The following is provided in cooperation with our national allies at NAM.
Senate Approves Trade Facilitation and Trade Enforcement Act. The New York Times (2/11, Calmes, Subscription Publication) reports that on Thursday, “The Senate gave overwhelming final approval” to the Trade Facilitation and Trade Enforcement Act, “the most comprehensive overhaul of customs law in decades, giving presidents new tools to combat unfair trade, yet falling short of bipartisan demands for penalties against other nations that manipulate their currencies.” The measure, which passed by a 75-20 vote, “defines a new process for the Customs and Border Protection service to act quickly against foreign businesses that evade anti-dumping laws and American duties on imports, or that traffic in counterfeit goods,” in addition to addressing the forced or child labor “loophole.” The Times notes that the NAM and other business groups were “Among the strongest supporters” of the legislation, with the NAM naming the legislation as a “key vote” heading into the elections cycle.
According to The Hill (2/12, Needham), the White House has said President Obama will sign the customs enforcement bill into law, with White House spokesman Josh Earnest saying the Administration was “pleased” the Senate passed a bill that “will provide additional tools to help crack down on unfair competition by trading partners and foreign companies that put our workers and businesses at a disadvantage.” The measure, which serves to add “protections for intellectual property and more tools for the government to crack down on currency manipulation,” received “broad backing by business groups,” including the NAM.
A separate article in The Hill (2/11, Carney) “Floor Action” blog also noted the support from business groups, reporting that NAM President and CEO Jay Timmons said in a statement before the Senate vote that “if senators want to grow manufacturing in the United States, then they should pass this bill immediately.”
The Business Journals (2/11, Hoover) also highlighted comments from Timmons, who stated, “By streamlining procedures that will cut red tape and facilitate legitimate trade, this bill would provide one of the most concrete improvements to our customs and border policies in over a decade.”
Meanwhile, Global Trade (2/12, Buxbaum) states that NAM Senior Vice President for Policy and Government Relations Aric Newhouse penned a letter to senators this week supporting the Trade Facilitation and Trade Enforcement Act, saying that “outdated customs and border policies are costing manufacturers billions of dollars a year in increased operating costs and unfair competition.” According to the letter, “Manufacturers are also harmed by the growing problem of evasion of U.S. trade remedy rules, intellectual property theft overseas, and the failure of our trading partners to fully enforce their trade agreement commitments.” Newhouse added the “legislation implements a strong new mechanism…to hold the U.S. government accountable for the enforcement of U.S. trade rules when evasion arises.”
Bloomberg News (2/11, Larson) reports as part of the “wide-ranging trade enforcement bill,” the Senate’s vote on Thursday “close[ed] a loophole in the Tariff Act of 1930, which bars goods made by convict, forced or indentured labor, amid a new focus on slavery in the supply chains of global companies.” The article states that since the loophole has been in existence for 85 years, politicians supporting the change “aren’t exactly sure how it will affect businesses.”
Congress Passes Ban On Internet Taxes as Part of Trade Bill. The AP (2/11, Fram) reports Congress on Thursday voted “to permanently bar state and local governments from taxing access to the Internet” and the White House indicated President Obama will sign the bill. The Senate vote “gave final congressional approval to the wide-ranging bill, which would also revamp trade laws.” Although some states had been allowed to impose taxes until now, the approved bill requires those states “to phase out their taxes by the summer of 2020.”
Reuters (2/11, Cowan) reports the permanent extension of the “Internet Tax Freedom Act” will also ban some taxes on digital goods and services.
WSJournal Praises Permanent Extension of Internet Tax Freedom Act. The Wall Street Journal (2/11, Subscription Publication) calls the Senate’s passage of a permanent extension of the Internet Tax Freedom Act and the President’s intent to sign it welcome news that will help encourage economic growth.
EU Sets March Goal for Deal On Multinationals’ Tax-Disclosure Rules. Reuters (2/8, Guarascio) cites European Union diplomats as saying Monday that an agreement is expected by March on new regulations mandating multinational corporations’ disclosure of tax and financial data in any of the 28 EU nations where they do business. An initial review of the country-by-country tax-avoidance rules that the European Commission proposed in January will take place Friday, at a regularly scheduled meeting of EU finance ministers, Reuters reports. It adds that each EU member government is expected to approve the measures on an accelerated basis, in time for a unified agreement next month.
The Guardian (UK) (2/7, Marks, Traynor) reported that the president of the Commission, Jean-Claude Juncker, “is said to be in favour of” the proposal that tax disclosures be required in every EU country where a multinational operates. “A consensus has formed around making the rules apply to the world’s biggest conglomerates, including those from the US,” the Guardian says, citing EU diplomats.
The Financial Times (2/8, Brunsden, Subscription Publication) reports that the rules the Commission is considering are similar to regulations that already apply to banking and extractive industries; if approved, the requirements would affect many other sectors as well.
Coleman: Latest Demands from Brussels Are Excessive, Unnecessary. Politico Pro (Subscription Publication, 2/9, Ariès) reports that US businesses are “wary” of the Commission proposals, and the story links to a post in the NAM’s Shopfloor (2/8) blog in which Vice President of Tax and Domestic Economic Policy Dorothy Coleman argues that the pending rules are “red flags” for American manufacturers operating in Europe. On the back of a set of similar proposals under the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting project, the EU is seeking to “impose additional compliance costs on companies and force disclosure of sensitive taxpayer information, creating a whole new set of unnecessary business challenges for global companies,” Coleman writes. The various rules, she adds, demand “much more information” than is needed to “assess a company’s tax liability,” and therefore are a threat to competitiveness. If NAM members want to read the full Politico Pro article for free, they may contact NAM account manager Molly Fluet at email@example.com.