Washington, D.C. –As evidence mounts about the extent to which foreign exporters have been eager and willing to circumvent U.S. trade laws continues, a bipartisan group of U.S. Senators have introduced legislation to create the discipline necessary at Customs and Border Protection to combat trade cheats and provide a fair playing field for U.S. manufacturers. The bill has been introduced by U.S. Senators Ron Wyden (D-Ore.) the chair of the Senate Finance Committee’s subcommittee on Trade, Customs and Global Competitiveness, Olympia Snowe (R-Maine), Claire McCaskill (D-Mo.), Roy Blunt (R-Mo.) Sherrod Brown (D-Ohio), Rob Portman (R-Ohio) and Charles Schumer (D-NY).
The Enforcing Orders and Reducing Circumvention Evasion Act (ENFORCE) requires CBP – the federal agency tasked with investigating and prosecuting trade violations – to quickly investigate allegations of antidumping and countervailing duty evasion in order to counteract the disastrous effects evasion has had on domestic manufacturing.
“Customs has been asleep at the switch and U.S. manufacturing is paying for it,” Wyden said. “Foreign exporters are running roughshod over our trade laws and showing almost total disregard for our ability to enforce them. This costs jobs. U.S. enforcement abilities must be up to the task of dealing with trade cheaters and this bill gives them the discipline they need to investigate, prosecute and collect from those willing to evade U.S. law.”
Senator Olympia J. Snowe said, “When unscrupulous foreign exporters invent schemes to avoid paying duties it puts workers in Maine and throughout the nation at a severe disadvantage and bilks our government out of millions of dollars in uncollected fees. Regrettably, our government’s reluctance when it comes to enforcing existing trade rules has contributed to the silencing of our manufacturing industry, adding to rampant job loss and high unemployment around the nation,” said Senator Snowe, a senior member of the Senate Finance Committee. “The ENFORCE Act is a vital step to make certain our government has the tools to protect American companies from blatant trade violations that take place at the expense of our global competitiveness and prosperity. Passing this critical legislation will ensure there are no excuses when it comes to holding accountable those who seek to evade our trade laws.”
“Foreign companies who are evading penalties and continuing to violate our trade laws are putting American jobs at stake. In Missouri, we’ve lost hundreds of jobs because of these kinds of violations. Missouri companies can compete on a global scale, but we have to make sure they have a level playing field. This bill will give the watchdogs who are supposed to be enforcing these laws the tools they need to protect our economy,” McCaskill said.
“In order to expand and promote trade policies that lead to more U.S. exports, it’s important that we properly enforce the remedies available to American companies that are victims of unfair trade practices,” said Blunt. “This legislation will build support for trade policies in the United States and ensure that we don’t disadvantage our own job creators in favor of foreign competitors.”
“When a reckless driver buys a radar detector instead of paying his speeding ticket, that’s evasion,” Brown said. “That’s exactly what happens when foreign companies avoid paying duties on unfairly- subsidized and dumped products. Ohio manufacturers rely on trade enforcement laws, but when duties are so easily evaded, they become meaningless. The ENFORCE Act will help ensure that we stay one step ahead of these illegal and unfair practices that put Ohio manufacturers at a serious disadvantage.”
“Foreign companies who are not playing by the rules, harming Ohio workers and American taxpayers, should not be allowed to do an end-run around the law,” said Portman, who initiated the first-ever legal case to be litigated and won against China before the World Trade Organization because of China’s unfair treatment of U.S.-made auto parts.
“The American people have been fleeced long enough by exporters who cheat the trade system to make a quick buck. Our American manufacturers are already hurting and the deceptive actions of these exporters only costs more jobs and economic growth. To those who are cheating our trade system the ENFORCE Act says, enough is enough.” Senator Schumer said. “It’s time the feds ripped the band aid off and began aggressively enforcing our trade laws so these cheats can no longer steal from the American people.”
Many countries provide their domestic manufacturing subsidies and other favorable treatment in order to increase their ability to export to other countries. This “leg up” is often disastrous for domestic manufacturing in the countries they are exporting to as they are often unable to compete with foreign produced goods. Anti-dumping and countervailing duty orders are the U.S. government’s remedy for using these practices. However, foreign exporters, many from China, have been known to intentionally mislabel shipments and reroute goods through third-party countries in an effort to fool customs officials and circumvent these trade laws. And as inquiries by Senator Wyden’s staff exposed, this practice is pervasive as many foreign exporters are eager and willing to evade these duty orders.
The ENFORCE Act establishes a rapid-response timeline by which Customs would respond to allegations of evasion. The law requires Customs to determine whether there is a reasonable basis to believe an importer is evading an AD/CVD order within 90 days of an allegation being put forward. If an affirmative preliminary determination is made, the ENFORCE Act will require that AD/CVD penalties be collected in cash until the investigation is concluded.
Since many of the schemes importers use to evade these orders include mislabeling the origin of merchandise, it is very difficult for the U.S. government’s product safety mechanisms to cope. The ENFORCE Act will also increase the safety of imports by authorizing information sharing among the appropriate agencies when the government determines that an importer may be attempting to evade an AD/CVD order.