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Border Trade Alliance urges Congress to reject reversion to NAFTA-era treatment of Foreign Trade Zones

The Border Trade Alliance is supporting a bipartisan effort led by Sen. John Cornyn, R-Texas, in urging Congress not to include a provision in the year-end spending bill that would erode the economic power of the country’s Foreign Trade Zones and make U.S.-based manufacturers less globally competitive. Senators Tom Carper (D-Del.) Chris Coons (D-Del.), Cindy Hyde-Smith (R-Miss.), Jerry Moran (R-Kan.) and Ben Sasse (R-Neb.) join Sen. Cornyn in the effort.

The BTA is opposed to a U.S. Trade Representative-backed “technical correction” to the implementation of the United States-Mexico-Canada Agreement (USMCA) that would prevent goods manufactured within an FTZ from receiving reduced or duty-free treatment under the agreement.

“USMCA is a trade agreement for the 21st century, but reinstating an old NAFTA-era rule turns back the clock on U.S. manufacturing competitiveness,” BTA Chair Sergio Contreras said. “In keeping with the goal of modernizing U.S. trade policy under USMCA, products produced within FTZs should qualify for duty-free treatment. We thank Sen. John Cornyn and his colleagues on both sides of the aisle for standing up for U.S. manufacturers.”

Rolling back USMCA’s FTZ provisions would be the equivalent of a $2 billion tax increase according to the nonpartisan Congressional Budget Office.

“This relic from the original NAFTA should not be reinstated,” BTA President Ms. Britton Mullen said. “There is no compelling reason to put thousands of U.S. job creators and their employees at a tremendous economic disadvantage when so many are already struggling during this pandemic-induced downturn. Congress made clear during the debate over USMCA’s implementation that this rule should be removed; it should not return.”

The BTA’s 2021 Policy Agenda, under the auspices of the organization’s Security & Trade Committee, states: 

The committee supports a policy reform that would ensure any manufacturing performed within a designated Foreign Trade Zone (FTZ) would qualify the resulting component or product for tariff-free treatment under USMCA. Doing so would increase the U.S.’ competitiveness in the manufacturing sector.

For more information:
Garrick Taylor
Border Trade Alliance
Tel: (602) 615-1657 
Email: [email protected] 

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