The US Congress Contemplates a Bill Which Could Remove the de minibus rule on Imported Goods
The de minibus rule refers to the value of an imported parcel that does not attract customs duties and sales tax (VAT) because the customs authority considers that it would cost more to collect than the value of the revenue collected from the tax/tariff. We wrote about this concept last month when reporting on the WTO ‘Moratorium’. In the USA the de minibus rule allows goods valued up to $800 to be passed through customs without duties or tax. In the EU, most countries apply a Euro150 value for the de minibus on customs duties. The USA de minibus rule is therefore very generous and of immense help to imports from Africa and elsewhere. Obviously, should the USA decide to do away with this rule other developed countries will be encouraged to do likewise.
Congressman Earl Blumenauer (D-OR) has been pushing to roll back the de minimis rule in all or some cases. His “Import Security and Fairness Act” (H.R. 6412) initially focused on eliminating the de minimis only from “nonmarket economy countries or countries on the priority watch list.” This is effectively China, and possibly Vietnam. The bill was included in the COMPETES Act, a larger China competition bill that passed Congress. This was being “conferenced” with the bi-partisan Senate bill, USICA. However, the political back and forth has reduced the China bills to something on semiconductors and investments in the National Science Foundation. All of the trade provisions, including those on renewing the MTB and GSP, have been stripped.
It is unlikely that the Blumenauer bill will pass before the US mid-term elections in November. Both Senate and Congress are now on their Summer recess. However, the risk is that after the elections, there will be a push for renewing GSP/MTB, and that could open up a new pathway for Blumenauer. Unfortunately, a number of members of Congress who supported raising the de minimis in 2016 and opposed the Trump Administration’s plans to lower the U.S. de minimis are now concerned with how China and others may be abusing the system. Many stories are circulating about warehouses across the border in Canada or Mexico using de minimis to ship into the U.S., competing with U.S.-based Foreign Trade Zones. A Republic victory in the mid-term elections could see the de minibus significantly reduced or even removed for all imports. EFA is also concerned that the AGOA agreement, which lists some 2,000 African goods that the US does not charge customs duties on, may not be renewed in 2025 if the Republicans control the Congress and Senate. We are working with the E-Merchants Trade Council in the USA, with whom we have recently been affiliated and with major members, such as DHL, to do what we can from this end to stress the importance of this rule for African ecommerce to the USA with the US Administration.
Meanwhile, the US Trade Representative, Katherine Tai, announced she will host a meeting of sub-Saharan African trade ministers and senior officials on 13 December 2022. The ministerial meeting will occur during the week of the United States-Africa Leaders’ Summit that President Joe Biden and Vice President Kamala Harris recently announced. “The meeting will discuss expanding trade and investment relations and implementation of the African Growth and Opportunity Act (AGOA),” according to a statement from the US State Department.
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