2020 Policy Agenda

As part of its ongoing advocacy initiative, NAFTZ will monitor and work to advance the following policy issues with the Administration and Congress in 2019.

Policy Agenda

United States-Mexico-Canada Agreement (USMCA)

The North American Free Trade Agreement (NAFTA) severely hindered the ability of U.S. FTZs to achieve their full potential to advance the program’s goals by imposing unfair and punitive restrictions on the ability of FTZ manufacturers to export products duty-free to Canada and Mexico and to use the rules of origin to make those products more cost-competitive with Canadian and Mexican products in NAFTA markets. NAFTZ developed two legislative proposals to address these problems.While we were ultimately unsuccessful in getting our proposed fixes attached to the USMCA implementing bill, NAFTZ will work to get those proposals introduced in Congress as quickly as possible and tee them up for inclusion on a miscellaneous trade bill (MTB) or another appropriate legislative vehicle sometime this year.

End discriminatory trade-action tariffs on FTZ-manufactured products

NAFTZ will continue to push for legislative and regulatory solutions to the inequitable tariff treatment between U.S.-based manufacturers located inside and outside an FTZ in the assessment of duties under various trade actions (Sections 201, 232, 301, etc.). The problem arose in the Sec. 201 and 301 trade actions where country-of-origin reporting requirements for entries from an FTZ resulted in certain instances in the improper assessment of these duties on the value of all foreign inputs incorporated into products manufactured inan FTZ, including inputs that are not products of a targeted nation or are not merchandise included on the published list of targeted foreign products subject to the trade action.

321/De Minimis

Changes to U.S. informal-entry rules increasing the duty-free de minimis level for imported goods from $200 to $800 adversely impacted FTZ distribution operations by encouraging a shift of e-commerce fulfillment for the U.S. market to Canada, Mexico, and other foreign locations. NAFTZ is a participant in an industry coalition seeking legislative changes to address the adverse impact of this change. While efforts to get the proposal attached to the USMCA implementing bill were also unsuccessful, NAFTZ and the Coalition will work to get the proposal introduced in Congress within the first three months of 2020 for inclusion on the MTB or another appropriate legislative vehicle.

Revise Customs Part 146 FTZ regulations

Customs regulations on FTZs have changed little since 1986. In 2018, NAFTZ relaunched an effort with CBP through the Customs Operations Advisory Committee (COAC) to modernize these regulations to account fully for the revolution in CBP automation and sweeping changes in modern global supply-chain management. NAFTZ has worked with CBP and now has a completed working draft that would transform the regulations to meet the 21st century needs of CBP, the FTZ community, and a more globally-integrated U.S. economy. NAFTZ also seeks to protect and expand direct delivery and eliminate the outdated five-day rule and the blanket 216 for manufacturing,manipulation, and exhibition.

Read the Rewrite of Part 146 Policy Brief

 

Read the Expansion of Blanket 216 Policy Brief

ACE programming for the FTZ e214 admission

A milestone in the ITDS single-window initiative occurred in 2017 with integration of the e214 FTZ admission process from the legacy Automated Commercial System (ACS) software platform into ACE. The next step is to add Partner Government Agencies (PGAs) message sets into the e214 through ACE for those PGAs needing their compliance data for FTZ goods before entry from a zone into U.S. Customs territory while ensuring the future viability of the FTZ direct-delivery procedure for program stakeholders. NAFTZ continues to work with the PGAs and CBP to facilitate this process and adopt a viable compliance process that fulfills the PGAs’ enforcement mandate while minimizing unnecessary burdens on FTZ filers.

Facilitate transition of FTZs to the Automated Commercial Environment (ACE)

As foreign-trade zones process over 10 percent of total U.S. merchandise imports, the International Trade Data System (ITDS) “single-window” initiative to ensure full and timely integration of all FTZ compliance data onto the ACE platform is vital for the efficiency of international commerce across America’s borders. NAFTZ continues to work with U.S. Customs and Border Protection (CBP) and Congress to secure sufficient funding, set trade-enhancing objectives with realistic deadlines, and provide adequate opportunity for software testing.

Read the ACE Policy Brief

Revise the FTZ Board’s “production scope of authority” regulations

Current regulations do not allow FTZ operator/user companies sufficient flexibility to quickly modify their approved list of imported components and/or finished products in response to changing demands of global competition. NAFTZ continues to urge the FTZ Board to introduce changes to allow use of six-digit Harmonized Tariff Schedule (HTS) numbers to define the scope of production authority (versus written commercial description), and a retrospective notification process to allow companies to maintain full compliance and keep assembly lines in operation.

Read the Scope of Authority Policy Brief

Illicit Trade

With increasing attention focused on the problem of illicit trade, partially due to the explosion in global small-package delivery, NAFTZ will continue to work with the Organization for Economic Cooperation and Development (OECD), the World Free Zones Organization (WFZO), and the U.S. Congress on efforts todevelop global best practices and models, including the U.S. FTZ program’s enforcement and compliance system, to reduce the risk of illicit trade transiting free-trade zones in other countries and entering U.S. commerce.

Trusted Trader Programs

NAFTZ seeks recognition in CBP’s physical-security guidelines of FTZ supply-chain security requirements and enhanced benefits to FTZ operator/users with trusted-trader status under the Customs-Trade Partnership Against Terrorism(C-TPAT) and/or Importer Self-Assessment (ISA) programs.

Read the TEAM Policy Brief

How do I get Involved?

Our members play an important role in our advocacy efforts. Here are some ways that you can contribute:

Keep up to date on the industry

Our email blasts inform members of breaking developments in FTZ regulations and our monthly Zones Reports contain a section devoted to regulatory changes and policy developments that affect the FTZ community.

Participate in the Grantee or Operator/User Roundtable discussions

At our Spring Seminars and Annual Conferences, we host roundtable discussions to receive input on what issues are of greatest importance for our Grantees and Operators.

Take part in Congressional Visits/Congressional Updates

As part of our annual Legislative Summit, the NAFTZ encourages members to visit their elected Senators and Representatives on Capitol Hill, to share the impact of the FTZ program in their home states and districts. This allows members a first-hand opportunity to tell the story of how FTZs contribute to the U.S. economy and to educate Congress about issues affecting business. The NAFTZ encourages its members to update elected Senators and Representatives on the positive investment and employment in zone projects on a direct continuing basis.

Join a Committee, Working Group, or Task Force

Members are presented with ongoing opportunities to shape and engage in our policy work. Our Committees meet regularly to discuss concerns and recommend action by the NAFTZ.

Our Working Groups are organized around major policy or issue areas and they meet on an ongoing basis. The working groups are to designed to help us think long-term; identify new opportunities; and to mobilize members to address specific issues. We have recently had several very active working groups formed to address the ACE transition of specific PGA’s. Task forces bring members together on a short-term basis to gather insights, expertise, and information to meet a particular policy challenge. We have a very active ACE Taskforce for example.

Contact Jarmila Zapata if you are interested in participating on a working group or task force.