AFI Association of Food Industries

AFI Serving the U.S. Food Import Sector

Processed Foods Section

Joseph Christovao, IV

There’s been a lot of news about tariffs of late, most of it bad. The focus of my report, however, is the opportunity to get tariffs on certain products reduced. It’s a legislative vehicle referred to as the Miscellaneous Tariff Bill. AFI has coordinated efforts to temporarily eliminate or reduce tariffs via the MTB since 2002. It’s a vehicle used by many other industries, though almost solely by AFI when it comes to the food industry.

Through the MTB, requests are made for temporary duty reductions or eliminations on products where there is little or no domestic production. Essentially, the MTB allows for a reduction in duties collected for each Harmonized Tariff Schedule number submitted of up to $500,000 per year. So every time AFI is successful in getting items included on the MTB, we’re eliminating up to $1.5 million in costs from the system for each of those HTS numbers over three years. It’s a process that’s supposed to take place every three years, though Congress has not always kept to that schedule.

Though Congress doesn’t keep to its schedule, those of us filing MTB petitions must. The current suspensions are in place through the end of 2020 but the work for the next renewal period begins in the summer of 2019. The first step will be for members to identify products to be included in any petitions. There are legal fees involved in getting the work done, so the next step involves getting agreement and commitment from importers and foreign suppliers to fund those efforts. Exporters in Greece and Spain, for example, have seen the value of this work in the past and with their help, we were able to get reductions on their products. It should be noted that since AFI begins to receive invoices for the MTB work immediately, only if the money is received prior to the filing deadline will AFI move forward.

Canned artichokes and pepperoncini were among the products included in past work. Capers were successfully included in some past efforts but importers and suppliers of capers did not come together in time in the most-recent MTB filing petition, so $1.5 million in duty savings was forfeited. I mention that so suppliers and importers of capers and other products pay attention to the notifications sent by AFI on this cycle of the MTB.

Now, some better news. In the last go-around, two AFI-member importers each paid the entire legal bill for one their products to be included on the MTB. Their petitions were successful, so an outlay of approximately $10,000-$15,000 will have given them a return/savings of several hundred thousand dollars over the time period covered by that MTB.

Other issues/projects have and will require attention from AFI and its members as well. For example, as this was being written, we were waiting for further news regarding the president’s announcement he intends to terminate India’s and Turkey’s designations as beneficiary developing countries under the Generalized System of Preferences program because they no longer comply with the statutory eligibility criteria.

By way of background, under the GSP program, certain products can enter the U.S. duty-free if beneficiary developing countries meet the eligibility criteria established by Congress. GSP criteria include, among others, respecting arbitral awards in favor of U.S. citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection and providing the U.S. with equitable and reasonable market access. Countries can also be graduated from the GSP program depending on factors related to economic development.

There are also other regularly scheduled GSP reviews. AFI will continue to monitor all developments and keep members apprised of any changes. That sort of information is incredibly beneficial because it allows us to make purchasing decisions based on the latest information. For example, if a product is no longer covered by GSP as of last week and you bring it in today, you’ve incurred extra costs. But having that information enables you to work to ensure the product arrives before the duty change.

It works the same across many issues. Having the knowledge of requirements, deadlines, problems with other products and entries, etc. puts us in a better position to make sound business decisions. That’s one of the key reasons my company and I, personally, have long histories with AFI.

Association of Food Industries: Serving the U.S. Food Import Trade Since 1906
3301 Route 66, Ste. 205, Bldg. C • Neptune, NJ 07753
(732) 922-3008 • Fax: (732) 922-3590 • •