US Debates Tariff Reduction
7 August 2010 The US Chemical Producers and Distributors Association (CPDA) is focused on two initiatives before Congress that could impact international chemical producers as well as formulators and suppliers domestically.
First, CPDA has serious concerns with the Clean Water Restoration Act, recently renamed America’s Commitment to Clean Water Act, due to its potential to severely disrupt the agricultural sector. This legislation, backed by environmentalists, would vastly expand the reach of the Clean Water Act (CWA) by removing the term “navigable” and replacing it with the broadly defined term “water of the US.”
CPDA and other opponents warn that this simple change would give the federal government unfettered jurisdiction over all waters and tributaries and unleash a tidal wave of permit requests that would overload an already burdened permitting system.
This change could impact foreign chemical producers because if ditches, gullies, and ephemeral streams become subject to federal jurisdiction, then farmers would have to choose from several unpleasant options. Growers first could place a buffer around everything that could be federal jurisdiction; second, apply for the very costly and time-consuming permit and run the risk of having it challenged in court; and third, to avoid a $37,500 penalty per violation the farmer may simply refrain from applying pesticide on that plot. The likely result will be a dramatic reduction in pesticide use.
The other proposal has a more direct impact on foreign chemical producers — the Miscellaneous Tariff Bill (MTB). This bill would temporarily reduce the tariffs on imported products for which there is no domestically produced competitor. It usually bundles hundreds of products together into a bipartisan package that, historically, is passed every few years.
There are a number of chemicals used by domestic chemical manufacturers that could be eligible for a tariff reduction if they meet the following requirements: raise no objection; cost under $500,000 per year; and have no domestic competition.
Considering it would promote domestic manufacturing, business interests are backing a new MTB. However, election year politics could prove deadly for the bill as Democrats are having a hard time passing a number of higher-priority items and some politicians sound more protectionist during the current economic downturn.
The economic health of US agriculture hinges largely on reducing any unnecessary regulatory burden that would discourage competition in the commerce of pesticides internationally.
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