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By Stephen C. Hanemann and Edward H. Warner

On Wednesday, February 24, 2016, President Obama signed H.R. 644, known as the Trade Facilitation and Trade Enforcement Act (“Customs Bill”). For Louisiana’s vast number of companies operating in the agribusiness, seafood processing, and related industries, the signing of the bill is a significant milestone. The Customs Bill sets forth principal objectives concerning: (1) general trade policy efficiency; (2) trade protection (leveling the playing field for local workers dealing with foreign competitors); and (3) strengthening of the Trade Promotion Authority Statute. The following represents Customs Bill considerations that Louisiana businesses will find pertinent.

What are the major components of the Customs Bill that Louisiana businesses must know?

The Customs Bill creates a coordinated effort for trade facilitation. The primary agency funded under the Customs Bill is the United States Customs and Border Protection (“CBP”). The bill modernizes the CBP’s Automated Commercial Environment (“ACE”) which will be used to track and process imports and exports.  The International Trade Data System (“ITDS”), also known as the “single window,” will eventually be used to submit all trade documentation. Cooperative efforts among trade enforcement agencies and the efficient-electronic filing of trade documents are both important goals of the Customs Bill.

The Customs Bill also strengthens the enforcement of U.S. international-trade laws. The bill expands requirements on imports to ensure health, safety, and the protection of intellectual property rights. The bill includes provisions, which prevent dumping and currency manipulation. The bill also includes “miscellaneous” provisions pertaining to expansions on the requirements for the United States Trade Representative to resolve foreign country practices that create barriers to U.S. goods and services. A portion of the bill also encourages more Americans to engage in global commerce through the internet by availing themselves of an internet tax moratorium.

How does the Customs Bill specifically help Louisiana’s local businesses?

The Customs Bill enforces U.S. trade laws which directly impact Louisiana’s local businesses. For example, “dumping,” a method of predatory pricing used by foreign companies to undercut local markets and drive away competition, has hurt critical Louisiana industries in the past. The Customs Bill requires CBP to investigate evasion of antidumping or countervailing duties. The bill also contains the legislative language of the PROTECT Act which would require annual reporting on CBP policies regarding antidumping evasion.  The Customs Bill’s antidumping provisions are particularly important for protecting Louisiana’s seafood, agriculture, and food-processing businesses.  Louisiana’s manufacturing sector also serves to benefit as that sector is often most impacted by unfair trade practices.

Louisiana’s seafood industry will also benefit from other measures in the bill.  The bill requires the CBP to train personnel for the detection and seizure of illicit fish and wildlife being imported into the U.S.

Finally, the Customs Bill should improve health and safety at Louisiana’s ports, and enhance port-related infrastructure.  Louisiana’s shallow-draft-inland ports are largely cargo and industrially focused, while the coastal ports serve as support sites for offshore-related industries. The Customs Bill requires CBP to coordinate federal responses to cargo entering the United States that pose a threat to the health and safety of U.S. consumers. CBP will also be required to provide effective training to its personnel assigned to U.S. ports of entry to ensure the safe and expeditious entry of merchandise into the United States. Each of these measures should ultimately help improve the safety of Louisiana ports, related-supporting businesses, and essential personnel.

What are the legal implications of the Customs Bill moving forward?

The Customs Bill is one of a number of bills which represents comprehensive U.S. trade reform in connection with the Trans-Pacific Partnership (“TPP”).[1]  The Customs Bill should improve the nation’s enforcement of trade laws which is integral to Congress passing the TPP.  The bill should also increase transparency, accountability, and coordination among U.S. agencies working in trade enforcement. The signing of the Customs Bill may be a step in the right direction in protecting certain of America’s target industries and ensuring the benefits of international trade in the 21st century.

[1] The Trans-Pacific Partnership (TPP) is a trade agreement involving twelve Pacific Rim countries signed on February 4, 2016 in Auckland, New Zealand after seven years of negotiations. It is not yet in effect.