Proposed US-Mexico-Canada ‘Technical Correction’ Could Affect Mississippi FTZs


U.S. Senator Cindy Hyde-Smith (R-Miss.) today voiced her opposition to a proposed “technical correction” that would re-impose a $2 billion NAFTA-era tax increase on Foreign Trade Zones (FTZs), including such job-creating areas in Mississippi.

Hyde-Smith joined Senator John Cornyn (R-Texas) in a letter asking U.S. Trade Representative Robert Lighthizer to oppose the reinstatement of a NAFTA FTZ provision in a “technical corrections” section of United States-Mexico-Canada (USMCA) implementing legislation.

“We shouldn’t impose taxes on U.S. manufacturers, especially considering the state of the economy, the ongoing pandemic, and existing tariffs already in place for foreign trade zones in Mississippi and around the country,” Hyde-Smith said.  “We are simply asking the U.S. Trade Representative to allow more time for the public and Congress to consider the ramifications of an ill-advised tax hike on our own job creators.”

Mississippi FTZs have raised concerns that the USTR proposal would diminish the competitiveness of FTZ users, including manufacturers that will benefit from the USMCA.  FTZ users in Mississippi produced more than $18 billion in manufactured goods in 2019, representing more than 15 percent of the state’s economic output for the year.

“Supporting such a tax increase during a global pandemic and economic recession would harm American manufacturers across a wide range of industries, including the energy, electronics, automobile, and pharmaceutical sectors, among others,” the Senators wrote to Lighthizer.

“The questions about the effect of reinstating this provision on our economy and constituents during this time deserve further discussion in the public square. Congress should not simply rubber stamp this tax increase,” they concluded.

Senators Tom Carper (D-Del.), Chris Coons (D-Del.), Jerry Moran (R-Kan.), and Ben Sasse (R-Neb.) also signed the letter.  A signed copy of the correspondence is available here.


Release from Senator Cindy Hyde-Smith.