H.R. 4379 Introduced by: Mr. Frenzel (Minn.) Date: November 14, 1984 To suspend the duty on sulfathiazole until the close of December 31, 1986. Summary of the Provision H.R. 4379, if enacted, would suspend the duty on sulfathiazole until the close of December 31, 1986. Section-by-Section Analysis Section 1 of H.R. 4379, if enacted, would amend item 907.19 of the Appendix of the Tariff Schedules of the United States (19 U.S.C. 1202) by striking out the column 1, MFN, duty rate of 13.3% ad valorem and the column 2 duty rate of 7 per pound + 80% ad valorem, and by inserting in lieu thereof "Free". Further, the effective date would be amended to read "on or before 12/31/86". Section 2, as amended, would make the provision effective on the 15th day after the date of enactment of the Act. Background and Justification Sulfathiazole is principally used as a low level additive in cattle and other animal feeds, where it functions as a growth promoter. In addition, it is used for treating certain bacterial and microbial infections in humans and animals. The medicinal use of this product has declined, due to the development of resistant strains of infective organisms and to competition from penicillin and other antibiotics. Sulfathiazole may be administered orally, in powder or tablet form, or used externally, in powder or ointment form. Imports of sulfathiazole enter the United States under item 411.80 of the TSUS, along with the sodium salt; and separate import statistics are not available. Exports of sulfathiazole are classified in Schedule B items 435.7160 (anti-infective sulfonamides, not artifically mixed and not put up in measured doses) and 442.1700 (sulfonamide preparations, n.s.p.f., put up in measured doses), along with all other sulfonamide anti-infective agents; and separate export statistics are not available. It is estimated that total U.S. consumption of sulfathiazole is less than 250,000 pounds per year. Sulfathiazole is classified in TSUS item 411.80, along with its sodium salt. The current and negotiated column 1, MFN, rate of duty is 26.5% ad valorem and the current LDDC rate is 15% ad valorem. The column 2 rate applicable to this item is 7¢ per pound plus 133% ad valorem. Since January 27, 1983, the rates of duty in columns 1 and 2 have been temporarily reduced to 13% ad valorem and 7 per pound plus 80% ad valorem, respectively, effective through December 31, 1983, as specified in item 907.19 of the Appendix to the TSUS. In addition, imports from all beneficiary countries are eligible for duty-free entry under the GSP; and LDDC imports are intended to be dutiable at the reduced rate of 8% ad valorem, as provided in Public Law 97-446. Effect on Revenue Based on information obtained from industry sources, it is estimated that customs revenue losses during the specified 3-year period, from 1984 through 1986, would be less than $50,000 per year. Subcommittee Action Agency Reports The Department of Commerce has no objection to enactment of H.R. 4379. The International Trade Commission submitted an informative report. Markup On June 27, 1984, the Subcommittee on Trade ordered H. R. 4379 favorably reported to the full Committee on Ways and Means by voice voice, with a technical amendment providing for the effective date to be 15 days after the date of enactment. Senate Action A companion bill, S. 1485, has been introduced in the Senate. H.R. 4379 Page Three SUMMARY OF TESTIMONY ON H.R. 4379 Administration Department of Commerce: No objection to enactment of H.R. 4379. Statements for the Record Supports The Honorable Cooper Evans, M.C. (Iowa): Sulfa drugs are 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, Inc.: 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. Also, due to environmental problems and costs associated with their manufacture, future domestic production is quite unlikely. H.R. 4380 Introduced by: Mr. Frenzel (Minn.) Date: November 14, 1984 To suspend the duty on sulfanilamide until the close of December 31, 1986. Summary of the Provision H.R. 4380, if enacted, would suspend the duty on sulfanilamide until the close of December 31, 1986. Section-by-Section Analysis Section 1 of H.R. 4380, if enacted, would amend subpart B of part 1 of the Appendix of the Tariff Schedules of the United States (19 U.S.C. 1202) by inserting a new item 907.29 to suspend both the MFN, column 1 duty and the column 2 duty on sulfanilamide, provided for in item 411.81, part 1C, schedule 4, until December 31, 1986. Section 2, as amended, would make the provision effective on the 15th day after the date of enactment of the Act. Background and Justification Sulfanilamide is primarily used as a low level additive in cattle and other animal feeds, where it functions as a growth promoter. In addition, it is used for treating certain bacterial and microbial infections in humans and animals. The medicinal use of this product has declined, due to the development of resistant strains of infective organisms and to competition from penicillin and other antibiotics. Sulfanilamide may be administered orally, in powder or tablet form, or used externally, in powder or ointment form. Imports of sulfanilamide enter the United States under TSUS item 411.81 along with several other enumerated anti-infective agents, and separate import statistics are therefore not available. Sulfanilamide is produced in Romania, China, Poland, Yugoslavia, Japan and India. Exports of this product are believed to be nil. Specific figures on domestic consumption are not available, due to the lack of production and import data. However, it is estimated that the total U.S. consumption of sulfanilamide is less than 250,000 pounds per year. Comparison With Present Law Sulfanilamide is classifiable in TSUS item 411.81, along with five other enumerated products. The current column 1, MFN, rate of duty is 18.9% ad valorem and the LDDC rate is 10.8% ad H.R. 4380 valorem. The column 2 rate applicable to this item is 7 cents per pound plus 96% ad valorem. This item was eligible for staged rate reductions under the Tokyo round of MTN and the column 1 rate of duty will decrease to 10.8% by 1987, where it is scheduled to remain. In March 1983, sulfanilamide was added to the list of articles eligible for duty-free entry when imported from countries designated in general headnote 3 (c) of the TSUS as beneficiary developing countries under the Generalized System of Preferences (GSP). By suspending the duties applicable to imports from countries not designated under the GSP, this legislation would temporarily eliminate any advantage, in terms of the cost of duties, which now exists as to imports of this product from beneficiary developing countries. Effect on Revenue It is estimated that customs revenue losses during the specified 3-year period, from 1984 through 1986, would be less than $50,000 per year. Subcommittee Action Agency Reports The Department of Commerce has no objection to enactment of H.R. 4380. The International Trade Commission submitted an informative report. Markup On June 27, 1984, the Subcommittee on Trade ordered H. R. 4380 favorably reported to the full Committee on Ways and Means by voice vote, with a technical amendment providing for the effective date to be 15 days after the date of enactment. Senate Action A companion bill, S. 1481, has been introduced in the Senate. |