ANNOUNCED AS TEMPORARYNo
The implementing legislation for the free trade agreement (FTA) between the United States and Korea could lead to an increase in a fee imposed on imports entering the United States. The revenue from this fee would be devoted to off-setting the costs of the bill, which include the revenue losses resulting from this FTA and two other (i.e., with Colombia and Panama) and to fund an increased program of adjustment-assistance for U.S. workers that are negatively affected by import competition.
Among the off-sets in the Korea FTA is an increase in the Merchandise Processing Fee (MPF) that importers must pay. As currently structured, the MPF for formal entries (generally those shipments valued at $2000 or more)'1' is an ad valorem fee of 0.21% that is subject to a floor of $25 and a cap of $485. The new proposal would raise that fee, but the two versions of the bill that were approved on July 7, 2011 by the trade committees in the House of Represetnatives and the Senate differ in the precise amounts. The House version of the bill would raise it to 0.3464% (see section 501) and the Senate version of the bill to 0.343% (see section 601). Both versions of the bill also provides for an extension of the Customs Service User Fee from the scheduled expiration date of October 29, 2020 (see sections 502 and 602, respectively).
The next step in the process is for the Obama administration to consider the two versions of the bill approved by the congressional trade committees and then to send back to Congress its own, final version of the implementing legislation. That bill will be subject to the special protections of the "fast track," namely a prohibition on amendments and a 90-day time limit for votes in Congress. It is not yet certain what level of the MPF will be approved
'1' The threshold for formal entries is $250 in the case of imports of textile and apparel products.
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