Introduction
On March 30th, the US House of Representative Committee on Ways and Means and the US Senate Finance Committee announced their intention to develop legislation that adjusts the US tariff schedule to temporarily suspend or modify duties on a range of products or materials, and makes miscellaneous corrections to existing trade laws.

The purpose of this Miscellaneous Tariff bill (MTB) is to implement changes in the tariff schedule that will reduce the costs for US business and increase the competitiveness of domestic products. These changes are commonly temporary duty suspensions or other modifications applied to intermediate products or materials that are not produced domestically, or for which there is no domestic opposition.

The process by which the MTB is developed has become standardized, and involves a substantial degree of consensus. The Ways and Means and Finance Committees issued a public notice outlining the process and timetable for reviewing and soliciting public comment on individual tariff proposals that the committees can ultimately aggregate into a single piece of legislation.

Process
The MTB process begins with a committee request to all Members and Senators intending to propose duty suspensions or miscellaneous corrections do so by introducing free-standing bills containing this language by Monday, April 30, 2012, to permit them to be thoroughly reviewed and evaluated. The bills are customarily drafted to include only a single duty modification or trade law change each. This means that interested parties will need to develop support in advance from Members of Congress.

After reviewing these proposals, the committees will post on their websites each bill under consideration (i.e. introduced) for inclusion in the MTB. Then, the committees will issue a request for public comment and solicit a review and analysis of each bill from the US Trade Representative, the US International Trade Commission, the US Department of Commerce, US Customs and Border Protection as well as a budget score from the Congressional Budget Office (CBO).

In considering which proposals to incorporate into their respective final Miscellaneous Tariff Bill, the committees have indicated that each tariff modification meet the following standards:

1. There is no opposition;
    
2. the total cost to the US Treasury is less than $500,000 per year; and
    
3. it is administrable by US Customs.

If a proposal extends an existing temporary duty suspension beyond the current expiration, legislation is encouraged to simply modify the expiration date.

Proposals to create new temporary duty modifications require determination of the correct technical format and physical description of product following the style of the Harmonized Tariff Schedule. Products must be described precisely based on their physical characteristics at the time of entry and include a correct 8-digit tariff line so that a Customs official can identify the product easily at the border. The use of copyrighted and trade names for products is discouraged, as well as product descriptions tied to end use that require tracking the product after it leaves the border. (Note: House and Senate rules require that Members provide a written disclosure statement to the committee for any bill containing a limited tariff benefit, identifying known beneficiaries.)

Following this review process, and with the benefit of technical assistance and recommendations from the ITC and committee, the Ways and Means and Finance Committees will produce a bipartisan, aggregate MTB proposal which can be marked up and sent to the full House and Senate for expedited consideration. Following House and Senate action, a conference committee will likely finalize a Miscellaneous Tariff Bill for approval.

The timing of the legislative process remains uncertain, but the demand for expedited action on MTB legislation is substantial.

Arent Fox is closely monitoring this process and urges companies which have a need or interest in tariff modifications to review strategies for participating in the MTB process. For more information about the prospects for a Miscellaneous Tariff Bill and the potential for temporary duty suspensions, please contact Philip English, co-chair of Arent Fox’s Government Relations practice, or Laura Doyle, Government Relations Director at Arent Fox.