No Hill Action Likely on Customs in September Due to Hang-Ups, Packed Legislative Schedule

House and Senate leadership are both planning votes related to the Iran nuclear deal next week, even after Senate Democrats on Sept. 10 blocked a procedural vote to open debate on a disapproval measure. Lawmakers also will have to tackle the looming appropriations crisis in the coming days. Without congressional action, funding for the federal government will expire at the outset of fiscal year 2016 on Oct. 1. On top of all that, Pope Francis will deliver an address to Congress on Sept. 23 in the middle of a two-day trip to Washington.

Substantial progress has been made in customs negotiations, but Congress' busy schedule is putting a report further out of reach, said a Capitol Hill staffer close to the negotiations. “It may not happen in September because of both the agenda and the fact that they’re still negotiating,” said the staffer. “There’s no report yet; they’re not quite ready.”

The negotiations could be concluded relatively quickly if lawmakers saw a window for action in the immediate future, said a person with intimate knowledge of the negotiations. “From a substance point, the issues could be resolved. The issue is there’s no floor time,” he said. “When you’re down to a couple of issues, it becomes a matter of timing.” Senate floor time is notoriously elusive because rules in that chamber put in place far more procedural hurdles in comparison to the House. The customs negotiations are “90-95 percent of the way there,” he said.

Several lobbyists said the ENFORCE Act will make it into the conference report as expected, echoing similar comments from other insiders in recent weeks (see 1508270022). The debate over the merits of ENFORCE, which is part of the Senate's Customs Reauthorization bill (here), versus the House Republican-preferred PROTECT Act, a part of the House bill (here), is one of the most controversial areas of negotiations. The import community and trade compliance professionals have aggressively rejected ENFORCE, which sets concrete timelines for CBP to act on antidumping and countervailing duty evasion complaints (see 1506240017).

Some groups that have joined the call to oppose ENFORCE now acknowledge the legislation will survive the talks. “That provision moved through committee as part of the Senate’s Customs Reauthorization bill with the support of [Finance Chairman Orrin] Hatch, which is a strong signal,” said Retail Industry Leaders Association trade executive Hun Quach, who left the U.S. Trade Representative’s office early this year (here). “Every impression I’ve got is the ENFORCE Act is pretty much here to stay.” Quach stressed that the ENFORCE Act puts honest traders at risk of CBP penalties. The absence of any language to safeguard trusted traders is also concerning, said Quach.

The ultimate fate of judicial review in ENFORCE remains a significant sticking point in the talks, according to several interviews. That language has drawn the suspicion and opposition from both House Republicans on the Ways and Means Committee and the Department of Justice, said one lobbyist who represents domestic manufacturers and formerly was a staff in a leadership office in the House. Under ENFORCE, evasion allegers and complainants would have 30 days to initiate an appeal to the Court of International Trade. The standard of review language tied to judicial review says CIT should uphold CBP findings on any entries “found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Quach said that language could open the door for inappropriate penalties on importers.

In a statement of policy several months ago (here), the Obama administration said the judicial review language would “undermine enforcement” of AD/CVD laws. The Justice Department didn’t respond for comment. Judicial review language will, however, make it into a final bill, said one insider, who didn’t mention whether the same language will stay in place. One lobbyist who works on behalf of U.S. manufacturers emphasized the other administrative and technical changes in both customs bills, such as the de minimis increase to $800, will deliver significant benefits to traders.

Currency and Miscellaneous Tariff Bill process reform are also high-profile, unresolved issues in the customs debate and pre-conference negotiations. The reform legislation, which is embedded in the Senate’s customs bill, would force Congress to move on an actual MTB bill six months after the Commerce Department and International Trade Commission complete related analysis.

The fate of MTB is still largely up in the air, but several lobbyists and staffers said it’s not likely to make the cut. “This is a [House Speaker John] Boehner problem and a House rules problem. The speaker has not been keen to try to move an MTB bill forward,” said one importer lobbyist. “Once that process is triggered you sort of have to comply; the Senate bill requires an actual MTB bill. I imagine that process is going to be difficult without getting a clear understanding from the speaker that he will move an MTB bill.” Boehner’s office has declined to comment on the customs bill. Some Republicans say MTB suspensions constitute earmarks and therefore violate House rules (see 1506300071).