Bipartisan Letter to USTR Asks for FTZ Treatment in USMCA to Stay
Sen. John Cornyn, R-Texas, led a bipartisan letter to U.S. Trade Representative Robert Lighthizer arguing that he should not push for returning treatment of foreign-trade zones to the NAFTA approach, and instead, should allow goods manufactured in those zones to receive tariff benefits if they meet USMCA rules of origin. This issue has been hanging up a technical fixes bill since the summer (see 2007200021).
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Cornyn, who sent the letter Dec. 1, was joined by Republicans Cindy Hyde-Smith of Mississippi, Jerry Moran of Kansas and Ben Sasse of Nebraska, and Delaware's two Democratic senators. They noted that the Congressional Budget Office projects returning to the prohibition on FTZ goods receiving tariff benefits would mean companies would pay $2 billion in tariffs over 10 years.
“Supporting such a tax increase during a global pandemic and economic recession would harm American manufacturers across a wide range of industries, including the energy, electronics, automobile, and pharmaceutical sectors, among others,” they wrote. They said there are nearly 500,000 workers in FTZs, and that reinstating the NAFTA treatment would have a significant impact on companies in their states.
“Congress should not simply rubber stamp this tax increase,” they said.
Cornyn's press office did not respond to follow-up questions on why Congress can't simply leave out the change to FTZ treatment in the technical fixes package.