H.R. 4380 SUMMARY OF TESTIMONY ON H.R. 4380 Administration 4380. Department of Commerce: No objection to enactment of H.R. 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. 4381 Introduced by: Mr. Frenzel (Minn.) Date: November 14, 1983 To suspend the duty on sulfamethazine until the close of December 31, 1986. Summary of the Provision H.R. 4381, if enacted, would suspend the duty of sulfamethazine until the close of December 31, 1986. Section-by-Section Analysis Section 1 of H.R. 4381, 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 907.24 to suspend both the MFN, column 1 duty and the column 2 duty on sulfamethazine, provided for in item 411.24, 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 Sulfamethazine 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. Sulfamethazine may be administered orally, in powder or tablet form, or used externally, in powder or ointment form. Imports of sulfamethazine enter the United States under item 411.24 of the TSUS. Separate import statistics on a calendar-year basis are available only for 1981 and 1982. Prior to July 1, 1980, sulfamethazine was classified in item 407.85, along with many other drugs; and separate import statistics are not available. Import levels in 1981 were 1.1 million pounds valued at $4 million and in 1982 were 1.5 million pounds valued at $5.1 million. Exports of sulfamethazine are classified in Schedule B items 435.7160 (anti-infective sulfonamides, not artificially 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. Separate export statistics are not available. However, exports of this product during the period 1980-82 are believed to have been nil. H.R. 4381 Specific figures on domestic consumption are not available, due to the lack of precise data on production. However, the International Trade Commission estimates that the total U.S. consumption was 1.9 million pounds in 1979, increasing to 2.4 million pounds in 1982. Because exports are nil, total U.S. consumption is estimated to be the sum of U.S. production and U.S. imports. In 1979 imports were estimated to be 27% of consumption and in 1982 imports were estimated to be 64% of consumption. Comparison With Present Law Sulfamethazine is classifiable in TSUS item 411.24, a provision created by the President in Proclamation No. 4768 effective July 1, 1980. The current column 1, MFN, rate of duty is 13.3% ad valorem and the LDDC rate is 8.0% ad valorem. The column 2 rate applicable to this item is 7 cents per pound plus 80% 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 8.0% by 1987, where it is scheduled to remain. In March 1983, sulfamethazine 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. 4381. The International Trade Commission submitted an informative report. H.R. 4381 Markup On June 27, 1984, the Subcommittee on Trade ordered H.R. 4381 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. 1484, has been introduced in the Senate. Administration Department of Commerce: No objection to enactment of H.R. 4381. 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. To suspend the duty on sulfaguanidine until the close of December 31, 1986. Summary of the Provision H.R. 4382, if enacted, would suspend the duty on sulfaguanidine until the close of December 31, 1986. Section-by-Section Analysis Section 1 of H.R. 4382, 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 907.26 to suspend both the MFN, column 1 duty and the column 2 duty on sulfaguanidine, provided for in item 411.27, 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 Suflaguanidine is principally used as a low level additive in cattle and other animal feeds, where it functions as a growth promoter; as an intermediate in the production of sulfonamides; and as an anti-infective agent in 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. Sulfaguanidine may be administered orally, in powder or tablet form, or used externally, in powder or ointment form. Imports of sulfaguanidine enter the United States under item 411.27 of the TSUS, along with several other drugs; and separate import statistics are not available. Exports of this product are expected 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 sulfaguanidine is less than 250,000 pounds per year. Comparison With Present Law Sulfaguanidine is classified in TSUS item 411.27, along with three other enumerated products. The current and negotiated column 1, MFN, rate of duty is 20.3% ad valorem, and the current |