Taiwan Trade Bill Heads to President's Desk
A bill that says the Taiwan trade initiative can't take effect until the administration submits an economic analysis of its effects and answers questions from Congress on implementation has passed both chambers of Congress. The bill also says the next deal between Taiwan and the U.S. must gain congressional approval.
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Congress says it wants negotiations to continue, and says the next round should be "high-standard, enforceable and meaningful to both the United States and Taiwan."
The U.S. and Taiwan reached an early harvest in trade facilitation and customs administration, good regulatory practices, domestic service regulations, anticorruption and small and medium-sized enterprises, and the agreement was signed June 1. Entry into force, however, follows written notification by Taiwan and the U.S. that "internal procedures" are completed (see 2305190074).
Under the previous trade promotion authority law, the administration had the authority to eliminate duties on goods with tariffs up to 5% and cut other tariffs in half without coming to Congress for a vote. That's how it concluded the Japan mini-deal in 2019 (see 1910070074 and 1909260014).
The Biden administration has continued that practice, arguing that deals like the one with Taiwan and the in-progress Indo-Pacific Economic Framework don't require a vote in Congress, because they do not lower tariffs.
This bill shows Congress strongly disagrees. The administration has not issued a veto threat, as it generally does if the president intends to veto, but the White House did not respond to a question about whether the president will sign the bill.
House Ways and Means Committee ranking member Richard Neal, D-Mass., issued a statement after the Senate approved the bill the evening of July 18. “Congress -- and the Ways and Means Committee in particular -- has exclusive constitutional authority to regulate trade, and with the 'United States-Taiwan Initiative on 21st-Century Trade,' we are not only reasserting that authority but also underscoring our commitment to democracy around the world. With the incredible pressure facing Taiwan from its authoritarian neighbor, it was critical that the Senate quickly pass this vital legislation, and now, I look forward to President Biden signing it into law.”
The Senate Finance Committee chairman and ranking member hailed its passage in the Senate through unanimous consent. “Deepening our ties with Taiwan and its vibrant democracy is important for strengthening our long-term partnership,” Sen. Mike Crapo, R-Idaho, said. “This legislation sends a strong message on Congress’s willingness to build a stronger trade partnership with Taiwan and clearly reasserts Congress’s constitutional authority over trade agreements.”
Ways and Means Chairman Rep. Jason Smith, R-Mo., issued a statement after the Senate vote: “The Constitution gives Congress authority over trade, because we are the branch closest to the people. With today’s vote in the Senate following a strong show of bipartisan support in the House, Congress has sent a clear message to President Biden that we are serious about safeguarding our Constitutional trade authority and upholding our duty to protect the workers, farmers, families, and small businesses who are impacted most by our trade policies."
This bill text also specifies that any future Taiwan agreement wouldn't allow critical minerals processed in Taiwan to qualify as critical minerals that come from a free trade partner under the Inflation Reduction Act consumer electric vehicle tax credits.