U.S. lawmakers introduce trade promotion authority bill

Bipartisan legislation was introduced Thursday on Capitol Hill to extend TPA to President Obama.    Congressional leaders on Thursday unveiled bipartisan legislation that would make it easier to pass trade deals, such as the Trans-Pacific Partnership agreement being negotiated by the United States and 11 other nations.
   Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., as well as House Ways and Means Committee Chairman Paul Ryan, R-Wis., introduced bills in both chambers to update and renew Trade Promotion Authority, which expired in July 2007.
   TPA, or “fast-track authority,” is designed to give the White House power to finalize trade agreements because negotiating partners know that what they sign will go to Congress for an up-or-down ratification vote – without being altered by amendments.
   TPA also enables Congress to play a role in the negotiations by providing negotiating objectives to the White House and spelling out how it wants to be consulted throughout the process.
   Every president since Franklin Delano Roosevelt has had some version of trade authority as the United States historically led the way for defining the rules of the road for global trade. 
   The Obama administration views trade as a key component of its economic recovery strategy. The National Export Initiative is a whole-of-government approach to boosting sales of U.S. goods and services abroad, including the negotiation of free trade agreements that increase market access for U.S. firms. Trade advocates note that exports have contributed to nearly a third of total economic growth over the last five years and that jobs at export-based companies typically pay 13 percent to 18 percent more than jobs at pure domestic companies. Trade deals also lower import tariffs, making goods cheaper for low-income and middle-class Americans.
   The United States is currently negotiating three significant trade agreements: the Trans Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (T-TIP) and the multilateral Trade in Services agreement.
   On Thursday, Treasury Secretary Jack Lew, Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman testified before the Senate Finance Committee on the importance of passing TPA. Among the goals spelled out for U.S. negotiators to achieve are streamlined customs procedures for U.S. imports in other countries, expanding electronic commerce, avoiding restrictions on cross-border data flows and ensuring fair competition with state-owned enterprises.
   Business groups roundly hailed the TPA legislation for setting the table for trade agreements that even the playing field for American exporters and urged Congress to quickly vote on the bill.
   “Given the ambitious trade deals already under negotiation, Congress and the president urgently need to enact TPA legislation to help complete strong agreements that open foreign markets and set enforceable rules for trade with other countries,” said David Thomas, president of The Trade Benefits America Coalition.
   “Equally important, Congressional consideration of TPA paves the way for renewing expired and expiring trade measures such as the African Growth and Opportunity Act (AGOA) and the Generalized System of Preferences (GSP),” said Juanita D. Duggan, president and chief executive officer of the American Apparel & Footwear Association. “We hope Congress approves these and other measures, which are vital for our members in reducing costs, promoting investment, and supporting trade-based jobs, both in the United States and abroad.”
   Other trade groups that praised the legislation were the American Association of Exporters and Importers, Sweetener Users Association, Business Roundtable, American Soybean Association, Express Association of America, and We R Here. 
    TPP would improve market access in the Asia-Pacific region for U.S. exporters. TPP members represent 40 percent of the global economy and the Pacific Rim is the fastest growing region in the world.
   But high tariffs and non-tariff barriers hamper U.S. exports. Tariffs on U.S. goods can reach 30 percent in Malaysia and poultry farmers have to contend with tariffs up to 40 percent in Vietnam. Meanwhile, intra-Asia trade deals have are making it easier for countries in the region to trade among themselves.
   The trade deal under negotiation for more than two years would cover a full range of products, services and investment. It also seeks to ensure high environmental and labor standards that can be enforced, intellectual property protection, a free and open Internet, and the elimination of unfair competition from state-owned enterprises.
   Some environmental and labor groups oppose TPP because they argue the standards being negotiated aren’t sufficient.
    “Right now foreign companies in Asia enjoy nearly unfettered access to sell their goods in the United States. But when Oregonians want to sell our high-quality products – from Willamette Valley pinot noir to Danner’s Oregon-made boots to Chris King’s world-class bicycle components, or anything else overseas – too often our businesses run straight into a wall of unfair tariffs and protectionist regulations,” Reps. Wyden and Earl Blumenauer wrote in an op-ed Thursday in the Oregonian.
   “We are pushing for new agreements that tear down the walls for Oregon innovators and pave the way to growing middle-class jobs and paychecks in our state. With 95 percent of the world’s consumers outside of the United States, it’s clear that getting into new markets is the best way to sell more made-in-Oregon goods.
   “Trade skeptics point out that past trade deals have not always lived up to expectations. We agree. As supporters of trade done right, we have fought to ensure our agreements include stronger and fully enforceable labor and environmental protections and new tools to combat unfair trade. We will not accept anything that fails to incorporate these critical reforms,” the lawmakers said.
   TPP, when fully implemented, will also open up new sourcing opportunities in Vietnam for textile and footwear companies, Deputy U.S. Trade Representative Robert Holleyman said Wednesday at the American Apparel & Footwear Association’s customs conference in Washington. Vietnam is the second largest, and fastest growing, supplier of apparel. All qualifying goods will receive significant duty reduction, with a significant portion going to zero immediately.
   The trade deal will also permit the full accumulation of inputs to production from across the free trade region to be entitled to duty preferences.
   TPP will open up export opportunities for “Made in the USA” apparel in Japan, which is the United States’ second largest non-free trade agreement export market. Currently, apparel exports face duties as high as 12 percent in Japan and 20 percent in Malaysia, Holleyman said. 
   “When TPP is completed and fully implemented those duties will be reduced or eliminated,” he said.
   The United States also seeks to eliminate tariffs of up to 188 percent in Japan on leather footwear and travel goods as a result of Japan’s tariff-rate quotas.
   The textile chapter “will help to ensure that benefits of agreement accrue to the TPP parties and that strong anti-circumvention measures will be in place to ensure the integrity of the agreement,” Holleyman said.
   T-TIP negotiations with the European Union are aimed at creating thousands of new jobs and preserving high levels of safety, health and environmental standards.
   Among the key objectives of both sides is to cut red tape at the border for importers and exporters.
   “Our goal in the T-TIP customs chapter is to go beyond what was recently negotiated in World Trade Organization’s Trade Facilitation Agreement and we’re looking to obtain new commitments that break new ground in a free trade agreement,” Holleyman said.
   The Trade Facilitation Agreement last year includes broad provisions intended to simplify and make more transparent customs procedures, with the knock-on benefit of speeding up trade flows and reducing costs.
   So far only four countries – the United States, Hong Kong, Mauritius and Singapore – have ratified the TFA. Two-thirds of the WTO’s members must ratify the deal for it to go into effect.
   Holleyman expressed hope that the TFA could enter into force by the end of the year, but encouraged companies with significant operations in other countries to express to government officials their interest in getting the deal ratified.
   The customs chapter of T-TIP is also expected to address customs advance rulings, expedited shipments and appeals, as well as set a de-minimus value under which shipments would be exempt from filing customs documents or paying taxes.
  “Now that’s a tall order,” Holleyman said. ““But we believe that this agreement can bring the best practices to bear for both the U.S. and the EU and then collectively that can have a force multiplier effect on the rest of the multilateral players” that raises the rules and expectations for future trade deals around the world.