Internet tax provision threatens to derail customs bill

With help from Victoria Guida

INTERNET TAX PROVISION THREATENS TO DERAIL CUSTOMS BILL: The Senate is poised to take up a customs bill — the only one of four big trade measures introduced in 2015 that have yet to be passed — likely in the last two weeks of January, a Senate aide tells Pro Trade. But trouble is brewing over a provision slipped into the conference report passed last month by the House that has nothing to do with trade.

Lawmakers overcame several differences to reach a deal on H.R. 644, a bill that promises to strengthen enforcement against duty evasion and provide the first overhaul of the Customs and Border Protection agency in more than a decade. But the Senate is still hotly debating the legislation’s permanent ban on internet access taxes from state and local governments, a measure widely thought to be inserted by Sen. Ron Wyden (D-Ore.) who has been a longtime supporter of the tax ban.

Sen. Dick Durbin (D-Ill.) continues to lead a push to remove the permanent tax ban language, saying it should not be considered on its own merits and not until the House votes on a separate bill that would effectively overturn a 1992 Supreme Court ruling that allows sales tax on most online purchases to go uncollected. Durbin could be satisfied by the fact that the tax ban has been extended to late September, but that doesn’t address the issue of the permanent ban still being included in the conference report. Even though the conference report can’t be amended, informed sources say Durbin could raise a point of order to try to remove the tax provision sending the bill back to the House. The point of order could be waived or defeated by a vote of 60 senators, but that could be a difficult threshold to overcome with many Democrats already opposed to the bill because it lacks currency disciplines, along with others who support online sales taxes.

IT’S WEDNESDAY, JAN. 6! Welcome to Morning Trade, where we’re kind of sad Paul Ryan ditched the beard: http://apne.ws/1R9VQC4 Got any tips to share on facial hair this winter? News on trade? Let me know: [email protected] or @abehsudi.

LEVIN TO HOLD ANOTHER TPP HEARING: Rep. Sander Levin (D-Mich.) will continue a series of hearings this week on the Trans-Pacific Partnership, this time focusing on the trade deal’s efforts to combat currency manipulation. The final agreement included a separate declaration in which countries agreed to transparency measures related to currency valuation decisions and to meet annually to discuss the issue.

The hearing will take place Thursday, 12:30 p.m.-2:30 p.m., in the House Visitor Center Room 215. Testimony will be given by: Fred Bergsten, senior fellow and director emeritus of the Peterson Institute; Simon Johnson, professor at MIT Sloan School of Management; Eswar Prasad, professor at Cornell University and senior fellow at the Brookings Institution; and Stephen Biegun, vice president for international government affairs at Ford Motor Company. Read an analysis paper prepared by House Ways and Means Democratic staff here: http://1.usa.gov/22Jlgui, and view past TPP hearings hosted by Levin here: http://1.usa.gov/1JW3atk

BRT WANTS TPP: Meanwhile, we’re sensing a trend this week, after another major business group endorsed TPP. Business Roundtable announced its official support for the pact on Tuesday, arguing the massive trade deal will promote U.S. economic leadership and growth as well as new jobs.

“We want Congress to approve the TPP this year,” Tom Linebarger, CEO of Cummins Inc. and chairman of the group’s International Engagement Committee, said in a statement. “To that end, we are urging the Administration to quickly address the remaining issues that impact certain business sectors in order to ensure the broadest possible benefits to all sectors of U.S. business, which will enable the broadest support possible for the TPP.”

The endorsement from the group, which is made up of of CEOs from about 200 major U.S. companies, follows the National Association of Manufacturers’ statement of support on Monday, leaving the U.S. Chamber of Commerce as the only major business association yet to come out with an official position.

COMMERCE TO CONSIDER WASHING MACHINE CASE: The Commerce Department’s International Trade Administration will decide today whether it will initiate an anti-dumping investigation on clothes washers from China. U.S. appliance manufacturer Whirlpool Corp. petitioned for the investigation last month.

The Michigan-based company accused South Korean companies Samsung and LG of shifting production from its South Korean and Mexican plants to China to avoid anti-dumping duties imposed by Commerce in a previous case. Whirlpool alleges that both companies are now selling Chinese-made washers in the U.S. at less than fair prices. In 2014, China exported nearly $900 million worth of large residential washers to the U.S.

INDIA LOOKING TO INCREASE FOREIGN INVESTMENT CAPS: The Indian government is considering raising equity caps for “multibrand” retail stores selling food, the Wall Street Journal reports. “The move comes after Minister of Food Processing Industries Harsimrat Kaur Badal wrote to Prime Minister Narendra Modi last month seeking a relaxation of the existing [foreign direct investment] policy for supermarkets and other similar retailers. If approved by the government, the policy change is expected to attract global food companies to set up fully owned processing and sales units in India,” the newspaper reports.

India’s previous government made the decision to allow foreign companies a 51 percent stake in multi-brand stores, such as supermarkets, subject to government approval. That policy was retained by Modi’s government, even though his ruling BJP party had opposed the move initially. The issue is sensitive as opponents argue foreign stores could displace more than 12 million traditional “mom and pop” stores. Supporters say more foreign investment could modernize the country’s food supply chains and prevent massive waste and spoilage under the current system. Read the story here: http://on.wsj.com/1Syfk2K

LABOR DEPT. PANEL TO SCRUTINIZE TRADE DEALS: A Labor Department advisory committee on free trade agreements will meet Feb. 2 to talk about the implementation of labor provisions in trade deals, according to a pre-published Federal Register notice.

The National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements, whose charter was renewed March 2, will also discuss its priorities for the coming year in the meeting, which will be open to the public. Written comments will be taken through Jan. 25, with further comments allowed if time permits. The committee has 12 members representing public institutions, labor groups and businesses. More detail here: http://bit.ly/1TD4iaX

INTERNATIONAL OVERNIGHT

Japan is helping Southeast Asian countries develop better mechanisms for loan guarantees to spur trade in those markets, Nikkei reports: http://s.nikkei.com/1Z6Q9cP

Malaysian Trade Minister Mustapa Mohamed argues that the TPP provides more benefits than challenges, Bernama reports: http://bit.ly/1RgHoZv

Ukraine is consulting with the EU and could explore action at the WTO on Russia’s recent ban on goods that transit through Russia from Ukraine to Kazakhstan, TASS reports: http://bit.ly/1OMlOoT

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: [email protected] and @ABehsudi; [email protected] and @vtg2; [email protected] and @tradereporter; [email protected] and @mjkorade; and [email protected] and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.