H.R. 4087
Page Two

U.S. imports for the past 5 years were as follows:

Since 1982, industry sources estimate exports of this chemical have been nil because of the cessation of domestic production. Prior to 1982, export data on this chemical are not available since B-naphthol is classified in a residual (basket) Schedule B number

for alcohols.

In

Data for domestic consumption of B-naphthol are not available, however, an industry source indicated that domestic consumption was essentially the same as domestic production during 1971-81. 1982, imports accounted for a more significant portion of domestic consumption, especially in the latter half of that year.

Comparison with Present Law

Tariff Treatment

As a result of the Trade Agreements Act of 1979, B-naphthol is presently classified in TSUS item 403.28 (naphthols). Item 403.28 has a column 1 (MFN) rate of duty of 0.2 cents per pound plus 22.7 percent ad valorem and is scheduled to be reduced to a column 1, MFN, duty of 20% by January 1, 1987, under the staged rate reductions. The column 2 rate is 7 cents per pound plus 73 percent ad valorem; the LDDC rate is 20 percent ad valorem. The column 1 rate of duty is scheduled for annual staged reductions within the framework of the Tokyo round of the MTN. The chemicals classified in item 403.28 are not eligible for duty free entry under the Generalized System of Preferences (GSP).

Effect on Revenue

The following are estimated revenue losses for a three year period, from 1983 through 1985, if this legislation were enacted. 1983 $1,613,000; 1985 - $1,847.000.

$1,290,000; 1984

H.R. 4087
Page Three

Subcommittee Action

Agency Reports

The Department of Commerce has no objection to enactment of H.R. 4087.

The International Trade Commission submitted an informative

report.

Markup

On June 27, 1984, the Subcommittee on Trade ordered H.R. 4087 favorably reported to the full Committee on Ways and Means by voice vote, without amendment.

SUMMARY OF TESTIMONY ON H.R. 4087

Administration

Department of Commerce: No objection to enactment.

H.R. 4088

Introduced by: Mr. Moore (LA)

Date: October 5, 1983

To provide for a temporary suspension of the duty on 6-amino-1-naphthol-3-sulfonic acid until June 30, 1986.

Summary of the Provision

H.R. 4088, if enacted, would provide for a temporary suspension of duty on 6-amino-1-naphthol-3-sulfonic acid otherwise known as J-Acid until June 30, 1986.

Section-by-Section Analysis

Section 1 of H.R. 4088, if enacted, would amend subpart B of part 1 of the Tariff Schedules of the United States (19 U.S.c. 1202) by inserting in numerical sequence a new TSUS item 907.03 to provide for the temporary suspension of duty on a certain sulfonic acid (provided for in item 405.00, part 1B, Schedule 4) until June 30, 1986.

Section 2 provides that the temporary duty suspension will become effective on and after the fifteenth day after the date of enactment of the Act.

Background and Justification

J-Acid is a chemical used extensively as an intermediate for dyestuff manufacture with major uses for coloring paper products, cotton products, viscose and fiberglass. The primary paper usages include bathroom tissues, towels, napkins, facial tissues, stationary and business forms. The only reported U.S. producer was American Color and Chemical Corporation, which discontinued production in 1981. Current sources of supply are from Italy, West Germany, Japan and China (People's Republic). Total imports in 1981 were reported to be 815,000 pounds.

Comparison With Present Law

This chemical provided under item 405.00 of the TSUS currently has an MFN, column 1 duty rate of 10% ad valorem. The column 2 rate of duty is $.07 per pound plus 51% ad valorem. The LDDC rate of duty is 6.8% ad valorem. This item is scheduled for annual staged reductions to 1987 within the framework of the Tokyo round of the Multilateral Trade Negotiations (MTN). This item is not eligible for duty-free entry under the Generalized System of Preferences (GSP).

H.R. 4088
Page Two

Effect on Revenue

It is estimated that the loss of tariff revenue will be approximately $410,000 per year and will decline until 1987 when the tariff reaches maximum reduction under the staged level of tariff reduction.

Subcommittee Action

Agency Reports

The Department of Commerce has no objection to enactment of H.R. 4088.

The International Trade Commission submitted an informative report.

Markup

On June 27, 1984, the Subcommittee on Trade ordered H.R. 4088 favorably reported to the full Committee on Ways and Means by voice vote, without amendment.

SUMMARY OF TESTIMONY ON H.R. 4088

Administration

Department of Commerce: No objection to enactment.

H.R. 4089

Introduced by: Mr. Moore (LA)

Date: October 5, 1983

To provide for a temporary suspension of the duty on 2-(4-aminophenyl)-6-methylbenzothiazole-7-sulfonic acid until

June 30, 1986.

Summary of the Provision

H.R. 4089, if enacted, would provide for a temporary suspension of duty on 2-(4-aminophenyl)-6-methylbenzo-thiazole-7-sulfonic acid until June 30, 1986.

Section-by-Section Analysis

Section 1 of H.R. 4089, 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 a new item 907.09 to provide for the temporary suspension of duty on dehydrothiotoluidine sulfonic acid (provided for in item 406.40, part 1B, schedule 4) until June 30, 1986.

Section 2 provides that the temporary duty suspension will become effective on and after the fifteenth day after the date of enactment of the Act.

Background and Justification

Dehydrothiotoluidine Sulfonic Acid (DSA) is a chemical intermediate used primarily for production of dyes used in the paper manufacturing business. There are no known domestic suppliers for this intermediate since the discontinuation of production by DuPont at the end of 1979. All current imports come from Europe and imports were reported to be 405,000 pounds in 1981. DSA is a major component and a significant cost factor in U.S. paper dye production.

Comparison With Present Law

This chemical, provided for under item 406.40 of the TSUS, currently has a MFN, column 1 duty rate of $0.017 per pound plus 16.2% ad valorem. The column 2 rate is $0.07 per pound plus 52.0% ad valorem. This chemical classified in item 406.40 is not eligible for duty-free entry under the Generalized System of Preferences (GSP).