DearColleague.us

Letter

From: The Honorable James B. Renacci
Sent By:
alex.dominguez@mail.house.gov

Date: 4/10/2017

SUPPORT U.S. MANUFACTURERS AND PROMOTE EXPORTS BY REMOVING DUTY DRAWBACK RESTRICTIONS FROM NAFTA

Current cosigners: Mike Thompson, Ralph Abraham, Todd Rokita, Pat Tiberi, Erik Paulsen, Carlos Curbelo, Sam Johnson, and Henry Johnson.

Supported by: American Association of Exporters and Importers, National Customs Brokers and Freight Forwarders Association, American Association of Port Authorities, American Apparel and Footwear Association,
National Retail Federation, United States Fashion Industry Association, The Wine Institute, American Petroleum Institute, Society of Chemical Manufacturers and Affiliates, Port of New Orleans, Constellation Brands, Inc., Sony Corporation, and Jones Walker,
LLP.

Dear Colleague:

We are writing to ask that you join us in signing the attached letter in support of preserving the duty drawback and deferral rights of U.S. manufacturers and exporters. Duty drawback and duty deferral are the last remaining World Trade Organization approved
export promotion programs that can be used by our U.S. manufacturers and workers.

Duty drawback benefits U.S. exporters by allowing a refund of Customs duties, taxes and other fees imposed on imported goods that are used as inputs in the production of manufactured products that are later exported, or where the imported good is substituted
for the same or similar U.S. made good that is later exported.  This allows U.S. manufacturers and exporters to reduce costs and remain competitive in pricing their goods when exported. The policy rationale supporting duty drawback is as simple as it is powerful:
to increase the competitiveness of U.S. manufacturers that export and to create and maintain U.S. jobs.

Article 303 of the North American Free Trade Agreement (NAFTA) and Article 3.8 of the U.S. Chile FTA (USCFTA) contain restrictions on duty drawback and duty deferral rights and are penalizing U.S. manufacturers and exporters.

Compounding the problem, our NAFTA partners have managed to minimize the impact of these restrictions. Canadian and Mexican manufacturers who export have obtained substantive relief from the NAFTA drawback restrictions through the adoption of duty reduction
regimes such as the Sectoral Promotion program in Mexico and targeted duty reductions in Canada designed to overcome the Article 303 restrictions. Without correction, there may be an incentive to shift U.S. manufacturing operations to non-U.S. locations, where
drawback is not restricted.

The drawback and deferral restrictions must be repealed in order to protect U.S. economic interests and place U.S. manufacturers and exporters on a level playing field with their foreign competitors.  Upcoming discussions to re-examine NAFTA provide a timely
opportunity to lift these unfair restrictions for U.S. manufacturers.

Please join us in support of this effort by contacting Alex Dominguez with Rep. Renacci at 5-3876 or alex.dominguez@mail.house.gov or Erin Helling with Rep. Thompson at 5-3311 or erin.helling@mail.house.gov.

_____________________________________________________________________________________________________________

April XX, 2017

 

Ambassador

United States Trade Representative

600 17th Street, N.W.

Washington, D.C. 20006

 

Dear Ambassador ________:

We are writing to express our support for preserving duty drawback and deferral rights for U.S. manufacturers and exporters in our free trade agreements. Duty drawback and deferral rights are among the last remaining World Trade Organization (WTO) sanctioned
export promotion programs available to U.S. manufacturers. These programs should remain available and unrestricted to U.S. manufacturers and exporters, allowing them to compete on a level playing field with foreign manufacturers who utilize similar programs.
Our manufacturers and workers exporting U.S. made good­­­s to foreign markets need and deserve every available export promotion program to keep them competitive in the global market – the duty drawback and deferral programs help accom­­plish such objective.

This issue was recently raised by a number of constituent companies with respect to the likely modernization of certain aspects of the North American Free Trade Agreement (NAFTA). The duty drawback program is restricted by Article 303 of the NAFTA such that
U.S. manufacturers and exporters do not have the full benefits of this export promotion program when sending U.S. made goods to Canada or Mexico. In addition, Canada and Mexico have created duty relief programs that effectively circumvent the Article 303 drawback
restrictions – this does not equal fair trade or a fair agreement. Other than the U.S. Chile FTA (Article 3.8) which entered into force more than a decade ago, no other FTAs negotiated by the U.S. have such antiquated restrictions which decrease the competitiveness
of U.S. manufacturers and workers by increasing the costs of the U.S. goods they produce.

The ability to fully participate in the duty drawback and deferral programs is critical for U.S. manufacturers and exporters, as well as the thousands of Americans those industries employ nationwide, to level the playing field and maintain their competitiveness
when exporting to foreign markets including Canada, Mexico, and Chile. 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.

Thank you for your consideration of our request.  We look forward to working with you to get this issue resolved.

 

Sincerely,

 

___________________________                              ________________________________

Jim Renacci                                                                     Mike Thompson