Lawmakers Push USTR to Nix NAFTA, Chile FTA Drawback Restrictions

A bipartisan group of 14 House lawmakers sent a letter May 11 to U.S. Trade Representative Robert Lighthizer just after his confirmation urging him to work to remove NAFTA drawback and duty deferral restrictions during any renegotiation of the deal. As expected (see 1705100034), the lawmakers wrote that NAFTA and the U.S.-Chile Free Trade Agreement are the only U.S. trade deals that contain such restrictions, which increase production costs and weaken U.S. manufacturing and worker competitiveness. A group calling itself the Duty Drawback Coalition highlighted similar concerns in recent comments to the Commerce Department (see 1704170025).

Canadian and Mexican use duty relief programs to circumvent the NAFTA and Chile drawback restrictions, said the lawmakers. "This does not equal fair trade or a fair agreement," according to the letter, which which was an effort led by Reps. Jim Renacci, R-Ohio, and Mike Thompson, D-Calif. Such restrictions are "antiquated," they said. In addition to Lighthizer, copied on the letter were Commerce Secretary Wilbur Ross, Homeland Security Secretary John Kelly and Treasury Secretary Steven Mnuchin.

Participation in "duty drawback and deferral programs is critical for U.S. manufacturers and exporters" to "level the playing field and maintain their competitiveness when exporting to foreign markets including Canada, Mexico, and Chile," the letter said. "As part of any NAFTA modernization process, we urge you to engage in consultations with the governments of Canada and Mexico, and Chile, to develop a pathway to eliminate the duty drawback and deferral restrictions in their respective Free Trade Agreements with the United States."

Email ITTNews@warren-news.com for a copy of the letter.