Washington, D.C. – Reps. Jim Renacci (R-OH) and Mike Thompson (D-CA), along with several of their House colleagues, sent a letter to newly confirmed U.S. Trade Representative, Ambassador Robert Lighthizer, expressing their support for eliminating the current duty drawback and deferral restrictions in any North American Free Trade Agreement (NAFTA) modernization process.
Dating back to 1789, U.S. exporters have been given a refund on the duties, taxes, and fees they pay on parts they import to produce their final exported product. Duty drawback and deferral rights are among the last remaining World Trade Organization (WTO) sanctioned export promotion programs available to U.S. manufacturers. However, NAFTA and the U.S. – Chile Free Trade Agreement are the only two U.S. free trade agreements placing restrictions on these refunds. This penalizes U.S. exporters by raising production costs, resulting in higher export pricing and making U.S. goods more expensive than those produced by its foreign competitors.
“Small businesses already face a number of challenges, and duty drawback and deferral rights just add to them,” said Renacci. “Ninety percent of Ohio’s exporters are small businesses, and nearly 28% of all Ohio jobs are export-dependent. Eliminating these two restrictions in our free trade agreements would be a huge step forward for many Ohioans as Canada and Mexico account for over half of our exports.”
“American businesses deserve a level playing field in the global economy," said Thompson. "Trade is already an important part of our state’s economy. Last year, California exported nearly $164 billion in goods to over 200 countries. We should take steps to make sure more of our local businesses have the chance to export their products to important markets.”
Elimination of duty drawback and deferral restrictions is supported by the following member associations and companies of the Duty Drawback Coalition:
- American Apparel and Footwear Association
- American Association of Exporters and Importers
- American Association of Port Authorities
- American Petroleum Institute
- C.J. Holt & Company
- Cerny & Associates
- Charter Brokerage, L.L.C.
- Comstock & Theakston
- Constellation Brands, Inc.
- Fanwood Chemical, Inc.
- Jones Walker, LLP
- National Association of Manufacturers
- National Customs Brokers and Freight Forwarders Association
- National Retail Federation
- National Wine Institute
- Port of New Orleans
- Society of Chemical Manufacturers and Affiliates
- Sony Corporation
- United States Fashion Industry Association