Census Won't Eliminate EEI Requirements for Puerto Rico, US Virgin Islands
The Census Bureau won't follow through with a rule to eliminate some export reporting requirements for shipments to Puerto Rico and the U.S. Virgin Islands (see 2009160033 and 2112140052), saying it couldn’t find an alternative data source to replace the information that would no longer have been submitted by exporters. The decision, released Feb. 3, came after months of both interagency and public discussions, including heavy lobbying from parts of the U.S. shipping industry, which argued the requirements were costly, burdensome and unfair.
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Census said it made the decision “after careful consideration” of feedback from U.S. companies and others. The agency received a mixed bag of comments in December 2020 on whether it should eliminate the requirements, with some calling the change long overdue, while others said it could lead to an absence of a vital source of economic data collection for both territories (see 2012040033).
Ultimately, the agency decided against eliminating the Electronic Export Information requirements because “there is no alternative data source that yields the same high-quality data” for Puerto Rico and the U.S. Virgin Islands. The data is especially important for the Commerce Department’s Bureau of Economic Analysis, Census said, which uses the information to calculate GDP estimates for both territories.
But Census also suggested that it may again consider eliminating the EEI requirements in the future. “Both the Census Bureau and BEA are open to considering proposed alternative data sources,” the agency said, “which will be evaluated, tested, and verified to determine whether the data meets the statistical objectives of the current EEI.”
The agency said it received 50 public comments that were opposed to eliminating the requirements and 43 comments that supported the effort. Among the most outspoken groups that supported eliminating the EEI was the Express Association of America, which last year led an effort by Commerce’s Advisory Committee on Supply Chain Competitiveness to appeal to Secretary Gina Raimondo (see 2106250021 and 2109140037).
In an August letter to Raimondo, advisory committee leaders said they were “convinced” the agency can use alternative data and called parts of the reporting requirements unjustifiable. Michael Mullen, EAA’s executive director, said this week that Commerce never responded to the letter.
Mullen also said Census’ notice this week announcing the decision “makes no effort to provide a cost/benefit analysis that incorporates” the public comments it received. The agency didn’t say why it still needs the EEI data on a transaction-by-transaction basis as opposed to a monthly basis, Mullen said, and hasn’t tried to quantify how much more accurate of a GDP Commerce can calculate from requiring the EEI data.
That increase in accuracy “is very likely a few tenths of a percent, which would not justify the considerable cost involved for sellers and carriers to provide 19 data elements on every shipment between the islands and the U.S. mainland,” Mullen emailed Feb. 3.
U.S. shippers weren’t the only ones who supported removing the rule. Several commenters told Census that the export filing requirements, which are typically needed only to ship to foreign countries, treat Puerto Rico and the U.S. Virgin Islands unfairly compared with U.S. states. This extra reporting barrier causes some businesses to “deny service to the trade community located in U.S. Caribbean territories,” one commenter said, according to Census.
Those supporting the requirement told Census the EEI information “yields high quality data” that “provides insight on policy decisions, GDP estimates, business development and marketing, economic recovery, research and academia as well as historical data and methodology” that is “critical in measuring economic growth” for the territories. Without the data and “high-quality GDP statistics,” Census added, it will be “difficult for policy makers to gauge the impact” of necessary funding, including hurricane recovery efforts, on the Puerto Rican economy. The data also allows “these territories to rebuild their economies and accurately measure, project, and plan economic development,” the agency said.
One agency told Census that the elimination of the EEI requirements could hurt U.S. trade enforcement. Census said that agency would “lose visibility” into shipments to Puerto Rico and the U.S. Virgin Islands of items subject to the Export Administration Regulations, which could be illegally diverted from the territories to foreign countries.
Although Census said commenters proposed some alternative data sets, the agency concluded that none could adequately replace the current EEI reporting. “Without an alternative data source that meets the same statistical objectives,” Census said, “it is not possible to continue to produce GDP estimates” for the territories.