NCBFAA Urges USTR To Maintain Drawback Program in CAFTA

Washington, DC: In a letter dated April 24, National Customs Broker & Forwarder Association of America, Inc. (NCBFAA) President Federico Zuniga today criticized the U.S. Trade Representative for its proposal to eliminate or restrict duty drawback in the negotiations for the U.S.-Central America Free Trade Agreement (CAFTA), calling such a position "misguided" and pointing to the "direct negative effect on jobs in the U.S. - particularly those related to export trade." The NCBFAA comments were submitted in response to aFederal Register notice requesting public comment on the employment impact of the U.S.-CAFTA.
        "Duty drawback is an incentive to export - it reduces cost and maximizes profit for exporters," the NCBFAA President wrote. "An export to a free trade partner is an export nonetheless. When drawback is denied for that export, it increases the U.S. manufacturer's costs, pure and simple. As such, the elimination of drawback is contradictory to the goals of a free trade agreement. In effect, the U.S. approach simply provides one incentive to trade only to take another away."
        The U.S. position in the CAFTA negotiations is similar to the policy followed in the NAFTA and the recently concluded U.S.-Chile FTA.
        "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," President Zuniga explained to U.S. negotiators. "In this environment, duty drawback remains vitally important to ensure the profitability of U.S. companies competing in a global marketplace."
        Zuniga concluded by saying "Duty drawback can and should coexist in a free trade area." The U.S. hopes to conclude the U.S.-CAFTA negotiations by the end of the year.
        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.