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National Association of Foreign-Trade Zones President Erik Autor Testifies at USTR Hearing on Proposed Section 301 Tariffs on Imports from China

Washington, D.C. -- National Association of Foreign-Trade Zones (NAFTZ) President Erik Autor today called for establishment of an effective, ongoing product-exclusion-request procedure and other measures in testimony before a hearing convened by the U.S. Trade Representative (USTR) regarding proposed 25 percent tariffs on $50 billion worth of Chinese imports under Section 301 of the 1974 Trade Act.

While agreeing that China’s intellectual property rights violations, forced technology transfers, and state interventions warrant appropriate action, Autor warned that many internationally competitive companies and industries represented by NAFTZ rely on China and other countries to supply inputs necessary for their U.S. production and include China as a key export market. “Accordingly,” said Autor, “we share the serious concerns of many U.S. business organizations about the adverse consequences Sec. 301 tariffs pose for U.S. manufacturing, exporting, and consuming industries, including creating strong incentives to manufacture abroad as U.S. production costs increase and imported goods become more competitive in the U.S. market.”

Autor warned that the proposed Sec. 301 tariffs threaten to undercut important FTZ program goals, including: 1) sustaining U.S.-based manufacturing and jobs by equalizing duties on U.S.-made and foreign-made products; and 2) eliminating situations where U.S. manufacturers pay significantly more than foreign exporters in U.S. duties because duties on inputs are higher than on the final product. 

To mitigate these problems, Autor stated, NAFTZ believes it is essential for the Sec. 301 process and other trade remedies actions to establish an effective, ongoing product-exclusion-request procedure, enabling companies to secure exclusions from duties for certain imported materials, including finished products manufactured in U.S. zones. 

Mr. Autor also pointed out that another critical issue for FTZ manufacturers in trade remedies proceedings is that finished goods approved by the U.S. Foreign-Trade Zones Board for zone production must not be incorrectly considered foreign origin for U.S. Customs entry purposes, and must be explicitly exempted from additional tariffs in Presidential Proclamations. NAFTZ’s written comments submitted on May 11 provide an example that illustrates the potential problem and includes recommended Proclamation language to ensure goods finished in a U.S. zone are not inadvertently subject to additional duties. 

Turning his attention to the problematic subject of “privileged foreign status” (PF) classification required by the proposed Sec. 301 action, Mr. Autor pointed out that the administration’s proposed action “would require FTZ manufacturers to admit any subject articles into a U.S. zone under ‘privileged foreign status’ and pay the additional duty when the finished product incorporating those articles is entered into U.S. commerce.” In laying out the PF process for FTZs, said Autor, it is essential for the final Sec. 301 proclamation to avoid including language similar to that used in the March 22 Presidential Proclamations on steel and aluminum. Those proclamations stated that any steel or aluminum article admitted into a U.S. foreign-trade zone under PF status prior to the effective date of the duties would be subject upon entry for consumption to any ad valorem rates of duty imposed by those proclamations.

Under U.S. Customs regulations, foreign-status merchandise categorized as having “privileged foreign status” maintains the status it enjoyed upon its admission to a Foreign-Trade Zone. When the merchandise is subsequently shipped from the zone to the U.S. market and entered for consumption by CBP, it is evaluated based on its time-of-admission condition, even though it may have undergone a transformation in the zone.

“NAFTZ is unaware of any past Proclamations containing such language imposing additional duties upon filing a customs entry on merchandise in an FTZ that was under PF status prior to the effective date of such duties,” said Erik Autor. “This condition penalizes FTZ users for manufacturing in the United States and contravenes language in the Foreign-Trade Zones Act and Customs regulations regarding the election of PF status on merchandise in zones.”

Mr. Autor also referred to other technical issues regarding treatment of foreign-trade zone merchandise in the pending Sec. 301 and other trade remedies actions, including additional recommendations for Presidential Proclamation language to provide better and clearer guidance to FTZ manufacturers. Those recommendations are fully detailed in NAFTZ’s May 11 submission of comments which can be downloaded here. Mr. Autor’s full May 16 testimony can be downloaded here.

The NAFTZ also recently joined with The National Retail Federation and more than 100 other associations in submitting comments to U.S. Trade Representative Robert Lighthizer outlining how the administration’s proposed tariffs would harm the U.S. economy. The groups urged the administration instead to develop a comprehensive strategy to effectively address China’s unfair trade practices. See nrf.com here. 

NAFTZ is the voice of the U.S. Foreign-Trade Zones program, created by Congress in 1934 to help U.S.-based companies be more globally competitive; maintain U.S.-based activity and jobs; attract investment to American communities; and boost exports through special duty benefits and customs procedures. FTZs account for a significant portion of total U.S. trade – 5.2 percent ($76 billion) of U.S. goods exports and 10.2 percent ($225.3 billion) of U.S. goods imports in 2016. Over 420,000 American workers are employed at FTZs in all fifty states and Puerto Rico.

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Louis Berger Goes Beyond Recovery Efforts in Puerto Rico to Enable a Renewable Future

As a multi-disciplinary engineering and infrastructure firm, Louis Berger has been involved in some of the most notable building projects around the world. Their projects range from architecture to operations and maintenance, and that scope allows the company to provide clients with a whole lifecycle of capability. It has also put them in a unique position to aid in response efforts for disasters and emergency situations, although these efforts are as much about creating opportunities for the future as they are restoring the present.

In addition to the Give Back Campaign that recently saw the company present a contribution of $60,000 to the International Federation of Red Cross and Red Crescent Societies, Louis Berger has been on the ground in Puerto Rico and the Virgin Islands to deliver and install more than 917 emergency generators with more than 873 people supporting emergency power missions. It’s the kind of support the company is in a unique position to provide and offer, although it requires a different application of their skillsets and resources.

 “Conventional engineering and infrastructure work is very driven by things like procedure and permitting, while planning can be a painstaking process that can take years or even decades,” Tom Lewis, Louis Berger’s U.S. division president, told AEC Next News. “These kinds of response and recovery efforts require us to apply all of the same skillsets we’d use for a traditional project, but without all the planning and permitting. There’s no time for any of that in the first few days and weeks after a disaster where speed literally means saving lives and preventing further damage. So we’re using some of the same skillsets, but in a much more high-pressure, fast-paced kind of environment.”

That kind of high-pressure environment is the one that Lewis and his team found in Puerto Rico after Hurricane Maria hit the island. Maria devastated Puerto Rico’s power grid and caused what some have calculated as over 100 billion dollars in damage, much of which goes beyond that scope of what can be done in an emergency situation. That’s why Louis Berger is now participating in the transition from emergency response to a long-term recovery and building back better in Puerto Rico. Their efforts in doing so are not focused on a particular solutions or approach though.

“There are almost always multiple solutions to a given infrastructure challenge, rather than just one way to go,” Lewis continued. “Just like people have many tools in their tool box for doing different jobs around their homes, the different places and situations here in Puerto Rico demand different and more modern technologies to build back better and more sustainably and resiliently.”

The unprecedented nature of the disaster underscores the monumental efforts that Louis Berger is making on the island, especially since the company is working to see Puerto Rico recover in a way that makes it less vulnerable to these types of events in the future. These recovery efforts aren’t about building back a more modern version of what was there before. Microgrids, solar hybrid renewables and even solar hybrid mobile generators are being utilized in these recovery efforts, which means what’s happening in Puerto Rico could expand across the island and beyond in a powerful manner.

“We’re looking to demonstrate this kind of integrated, renewable technology in the hopes that we can get stakeholders to deploy it to a higher degree on Puerto Rico,” Lewis said. “Beyond that, we look at it as a way to demonstrate our capability as well as the technology itself for application on the mainland in the United States and around the world. We’re very excited about it, and in fact we believe in it so much that we’re looking at deploying some of this technology in a few small test cases on our own.”

One of those test cases is a pro bono demonstration project to provide solar-hybrid and microgrid solutions to La Perla de Gran Percio in Bayamón, Puerto Rico. As part of the aforementioned “Give Back” program, this distributed model is set to supplement Puerto Rico’s power needs through the application of solar-hybrid and micro grid technologies. The objective of the project, implemented at no cost to local residents, is to demonstrate distributed, solar hybrid power technologies while restoring residents’ access to fundamental services that would otherwise not be available until the central power grid is fully restored.

In addition to improving the quality of life of the community, this pro bono project is part of an effort to raise public and private sector awareness of the benefits of cleaner, distributed, mobile and resilient energy solutions. Especially in storm-prone communities, distributed power generation provides many advantages over reliance on a centralized grid alone. On a practical level, this approach will provide an additional layer of resilience in the event of a future storm, which will help the island become less susceptible to catastrophic events.

It’s exciting to consider what that will mean for the present in Puerto Rico and for the future of this type of technology for communities all across the world.

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Louis Berger restores power to La Perla de Gran Precio in Bayamón, Puerto Rico, using mobile solar hybrid power technology

MORRISTOWN, N. J., Jan. 29, 2018 (GLOBE NEWSWIRE) -- Louis Berger, a global infrastructure engineering and development firm, together with the municipality of Bayamón, Puerto Rico, hosted a special event on January 26 celebrating the launch of a pro bono project to restore power to Hogar El Pequeño Joshua, a shelter for children and to La Perla de Gran Precio, a shelter for women in the rural mountain village of Barrio Nuevo.

Louis Berger has been working in cooperation with the government of Puerto Rico to identify and assess communities with extended power outages in the aftermath of Hurricane Maria. In a joint effort to evaluate and promote more sustainable and resilient infrastructure solutions in Puerto Rico, Louis Berger and its partners – WestGen and AEG, along with the Zofnass Program for Sustainable Infrastructure at Harvard University – identified the foundation La Perla de Gran Precio, which helps women and children in need as the ideal community to benefit from a pro bono power technology demonstration project.

“We embrace this opportunity to ease the daily life of these women and children, and to help support a renowned foundation that’s been conducting meritorious social work for the past 17 years, while also demonstrating new power solutions for Puerto Rico,” said Tom Lewis, Louis Berger U.S. division president. “The La Perla de Gran Precio project is a part of Louis Berger’s corporate social responsibility program, which is committed to serving and giving back to communities where our employees and clients live and work.”

The objective of the project, implemented at no cost to local residents, is to demonstrate distributed, solar hybrid power technologies while restoring residents’ access to fundamental services that would otherwise not be available until the central power grid is fully restored. As part of Louis Berger’s continuing commitment, the second phase of the project will be to provide a larger capacity solar hybrid microgrid that can provide power to more buildings in the compound.

In addition to improving the quality of life of the community, this pro bono project is part of an effort to raise public and private sector awareness of the benefits of cleaner, distributed, mobile and resilient energy solutions. Especially in storm-prone communities, distributed power generation provides many advantages over reliance on a centralized grid alone. The project will continue until the central power grid is fully restored.

About Louis Berger

Louis Berger is a global professional services corporation that helps infrastructure and development clients solve their most complex challenges. We are a trusted partner to national, state and local government agencies; multilateral institutions; and commercial industry clients worldwide. By focusing on client needs to deliver quality, safe, financially-successful projects with integrity, we are committed to deliver on our promise to provide Solutions for a better world.

Louis Berger operates on every habitable continent. We have a long-standing presence in more than 50 nations, represented by the multidisciplinary expertise of 6,000 engineers, economists, scientists, managers and planners.

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Mayor Carvalho attends U.S. Conference of Mayors 86th Winter Meeting

Mayor Bernard Carvalho Jr. traveled to Washington, D.C., last week to participate in the U.S. Conference of Mayors 86th Winter Meeting. In addition, the Mayor met with federal agencies and the Congressional delegation to discuss priorities for the County of Kaua‘i. 

The 86th Winter Meeting, hosted by the U.S. Conference of Mayors, included over 250 mayors from across the nation. Mayor Carvalho participated in many working group sessions on topics such as: Homelessness: Strategies that Work in Reducing Chronic and Veteran Homelessness; Equity: Economic Inclusion and Civil Rights; Energy: Powering Smart Cities through New Energy Technologies and Partnerships; Housing: Local Solutions to Affordable Housing; Building Resilient Cities: Preparing for Disasters and More; Climate Change: Today’s Leadership Confronting Tomorrow’s Challenges; Immigration: Responding to Current Challenges; and Infrastructure: Investing Locally to Grow Nationally.

In addition to the U.S. Conference of Mayors, Mayor Carvalho attended meetings promoting the goals for the County outlined in Holo Holo 2020, which is aimed at enhancing the economy, increasing sustainability, planning for the island’s future, caring for the community, and delivering excellent customer service. 

The Mayor met with the United States Department of Commerce Economic Development Administration and International Trade Administration regarding the Americas Competitive Exchange (ACE) program, which brings together decision-makers from throughout the Western Hemisphere and other nations to explore global and regional partnerships and economic development opportunities that will strengthen innovation and entrepreneurship in the region.

Furthermore, the Mayor met with the Congressional delegation to update them on the success of the County’s priorities outlined in Holo Holo 2020, and to thank them and their staff for their continued support and dedication to the County of Kaua‘i.  He also met with Rear Admiral Jon A. Hill, Deputy Director of the Missile Defense Agency, and was briefed on their capabilities against all ranges of enemy ballistic missiles in all phases of flight. Additionally, the Navy briefed the Mayor on the significance of the Pacific Missile Range Facility on Kaua‘i and the critical role it plays in testing and training, which it must continue to perform for the protection and defense of Hawai‘i and the entire United States.

The week was an opportunity for the Mayor to discuss important issues for the County of Kaua’i with mayors from across the nation. Mayor Carvalho looks forward to following up with them, as well as the various federal agency representatives who participated in the conference – the Department of Commerce and the Hawai‘i Congressional delegation – to continue to achieve the priorities and goals for the county. 

Pictured above: Mayor Carvalho meets with Congresswoman Tulsi Gabbard's staff

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