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Immediate Impact on Trade of Government Shutdown Seen Mixed

October 1, 2013 by Mike Feazel|Top News

The trade industry was still assessing the short- and long-term effects of the government shutdown Oct. 1. CBP had already said its core functions would not be immediately affected (see 13093028). And the U.S. National Airspace System was operating normally Oct. 1, with no reports of any impact to operations due to the government shutdown, said The International Air Cargo Association.

"At the moment we are seeing no impact insofar as Customs handling of cargo," said Darrell Sekin of DJS International Services, president of the National Customs Brokers and Forwarders Association of America. CBP was scheduled to brief industry on the situation at 1:30 p.m. EDT.

While the government shutdown will affect many agencies, most dealing with freight transportation will not see an impact, said Airforwarders Association Executive Director Brandon Fried, citing government statements that most Department of Homeland Security's employees are expected to stay on the job, including uniformed agents and officers at the country's borders and ports of entry, members of the Coast Guard, Transportation Security Administration officers and other law enforcement officers. TSA cargo inspectors will be on the job conducting cargo inspection activity as usual, he said, and air traffic controllers will remain on the job.

APHIS Stops Permit Review; All AD/CVD Deadlines Tolled; Steel Import License Site Offline

But there will be impacts. Due to the lapse of appropriations and the emergency furlough, all CBP Client Representative offices are closed, the agency said (here).

The Animal and Plant Health Inspection Service will no longer be able to review or authorize notifications or permits for importation, interstate movement, or field release of genetically engineered organisms, it said in an emailed bulletin (here). The shutdown also means APHIS will no longer to continue most other management, administrative, and oversight functions, like facility inspections and complaint investigations related to the Animal Welfare Act. But programs financed by mechanisms like user fees and trust funds will continue, as will those that are necessary to protect against foreign diseases, such as cattle fever tick surveillance and foreign animal disease diagnostics.

The Commerce Department and Census Bureau will only retain employees engaged in military, law enforcement, or employees necessary to protect the safety of human life or protection of property, according to a Sept. 27 shutdown preparation document (here).

With the vast majority of its antidumping and countervailing duty employees facing furlough, the Commerce Department said it's tolling all deadlines in antidumping and countervailing duty proceedings “for the duration of the shutdown of the United States Government.” Tolling means the AD/CVD deadlines will be postponed for the length of the shutdown, so if the shutdown lasts 10 days then all deadlines will be extended by 10 days. That includes deadlines in ongoing investigations and administrative reviews, “and those for all actions by parties to these proceedings,” Commerce said.

Steel import licensing, also administered by the ITA, will be affected as well. The online steel licensing system was suspended. But steel importers will still need a license number to complete the entry summary process, Commerce said. Importers who have already obtained a license for an incoming shipment can use that license number on customs paperwork. Those who have not yet obtained a steel import license should email steel.license@trade.gov, Commerce said. Import-related concerns or questions should be directed to local CBP offices, it said.

Websites Taken Offline, Including Tariff Schedule

The International Trade Commission went completely offline as a result of the shutdown. “Due to an absence of appropriations, all USITC web and network-based services are currently unavailable,” said the message that now replaces the ITC website (here). The message says the shutdown also means the ITC’s EDIS database is unavailable, as well as its DataWeb, Dropbox, and the Harmonized Tariff Schedule. All email sent to ITC addresses will be delayed until the restoration of network services, and phone communication with ITC staff will also be unavailable until further notice, the message said.

The Commerce Department’s International Trade Administration took down its entire website, including the AD/CVD section. It now redirects to the announcement on how the shutdown will affect AD/CV operations and steel import licensing (here). As of press time, the IAACCESS database (here) remained in operation.

The USATradeOnline website, a provider of import and export commodity data statistics, shuttered operations Oct. 1. The Federal Maritime Commission shut down immediately and, like many other government agencies, said its website will be available during the shutdown, but it will not be updated with new information until operations resume. It also said its online databases -- SERVCON, the VOCC and NVOCC Tariff List, List of FMC Licensed and Bonded OTIs, and the Agreement Notices & Library -- won't be accessible. All filing deadlines in formal and informal adjudicatory and investigatory proceedings were stayed as of midnight Sept. 30.

The DHS website and social media networks also won't be actively managed during the lapse in funding, it said. It said transactions submitted via this website might not be processed and DHS won't be able to respond to inquiries until after appropriations are enacted.

Due to the lapse in funding, the USTR website will remain live, but without updates, for the duration of the government shutdown.

Courts to Stay Open, but CIT Filing Deadlines Extended

The federal judiciary will remain open during the shutdown, at least until further notice, according to notices posted on several court websites. The U.S. Court of Appeals for the D.C. Circuit said federal courts will remain open for business for “approximately 10 business days” (here). Then, around Oct. 15, “the judiciary will reassess its situation and provide further guidance.” Court of International Trade Clerk Tina Potuto Kimble said the trade court will also remain open pending the reassessment. The Court of Appeals for the Federal Circuit put out a similar notice that said it will remain open for business and fully staffed through at least Oct. 11 (here).

But given the shutdown’s effects on federal agencies involved in litigation, court deadlines will be affected. In response to motions filed by the International Trade Commission and the Department of Justice, CIT postponed all agency filing deadlines for the duration of the shutdown, although it limited the extension to a maximum of 14 days (here). Filing deadlines that are concurrent with postponed agency deadlines, as well as due dates that are dependent on the postponed agency deadlines, were also extended by CIT.

Export Licensing to Continue

Personnel of the Office of Export Enforcement at Commerce's BIS are considered essential for national security purposes, the Commerce document said, as are the activities of the Export Administration, including:

The government shutdown would likely close down operations for the administration's Export Control Reform, said Under Secretary of the Commerce Department's BIS Eric Hirschhorn on Sept. 18 (see 13091913).

USTR to Maintain Schedule for Negotiations

The Office of the U.S. Trade Representative (USTR) will retain the highest percentage of staff during the indefinite government shutdown among non-security agencies at the Executive Office of the Presidency (EOP), according to a White House document (here) dated Sept. 26. USTR will operate with 57 out of 232 full-time employees, a 24.6 percent retention. The White House has determined these employees to be “excepted or exempt to perform excepted functions.” USTR will also keep on staff four additional administrative employees.

USTR Michael Froman will maintain his schedule (here) for the week, said a USTR spokeswoman, noting USTR opposition to a lapse in appropriations. Froman was slated to travel to Geneva Oct. 1 to meet with World Trade Organization officials and Bali, Indonesia, Oct. 3 to conduct Trans-Pacific Partnership (TPP) ministerial and bilateral meetings. Froman will also participate in an Asia-Pacific Economic Cooperation (APEC) ministerial meeting in Bali Oct. 4.

Of all EOP agencies, the National Security Staff will retain the highest employee percentage at 62.1 percent, or 41 employees. The Office of Management and Budget will retain 109 employees at 24.0 percent of total full-time staff, according to the document. Non-excepted staff for all EOP agencies worked for four hours on Oct. 1 to implement orderly shutdown.

The USTR spokeswoman declined to comment further on the impact furloughs will have on U.S. trade negotiations and which operation areas of USTR would make cuts. USTR continues to eye the end of 2013 for TPP negotiation conclusion (see 13092319).

Lengthy Shutdown Could Cause 'Significant' Economic Damage

A government shutdown will endanger the entire U.S. economy and have lingering disastrous effects, the Teamsters union said, saying a lengthy shutdown could cause significant economic damage, costing as much as $55 billion. "That's a devastating impact just to score political points and raise some profiles before upcoming elections," said Teamsters General President Jim Hoffa.

"The rest of the western world is ridiculing us and every financial page editor is feasting on analyses of the likely very negative impact on the U.S. economy regardless of the outcome of this latest game of chicken," said National Industrial Transport League President Bruce Carlton of the government shutdown.

The federal government must maintain normal operations in the lead-up to a successful outcome of broader budgetary reforms, in light of a continued sluggish economic recovery, argued an industry letter (here) submitted to Congress on the Sept. 30 eve of the government shutdown currently underway. Lawmakers in the House and Senate should compromise on legislation to prevent uncertainty in the U.S. economy, said the letter endorsed by 251 organizations and associations, including the U.S. Chamber of Commerce, the American Apparel & Footwear and the National Association of Manufacturers.

“It’s time to take corrective action to address the unaffordable path of entitlement spending, to stabilize federal finances and to undertake fundamental tax reform to strengthen the American economy,” said the letter, saying Congress can't continue “kicking the can down the road.” The debt ceiling should be raised before the U.S. hits projected default on Oct. 17, the letter also said. Lawmakers on Capitol Hill continue to debate the merits and drawbacks of government shutdown and default (see 13092501). “The government shutdown sends the disturbing signal to manufacturers and their employees that gridlock and partisanship are winning the day in Washington over a pro-growth and pro-jobs agenda," said National Association of Manufacturers (NAM) Senior Vice President of Policy and Government Relations Aric Newhouse in a Sept. 30 statement (here).