Legislative Update: Trade Measures Could Move Before Summer Recess

(World Trade Interactive)

With just a few weeks left before the month-long congressional summer recess begins, there are several trade-related measures that could see action in that time. A miscellaneous trade bill with hundreds of import duty breaks appears to finally be moving forward, a financial reform bill that cracks down on trade in conflict minerals and tightens anti-bribery law enforcement is expected to be sent to the White House soon, and supporters are still working to move bills dealing with China’s currency and food safety.

Miscellaneous Trade Bill (MTB)

A draft manager’s amendment of a miscellaneous trade bill providing duty breaks for hundreds of imported inputs and other goods not produced or otherwise available domestically (see attached) was posted to the House Ways and Means Committee’s Web site July 7. This measure would provide duty-free treatment for affected goods retroactive to Jan. 1, 2010. Supporters are hoping to bypass a committee vote and move the bill straight to the House floor and to then have the Senate pass the same bill by unanimous consent. Ways and Means majority staff members have indicated that they would like to see a vote in the House before the August recess, but the timing of action in the Senate is uncertain.

There are hundreds of individual duty suspension bills that are not included in the draft manager’s amendment, most of which were introduced in the Senate in 2009. On July 8, the Senate Finance Committee posted on its Web site the results of the administration’s review for most of these bills. Sources close to Congress expect that a second MTB containing these bills will be drafted and possibly passed before the end of the year.

The MTB process had been held up by a self-imposed ban by House Republicans on legislation with earmarks. Some have held that the duty reduction measures in the MTB should be considered earmarks, but Ways and Means Chairman Sander Levin disputed that view in a recent “Dear Colleague” letter asking lawmakers to support the MTB. Levin pointed out that House rules do not define individual MTB provisions as earmarks, which he said “makes sense” because such provisions do not direct how federal government funds are spent. He also noted that MTB provisions go through an extensive and public vetting process in which anticipated beneficiaries are identified (if there are 10 or fewer).

Free Trade Agreements

The Obama administration has indicated in recent weeks that it will work to advance the U.S.-Korea Free Trade Agreement later this year and that it wants to submit the Colombia and Panama FTAs for congressional consideration “as soon as possible.” A number of companies and business groups, along with some lawmakers, have applauded the president’s announcements and urged quick action, but others have called for caution and are seeking meetings with the president to outline their concerns.

The president directed U.S. Trade Representative Ron Kirk to begin discussions with Korean officials in hopes of resolving outstanding concerns by the G-20 leaders’ meeting in November. South Korean Trade Minister Kim Jong-hoon said recently that talks are not expected to begin until late September but that he believes the November deadline can be met. There has been no indication yet on how the administration plans to overcome resistance to the Colombia and Panama agreements. Read the complete article here.

Legislative Update: MTB Stalls, Trade Preferences Extension Still Possible

(World Trade Interactive)

As this year’s session of Congress draws to a close, lawmakers missed an opportunity to approve a miscellaneous trade bill that would have extended tariff breaks on hundreds of imported goods. There was still time, however, to approve legislation extending the Generalized System of Preferences and the Andean Trade Preference Act.

Trade Preferences
The House of Representatives approved Dec. 14 a one-year extension of the Generalized System of Preferences and the Andean Trade Preferences Act, which are both currently slated to expire Dec. 31. This bill does not include an extension of trade preferences to apparel imported from Cambodia, as some lawmakers had been pushing for. It also does not include new trade preferences for goods imported from designated reconstruction opportunity zones in Afghanistan and Pakistan, which President Obama supports.

Sen. Jeff Sessions, R-Ala., had put a hold on Senate consideration of this bill because he wants to terminate GSP eligibility for sleeping bags from Bangladesh. Sessions lifted his hold after U.S. Trade Representative Ron Kirk agreed to review a petition seeking this change as part of the annual GSP review. Sen. Olympia Snowe, R-Maine, had also posed a potential obstacle by pushing for Senate action on her bill to create a new assistant U.S. trade representative position for small business issues (see related item, below). However, Snowe never placed a formal hold on the bill, and at press time it appeared her concerns had been resolved, although no further details were available.

MTB
A miscellaneous trade bill was introduced in the House Dec. 16, but the House adjourned for the year before passing it. This bill would have suspended or reduced for three years duties on over 600 imported goods, most of which are inputs or components for products manufactured in the U.S. Many of the bill’s provisions would have renewed existing duty suspensions or reductions, which are now expected to expire Dec. 31. There were reports that the MTB stalled due to concerns raised by Sen. Debbie Stabenow, D-Mich., about lowering tariffs on imported goods amid declining domestic manufacturing employment.

Inside US Trade reports that Congress may act in early 2010 to approve the tariff suspensions and reductions that have already been reviewed by the International Trade Commission, which include new measures as well as the renewal of existing duty breaks. A second bill with additional provisions could then see action later in the year. The article cited unnamed sources as noting that when MTB provisions have expired in the past before being reinstated, there were no refunds of duties paid by affected importers.

Read the complete summary here.

Supporters Cite Economic, Employment Gains in Pushing for Misc. Trade Bill

(World Trade Interactive)

The Tariff Action Coalition, a group of domestic chemical and other companies, released July 10 a report arguing that congressional approval of a miscellaneous trade bill this year would have a positive effect on domestic economic output and employment. The MTB would lower or suspend tariffs on imports of key manufacturing and production inputs that are not made in the U.S. or where there is no domestic opposition. Supporters are seeking to push lawmakers to enact an MTB before current duty breaks provided under the last MTB expire at the end of this year.

The report estimates that the tariff suspension bills now being considered by Congress as part of a potential MTB would result in $4.6 billion in additional domestic production, which would expand real gross domestic product by $3.5 billion and support nearly 90,000 U.S. jobs. The report notes that the economic benefits derived from the MTB are proportionately higher than those derived from other types of tariff reductions (e.g., under free trade agreements) because there is no domestic production of MTB products that would be displaced by rising imports. Read more here.