USMCA FTZ Modernization Act of 2021
Bill: S.2208 | Sponsor: Sen. Cornyn, John (R-TX)
Policy area: Foreign Trade and International Finance

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.

To require the United States International Trade Commission to 
      investigate tariff policies relating to foreign-trade zones.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``United States-Mexico-Canada 
Agreement Foreign-Trade Zone Modernization Act of 2021'' or the ``USMCA 
FTZ Modernization Act of 2021''.

SEC. 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; 107 Stat. 2057) included a 
        restriction, in section 202(a)(2)(A) of that Act, that 
        prevented goods manufactured in foreign-trade zones from 
        receiving preferential tariff treatment under the North 
        American Free Trade Agreement.
            (3) Title VI of division O of the Consolidated 
        Appropriations Act, 2021 (Public Law 116-260) made a set of 
        ``technical corrections'' to the United States-Mexico-Canada 
        Agreement Implementation Act (19 U.S.C. 4501 et seq.) and 
        included the same restriction described in paragraph (2).
            (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.

SEC. 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); or
            (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).
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