Statement of Administration Policy: H.R. 4318 - Miscellaneous Tariff Act of 1992

(House Rules)
(Gibbons (D) Florida)

Although the Administration would have no objection to many of the tariff extensions included in H.R. 4318 if their estimated revenue loss is fully offset, other provisions raise serious trade policy and budget concerns. Accordingly, if H.R. 4318 is presented to the President in its current form, the President's senior advisers would recommend a veto.

The Administration's specific objections include:

—   Section 2121B, which would arbitrarily reclassify "light trucks" for tariff purposes, thereby increasing the rate of duty from 2.5 percent to 25 percent. This provision would lead to a dramatic increase in consumer costs, could be considered as violating U.S. obligations under the General Agreement on Tariffs and Trade (GATT), and could result in retaliation against U.S. exports. In addition, this reclassification would thwart the harmonization of U.S. tariff classifications.

—   Section 2123, which contains the CBO scoring language required by House Rule XXI, is unacceptable. In a letter of December 21, 1990, the President stated that he would veto any bill containing such language. The effect of this provision is to overturn a key element of the Federal spending control mechanisms enacted pursuant to the 1990 Budget Agreement.

—   Section 2004, which unilaterally increases bound tariff rates on iron and steel pipe and tube. This increase could be considered by our trading partners as violating U.S. obligations under the GATT and could entitle them to retaliate against U.S. exports.

—   Sections 1001 through 1162, which are new duty suspensions or reductions on a variety of chemicals and other items. These tariff provisions would be effective from January 1, 1995, to December 31, 1996. The Administration opposes any duty suspension beyond December 31, 1994. At that time, an assessment can be made of progress in the Uruguay Round of negotiations and the possibility of gaining reciprocity for U.S. duty changes. In addition, enacting a future duty reduction could affect U.S. manufacturers adversely by discouraging planned and future domestic production.

—   Several sections providing for reliquidation of Customs duties. These provisions grant preferential treatment to one importer to the exclusion of others who may be similarly situated. In addition, they establish an undesirable precedent and encourage importers to seek redress of disputes through legislative action.

SCORING FOR THE PURPOSE OF PAYGO

H.R. 4318 would affect receipts; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation ACT (OBRA) of 1990. OMB's preliminary scoring estimates of this bill are presented in the table below. Final scoring of this proposal may deviate from this estimate. If H.R. 4318 is enacted, final OMB scoring estimates would be published within five days of enactment, as required by OBRA. The cumulative effects of all legislation on direct spending and revenue will be issued in monthly reports transmitted to Congress.

ESTIMATES FOR PAY-AS-YOU-GO
($ in millions)