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WFMY - Sen. Kay Hagan Responds to Tarriff Concerns of NC Firms

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Location: Washington, DC

By Paul Barton

Many of the bills Sen. Kay Hagan has introduced in the 112th Congress read like they belong on the blackboard of a college chemistry class.

They are littered with names of strange-sounding compounds like "phenylamino" and "Pyridinecarbonitrile," along with strings of numbers placed inside and outside of a dizzying array of brackets and parentheses.

While unfathomable to most, these bills describe various dyes, fibers and other substances North Carolina industries consider essential to their manufacturing processes. And because they can't find be found in the United States, they must be imported.
Hagan's bills call for tariff relief on such items.

"These bills are about helping North Carolina companies compete in the global economy and get the people of our state back to work. Right now, businesses in industries ranging from textiles to chemicals could face tax hikes on some of the materials they use to manufacture their products," Hagan, a Democrat, said in a statement.

In fact, she's sponsoring 87 such measures that she hopes will be wrapped into a miscellaneous tariff relief bill to be passed by Congress before the end of the year. The state's U.S. House delegation, meanwhile, is sponsoring 124 tariff bills.

Other states with manufacturing bases that depend heavily on imported substances to make consumer goods include Pennsylvania, Ohio, New York and New Jersey.

Because many of these substances were once available domestically, they still carry duties that Congress -- once every three years -- must decide to lower or suspend altogether. If nothing is done by Dec. 31, they go back to higher levels.

"The whole premise behind this is to make U.S. companies more competitive," said Sarah Faye Pierce, spokesman for the National Council of Textile Organizations.

The council represents firms such as Shuford Yarns in Hickory, N.C., which asked for reduced duties on various rayon fibers used to make yarn that, in turn, is used to make home furnishings.

Despite intense foreign competition, North Carolina textile firms still employ more than 37,000 workers, labor statistics show.

But textiles aren't the only North Carolina industry that asks for tariff relief. Companies making items as diverse nail clippers, cosmetics and window shades also seek help. Imported ingredients are even essential to in-state firms that make products to help with smoking addiction.

Before they can pass Congress, however, Hagan's tariff-related measures, like those offered by other lawmakers, have to be reviewed by the International Trade Commission, an agency in the Department of Commerce.

The ITC has to make sure that no U.S. company would be harmed by suspending or reducing the tariffs and that the bills conform to Customs and Border Patrol requirements as well.

And before an omnibus tariff bill comes to the House or Senate floor, the Senate Finance and House Ways and Means committees will weigh in as well.

But even a subject as arcane as tariffs is not without controversy. Because tariff relief is often done to benefit companies in specific areas of the country, some budget hawks liken them to earmarks, appropriations that lawmakers can tuck into bills to benefit projects or programs in their home states.

The House Republican Conference, in its rules for the 112th Congress, described "limited tariff benefits" as those helping 10 or fewer firms and called for a ban on such measures along with its call for an earmark moratorium.

And Taxpayers for Common Sense, a watchdog group, said it remains concerned about tariff bills because of the "special interest giveaways" they can represent.

"So call them earmarks, call them limited tariff benefits, call them whatever you like, we are still concerned with this legislation," Steve Ellis, spokesman for the group, wrote earlier this year.

Some members of Congress have called for changing the process so that firms apply directly to the International Trade Commission rather than lobby lawmakers. Another idea is to have the ITC regularly undertake such reviews on its own.

Hagan, however, said she doesn't want aspersions cast on the bills important to North Carolina firms.

"Any company can benefit from one of these provisions when they are put into law," she said.

"There has long been support on both sides of the aisle -- from Democrats and Republicans -- for duty suspensions that meet certain criteria. While I believe Congress should take steps to reform the duty suspension process, North Carolina manufacturers and their employees should not pay the price for Congressional inaction."


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