Legislative Update: MTB Moving Forward, Trade Preferences Could Follow
October 5, 2009
World Trade\Interactive
Congress remains heavily engaged in discussions on health care reform, as well as attempts to approve fiscal year 2010 funding for federal agencies, but several trade-related initiatives are nevertheless moving forward. The Senate has finally broken its impasse on a miscellaneous trade bill and work could begin soon on extending two trade preference programs.
MTB. The Senate has finally resolved the problems delaying movement on a miscellaneous trade bill and has called on senators to introduce by Oct. 30 duty suspension and reduction legislation to be included in an MTB (see separate article this issue). Lawmakers are aiming to complete an MTB by the end of this year, when duty suspensions and reductions already in effect under the previous MTB expire. With the House of Representatives expected to take up the draft MTB it developed during the last session of Congress instead of issuing its own call for legislation, the Senate process will be the only one available this year for importers to seek new duty breaks.
Trade Preferences. The Senate approved Sept. 24 a Pakistan aid bill that left out new trade preferences for goods imported from designated Reconstruction Opportunity Zones in Afghanistan and Pakistan. President Obama has specifically indicated support for this measure, however, and supporters say they will work to push through a stand-alone ROZ bill or add it to a trade preference program extension bill expected later this fall. According to a Reuters article, Sen. Maria Cantwell, D-Wash., said lawmakers are discussing a possible compromise with the Office of the U.S. Trade Representative that would pattern the ROZs “after a trade deal the United States struck with Cambodia, linking trade privileges to labor conditions.”
The anticipated trade preference bill will likely extend but not make substantive changes to the Generalized System of Preferences and the Andean Trade Preference Act, both of which are slated to expire Dec. 31. It may also include legislation introduced Sept. 14 by Senate Foreign Relations Committee Ranking Member Richard Lugar, R-Ind., that would to add Uruguay and Paraguay as ATPA beneficiary countries.
FTAs.Some observers have speculated that the Obama administration has been strengthening its credentials on trade enforcement in recent months (e.g., the safeguard tariffs on Chinese automobile tires) as a prelude to efforts to secure congressional approval of pending free trade agreements with Colombia, Panama and South Korea. While President Obama himself has given credence to this idea, it is increasingly unlikely that there will be any substantive movement on these FTAs until next year. “It’s pretty doubtful” that Congress will approve the FTA with Colombia this year, Commerce Secretary Gary Locke said recently, and Assistant U.S. Trade Representative Wendy Cutler added Sept. 30 that “there is no timeline” for implementing the Korea FTA. While administration officials “want to move on Panama and Colombia,” a CongressDaily article quoted Rep. Jim Moran, D-Va., as saying, “the members of Congress just don’t feel it’s a high priority, particularly in a recessionary period.”
Customs Reauthorization. There has still been no word on when the Senate Finance Committee might hold a hearing on the customs reauthorization bill introduced Aug. 6. Work on this bill is likely to carry over into 2010, in part because of other legislative priorities and in part to give the trade community ample time to submit comments and suggest amendments.
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