USTR Releases Advisory Committee Reports on TPP, New Customs Provisions Highlighted

The Office of the U.S. Trade Representative posted advisory committee reports on the Trans-Pacific Partnership (here). The advisory committees represent a number of different industries and interests, including one focused on customs matters and facilitation (here). While a majority of the committees endorsed the TPP, which still needs Congressional approval, the advisory committee for labor issues said it opposes the trade deal (here).

The International Trade Advisory Committee on Customs Matters and Trade Facilitation (ITAC 14), which gave its support for the TPP, is made up of "members from across the importing and exporting communities, including related transportation and logistics industries," it said. Most of the ITAC 14 report is focused on Chapter 5 of the TPP (here), which spells out the customs provisions of the agreement. Many of the provisions, such as the inclusion of advance ruling requests and automation, would align customs processing with the U.S.

Chapter 5 includes several new articles that weren't included within previous trade agreements. One such new piece is on responses to requests for advice or information. That TPP provision calls for expeditious responses to requests from an "importer in its territory, or an exporter or producer in the territory of another Party" on a number of issues. Also new is language encouraging consideration of voluntary disclosures as a mitigating factor for violations of customs regulations, the committee said. "This committee urges the U.S. Government accept information from the industry stakeholders on cases where such mitigation is not provided when a breach has been voluntarily disclosed, and to engage with TPP members to improve policies in this area," it said. Governments should also "consider providing expanded voluntary disclosure relief to trusted trader program participants in the event an error is detected by the Party’s customs administration," said the ITAC.

Other new features address the use of security and bonds. For example, one new provision separates the release of goods "from the final settlement of the financial aspects of the transaction will help prevent bottlenecks at the border," said the ITAC. "Particularly for trusted industry partners, release of shipments covered by security bonds presents little or no risk that the final duties, taxes and fees will not be paid." The committee also notes that language on the use of security or bonds "are the first time this critical area has been addressed in a trade agreement and will ensure TPP members adopt harmonized regulations for managing this very important and widespread trade tool."

Outside of Chapter 5, the TPP would also create a new Committee on Rules of Origin and Origin Procedures, said the ITAC. "This Committee should endeavor to standardize implementation regulations, rulings and practices across all member countries," it said. Also important is a new requirement within the chapter on sanitary and phytosanitary measures "for rapid notification to the exporter of record (of no more than 7 days) when a food and agriculture shipment is delayed at a port of entry -- and a defined period to resolve disputed shipments," said the committee.

The U.S. should make a point to follow the implementation of rules of origin and other origin and verification provisions, the committee said. "For some agreement members, the agreement’s origin and verification procedures are new or advanced," the committee said. "Therefore implementing regulations, rulings and practices--especially certificate of origin format and verification procedures--will need to be watched closely to ensure the benefits are realized in these countries." Among important changes related to origin "the language preference provision for certificates of origin in English will be beneficial to US industry," it said.

Meanwhile, the Labor Advisory Committee said it disapproves of the TPP. "We believe that the Agreement fails to advance the economic interests of the U.S. and does not fulfill all of the negotiating objectives identified by Congress," the committee said. Other committees, such as the committees that cover tobacco (here) and pharmaceutical (here) industries, also voiced some concerns.