H.R. 5986: To amend the African Growth and Opportunity Act, to make technical corrections to the Harmonized Tariff Schedule, to approve renewal import restrictions in the Burmese Freedom and Democracy Act

H.R. 5986

To amend the African Growth and Opportunity Act, to make technical corrections to the Harmonized Tariff Schedule, to approve renewal import restrictions in the Burmese Freedom and Democracy Act

Sponsor
Rep. Dave Camp

Date
July 24, 2012 (112th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Tuesday, July 24, 2012, the House is scheduled to consider H.R. 5986, a bill to amend the African Growth and Opportunity Act, to make technical corrections to the Harmonized Tariff Schedule, to approve renewal import restrictions in the Burmese Freedom and Democracy Act, under a suspension of the rules requiring a two-thirds majority for approval.  The bill was introduced on June 21, 2012, by Rep. Dave Camp (R-MI), and referred to the Committee on Ways and Means. 

Bill Summary

H.R 5986 would extend for three years the preferential tariff treatment currently accorded to certain textile products from lesser-developed countries (LDCs) in the African Growth Opportunity Act (AGOA) program.

The bill would also modify the rules of origin for products imported from countries that are members of the Dominican Republic and Central America Free Trade Agreement (DR-CAFTA), and would renew import restrictions enacted in the Burmese Freedom and Democracy Act of 2003.  

Lastly, the bill would shift some corporate income tax payments between fiscal years and extend user fees collected by Customs and Border Protection (CBP) that expire under current law.

Background

The following background information is provided courtesy of the Committee on Ways and Means:

 

African Growth and Opportunity Act

Since its enactment in 2000, AGOA has helped countries develop and diversify their exports, and most importantly, it supports jobs in Africa and the United States.

Third-Country Fabric: Under a special provision of AGOA, eligible textile and apparel products can be made using third-country fabric as an input. This provision will expire in September 2012, and already orders have begun to slow and factories have begun to lay off workers. The legislation extends the AGOA third-country fabric provisions through the current authorization of the AGOA program (September 2015).

South Sudan Eligibility: The legislation adds the Republic of South Sudan to the list of eligible beneficiaries under AGOA, ensuring that the Administration is able to extend the important benefits of this program to the new state of South Sudan if it meets the AGOA eligibility criteria.

 

Dominican Republic-Central America-United States Free Trade Agreement

The United States signed CAFTA-DR in 2004, and it entered into force for the United States in 2006. As part of the agreement, certain textile and apparel products were granted duty-free access to the U.S. market provided they met certain rules of origin. In February 2011, the CAFTA-DR trade ministers agreed to make several non-controversial technical corrections and modifications to the rules of origin for these products under CAFTA-DR. All CAFTA-DR countries except the United States have already approved the changes this legislation implements.

 

Burma Sanctions

In 2003, Congress passed the Burmese Freedom and Democracy Act, which among other things imposed an import ban on products of Burma. While other provisions of the Act apply indefinitely, the import ban required annual renewal for a maximum of three years. Since then, the import ban has been reauthorized twice (in 2006 and 2009), and renewed annually. While there have been encouraging developments in Burma, additional and significant political and economic reforms in Burma are required to meet all of the benchmarks and goals set out in the 2003 Act. As a result, the legislation extends the 2003 Act’s import ban for an additional three years, and effectuates the annual renewal of the sanctions.

Statements of support by the Chairman Camp (R-MI), Ranking Member Rangel (D-NY), and the Trade Subcommittee Chairman and Ranking Member are highlighted here.

Cost

The following cost estimate from the Congressional Budget Office (CBO) is for identical companion legislation in the Senate (S. 3326):

“CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting S. 3326 would reduce revenues by $59 million in 2013, increase revenues by $4 million over the 2013-2017 period, and reduce revenues by $192 million over the 2013-2022 period. Enacting S. 3326 also would reduce direct spending by $197 million over the 2013-2022 period. Thus, the net impact of those effects is an estimated reduction in deficits of $5 million over the 2013-2022 period. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.

“CBO has determined that the nontax provisions of the bill contain no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would impose no costs on state, local, or tribal governments. JCT has determined that the tax provision of the bill contains no intergovernmental or private-sector mandates.

“CBO has determined that the nontax provisions of S. 3326 would impose private-sector mandates as defined in UMRA by extending the authorization to collect customs user fees, and by renewing the ban on all imports from Burma. CBO estimates that the aggregate cost of those mandates would exceed the annual threshold established in UMRA for private-sector mandates ($146 million in 2012, adjusted annually for inflation.)”