The Importance of Imports: The “To Do” List
Crossposted from Imports Work
We've been celebrating "Imports Work for America" week. While the Chamber has long argued that boosting exports is vital to our economy, imports also play a critical role.
So how can we better ensure that imports work for America going forward? First, trading away U.S. import barriers to secure better access to foreign markets is a terrific deal. Today, negotiations for the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) aim to eliminate tariffs and other trade barriers between the United States and some of the largest economies in the world, including the European Union, Japan, and a collection of other Asia-Pacific nations. The U.S. should vigorously pursue such trade agreements.
Further, the Chamber strongly supports the Miscellaneous Tariff Bill (MTB), which provides relief from tariffs levied on imported materials or intermediate products that are essential to U.S. manufacturers but unavailable from domestic sources. Tens of thousands of American workers and hundreds of American companies depend on the MTB for relief from tariffs that serve only to raise costs for U.S. manufacturers and dull their competitive edge. The last MTB supported an estimated 90,000 American jobs; the latest bill promises benefits that could reach twice as many workers.
In the view of some, the MTB's duty suspensions are earmarks because they provide a "limited tariff benefit," which is defined under House rules as benefiting 10 or fewer entities. However, the MTB's benefits are in no way limited: Duty suspensions are available to all importers of the product. The bill makes no appropriation of public funds; it merely suspends a tariff that serves only to undermine U.S. competitiveness. The MTB is a tax cut, not an earmark.
Since the expiration of the last MTB on December 31, 2012, U.S. businesses both large and small have faced higher costs for imported inputs not available from domestic sources. It's time legislators acted to renew the MTB and lift the burden of these pointless and damaging tariffs.
In addition, Congress should move quickly to renew the Generalized System of Preferences(GSP), which expired on July 31, 2013. Since 1976, GSP has promoted economic growth in developing countries by providing duty-free access to the U.S. market for thousands of selected products from more than 120 developing countries.
GSP helps keep U.S. manufacturers and their suppliers competitive. Approximately three-quarters of U.S. imports using GSP are raw materials, parts and components, or machinery and equipment used by U.S. companies to manufacture goods in the United States for domestic consumption or for export. The products coming in under GSP generally do not compete with U.S.-made goods in any significant way. According to a 2006 U.S. Chamber of Commerce study, over 80,000 American jobs are associated with moving GSP imports from the docks to farmers, manufacturers, and retail shelves.
Finally, the Chamber has endorsed the Affordable Footwear Act, which suspends for five years U.S. tariffs on inexpensive footwear that is not manufactured in the U.S. Such footwear is often subject to very high tariffs, which represent a hidden, regressive tax on low-income Americans.
In the end, imports are important because they show that trade is a two-way street -- with benefits on both sides.