TPA Introduction Generates Enthusiasm, Criticism Among Congress and Industry

“The TPA legislation that we are introducing today will make sure that these trade deals get done, and get done right. This is our opportunity to tell the administration -- and our trading partners -- what Congress’ negotiating priorities are,” Baucus said in a in a press release (here). “TPA legislation is critical to a successful trade agenda. It is critical to boosting U.S. exports and creating jobs. And it’s critical to fueling America’s growing economy.” The introduction also quickly garnered the support of administration officials. The legislation will help create a level playing field for U.S. companies to compete globally by sealing the high-profile trade pacts, U.S. Trade Representative (USTR) Michael Froman said (here).

The White House is prepared to work with Congress to pass the TPA bill, along with Generalized System of Preferences and Trade Adjustment Assistance renewals, the administration said in a press release (here). “The United States has the most open markets in the world, but our products and services still face barriers abroad. That’s why we need to use every tool we have to knock down trade barriers that prevent American goods and services from being exported,” said the White House in the press release. “If we don’t seize these opportunities, our competitors surely will. And if we don’t take the leadership to set high standards around the world, we will face a race to the bottom which is not in the interest of our workers and firms.”

Many industry officials claim the legislation will expand U.S. market access internationally, helping to ramp up U.S. exports as the administration continues to pursue its National Export Initiative (see 13122014). “We’re very pleased to see language of forced localization barriers to trade. The challenge for a lot of our manufacturers is that some countries put in forced localization barriers, meaning products have to be made in a country to be sold there. That destroys opportunities for U.S. manufactured products,” said National Association of Manufacturers Senior Director, Chris Moore, in an interview. “This bill makes it a trade negotiating objective to eliminate these measures. In terms of forced localization barriers, a country may also require the transfer of certain intellectual property rights as a condition of market access.”

But some lawmakers, notably House Ways and Means Committee ranking member Sander Levin, D-Mich., and labor advocates flatly rejected the legislation in the immediate wake of its introduction. Levin vowed to introduce alternative legislation that permits Congress to circumvent fast rules in considering trade agreements, such as the 90-day vote requirement and removed amendment process, if the Senate Finance Committee or the House Ways and Means Committee object to the agreements during negotiations. New TPA legislation must also heighten labor and environment stringency, improve congressional ability to view agreement text, and bolster U.S. trade enforcement.

“In addition to legislation to address currency manipulation, we need to strengthen the enforcement of U.S. trade remedy laws by Customs,” said Levin in a statement (here). “We also need to consider legislation to establish a Congressional Trade Enforcement Office to monitor and help develop trade cases against foreign countries, along with other trade enforcement legislation. And we should consider measures to encourage production and create jobs in the United States, and measures to help small businesses export overseas.”

Some industry groups rallied to the side of Levin and other critics. “We asked for a national priority goal of balanced trade. They said no. We asked for legislation to neutralize foreign currency manipulation. They said no,” said the Coalition for a Prosperous America in a press release. House Ways and Means Committee Chairman Camp likely delayed introduction of the legislation in order to try to secure a House Democratic co-sponsor, preferably Levin, according to National Foreign Trade Council President Bill Reinsch the day prior to TPA introduction (see 14010910).

Camp either failed or refused to bring a House Democrat on board to share sponsorship. “My understanding is that there were extensive efforts to reach out to the Ways and Means Democratic staff and Congressman Levin and the gaps couldn’t be bridged,” said Scott Miller, Scholl chair in international business at the Center for Strategic and International Studies, in an interview. “Congressman Levin has long held different views about how Trade Promotion Authority should be structured. In the past, those views were not the majority. It remains to be seen if they are a majority view today.” Camp's office didn't return a request for comment.

The legislation contains stronger language on currency than the last TPA legislation, which passed in 2002, said Cato Institute trade policy analyst William Watson, but the provisions still permit the president significant leeway in determining how to address currency manipulation. “In some ways I was surprised that it didn’t contain stricter provisions on currency manipulation. They dodged a bullet there by not imposing specific requirements on the President,” said Watson in an interview. ”That would have been a setback for TPP. Strict currency provisions are not popular with trading partners. Some members of Congress have been hammering away at this for years.” Levin prefers concrete currency manipulation requirements, said Watson. TAA is also a controversial and potentially divisive priority for Levin and other Democrats that could pave the way for a contentious vote, said Watson.

“There are also Republicans who have expressed concern over giving authority over to the president. The vote won’t be on a perfect party line but it will be close. There will be an obvious party affiliation…I don’t think it’s a slam dunk, particularly in the Senate,” said Watson. “My understanding is that Trade Adjustment Assistance is something Senate Democrats will insist on. House Democrats support TAA. House Republicans oppose it. I’m not sure if its inclusion will help or hurt passage. TAA may be more upsetting for Republicans than valued by Democrats. At this point in time, it seems difficult to push an entitlement program.” The Finance Committee intends to hold a hearing on the legislation on Jan. 16, a spokesman said.

The looming inclusion of other pieces of legislation in what is poised to become a much larger bill in the end makes gauging congressional support difficult, said Miller. “The thing is this is only the start. Keep in mind this is only [the] TPA portion,” said Miller. “It’s a long way from an omnibus trade bill. There will be a complicated legislative dance to include other programs, like TAA, Customs Reauthorization, and GSP, which are at various states of legislative development.” But Miller said the TPA legislation is a strong, thoroughly considered bill that makes particular inroads into addressing emerging trade issues, a view shared by some industry officials. The bill "devotes welcome attention to new ‘21st-Century’ trade issues, including impediments to cross-border data flows, forced localization of facilities, and related barriers to U.S. goods and services exports,” said Computer and Communications Industry Association President Ed Black in a statement (here). “It is also noteworthy that the bill acknowledges that intellectual property provisions must be crafted to facilitate legitimate digital trade.”

Despite concerns the bill will not garner support from Democrats, some in the House Democratic caucus expressed openness to considering the bill. “We are pleased to hear that several key improvements the New Democrats have advocated -- such as increased Congressional consultation and the inclusion of provisions from the May 10, 2007 agreement that brought labor and environmental standards into trade agreements with the same dispute settlement and remedies as commercial chapters, appear to have been included in TPA,” said the New Democrat Coalition, a House group led by Ron Kind, D-Wis., in a statement (here). “We also will work to ensure that during consideration of this bill we maintain TPA’s requirement that trade agreements have strong labor and environmental standards.” Kind is a co-chairman of the Friends of TPP caucus. Some industry analysts floated Kind’s name as a co-sponsor for the legislation over recent days, but no House or Senate leadership officially solicited his sponsorship, according to a Kind spokesman.-- Brian Dabbs