NCBFAA Supports Drawback in Comments to USTR

Washington, DC: Responding to United States Trade Representative's Trade Policy Staff Committee request for public comment, National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) President Federico Zuniga urged "U.S. negotiators to allow the U.S. and its trading partners to maintain their existing duty drawback and duty deferral programs without restriction."
        In its July 28, 2003 letter, the NCBFAA President explained, "duty drawback is a program of enormous importance to U.S. industry.... To restrict or eliminate duty drawback in free trade agreements seriously disadvantages U.S. companies in terms of export trade."
        Describing the U.S. position to eliminate or restrict drawback in previous free trade agreements as "misguided," President Zuniga told US negotiators that "U.S. manufacturers operate in a dynamic, global economy, where inputs are sourced from a wide variety of countries, based on a range of factors. In this environment, duty drawback remains vitally important to ensure profitability...Duty drawback can and should coexist in a free trade area."
        The request for public comment is part of an Administration review of its long-held view that drawback and duty deferral programs should be restricted or eliminated altogether in a free trade agreement. This review was stimulated by the efforts of a coalition of companies and associations, including NCBFAA, to build support for duty drawback in upcoming free trade agreements.
        Drawback permits a U.S.-based manufacturer to recoup the duties paid on materials imported to the U.S. and used to manufacture a finished product that is then exported. This is so because the imported materials never fully enter U.S. commerce but are instead used in the manufacturing process to produce a product for export – and because incentives to export are a valuable tool in establishing a favorable balance of trade. The drawback program also refunds customs duties paid on imported products that are not used in the manufacturing process, but are later exported as unused merchandise.
        With headquarters in Washington, DC, the NCBFAA (members.ncbfaa.org) represents nearly 700 member companies - the nation's leading freight forwarders, customs brokers, ocean transportation intermediaries (OTIs) and air cargo agents. Established in 1897 in New York, NCBFAA is the strong, effective national voice of the industry. Through its various committees, counsel and representatives, the Association maintains a close watch over legislative and regulatory issues that affect its members. It keeps them informed of these and other related issues through its weekly Monday Morning eBriefing, Quarterly NCBFAA Bulletin, and various meetings and conferences throughout the year.