To extend temporary suspension of duties on certain clock radios until September 30, 1986. Summary of the Provision H.R. 3731, if enacted, would extend the temporary suspension of duty on certain clock radios until September 30, 1986. Section-by-Section Analysis Section 1 of H.R. 3731, if enacted, would amend item 911.95 of the Appendix to the Tariff Schedules of the United States (19 U.S.C. 1202) by inserting the date 9/30/86 in lieu of 9/30/84 in the date column. This will effectively extend the temporary suspension of duty on certain clock radios for an additional two years until September 30, 1986. Background and Justification This legislation would extend for an additional two years the temporary suspension of duty on certain clock radios provided for under Public Law No. 97-446 which was signed into law on January 12, 1983. Public Law No. 97-446 provided duty suspension for entertainment broadcast band receivers valued not over $40 each and incorporating timekeeping or time display devices not in combination with any other article, and not designed for motor vehicle installation. The term "entertainment broadcast band receivers" is defined as those receivers designed principally to receive signals in the AM (53-1710KHz) and FM (88-108MHz) entertainment broadcast bands, whether or not they are capable of receiving signals on other bands such as aviation, television, marine, public safety, industrial and citizens bands. Imports of clock radios were 9.4 million units in 1980 and 9.8 million units in 1981. This is down approximately 10 percent from the 1977-78 levels. Imports in 1980 were valued at $101 million and 1981 at $109 million. Major suppliers of these Exports of all types of radios from the U.S. totalled 413,000 units in 1982. The portion of this which is clock radios is unknown. H.R. 3731 Page Two It is believed that 80 percent of the clock radios imported are equipped with solid state clocks and would be duty-free for 3 years under this legislation. Comparison with Present Law Entertainment broadcast band receivers are currently provided for in the Tariff Schedules as item 685.24. However, under 911.95 of the Appendix to the Tariff Schedules of the United States, the column 1 duty is currently suspended until September 30, 1984. The duty on this item is 8.2 percent ad valorem for column 1 entries, 6 percent ad valorem for LDDC entries, and 35 percent ad valorem for column 2 entries. In addition, the item is scheduled for column 1 staged reductions under the 1979 MTN agreement as shown below: Date January 1, 1984 January 1, 1986 Column 1 duty rate for item 685.24 7.7% ad valorem 7.1% ad valorem Also, the item is subject to duty-free entry from countries qualifying for such under the Generalized System of Preferences, except for Hong Kong, Singapore, Taiwan, and the Republic of Korea because these countries have exceeded the "competitive need" import limitations set forth in section 504 (c) of the Trade Act of 1974 (19 U.S.C. 2464 (c)). The decision in United States v. Texas Instruments, Inc., decided March 25, 1982, Appeal 81-23, the Court of Customs and Patent Appeals reiterated that solid state electronic clock mechanisms are not "movements". Thus, they are not with the constructive separation provisions of head note 5, subpart E, part 2 of schedule 7, which deal only with the movements. As a result, the proposed legislation would also affect the solid state clock or timing portions of clock radios. Effect on Revenue Based on 1981 import statistics, it is estimated that the revenue loss resulting from this proposed legislation would be $9.5 million annually. Subcommittee Action Agency Reports The U.S. Trade Representative has no objection to a one-year suspension. H.R. 3731 Page Three The International Trade Commission submitted an informative report. Markup On June 27, 1984, the Subcommittee on Trade ordered H.R. 3731 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment reducing the effective period from 3 years to 2 years. Senate Action A companion bill, S. 1771, was introduced in the Senate. Administration U.S. Trade Representative: Opposes enactment of H.R. 3731 as written but has no objections to a one-year suspension. Statements for the Record Supports General Time Corporation: Duty-free treatment reduces the bonded cost of the imported product resulting in lower wholesale and retail prices of clock radios. The bill will not adversely affect any domestic manufacturers and will benefit the consuming public. General Electric Company: The suggestion that GSP proposal would achieve the same result as a duty suspension is unpredictable, because it appears doubtful that a GSP extension will be enacted before the current duty suspension expires on September 30, 1984. To suspend for a three year period the duty on 3[Hydroxydiphenylacetyl)oxy]-1,1-dimethylpiperidinium bromide, commonly called mepenzolate bromide. Summary of the Provision H.R. 3740, if enacted, would suspend the duty on mepenzolate bromide otherwise known as 3 [Hydroxydiphenylacetyl) oxy]-1,1-dimethylpiperidinium bromide until the close of September 30, 1987. Section-by-Section Analysis Section 1 of H.R. 3740, 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 a new item 906.53 to suspend the column 1, MFN, duty on mepenzolate bromide, provided for in item 412.02, part 1C, schedule 4. Section 2 makes the provision effective on or after the 15th day after the date of the enactment of this Act. Background and Justification Mepenzolate bromide is an active ingredient used in the manufacture of the ethical pharmaceutical product (prescription drug) sold under the trademark Cantil. The product is an anticholinergic. It is believed that mepenzolate bromide is not manufactured in the United States although there may be other resultant competitive drugs which are manufactured domestically. Comparison With Present Law Mepenzolate bromide is classifiable under TSUS item 412.02 as a drug provided for in the Chemical Appendix to the TSUS. The current column 1 rate of duty is 14.1 percent ad valorem. The column 2 rate of duty is 7 cents per pound plus 71.5% ad valorem. This item is eligible for staged rate reductions under the Tokyo round of the MTN and the column 1, MFN, rate of duty will be reduced to 8.2% in 1987. H.R. 3740 Page Two Imports from designated beneficiary developing countries under TSUS item number 412.02 are eligible for duty-free treatment under the Generalized System of Preferences (GSP). The LDDC rate of duty is 8.2% ad valorem. Effect on Revenue It is estimated that the future loss of revenue as a result of enactment of this legislation would be less than $50,000 in 1983, declining in ensuing years as a result of staged rate reductions unless import levels increase. Subcommittee Action Agency Reports The Department of Commerce has no objection to enactment of H.R. 3740. The International Trade Commission submitted an informative report. Markup On June 27, 1984, the Subcommittee on Trade ordered H. R. 3740 favorable reported to the full Committee on Ways and Means by voice vote, with minor technical amendments, including a change in the article description to "mepenzolate bromide", the accepted chemical name for this product. Senate Action A companion bill (S. 2056) was introduced by Senator Symms. SUMMARY OF TESTIMONY ON H.R. 3740 Administration Department of Commerce: No objection to enactment of H.R. 3740. |