H.R. 4899 Introduced by: Mr. Frenzel Date: February 22, 1984 To suspend the duty on acetylsulfaguanidine until the close of December 3, 1986. Summary of the Provision H.R. 4899, if enacted, would suspend the duty on acetylsulfaguanidine until the close of December 31, 1986. Section-by-Section Analysis Section 1 of H.R. 4899, if enacted would temporarily suspend the column 1 rate of duty for acetylsulfaguanidine, currently classified in item 406.56 of the Tariff Schedules of the United States (TSUS). The legislation would amend subpart B of part 1 of the Appendix to the TSUS to add a new item number, 907.11, with free entry for articles from countries entitled to MFN treatment, commencing on the date of enactment and ending December 31, 1986. The column 2 rate of duty is intended to remain unchanged. Section 2 provides for the effective date of the Act to be on or after the 15th day after the date of the enactment of this Act. Background and Justification Acetylsulfaguanidine is a synthetic organic chemical used in the production of sulfaguanidine. This chemical is used primarily to produce a sulfa drug, sulfamethazine. In the United States, this drug is used mainly to combat bacterial infections in animals. Domestic producers generally have the facilities to produce this sulfa drug from either acetylsulfaguanidine or sulfaguanidine. As a result, the selection of either chemical by the consumer usually depends on the price and availability of these chemicals. At the present time, this chemical is not produced in the United States. According to a major importer, this chemical is not produced in the United States for a number of reasons such as high production costs, competitively-priced imports, and environmental concerns with the by-products. According to a major importer, U.S. imports of this chemical in 1983 amounted to approximately 60,000 pounds, mainly from West Germany. During 1979-82, the International Trade Commission (ITC) found imports for only 1979 and 1980, amounting to 757,742 pounds and 198,370 pounds, respectively. The ITC did not find any imports from column 2 sources. H.R. 4899 Page Two The major importers of acetylsulfaguanidine during 1979, 1980, and 1983 were Salsbury Laboratories, Charles City, Iowa, and Olavson Industries, Inc., New York, New York. There are no exports of this chemical from the United States, since all imports are consumed domestically in the production of sulfamethazine which is more likely to be exported. Since there is no domestic production, domestic consumption is essentially the same as the quantity of imported acetylsulfaguanidine. Comparison with Present Law Since July 1980, acetylsulfaguanidine has been classified in TSUS item 406.56, other sulfonamide products provided for in the Chemical Appendix to the Tariff Schedules, a provision created by Presidential Proclamation 4768 (45135, 45149). It is dutiable at a column 1 rate of 1.7 cents per pound plus 18 percent ad valorem; no preferential rate is afforded to imports from least developed developing countries. The column 2 duty rate is 7 cents per pound plus 57.5 percent ad valorem. The column 1 duty rate is not scheduled to be reduced through staging. Imports of this chemical are not eligible for duty-free entry under the Generalized System of Preferences (GSP). However, imports from designated beneficiary countries are eligible for duty-free entry under the Caribbean Basin Initiative (CBI). Effect on Revenue Based on estimates by the major importers of potential imports, enactment of this legislation would likely result in a loss of customs revenue in 1984 of approximately $48,000. Subcommittee Action Agency Reports The Department of Commerce has no objection to enactment of H.R. 4899. The International Trade Commission submitted an informative report. H.R. 4899 Markup On June 27, 1984, the Subcommittee on Trade ordered H.R. 4899 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment changing the applicable column 2 rate for the new item from "Free" to "No change" and making the provision effective 15 days after enactment. SUMMARY OF TESTIMONY ON H.R. 4899 Administration Department of Commerce: No objection to enactment of H.R. 4899. Supports The Honorable Lane Evans, M.C. (Ill.): The bill suspends duty on a drug that is used primarily by the livestock and poultry industry directly in the treatment of animal infection or indirectly in the production of other drugs which treat infection. Salsbury Laboratories: Sulfa drugs are of prime importance to the livestock and poultry industries and there is virtually no domestic production of these essential veterinary health products. To suspend until July 1, 1987, the duty on decorative lace-braiding machines and parts thereof. Summary of the Provision H.R. 5283, if enacted, would suspend until July 1, 1987 the duty on decorative lace braiding machines. Section-by-section analysis Section 1 of H.R. 5283, if enacted, would amend subpart B of part 1 of the Appendix to the Tariff Schedules of the United States (19 U.S.C. 1202) by inserting in numerical sequence the new item 912.11 to suspend the column 1 duty until July 1, 1987 on decorative lace-braiding machines using the jacquard system, and parts thereof, provided for in item 670.25 and 670.74, part 4E, schedule 6. Section 2 makes the provision effective on or after the 15th day after the date of the enactment of this Act. Background and Justification Textile braiding machines are of three general types, the comparatively simple Maypole type, which is used to produce such articles as sash cords, fire-hose covering, shoe laces, ornamental braid, fiberglass, sutures, optical fibers, and pacemaker leads, and high-speed type, which is used chiefly for insulating electric wires and cables; and the Barmen lace braider, which is used chiefly for making materials for insulating electrical wires and cables, and the Barmen lace-braider, which produces a fabric that is similar to handmade laces. These machines produce fabric by interlacing, diagonally, a series of threads or strands in a maypole fashion. Separate domestic production data for lace-braiding machines is not available. The majority of domestic manufacturers indicated that they produce a wide variety of other textile machinery and that lace-braiders constitute a minor proportion of total annual sales. Machines.--Imports of braiding and lace-braiding machines were as follows during 1979-83. West Germany and Japan accounted for 96 percent of all U.S. imports of these machines in 1982 and 94 percent in 1983. Industry sources indicated that four companies dominate the U.S. import market. They are J.B. Hyde & Co. Ltd. of the H.R. 5283 United Kingdom, Kokubun Iron Works of Japan, Wilhelm Steeger of West Germany, and the Karg Corporation of the United Kingdom. Separate import data for lace-braiding machines are not available Industry sources are of the opinion that import competition would increase as a result of the suspension of duties on imports under item 670.25 and 670.74. U.S. manufacturers indicated that they have dominated the domestic and international markets in recent years. Parts.--Parts for lace-briding machines, if not specially provided for elsewhere in the TSUS are classifiable under item 670.7480 as other parts of textile machinery, not specially provided for. Imports under that item number during 1979-83 were as follows: The percentage of the value of imports classified under TSUSA item 670.7480 which is attributable to parts for lacebraiding machines is not known. Japan and West Germany accounted for 58 percent of all imports under 670.7480 in 1982 and 50 percent in 1983. Exports of braiding and lace-braiding machines, were as follows during 1979-83: The percentage of the value of all braiding machines attributable to lace-braiding machines is not known. The United Kingdom, the Republic of South Africa, South Korea and Singapore were the largest export markets for all braiding machines during 1983, accounting for 31 percent of total U.S. exports. |