r'our Subcommittee Action Agency Reports The Department of Commerce had no objection to enactment of H.R. 5284 provided that a tariff remain on narrow fabric loom parts. The International Trade Commission submitted an informative report. Markup On June 27, 1984, the Subcommittee on Trade ordered H.R. 5284 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment excluding parts from the coverage of the new provision and a technical amendment conforming the effective date to the other provisions. SUMMARY OF TESTIMONY ON H.R. 5284 Administration Department of Commerce: Opposes enactment of H.R. 5284 as originally written but has no objections to suspension on narrow fabric looms provided a tariff remains on the parts thereof. Enactment of this bill could adversely affect the estimated 12-15 U.S. producers of narrow fabric loom parts (670.74). The competitive position of U.S. manufacturers of narrow fabric loom parts already has been seriously eroded.. Statements for the Record Supports Northern Textile Association: Enactment would be beneficial to American manufacturers as well as consumers. Suspension of the existing duty on these machines and their proprietary parts until July 1, 1987, will encourage narrow fabric firms to continue to replace outdated equipment. Purchasing the new equipment without the penalty of a tariff will assume that woven narrow fabric products will be more competitive at home and abroad. Leesona Corporation: Supports enactment of H.R. 5284, a bill which suspends the duty on narrow fabric looms. To provide for the temporary suspension of the duty on mixtures of 5-chloro-2-methyl-4-isothiazolin-3-one, 2-methyl4-isothiazolin-3-one, magnesium chloride and magnesium nitrate. Summary of the Provision H.R. 5338, if enacted, would temporarily suspend the duty on mixtures of 5-chloro-2-methyl-4-isothiazolin-3-one, 2-methyl4-isothiazolin-3-one,magnesium chloride, and magnesium nitrate until June 30, 1987. Section-by-Section Analysis Section 1 of H.R. 5338, 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) to suspend the column 1 rate of duty until June 30, 1987 on mixtures of 5-chloro-2-methyl-4-isothiazolin3-one, 2-methyl-4-isothiazolin-3-one, magnesium chloride and magnesium nitrate, provided for in item 432.25 TSUS. The column 2 rate of duty would remain unchanged. The duty would be suspended with respect to articles entered, or withdrawn from warehouse for consumption, on or after the 15th day after the date of enactment of this Act. Upon request filed with Customs within ninety days of the date of enactment, the duty would also be suspended with respect to articles entered, or withdrawn from warehouse for consumption, before the enactment of the legislation, if the entry or withdrawal was unliquidated, or the liquidation was not final, on the date of enactment. Background and Justification In the commerce of the United States, mixtures of isothiazolinones are shipped as aqueous solutions. These solutions contain the active ingredient, as well as certain reaction products, and a stabilizer. Production and importation of this mixture are required to be in compliance with regulations of the Environmental Protection Agency issued under the Toxic Substance Control Act. The raw materials for this product are methyl-3-mercaptoproprionate, monomethylamine, chlorine, magnesium oxide, and magnesium nitrate. Mixtures of isothiazolinones are used as preservatives for cosmetics, toiletries, floor polishes, fabric softeners, dishwashing liquids, metal-working fluids, water-based paints, and latex polymers. They are also used as slimicides in pulp and paper mills, in secondary oil and gas production, in industrial cooling towers, and in air washers. H.R. 5338 Page Two Rohm and Haas Co., a large U.S. multinational corporation, has a plant capable of producing mixtures of isothiazolinones, located in Philadelphia, Pennsylvania. Although they are not presently producing the product in the U.S. plant, they are doing so in the United Kingdom and are marketing that product in the United States. Data concerning U.S. production of 5-chloro-2-methyl-4isothiazolin-3-one and 2-methyl-4-isothiazolin-3-one have been reported to the U.S. International Trade Commission since 1980. However, these production data are accorded confidential business treatment and are therefore not included in this report. The International Trade Commission does not collect data on magnesium chloride and magnesium nitrate. Data on U.S. imports of the mixtures of 5-chloro-2-methyl-4isothiazolin-3-one and 2-methyl-4-isothiazolin-3-one, magnesium chloride, and magnesium nitrate are included within the statistical classification for other mixtures, not specially provided for. Therefore, data on this product alone are not available. The staff understands that it is the intention of the patent holder, Rohm and Haas, to supply the U.S. market for this product with imports only, rather than to produce the product in the U.S. Data on U.S. exports of the mixtures in question are included within the export classification for mixtures and preparations, not specially provided for, and, therefore, data on this product alone are not available. U.S. consumption of this product is believed to be approximately equal to the amount imported. Comparison with Present Law Mixtures of isothiazolinones are classified in TSUS item 432.25 as other mixtures not specially provided for, at a column 1 rate of duty of 4.2 percent ad valorem, but not less than the highest rate applicable to any component material. The LDDC and column 2 rates are, respectively, 3.7 percent and 25 percent ad valorem, but not less than the highest rate applicable to any component material. Articles imported from designated beneficiary countries and classified under TSUS item 432.25 are eligible for duty-free treatment under the Generalized System of Preferences (GSP). Imports from designated beneficiary Caribbean Basin countries are eligible for duty-free entry under the Caribbean Basin Initiative (CBI). H.R. 5338 Page Three The component material contained in this mixture which has the highest rate of duty if imported as an individual compound is either one of the isothiazolinone compounds. Isothiazolinones are nitrogenous compounds classified under item 425.52, at a column 1 and LDDC rate of duty of 7.9 percent ad valorem, and a column 2 rate of 30.5 percent ad valorem. The concession granted with respect to item 425.52 during the Tokyo round of the Multilateral Trade Negotiations provided for a one-time reduction on July 1, 1980, from 8.4 percent to 7.9 percent ad valorem. Effect on Revenue The potential annual loss of revenue resulting from enactment of this legislation is estimated to be approximately $117,000. Subcommittee Action Agency Reports The Department of Commerce had no objection to enactment of H.R. 5338 except that they did oppose the retroactive provision provided for in Section 2 (b). The International Trade Commission submitted an informative report. Markup On June 27, 1984, the Subcommittee on Trade ordered H.R. 5338 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment changing the effective date to 15 days after the date of enactment. SUMMARY OF TESTIMONY ON H.R. 5338 Administration Department of Commerce: No objection to enactment of H.R. 5338 except for the retroactive application of the duty suspension provided in Section 2 (b) of the bill. Commerce opposes provisions of retroactivity. Statments for the Record Supports Rohm and Haas Company: Chloromethylisothiozolinone based biocides are not manufactured in the United States and are in demand by U.S. industry for a wide variety of applications in which they have demonstrated superior cost effectiveness. H.R. 5339 Introduced by: Mr. Schulze Date: April 3, 1984 To provide for the temporary suspension of the duty on mixtures of potassium 1-(p-chlorophenyl)-1, 4-dihydro-6-methyl-4 -oxopyridazine-3-carboxylate ("fenridazon-potassium") and formulation adjuvants. Summary of the Provision H.R. 5339, if enacted, would temporarily suspend the duty on mixtures of potassium 1-(p-chlorophenyl)-1,4-dihydro-6methyl-4-oxopyridazine-3-carboxylate (fenridazon-potassium) and formulation adjuvants until June 30, 1987. Section-by-Section Analysis H.R. 5339, if enacted, would temporarily suspend the column 1 rate of duty for mixtures of potassium 1-(p-chlorophenyl)-1, 4-dihydro-6-methyl-4-oxopyridazine-3-carboxylate ("fenridazonpotassium") and formulation adjuvants, currently classified in item 408.38 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, numbered 907.13, with free entry for articles from countries entitled to MFN treatment, commencing on or after the 15th day after the date of enactment of this Act and ending on June 30, 1987. Upon request filed with customs within 90 days of enactment of this legislation, the duty would also be suspended with respect to articles entered, or withdrawn from warehouse for consumption, before the enactment of the legislation, if the entry or withdrawal was unliquidated, or the liquidation was not final, on the date of enactment. The column 2 rate of duty would remain unchanged. Background and Justification Fenridazon-potassium is a synthetic organic chemical produced from specialty organic chemicals and then mixed with formulation adjuvants in an aqueous solution. At this time, its only known commercial use is as a plant growth regulator. This chemical inhibits the development of pollen on wheat, allowing the hybrid wheat seed to develop by selective cross-pollination. The only commonly used alternative to this method is to breed in male pollen sterility by using the cytoplasmic male sterile system. This, however, is an expensive and time-consuming procedure. |