USMCA FTZ Modernization Act of 2021

To require the United States International Trade Commission to investigate tariff policies relating to foreign-trade zones. 1. Short title This Act may be cited as the United States-Mexico-Canada Agreement Foreign-Trade Zone Modernization Act of 2021 USMCA FTZ Modernization Act of 2021 2. Findings Congress makes the following findings: (1) Expanding benefits to United States workers and businesses, reshoring critical supply chains, and creating United States based manufacturing requires analyzing tariff policies, assessing any negative impacts that tariffs may have on United States businesses and workers, and identifying the most effective policy options to correct those impacts and to revisit tariff treatment, if needed, particularly with respect to manufactured products exported from countries with which the United States has a free trade agreement in effect. (2) The North American Free Trade Agreement Implementation Act ( Public Law 103–182 (3) Title VI of division O of the Consolidated Appropriations Act, 2021 ( Public Law 116–260 technical corrections 19 U.S.C. 4501 et seq. (4) United States manufacturers operating in foreign-trade zones believe that that restriction removes parity with their counterparts in the equivalent of foreign-trade zones under Mexico and Canada’s export-promotion programs, which do not have a similar restriction in place. (5) Canadian and Mexican manufacturers already enjoy advantages over United States manufacturers operating in the North American market as a result of— (A) Mexico and Canada’s export-promotion programs and extensive networks of free trade agreements, including with the European Union and Japan; and (B) not being subject to restrictions comparable to the unilateral restrictions on United States-based manufacturing in foreign-trade zones under the United States-Mexico-Canada Agreement Implementation Act, which were carried over from the North American Free Trade Agreement Implementation Act. (6) Among other things, the advantages described in paragraph (5) may encourage the location of manufacturing in Canada and Mexico, rather than the United States. 3. Investigation of tariff policies relating to foreign-trade zones (a) In general The United States International Trade Commission shall conduct an investigation to examine— (1) policies, particularly differences in tariff treatment by the United States and Canada and Mexico, that create inequities between products manufactured in the United States in foreign-trade zones and products manufactured in the equivalent of such zones in Canada and Mexico under the USMCA (as defined in section 3 of the United States-Mexico-Canada Agreement Implementation Act ( 19 U.S.C. 4502 (2) any effects those policies have on the cost-competitiveness of products manufactured in the United States for both the domestic and export markets compared to products manufactured in Canada or Mexico under the USMCA, including an analysis by sector and State; and (3) how the foreign-trade zones in the United States could be better employed to redress and mitigate those inequities. (b) Exclusions from investigation The Commission shall exclude from the investigation required by subsection (a) examination of duties imposed under— (1) chapter 1 of title II the Trade Act of 1974 ( 19 U.S.C. 2251 et seq. (2) title III of that Act ( 19 U.S.C. 2411 et seq. (3) section 232 of the Trade Expansion Act of 1962 ( 19 U.S.C. 1862 (4) any other trade remedy law of the United States. (c) Assistance from other agencies The Secretary of Homeland Security and the Secretary of Commerce shall make available to the Commission such information as is necessary for the Commission to conduct the investigation required by subsection (a). (d) Report required Not later than 18 months after the date of the enactment of this Act, the Commission shall submit to Congress a report on the investigation required by subsection (a).

Summary: United States-Mexico-Canada Agreement Foreign-Trade Zone Modernization Act of 2021 or the USMCA FTZ Modernization Act of 2021 This bill requires the International Trade Commission to investigate tariff policies related to foreign-trade zones (FTZs), which are designated sites at which special customs procedures may be used to allow for domestic activity involving foreign items prior to formal customs entry. The investigation must examine (1) differences in tariff treatment by the United States, Canada, and Mexico; (2) any effects of such differences on the cost-competitiveness of U.S.-manufactured products compared to products manufactured in Canada or Mexico; and (3) how FTZs in the United States could be better employed to redress and mitigate any inequities.