Brandon J. Murrill
Legislative Attorney
Most consumer products within the jurisdiction of the U.S. Consumer Product
Safety Commission (CPSC) are imported into the United States. The CPSC is
the central, federal authority for the promotion and enforcement of
consumer product safety. In 2008, following several well-publicized
national recalls of toys and children’s products, many of which
contained lead, Congress passed the Consumer Product Safety Improvement
Act (CPSIA), which included provisions addressing the CPSC’s role in
ensuring the safety of imported and exported consumer products.
With regard to import safety, the CPSC acts in coordination with U.S. Customs
and Border Protection (CBP), Department of Homeland Security, to evaluate
the safety of consumer products offered for import into U.S. customs territory.
Working together with CBP, the CPSC attempts to identify shipments that
are likely to contain consumer products which violate import
provisions that the agency enforces. The CPSC also determines whether to
admit certain consumer products offered for import into U.S. customs
territory. Importers of products manufactured outside of the United States
must certify that finished products comply with all rules, bans, standards,
or regulations applicable to the product under any act enforced by the
CPSC.
The export of consumer products from the United States to foreign countries may
also be subject to regulation by the CPSC. In the CPSIA, Congress provided
that, among other things, the CPSC may prohibit the export from the United
States for the purpose of sale any consumer product that violates a safety
rule under the Consumer Product Safety Act (CPSA) unless the
importing country informs the CPSC that it accepts the importation of the
consumer product.
In addition to domestic laws pertaining to the CPSC’s regulation of the import
and export of consumer products, the United States has also agreed to
undertake certain international obligations with respect to the
promulgation of standards-related measures (e.g., product safety regulations)
by its central government bodies, including the CPSC. These obligations are
found in several international agreements to which the United States is
party, including the multilateral World Trade Organization (WTO) Agreement
on Technical Barriers to Trade (TBT Agreement), as well as bilateral and
regional U.S. free trade agreements (FTAs). Among other things, the TBT Agreement
establishes rules pertaining to the promulgation of technical regulations by
central government bodies like the CPSC, including rules concerning nondiscrimination,
transparency, and reliance on international standards as a basis for
regulations. U.S. FTAs also contain additional obligations for certain
parties with regard to transparency. Standards-related trade obligations
have been implemented in U.S. law, particularly in the Trade Agreements Act of
1979.
In the 113th Congress, H.R. 1910, the Foreign Manufacturers Legal Accountability Act
of 2013, would require the Chairman of the CPSC to mandate that certain
foreign manufacturers and producers of consumer products distributed in
commerce establish a registered agent in the United States to accept
service of process on behalf of such manufacturer or producer for
the purpose of any state or federal regulatory proceeding or civil action
related to the product.
Date of Report: November 5, 2013
Number of Pages: 20
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Mary Jane Bolle
Specialist in International Trade and Finance
Brock R. Williams
Analyst in International Trade and Finance
U.S. foreign-trade zones (FTZs) are geographic areas declared to be outside
the normal customs territory of the United States. This means that, for
foreign merchandise entering FTZs and reexported as different products,
customs procedures are streamlined and tariffs do not apply. For products
intended for U.S. consumption, full customs procedures are applied and duties
are payable when they exit the FTZ.
In 1934, in the midst of the Great Depression, Congress passed the U.S.
Foreign-Trade Zones Act. It was designed to expedite and encourage
international trade while promoting domestic activity and investment. The
U.S. FTZ program offers a variety of customs benefits to businesses which
combine foreign and domestic merchandise in FTZs. Similar types of “zones”
exist in 135 countries, employing about 66 million workers worldwide.
Though some aspects differ, all have streamlined customs procedures and no
duties applicable on components and raw materials combined in zones and
then exported. Use of the zones can facilitate cooperative
international production for a substantial share of the global supply
chain.
U.S. FTZs can affect the competitiveness of U.S. companies by allowing savings
through (1) duty reduction on “inverted tariff structures” (where tariffs
are higher on imported components than on finished products); (2) customs
and inventory efficiencies; and (3) duty exemption on goods exported from,
or consumed, scrapped, or destroyed in, a zone. Though difficult to achieve,
other possible alternatives, such as broad-based tariff reductions through
multilateral negotiations, and overall customs reform might provide some
of the same competitive advantages as zone use in a more efficient manner,
while also ensuring that all importers have equal access.
Zone activity represents a significant share of U.S. trade. In 2012, over 13%
of foreign goods entered the United States through FTZs or bonded warehouses—72%
of them as crude oil. Most shipments arriving through FTZs were consumed
in the United States; the rest were exported. Crude oil byproducts such as
gasoline, diesel, jet fuel, kerosene, and petrochemicals dominate FTZ
output. Other key products include autos, consumer electronics, and machinery.
U.S. zone activity occurs primarily in FTZ manufacturing operations.
Administration of the U.S. FTZ system is overseen by the Secretaries of
Commerce and the Treasury, who constitute the U.S. FTZ Board. The Board is
responsible for the establishment of zones, the authorization of specific
production activity, and the general oversight of zones. It also appoints
an Executive Secretary, who oversees the Board’s staff. Homeland Security’s
Customs and Border Protection (CBP) directly oversees FTZs. It activates
the zones and secures and controls dutiable merchandise moving into and
out of them. CBP oversight also includes both protection of U.S. tariff
revenue and protection from illegal activity through screening,
targeting, and inspections.
In 2012, the U.S. FTZ Board issued new regulations. They focused primarily on
streamlining the application procedures and shortening, generally from a
year to four months, the time for FTZ approval for manufacturing.
Congressional Interest
Congress has demonstrated a continuing interest in U.S. Foreign Trade Zones
(FTZs), as they (1) may help to maintain U.S. employment opportunities and
the competitiveness of U.S. producers;
(2) encompass a portion of U.S. trade; and (3) affect U.S. tariff revenue.
U.S. FTZs account for less than one-half of 1% of all world zone workers
and a small share of the U.S. workforce. However, most of this employment
is in manufacturing, which has lost a significant share of its workers
over the past several decades. Today, every state has at least one FTZ, and
many have numerous manufacturing operations.
Current issues for Congress relating to the U.S. FTZ program may include (1)
whether U.S. FTZs encourage a misallocation of U.S. resources; (2) data
availability issues; (3) security concerns; and (4) the U.S. employment
and global competitiveness impact of FTZs. Broader considerations relating
to the world zone network include (5) the effectiveness of trade zones
worldwide as a tool for economic development; and (6) trade zones
worldwide and worker rights.
Date of Report: November 12, 2013
Number of Pages: 32
Order Number: R42686
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James K. Jackson
Specialist in International Trade and Finance
The Organization for Economic Cooperation and
Development (OECD) celebrated its 50th anniversary in 2011, a time when
the global economy was struggling to recover from the financial crisis and
slow economic growth. The OECD is an intergovernmental economic organization in which
the 34 member countries discuss and develop key policy recommendations that
often serve as the basis for international standards and practices. In
addition, the OECD members analyze economic and social policy and share
expertise and exchanges with more than 70 developing and emerging
economies. The 34 member countries include Australia, Austria, Belgium, Canada,
Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg,
Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, Slovak
Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom,
and the United States. While all of the member countries are considered to
be economically advanced and collectively produce 60% of the world’s goods and
services, membership is limited only by a country’s commitment to a market
economy and a pluralistic democracy. The OECD also has extended an
invitation to the Russian Federation for membership, which includes
meeting rigorous best practices relative to anti-bribery and anti-corruption standards.
Furthermore, the OECD works with other potential partners such as Brazil,
China, India, Indonesia, and South Africa with a view toward possible
membership.
The member countries rely on the OECD Secretariat in Paris to collect data;
monitor trends; analyze and forecast economic developments; and research
social changes and patterns in trade, environment, agriculture, society,
innovation, corporate and public governance, taxation, sustainable
development, and other areas to inform their discussions and to assist them in pursuing
their efforts to develop common policies and practices. Following the financial
crisis, the OECD played a major role in providing cross-country analyses
of market reforms and programs to stimulate growth. The United States has
sparred periodically with other OECD member countries over various issues,
including U.S. antidumping laws and the size of the U.S. financial
contribution. Karen Kornbluh was appointed in 2009 by President Obama to serve
as the U.S. Ambassador to the OECD. She stepped down as Ambassador and
Daniel W. Yohannes was nominated to serve as the next U.S. Ambassador to
the OECD. Key issues for Congress include OECD work on coordinating
national approaches to curtailing bribery and the illicit use of tax havens.
Congress appropriated about $82.2 million to the OECD in FY2013; the budget
request for FY2014 was $83.2 million. .
Date of Report: October 30, 2013
Number of Pages: 128
Order Number: RS21128
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