America Competes Act Passes, Now Effort to Compromise With Senate Begins
The House passed its China package, the America Competes Act, on a nearly party-line vote, with one Democrat dissenting and one Republican voting for it. The America Competes Act and the Senate's U.S. Innovation and Competition Act both propose subsidizing American semiconductor manufacturing and both propose investing in science research to better counter China's play for technological dominance, but the House version spends far more money and includes some priorities that the Senate did not, such as $2 billion annually for climate change foreign assistance and a generous reauthorization of Trade Adjustment Assistance. The vote was 221-210.
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The two versions will need to be reconciled through negotiations between the House and Senate, Commerce Secretary Gina Raimondo, whose department would be responsible for disbursing billions under either version, said in a phone call with reporters, “I'm urging Congress in the strongest possible terms to move quickly, immediately, now to start negotiations and work out the differences between the House and Senate bills, focus on areas of common agreement, find the landing zone, start negotiating and move as swiftly as possible to get a final version of the bill to President Biden’s desk for his signature.” She later added, "There is no reason that they should drag on for months."
Sen. Todd Young, the Indiana Republican who is likely to be one of the negotiators, has estimated that a compromise could be reached by Memorial Day.
Raimondo said, “I think it's fair to say that the trade title portions of both of these bills is the most contentious, is the area where there's the least bipartisan agreement. And while trade is, of course, an incredibly important part of our competition strategy, we have to find common ground, however limited that might be, and not let those controversial pieces of the trade title bog down this whole negotiation.”
President Joe Biden said he was pleased the House passed the bill Feb. 4, and said, "I look forward to the House and Senate quickly coming together to find a path forward and putting a bill on my desk as soon as possible for my signature."
House Ways and Means Committee Chairman Richard Neal, D-Mass., said, "This package contains critical trade provisions authored by the Ways and Means Committee, including the long-overdue reauthorization and modernization of Trade Adjustment Assistance programs. I look forward to advocating for that policy and our other priorities -- several of which are bipartisan -- when we conference with the Senate.”
Young, who was one of the original authors of a bill that is the heart of USICA, said that he is disappointed that the House did not move its bill through committees in a way that could draw bipartisan support. “As we head to a conference process, my hope is that the final legislation will reflect the Senate bill and give House Republicans a much better option to support," he said.
Rep. Stephanie Murphy, D-Fla., was the sole Democrat to vote no, and she said her no vote was because of the trade portion of the bill. Murphy, who is retiring, is a pro-trade voice on Ways and Means. She said she hopes the trade language "will be substantially improved when the House and Senate reconcile their bills, so that I can vote for a bipartisan bill that strengthens America’s economy and enables us to successfully compete globally.”
The Competes Act includes many proposals that affect trade -- the renewal of the Generalized System of Preferences benefits program and Miscellaneous Tariff Bill; excluding China from de minimis entries; the Inform Consumers Act and Shop Safe Act, both of which require online platforms to do more to stop sales of counterfeit goods; sweeping changes to antidumping and countervailing duty laws and enforcement of circumvention of those duties; and the Ocean Shipping Reform Act, which tackles some complaints exporters have had with carriers during the supply chain crunch of the last year.
The Senate bill has a different version of GSP and MTB, does not tackle antidumping and countervailing duties or de minimis, and doesn't include the e-commerce language or the shipping sections. It does direct the Office of the U.S. Trade Representative to restore lapsed Section 301 exclusions and to reopen an application process for exclusions, though it gives the agency wiggle-room to say no if officials deem that more exclusions would undermine the administration's leverage with China.