Summary of the 111th Congress

Full props for this belong to Jon Kent of the firm Kent & O’Connor.  They are the Washington, DC, representatives of the NCBFAA (of which we are members) and as the year draws to a close, put together a very eloquent summary of the legislative accomplishments and failings of the 111th Congress.  When things resume in January, there will be a lot of politics played and we can only hope that while the noise is made on issues that are of greatest philosophical differences between the parties, that the real work of governing the country can still transpire.Happy New Year to all, be safe and we look forward to great opportunities in 2011.___________

What the 111th Congress Did and Didn’t Do

The 111th Congress ended with a long list of unfinished business — particularly trade-related matters. Following is an overview of the final outcome on key issues:

•    GSP Renewal: Congress did not renew the Generalized System of Preferences (GSP) program due to objections from Senator Jeff Sessions (R-AL) over sleeping bags from Bangladesh, which compete with a company in his state. Last-ditch negotiations to resolve the concerns were unsuccessful, resulting in a lapse in the program after its December 31 expiration date. Efforts to renew GSP will resume when the new Congress convenes in January.

•    Andean Trade Promotion Act: Congress did approve a temporary extension of the ATPA for Colombia and Ecuador — but only until February 15, 2011. It is hoped that the short time frame will place added pressure on Congress to address both ATPA and GSP early in the new session.

•    Miscellaneous Tariff Bill: The House moved quickly in the lame duck session to approve a noncontroversial package containing hundreds of new duty suspensions for imported products. The duty suspensions fell by the wayside along with the GSP extension in the Senate. It is unclear how the duty suspensions will be handled in the new Congress, since the House Republicans’ ban on “earmarks” may impact action on miscellaneous tariff bills.

•    China Currency: Sometimes Congressional inaction can be a good thing, as in the case of legislation to address the undervaluation of China’s currency. There was strong interest in the Senate in voting on House-passed legislation to give the Commerce Department authority to impose sanctions on products from countries that manipulate their currencies. Several attempts were made to add China currency amendments to other legislative vehicles, as well as to bring a Schumer-Graham China currency bill to the Senate floor for a vote under the expedited unanimous consent procedures. Time ran out, however, before obstacles could be cleared away for a vote. China currency and other China issues are expected to resurface in 2011.

•    Food Safety: Just when nearly everyone had given up on Food Safety legislation, the Senate and House cleared away procedural hurdles to pass comprehensive legislation giving broad new authority to the Food and Drug Administration (FDA) to regulate food imports. The less onerous Senate measure was the version that was ultimately adopted, though it too will give the FDA a much strengthened role in the importation of food products. Missing from this expansion of authority is sufficient funding — a cost which some in the Congress have objected to. Additional resources for the FDA will wait until an FY ’11 appropriations bill is passed in the early part of the new Congress.

•    Customs Reauthorization: For the past two years, staff at the Senate Finance and House Ways and Means Committees has worked diligently to craft a Customs reauthorization bill, to strengthen CBP’s enforcement of intellectual property and import safety. Amid the chaos of mid-term elections and the press of other legislative priorities, the Customs reauthorization bills ultimately stalled in committee.

•    Nominations: The Senate failed to act on the pending nominations of Rebecca Dye and Mario Cordero to be commissioners of the Federal Maritime Commission. The nominations were returned to the President, who will need to resubmit them in the new Congress.

•    Tax on Foreign Procurement By Federal Government: In passing the 9/11 Responders Health bill in the final days of the lame duck session, Congress included an excise tax on any foreign person (from a country who has not signed the WTO Government Procurement Agreement) that receives payment from the federal government under a federal procurement contract for foreign manufactured goods or foreign-provided services. The tax will equal 2% of the amount of the payment received by the foreign person. According to the language of the provision (in Title III of H.R. 847), the tax will be imposed on the payment to the foreign person, rather than on the products themselves. Therefore, it should not directly impact customs brokers.