Administration Pulls Back Objections to Footwear Duty Suspensions as Companies, Trade Associations Push for Movement on MTB

The Obama administration changed its mind about its concerns with several proposed miscellaneous tariff bills that would suspend duties on footwear, said a spokeswoman for the Office of the U.S. Trade Representative. The USTR now says it only has issues with new duty suspensions and not the 15 bills that would extend previous suspensions. A large number of duty suspensions are scheduled to expire at the end of the year.

(See ITT's Online Archives 12112034 for summary of the concerns from the administration and resulting backlash from footwear trade associations.)

The administration's original objections to the footwear and apparel bills had to do with worries of the effect on ongoing trade negotiations, specifically the Trans-Pacific Partnership. "The Administration conducted its review of nearly 1,300 miscellaneous tariff bills as requested by the Ways and Means and Senate Finance Committees, and our comments included objections to MTBs covering footwear on the basis that their enactment would undermine ongoing trade negotiations, said the USTR spokeswoman. "USTR and Commerce have consulted extensively with the trade committees and have considered additional analysis and information about the footwear bills; as a result, we have revised our views on the 15 extension bills that we objected to on the basis of trade negotiations. We feel that their effect on current trade negotiations may not be as significant as that of the new bills, and we have therefore removed our objections. These extensions support an existing pattern of trade that would be disruptive to U.S. importers to change. At the same time, footwear will continue to be a key part of the TPP negotiations, and we remain committed to achieving the most ambitious and market-opening outcomes for US exporters in TPP."

(The Senate Finance and House Ways and Means Committees recently posted the International Trade Commission reports and Obama Administration analysis on the MTBs. The Senate Finance Committee spreadsheet with links to the bills, comments and ITC report is (here). A Senate Finance spreadsheet of administration positions is (here). The House Ways and Means Committee has similar lists (here). Input from the ITC and Obama Administration through the Commerce Department is required to pass a MTB, which is typically passed by every congress to suspend tariffs on certain products.)

Concerns with Remaining Objections Persist

The American Apparel and Footwear Association (AAFA) said it was happy to see the administration's change of heart on some items, but concerns remain for some of the remaining objections. The "administration continues to maintain its objections to the 40 new footwear MTBs proposed as part of the 2012 MTB package," said an AAFA spokesman. "The administration also continues to object to half dozen new finished apparel MTBs. AAFA, along with many others, will continue its efforts to remove those objections. The overall MTB package must still be approved by Congress before the end of the year. AAFA is urging our members to continue working with their members of Congress to encourage them to remove the administration's objections to the new footwear and apparel MTBs and ensure that Congress approves the overall MTB legislation before it adjourns for the holidays."

Meanwhile, a wide array of companies and trade associations urged lawmakers in a letter to move forward on passing an MTB this year. "Existing duty suspensions on over 600 products are set to expire at the end of 2012 and without Congressional action, costs will go up on those important manufacturing inputs," they said in the letter to congressional leaders. "In addition, hundreds of new provisions have been requested. In total, nearly 2,100 bills have been introduced in the House and Senate, demonstrating the wide range of manufactured products that might benefit from passage of the MTB. An MTB which both extends expiring provisions and includes new suspensions is vital to level the playing field for manufacturers in the United States and improve our global competitiveness.

The MTB "is one of the most important short-term actions Congress can take to preserve and expand good American jobs, boost America's manufacturing competitiveness, and increase our manufacturing exports," the letter said. "Our economy cannot afford the prospect of yet another tax increase on manufacturing." The letter was signed by several footwear trade associations that previously objected to the administration's concerns.

(See ITT's Online Archives 12112826 for summary of recent remarks from Rep. Kevin Brady (R-Texas), who expects an MTB to be introduced soon.)