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U.S. Chamber Newsletter-International Policy Update (2/4)

7 February 2022 Monday

U.S. Chamber of Commerce
International Policy Update
February 4, 2022
Chamber Weighs in on “America COMPETES Act”
Chamber Comments on 2022 Special 301 Review
Lewis Nears Confirmation to Lead Export-Import Bank
Senate Finance Leaders Pen Letter on EU’s Digital Proposals
Chamber Welcomes Enhanced U.S.-EU Energy Cooperation
From the Home Front
Chamber CEO Calls on Congress, Administration to Act on Job Openings
Commentary
Ukraine Cyberattacks: What Businesses Need to Know
How Tariffs are Hitting Small Business and Why Congress Needs to Renew GSP
10 Trends in 2022: Global Perspectives for Business
Chamber Weighs in on “America COMPETES Act”
The U.S. Chamber of Commerce on February 2 sent a letter to members of the House of Representatives opposing the “America COMPETES Act” in its current form on the grounds that Members have been denied the opportunity to vote on amendments to the bill that might address “numerous policies that would undermine U.S. competitiveness.” House members on February 2 began consideration of 261 amendments (out of more than 600 offered); no votes were permitted on trade amendments. A final vote is expected on February 4, and if passed, the America COMPETES Act will enter into conference with the Senate-passed “U.S. Innovation and Competition Act (USICA).”
In the letter, the Chamber lamented that it could not support the package as it did USICA and pressed for the House to turn instead toward an open, bipartisan process. The Chamber noted that the America COMPETES Act “includes some worthy components — including funding for the CHIPS for America Act to bolster U.S. semiconductor capacity and new tools for supply chain resiliency.” However, the House bill includes a number of harmful provisions not included in the Senate bill, the Chamber wrote in its letter (excerpts follow):
  • New Regulation of Outbound Investment. Known as the “National Critical Capabilities Defense Act,” this provision would establish an ill-defined new bureaucracy to review certain outbound investments, which would complicate efforts by U.S. businesses to compete, grow, and expand in global markets. It would create a Committee on National Critical Capabilities chaired by the United States Trade Representative and empower it with new responsibilities for which USTR is ill-equipped. USTR’s mission is to develop and coordinate international trade policy and negotiations with other countries; it lacks the resources and experience to scrutinize U.S. investments abroad for potential national security risks. Congress should play a more constructive role by pressing the Administration to prioritize implementation of the Foreign Investment Risk Review Modernization Act and the Export Control Reform Act.
  • Eliminating Global Market Distortions to Protect American Jobs Act.” This component of H.R. 4521 would make sweeping changes to U.S. antidumping and countervailing duty (AD/CVD) laws in ways that have not received the scrutiny and deliberation required for such a complex, far-reaching proposal. This major overhaul of U.S. trade law could add to inflationary pressures by raising costs for a wide variety of imports, including many products sourced from U.S. allies. It would fast-track AD/CVD investigations based on the findings of earlier, unrelated cases in a manner that could injure U.S. businesses that had nothing to do with the past cases in question. The bill would change methodologies in ways that would increase tariffs and extend the reach of duties to goods from all producers in a given country in the event a single firm was found to engage in dumping or to receive countervailable subsidies. The bill also glosses over the extremely substantial challenges of determining third-country subsidization contemplated in the bill. In sum, the bill has the potential to favor a handful of businesses at the expense of a much wider swath of industries employing many more American workers, thereby undermining the global competitiveness, productivity, and growth prospects of many more U.S. firms in high growth sectors.
  • Import Security and Fairness Act.” This provision would add to the challenges of supply chain bottlenecks and backups at U.S. ports of entry. By diverting a share of the over 500 million shipments that enter the United States under the existing de minimis process, it would add substantially to the workload of CBP personnel who are already stretched thin. Further, it would increase costs with a particularly large impact on U.S. small businesses. Above all, any legislation on this matter should be delayed pending the conclusion of the pilot programs on Section 321 and Type 86 data pilot programs, which have already shown promise by allowing CBP to segment risk and target shipments more accurately even though the pilot programs and associated findings and conclusions are not complete. Congress should not prematurely legislate in this area.
  • Miscellaneous Tariff Bill (MTB) and Generalized System of Preferences (GSP). COMPETES would upend the MTB existing process established in the American Manufacturing Competitiveness Act of 2016 that allows for a fulsome and transparent vetting process overseen by the U.S. International Trade Commission. Members of Congress and industry have ample opportunity to object to the temporary duty suspensions afforded under this process. Blocking the inclusion of finished goods in future MTBs would close the door to the possibility of relief from tariffs on goods generally not available from domestic sources and to which no one has objected. On GSP, the bill includes a reauthorization period that is two years shorter than the Senate proposal, which would add uncertainty and undermine the capacity of the program to accomplish its objective of fostering economic development in developing countries. On the program’s eligibility criteria, the bill would go well beyond provisions of USICA in ways that analysts warn could lead foreign governments to conclude that GSP’s compliance burdens outweigh its economic benefits.
  • Lack of Section 301 Tariff Exclusion Process. The Chamber strongly supports amending the bill to include a Section 301 tariff exclusion process that is fair, consistent, and transparent. The Congressional Budget Office has estimated that U.S. tariffs imposed in 2018-2019 — the overwhelming majority of which are Section 301 tariffs on goods from China — cost the average American household more than $1,200 in 2020 alone. Multiple studies show that nearly the entire burden of these duties has fallen on U.S. families and companies. USICA Section 73001 would reinstate previously granted tariff exclusions that expired last year through the end of 2022. USICA would also require USTR to implement a new product exclusion process beyond the extremely limited one now underway, which at most would reinstate one percent of previously granted exclusions, and it outlines specific criteria for USTR to consider in determining whether to grant an exclusion. Such a measure would help ensure American workers and businesses do not suffer disproportionate harm because of the tariffs.
  • Prohibitions or Conditions on Certain Transmittal of Funds. The Chamber strongly supports laws to prevent money laundering but is concerned that provisions of 4521 would expand the Financial Crimes Enforcement Network’s special measures authority in ways that would capture an overwhelming number of American businesses and investors engaged in lawful and productive digital assets activity. The Chamber stands ready to work with Congress on better avenues to target and eliminate fraudulent and criminal transactions.
  • Country of Origin Labeling Online. The Chamber also raised concerns over a Senate USICA provision that was not included in COMPETES. This ill-conceived provision would add significant complexity, costs and burdens to the existing programs authorized by trade laws and enforced by U.S. Customs and Border Protection. Such a new, conflicting regulatory regime would create a new liability for retailers and sellers to not only post the required information but certify the accuracy of the information provided by product vendors. Labeling provisions were added to USICA legislation without sufficient opportunity for stakeholders to discuss their concerns. Many unanswered questions remain about the practicality and administrability of such a provision.
The Chamber continues to argue that the best course for enacting critical and durable legislation to improve American competitiveness is to allow for meaningful bipartisan input and to reject the misguided and problematic provisions detailed above. Should the House pass this legislation as reported from the Rules Committee, the Chamber will continue working with company representatives and other associations to improve the bill in conference.
For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).
Chamber Comments on 2022 Special 301 Review
On January 31, the U.S. Chamber of Commerce submitted comments to the Office of the U.S. Trade Representative in response to the agency’s request for comments to guide its 2022 Special 301 Review. The comments, prepared by the Chamber’s Global Innovation Policy Center, commended the agency’s efforts to “shine a much-needed spotlight on inadequate IP protection and enforcement globally” and urged USTR to use the analysis, in addition to other available mechanisms, to improve IP conditions among U.S. trading partners.
For further information, please contact Executive Director for International Affairs at the Global Innovation Policy Center Robert Grant (rgrant@uschamber.com).
Lewis Nears Confirmation to Lead Export-Import Bank
The Senate advanced the nomination of Reta Jo Lewis to serve as President and Chair of the Export-Import Bank (Ex-Im) in a 54-39 cloture vote on February 3, and a positive confirmation vote is expected on the floor the week of February 7. Senator John Kennedy (R-LA), the lone Republican to vote to advance Lewis out of the Senate Banking Committee, was joined by five other Republicans in voting to proceed to the floor vote.
On February 2, the U.S. Chamber sent a letter to the Senate in support of Lewis’s nomination. The Chamber’s letter reads in part:
“Ex-Im plays a vital role supporting U.S. exporters by leveling the trade finance playing field for American companies. Without Ex-Im’s support, U.S. exporters are competing for customers with one arm tied behind their backs.
“Senate-confirmed leadership is crucial to ensuring a robust role for Ex-Im in restoring economic growth and job creation in the wake of the COVID-19 pandemic. Ex-Im reported a backlog of $39 billion in projects in its financing pipeline awaiting approvals at the end of 2020, and a significant share of this backlog remains. Expediting these projects will support good American jobs. Additionally, confirming Ms. Lewis will ensure that many of the reforms Congress has mandated are fully implemented, including the Program on China and Transformational Exports.”
Lewis previously served as Vice President and Counselor to the President at the U.S. Chamber, where she led the Chamber’s initiatives focused on fostering strategic alliances between small businesses, especially women and minority-owned businesses, entrepreneurs, and executives. In a September letter, the Chamber supported Lewis and other Ex-Im nominees Judith DelZoppo Pryor as First Vice President and Owen Herrnstadt as a Member of the Board.
For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
Senate Finance Leaders Pen Letter on EU’s Digital Proposals
On February 1, Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) sent a letter to President Joe Biden urging the administration to “increase meaningful engagement with the European Union (EU) regarding its digital agenda.” The pair specifically commented on the EU’s Digital Markets Act (DMA) and Digital Services Act (DSA), which they said target successful American companies while failing to regulate similar companies in other jurisdictions. They wrote:
“If left unaddressed, these discriminatory policies will distort trade by disadvantaging U.S. companies and their workers, protecting domestic European firms, and even giving an unfair advantage to government-owned and subsidized companies based in China and Russia that do not reflect shared U.S.-EU values of democracy, human rights and market-based principles.”
The committee leaders also welcomed the administration’s commitment to strengthen transatlantic trade relations and encouraged the White House to “renew engagement and cooperation on the unique challenges facing 21st century democracies” through the U.S.-EU Trade and Technology Council (TTC). They added:
“As this Administration continues to improve engagement with the EU and its Member States, including through such for a as the TTC, we urge you to leverage these conversations to ensure digital laws and regulations do not function as mechanisms for unfair and discriminatory trade protectionism.”
For further information, please contact Senior Director for European Affairs Garrett Workman (gworkman@uschamber.com).
Chamber Welcomes Enhanced U.S.-EU Energy Cooperation
On January 31, President of the U.S. Chamber of Commerce’s Global Energy Institute Marty Durbin made the following statement on the U.S.-EU joint statement to strengthen Europe’s energy security and sustainability and accelerate the global transition to clean energy:
“The U.S. Chamber of Commerce commends President Biden and European Commission President von der Leyen for their commitment to enhanced cooperation on energy security as outlined in their joint statement today. Energy security is national security, and the United States is well positioned to assist European allies in a manner that ensures reliable and affordable energy for all while also advancing shared environmental goals. Greater EU access to abundant U.S. natural gas will diversify Europe’s sources of supply and strengthen energy security for years to come. We look forward to working with the White House and the European Commission to advance specific actions to facilitate this effort and protect allies — in Europe, Asia, and elsewhere—- from potential supply disruptions.”
From the Home Front
Chamber CEO Calls on Congress, Administration to Act on Job Openings
On February 1, President and CEO of the U.S. Chamber Suzanne Clark called on Congress and the administration in the following statement to address the current worker shortage crisis that has exacerbated economic issues throughout the pandemic:
“We have 4.6 million more open jobs than we have people looking for work. We can’t get inflation under control, unclog our supply chains, or fully grow our economy unless we fill these open jobs.
“The Chamber applauds the Biden administration’s recent moves to increase H-2B visas and actions that make it easier to employ international STEM workers, but we must do more. Addressing the worker shortage crisis needs to be a top priority for the Administration and Congress.”
Commentary
U.S. Chamber (January 28) by Chamber Cyber, Intelligence, and Supply Chain Security Policy Staff
U.S. Chamber (January 26) by Isabelle Icso
U.S. Chamber (January 21) by Myron Brilliant

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