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Trade Legislation to be Marked Up in Committee This Week

Tuesday, April 21, 2015
Sandler, Travis & Rosenberg Trade Report

Just days after its long-awaited introduction in the House and Senate, legislation to advance a host of trade liberalization initiatives will move forward this week with hearings and markups in both chambers. The Senate Finance Committee will meet April 21 to further discuss the trade promotion authority bill as well as renewal of the Trade Adjustment Assistance program; reauthorization of the Generalized System of Preferences, the African Growth and Opportunity Act, and trade preferences for Haiti; and a trade facilitation and enforcement measure. A committee markup of those bills is expected the following day. The House Ways and Means Committee will likely follow suit with a hearing April 22 and markup on April 23.

Additional highlights of the measures under consideration include the following. Details on the trade facilitation and enforcement provisions will be provided in a later issue.

Trade Promotion Authority

- Principal trade negotiating objectives would relate to trade in goods, trade in services, trade in agriculture, foreign investment, intellectual property, digital trade in goods and services and cross-border data flows, regulatory practices, state-owned and state-controlled enterprises, localization barriers to trade, labor and the environment, currency, World Trade Organization and multilateral trade agreements, trade institution transparency, anti-corruption, dispute settlement and enforcement, trade remedy laws, border taxes and textile negotiations.

- TPA would apply to trade agreements submitted to Congress by July 1, 2018, or, if TPA is extended, by July 1, 2021.

- TPA would not apply to an agreement that reduces any rate of duty that is more than five percent at the date of enactment by more than 50 percent, reduces the rate of duty on import-sensitive agricultural products to a rate of duty below that applicable under the Uruguay Round Agreements or a successor agreement, or increases any rate of duty above the rate that applied at the date of enactment.

- The Office of the U.S. Trade Representative would have to develop written guidelines on enhanced coordination with Congress and public access to information regarding trade negotiations. A new chief transparency officer at USTR would be responsible for consulting with Congress on transparency policy, coordinating transparency in trade negotiations, engaging and assisting the public, and advising USTR on transparency policy.

- Consultation and reporting requirements for negotiations that concern agriculture, import-sensitive products, fish or shellfish trade, and textiles and apparel would be established.

AGOA

- AGOA and the special rule of origin on third-country fabric would be extended from Sept. 30, 2015, to Sept. 30, 2025.

- The accumulation of the direct costs of processing operations performed in one or more beneficiary sub-Saharan African countries or former beneficiary SSA countries would be allowed in achieving the required minimum 35 percent local value content.

- The president would be authorized to conduct out-of-cycle reviews of any beneficiary country to determine whether it is making continual progress in meeting the eligibility criteria, and the bill would urge the president to launch such a review of South Africa (and other countries if appropriate) within 30 days of enactment.

- The president would be required to report to Congress every five years on each beneficiary country’s progress toward becoming a trade agreement partner and establishing a plan for negotiating and concluding such agreements.

GSP

- GSP would be extended through Dec. 31, 2017, and benefits would be retroactively applied to otherwise eligible articles imported on or after July 31, 2013.

- The president would be authorized to designate certain cotton articles as GSP-eligible for least-developed beneficiary developing countries.

- The president would be given additional time to conduct annual reviews with regard to products subject to a competitive need limitation.

Haiti

- Benefits under the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, the HOPE II Act of 2008 and the Haiti Economic Lift Program Act of 2010 would be extended through Sept. 30, 2025.

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