June 29, 2018

Members of the Society of Chemical Manufacturers & Affiliates (SOCMA) met with lawmakers on Capitol Hill on June 6 to communicate the positive impact their businesses have on their communities and share concerns about issues critical to the industry as part of the association’s annual Specialty Chemical Industry Fly-In. 
During Hill meetings, SOCMA asked members of Congress to:
• Support and modernize the North American Free Trade Agreement (NAFTA); 
• Pass tariff-relief legislation through the Miscellaneous Tariff Bill (MTB) Act of 2018; and 
• Reauthorize the Chemical Facility Anti-Terrorism Standards (CFATS) program. 

NAFTA Modernization: NAFTA has been instrumental to job creation and growth in the U.S. chemicals sector. Since the commencement of the NAFTA in 1994, U.S. chemical exports to Mexico and Canada have increased from $13 to $44 billion. Withdrawal from NAFTA would create a tariff burden of nearly $9 billion on chemical exports to Mexico and Canada. SOCMA’s top priority is to maintain duty-free trade for all qualifying chemical exports. There is opportunity to modernize the rules of origin in the renegotiation of NAFTA, including eliminating the Regional Value Content (RVC) rule since the administrative requirements to prove origin are costly. Limits on duty drawback should also be removed, enabling U.S. firms to reclaim tariffs paid on manufacturing imports.

MTB Passage: Miscellaneous Tariff Bills (MTBs) enact the temporary reduction or suspension of duties on certain U.S. imports or other technical corrections to the U.S. Harmonized Tariff System. Passage of the MTB Act of 2018 would reduce or eliminate nearly 1,700 taxes on raw materials not manufactured domestically or available in sufficient quantities, with significant benefit to the specialty chemical industry. The elimination of these duties on imported chemical products has a large impact on the ability of members to spend money to develop, register, and sell products. With passage, money that historically has gone to duties can now be put towards growth and job creation.

CFATS Reauthorization: The Department of Homeland Security program sets the standards for securing facilities that use, manufacture, store or handle certain high-risk chemicals. CFATS will expire in January 2019 if Congress does not act quickly to reauthorize it. This important security program requires impacted chemical facilities to prepare Security Vulnerability Assessments and implement Site Security Plans (SSPs) that must satisfy the risk-based performance standards outlined in the regulation. Reauthorization will provide industry with the certainty needed to make long-term facility security investments and enable DHS to continue running the CFATS program efficiently, ensuring it properly protects against security threats across the nation.

“The meetings on Capitol Hill gave SOCMA members the chance to highlight these important legislative issues, which clearly have serious implications on the ability of specialty chemical manufacturers to operate successfully and profitably,” said Robert Helminiak, SOCMA Vice President of Legal and Government Relations. “It was clear many of the Senators, Representatives and committee staff we met with were receptive to our concerns, and SOCMA will carry the message forward on these legislative priorities through continued engagement with Congress.”

The day prior, SOCMA also invited representatives from the U.S. Environmental Protection Agency, the Office of the U.S. Trade Representative, the U.S. Small Business Administration and the U.S. Department of Homeland Security to meet with members. Federal agency staff discussed their regulatory agendas and the effects their programs are having on specialty chemical manufacturers. 

“For numerous decades, SOCMA members have provided key insight and opinions to U.S. government agencies,” said Helminiak. “They know how and what programs work and, as such, were able to provide meaningful dialogue with the agencies on the performance of their current regulatory initiatives.” 

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