 2011 but failed to pass.

Co-sponsors of the bill currently include Sens. Charles E. Schumer (D-NY), Lindsey Graham (R-SC), Debbie Stabenow (D-MI), Richard Burr (R-NC), Susan Collins (R-ME), and Robert P. Casey, Jr. (D-PA). The full text of the legislation can be found here.

Michael Froman Testifies for Nomination as United States Trade Representative
The Senate Finance Committee held a hearing on the nomination of Michael Froman as the next United States Trade Representative on June 6, with the nominee testifying before the Committee. Most notably, Froman committed to renewing Trade Promotion Authority (TPA), confirming that it was his intent – as well as the intent of President Obama – to request TPA from Congress “as soon as possible.” At the hearing, Members touched upon a wide range of issues, including but not limited to: the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), China currency, steel, energy, intellectual property protection, and employee satisfaction at USTR.

In addition, Froman committed to supporting “a global settlement” with respect to China’s measures against the antidumping and countervailing duty orders issued by the United States and Europe on solar panels. In response to questioning on the issue of currency manipulation, Froman also stated that he intended to “raise this issue at every discussion with China, conceding that while the RMB has appreciated some, it hasn’t been enough.

The Senate voted 93-4 to confirm Froman on June 19.

Senate Committee on Finance Holds Hearing on Customs Reauthorization
On May 22, the Senate Finance Committee held a hearing on S. 662, the Trade Facilitation and Trade Enforcement Act of 2013. The legislation, co-sponsored by Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT), aims to reauthorize U.S. Customs and Border Protection (CBP), as well as Immigration and Customs Enforcement (ICE). Witnesses from the Chrysler Group, Procter & Gamble, the National Electrical Manufacturers Associations, and United Parcel Service (UPS) testified before the Committee.

Testimony and questions centered on provisions in the bill addressing trade facilitation and enforcement. Chairman Baucus and Senator John Thune (R-SD) both made statements regarding the critical role CBP and ICE play in executing trade enforcement. “CBP must fulfill its historic mission of collecting duties owed to the U.S. Treasury,” said Chairman Baucus. He also discussed how “CBP and ICE also enforce U.S. antidumping and countervailing duty laws and ensure that foreign companies don’t undercut American jobs by circumventing those laws” and how these agencies “stop counterfeit goods from entering the U.S. market.” Senator Thune, who is from a top honey-producing state, cited how “duties to stop the dumping of Chinese honey have too often gone uncollected.”

The hearing also focused on the bill’s expansion of intellectual property protection at the border. S. 662 proposes to codify the National Intellectual Property Rights Coordination Center and requires CBP to establish a process for enforcing copyrights while registration with the Copyright Office is pending, and to publish information about unlawful circumvention devices that are seized.

Two versions of a Customs reauthorization bill were introduced during the 112th Congress by House Ways and Means Committee Ranking Member Sander Levin (D-Mich.) and Rep. Charles Boustany (R-LA), but they failed to reach the floor. More information on the Senate Finance Committee hearing discussing S. 662 can be found here.


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