Trade Groups Call for Elimination of Entry Summary Requirement for MTB Applications

Manufacturers and trade associations called for more detailed petitions and comments, but the elimination of some "burdensome" requirements for supporting documentation, in comments on the International Trade Commission’s proposed new Miscellaneous Tariff Bill (MTB) procedures. In response to the agency’s request for comments on new information collected for petitions under a reformed MTB process recently adopted into law (see 1606130009), commenters (here) took issue with a requirement to submit an entry summary, and called for the ITC to create an easily searchable list of products nominated for MTB tariff cuts. MTB reform legislation enacted in May requires the ITC to initially vet MTB requests before recommending specific tariff cuts to Congress (see 1606130009). Under the new law, the ITC is required to begin the first round of the MTB process in October.

The Rubber and Plastic Footwear Manufacturers Association (here), noting its opposition to past MTB bills that would have reduced tariffs on footwear that competes with domestically produced footwear, proposed new fields on MTB petition and comment forms to “help ensure that the Commission fully understands whether a product that is directly competitive with a proposed product is domestically produced so that any MTB passed will be noncontroversial.” Similarly, additional detail on petition and comment forms would enable petitioners for MTB tariff cuts to “fully support its case for a duty reduction or suspension,” Unilever said (here).

However, other requirements proposed by the ITC are “unnecessary and burdensome” and could “dissuade some manufacturers from seeking the elimination or reduction of tariffs under the MTB,” the National Association of Manufacturers said in its comments (here). Petitioners should not be required to list all applicable CBP rulings, because they will “not always be able to determine whether a relevant older ruling exists,” NAM said. Instead, companies should also be able to indicate they are not aware of the existence of an older ruling. Nor should petitioners have to provide five-year projections of import data, which would be impossible because companies “cannot accurately predict” trade flows “so far in the future.”

The requirement that importers "'provide a copy of an entry summary supporting the product’s classification for each HTS subheading'” may be impossible to meet for many companies that don’t act as importer of record, NAM said, along with the Society of Chemical Manufacturers and Affiliates (here), Nation Ford Chemical (here) and other companies and associations. “Many companies, especially small and medium-sized enterprises, are not the actual importers of record for the imported materials they buy. In these cases, they would not have available a copy of a liquidated customs entry form,” SOCMA said.

CBP took issue with the petition form’s field for a description of the article nominated for MTB duty cuts, in comments submitted by the agency (here). Currently, the field asks for a description for the "'proposed duty suspension or reduction to be included in the amendment to subchapter II of chapter 99 of the HTS,'” but CBP says that could lead importers to describe the article by its use. “A description referring to an article’s use is not administrable, because CBP officials are typically unable at the time of entry to determine how articles will be ultimately used after they leave the port,” CBP said. “For example, a proposal for a duty suspension on 'steel screws used in furniture' could not be administered because CBP officials at ports of entry would be unable to distinguish those particular screws from screws used for other purposes.” CBP asked the ITC to modify the field so it asks for a physical description of the article, “without reference to the article’s use.”

Considering the newness of this MTB process, there should be "sufficient flexibility in the process to allow for adjustments in product definitions after submissions are made to ensure the proper balance between domestic manufacturers and importers," the Outdoor Industry Association said (here). "While we appreciate that submissions will not be allowed after December 15, 2016, petitioners should be able to work with the ITC to modify definitions that result from comments and interaction among various private sector entities" and with CBP, the OIA said. The ITC should seek to provide for the greatest amount of duty relief possible, as was the congressional intent, the American Apparel & Footwear Association said in its comments (here). The AAFA suggested that the ITC delete the question as to whether filers want a temporary duty suspension or reduction. "Importers will naturally want the greatest amount of duty relief possible provided the amount of duty loss does not exceed $500,000," the group said. "We encourage the Commission to perform that calculation -- as we understand was done in previous years -- to assign the rate that generates the greatest amount of duty reduction possible for each petition."

Finally, the ITC should, during the comment period for MTB requests, post a list of all products nominated for the MTB, including the HTS classification and, for chemicals, the name of the chemical and CAS number, said SOCMA, Fanwood Chemical (here) and the Manufacturing Tariff Bill Coalition (here). “In this manner, it should be fairly routine for U.S. companies to download the list and then sort it as appropriate to be sure nominations do not adversely impact their business,” Fanwood said. “Given the anticipated number of petitions, it would be very difficult for a company to conduct a review for potential products of concern unless the list is sortable by HTS classification and -- in the case of chemicals -- CAS numbers,” the Manufacturing Tariff Bill Coalition said.