October 13,2000

Senate Approves Trade Bill

Legislation includes Provision Banning Importation of Products Made with Dog or Cat Fur

WASHINGTON -- The Senate Friday approved the Tariff Suspension and Trade Act of 2000, a compendium of non-controversial duty suspensions and technical changes to the trade laws. The Senate's action now sets up the possibility of a conference with the House on the differing versions of the bill.

"This legislation includes provisions which would temporarily suspend or reduce duties on a wide variety of products. These include a broad range of chemicals, including those used to manufacture drugs in the fight against HIV/AIDS, and environmentally friendly herbicides and insecticides," Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) stated. "Importantly also, the bill contains a provision that would ban the importation of products made with dog or cat fur, as well as a provision that would ban the importation of 'gray market' cigarettes."

Background:

Each provision included in this bill was separately introduced by a Senator, or was passed by the House as a part of H.R. 4868. On February 1, 2000, Senators Roth and Moynihan requested public comments to ensure that only those provisions that were non-controversial and which had a de minimus revenue impact were included in the bill. The Committee also solicited input from the Administration and the U.S. International Trade Commission (press release 106-290). In response to these comments, the Committee prepared a bill, which included only those duty suspension and reduction provisions which were non-controversial based on the public comments and Administration review and were revenue neutral based on estimates by the Congressional Budget Office. In addition, the bill incorporates many of the provisions unanimously passed by the House of Representatives.

Included in the bill:

Ban on importation of products using cat or dog fur: This provision, authored by Roth, prohibits the importation of products made from dog and cat pelts and requires labeling of all fur products regardless of price.

Ban on "Gray Market" Cigarettes: This provision would end the importation of "gray market" cigarettes which are currently siphoning money from the states' tobacco settlement. Manufactured abroad and bearing U.S.- registered trademarks, "gray market" cigarettes are diverted to the United States market, thus undermining funding for the states' tobacco settlement funds and potentially evading federal health requirements, banning the importation of such cigarettes. These "gray market" cigarettes may account for as much as 14% of all cigarette sales in the united States.

Suspension of Tariff collected on Imports of HIV-Combatting Drugs: Two provisions (that Sen. Roth introduced, S. 2391 and S. 2392) temporarily suspended the tariff collected on imports of HIV-combatting drugs, thus lowering the price for HIV infected consumers in the United States. The two drugs are DPC 961 and DPC 083. Their combined potency, excellent resistance profile, lower protein binding, and longer plasma half life increases the probability that these drugs will successfully treat both HIV patients who have not previously had a similar treatment as well as those HIV patients who have already developed resistance to currently available agents. According to publicly available information, there is no other HIV treatment in clinical trials that is expected to be able to treat most patients with resistance to currently available agents. They are also expected to have the advantage of once daily therapy.

Recycling provision: The Chairman included a provision that will create an economic incentive for importers to recycle their defective goods rather than simply destroy them and put them in a dump. Under existing current law an importer may be eligible for duty drawback (refund of 99% of the import duty paid) on products that are returned to the importer and are determined to be manufacturer defectives. The purpose of this provision is to reimburse importers for import duties paid on product that is not consumed within U.S. commerce.