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Senate-Approved Customs Bill Could Cut Costs and Ease Trade for US Companies

The U.S. Senate passed a customs enforcement bill last week in a 75-20 vote, moving it on to President Obama’s desk for a signature. The House has already passed a similar bill.

Called the Trade Facilitation and Trade Enforcement Act of 2015, the bill would likely cut costs for apparel and footwear trade.

For one, it would raise the de minimis threshold from $200 to $800, meaning a company could import a good for up to $800 (or several goods which still amount to less than $800) once a day without paying duty on them.

It would also fix certain footwear and outerwear tariff classifications and provide new trade preferences for Nepal, according to the American Apparel and Footwear Association (AAFA), which has pushed for swift passage of the act. Outdated customs processes at U.S. Customs and Border Protection would be overhauled, too, making for easier movement of goods and less paperwork.

Intellectual property will see new rights and protections under the bill and the government will have more tools for reining in currency manipulation.

On the perhaps more contentious side, the bill also includes an extension of the ban on Internet access taxes, which prevents states from taxing Internet access.

“These taxes would make (and in some places already have made) broadband more expensive, reducing consumers’ ability and willingness to get online,” Federal Communications Commission (FCC) commissioner Ajit Pai said. Which would also likely affect the growth of e-commerce.

The Senate tried to pass the customs bill last year but Senator Dick Durbin (D-Ill.) promised to block it over the Internet tax clause. According to The Hill, Durbin didn’t try to block the bill this go around because Senate Majority Leader Mitch McConnell (R-Ky.) made a deal to discuss separate legislation later this year that would let states collect sales tax from Internet retailers.

Senator Orrin Hatch (R-Utah), co-author of the customs bill said the Senate’s passage marks a “major step forward” in advancing an agenda that accounts for the realities of modern day global trade.

“This bill is about coming down hard on the trade cheats who are ripping off American jobs,” said Senator Ron Wyden (D-Ore.), who also worked on the bill. “The truth is, past trade policies were often too old, too slow, or too weak for our country to fight back.”

The customs bill would be a long time coming as it has been more than 20 years since Congress passed “true” legislation to modernize customs, the United States Council for International Business wrote in a letter to Congress back in December.

“Continued customs modernization is essential to providing U.S. Customs and Border Protection (U.S. CBP) the support it needs to safeguard America’s borders while enhancing economic prosperity, and ensuring stability for American importers and exporters,” the letter said. “The bill is vital to the U.S. economy.”

According to the AAFA, the president is expected to sign the bill “shortly.”

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