Miscellaneous Tariff Bill Introduced as Numerous 9902 Subheadings Expire

House Ways and Means Committee Chairman Dave Camp (R-Mich.) introduced long-awaited Miscellaneous Tariff Bill (MTB) legislation Jan. 1. The bill, named the U.S. Job Creation and Manufacturing Competitiveness Act of 2013 (HR-6727), won't be voted on this Congress and will be need to be reintroduced in the 113th Congress, said a House Ways and Means spokeswoman. A large number of duty suspensions or reductions expired Dec. 31, though it's expected that coming legislation would retroactively address the expired suspensions, which is how Congress handled a similar expiration in 2010.

Numerous 9902 Tariff Numbers Expired on Dec. 31

As a result of Congress' failure to pass extension legislation, numerous HTS 9902 tariff numbers, which temporarily provide duty-free or reduced duty treatment to certain products, expired Dec. 31. Most of the temporary duty-free or reduced duty treatment provided for in HTS 9902 are for chemical products. However, other types of items, such as textiles, footwear, food, consumer-related products, etc. also receive duty-free or low duty treatment under Heading 9902.

MTB an Urgent Matter for Committee Leadership

House Ways and Means leadership from both sides voiced approval for the bill and the process, urging their fellow lawmakers to pass the bill. "Suspending duties temporarily on products such as manufacturing inputs is an essential step in helping to make U.S. manufacturers more competitive and creating U.S. jobs," said Trade Subcommittee Chairman Kevin Brady (R-Texas). "The MTB is an urgent matter for Chairman Camp and me, and we look forward to working with our House and Senate colleagues to ensure that we can get this bipartisan, bicameral tax relief bill over the finish line.”

The bipartisan legislation provides "temporary" tax relief to help U.S. manufacturers and "lowers the cost of manufacturing inputs and some finished products not made or available here," said a press release. The package includes provisions from more than 2,000 bills introduced in the House and Senate during MTB process, the committee said. The legislation is likely meant to serve as "marker" for the next congress, said Jon Kent, a lobbyist with Kent & O'Connor, who is following the process.

Earmarks Concerns Persist

The MTB is "very popular" and the Ways and Means Committee will likely reintroduce the bill and move forward to pass it "as soon as possible," said Matt Priest, president of the Footwear Distributors and Retailers of America, in an interview. There remains some question over Senate consideration of the bill due to questions of whether the MTB violates a ban on earmarks, said Priest. "We're going to have to deal with that issue," he said. The MTB is especially important to the footwear industry, which has, on average, much higher duty rates than other consumer goods, he said.

The bill doesn't include a number of new footwear MTBs that were proposed under the process, an issue footwear industry recently took issue with following trade negotiation concerns lodged by the Obama administration over footwear tariff suspensions, said Priest. "We respectfully disagree" that the new footwear MTBs would undercut the negotiations regarding the Trans-Pacific Partnership, but "clearly weren't on the winning side of that," said Priest. Still, the FDRA will move forward in support of the bill in an effort to get it done as quickly as possible, he said. The MTB is "a tool well worth implementing," especially when there's not much trade liberalization or duty reduction happening right now outside of the TPP, which is still years away, he said.

(See ITT's Online Archives 12112034 for summary of the concerns from the administration and resulting backlash from footwear trade associations. See ITT's Online Archives 12120406 for summary of the administration's removal of its objections to some duty suspensions, while continuing to object to new duty suspensions.)

Some importers were able to prepare for the possibility of a failure to pass an extension to the duty suspensions became more likely, said Priest. "For those that are well-versed in this process and understand that the savings come from a political process that's not always a certainty, they often will plan for it, so they brought in product prior to the MTB expiring," he said. "I'm sure there are some that get caught off guard and so that's a challenge. As an association we are constantly trying to educate our members that these things aren't a foregone conclusion and so you need to plan accordingly and I think most of our members were able to do that."

A press release from the House Ways and Means Committee is (here). Text of the legislation is (here).

(A MTB usually enacts HTS 9902 duty-free or low duty benefits for various products. The most recent MTB legislation was enacted in 2010.)

(Sens. Rob Portman (R-Ohio) and Claire McCaskill (D-Mo.) introduced Temporary Duty Suspension Process Act June 13 meant to improve the MTB process and work around conservative objections to the MTB. The lawmakers said a new process, in which duty suspensions requests would be sent directly to the International Trade Commission, is needed to limit the role of lobbyists in the process. See ITT's Online Archives 12061429 for a summary of the Portman-McCaskill bill)