Legislative update: Groundwork being laid for FTAs, progress on MTB possible soon
July 22, 2009
World Trade\Interactive
Congress is currently preoccupied with the issues of health care reform and climate change, and little substantive action on trade issues is expected until after lawmakers return from their summer recess in early September. One possible exception is work on a miscellaneous trade bill, which the Senate may initiate in the coming weeks.
FTAs. Pending free trade agreements with Colombia, Panama and South Korea are not expected to move forward until President Obama gives a speech outlining his trade policy later this year. There are signs, however, that the administration is preparing the way for the FTAs to be implemented and does not intend to merely let them sit. Given the current economic climate and accompanying skepticism about the benefits of trade, the White House appears to be taking steps to address those concerns so that trade liberalization initiatives like the FTAs can move forward. This includes stronger enforcement of existing trade agreements, which was the topic of a major policy speech given by U.S. Trade Representative Ron Kirk last week, and improved Trade Adjustment Assistance programs for workers affected by trade, which Congress approved earlier this year. The administration had in fact been pushing lawmakers to quickly approve the Panama FTA before backing off to avoid contention that could have dimmed the prospects for enacting legislation on higher priority issues.
MTB. The Senate may get the process of developing a miscellaneous trade bill underway before adjourning for its summer recess in early August by issuing a call for senators to introduce legislation seeking to 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. The Senate process is likely to be the only opportunity for companies to seek MTB benefits for products that do not already have them because the House MTB is expected to be merely a compilation of duty reduction or suspension bills introduced in the last session of Congress. Click here for more information on how your company can get involved in the MTB process.
Food Safety. There has been a considerable amount of pushback on a House bill that would overhaul the imported and domestic food safety system. Small U.S. growers and producers have expressed opposition to the bill’s requirement for them to register with the Food and Drug Administration and pay a registration fee, which foreign growers would be subject to as well. Other entities are also becoming involved as the full extent of the bill, which aims to ensure the security of the entire food supply chain, becomes clear.
Knowledgeable sources say the House could pass the food safety bill before it adjourns for its summer recess, although a possible jurisdictional squabble between the House Energy and Commerce and Agriculture committees could push that timeframe back. Agriculture Committee Chairman Collin Peterson, D-Minn., held a hearing on the bill recently and indicated that his committee could take a more active role if certain changes to the bill are not made.
The Senate bill, which differs in many respects from the House version, may not be taken up until sometime in 2010 given that chamber’s preoccupation with health care reform and climate change. This time frame will provide those interested in specific provisions with an opportunity to weigh in with Congress before the bill becomes law.
Pakistan/Afghanistan. Legislation to establish new trade preferences for goods imported from designated Reconstruction Opportunity Zones in Afghanistan and Pakistan was passed by the House in June but appears to have stalled in the Senate. A number of concerns have been raised regarding the bill, including product coverage, labor rights and effects on other least-developed countries. The bill has been explicitly endorsed by the Obama administration, but according to Inside US Trade no action is expected in the Senate until this fall, perhaps in conjunction with a reauthorization of existing trade preference programs.
Other. Other trade-related bills that have been introduced recently include the following. (Note that the text of these bills can be found on the Library of Congress’ Web site.
• S. 1475 – to prohibit the heads of executive agencies from entering into or renewing procurement contracts with persons that export certain computer or telecommunications technologies to Iran
• S. 1466 – to establish the position of deputy U.S. trade representative for trade enforcement and a Trade Enforcement Division in the Office of the U.S. Trade Representative, to establish a chief manufacturing negotiator at USTR and to strengthen enforcement of U.S. intellectual property rights at U.S. borders
• H.R. 3196 – to impose limitations on investment and certain operations by foreign entities in the U.S.
• H.R. 3187 – to reduce and eliminate the tax credit for alcohol fuel mixtures and the tariff on imported ethanol
• H.R. 3190 – to restore the rule that agreements between manufacturers and retailers, distributors or wholesalers to set the price below which the manufacturer’s product or service cannot be sold violates the Sherman Act
• H.R. 3168/S. 1439 – to provide for duty-free treatment of certain recreational performance outerwear
• H.R. 3173 – to prohibit the importation and shipment of certain species of carp
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