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Legislative Update: Trade Preferences Expiring, TPA on Back Burner

Wednesday, July 31, 2013
Sandler, Travis & Rosenberg Trade Report

Congress is not expected to act on any trade-related legislation before its annual summer recess begins at the end of this week. As a result, two trade preference programs will likely expire and issues such as trade promotion authority, customs reauthorization and export promotion will have to wait until lawmakers return in September.

Trade Preferences. The Generalized System of Preferences is scheduled to lapse again on July 31. Legislation to extend GSP through September 2015 has been introduced in both the House (H.R. 2709) and Senate (S. 1331), but prospects for its passage before the program expires appear increasingly dim. Business groups have warned that the loss of duty breaks on thousands of imported inputs under GSP will cost domestic manufacturers about $2 million a day. Some observers think that if the program expires it will be reauthorized before the end of the year, though whether with retroactive effect (thus allowing refunds of duties paid on GSP-eligible goods beginning Aug. 1) is still unclear.

The Andean Trade Preference Act, meanwhile, appears to have reached the end of its lifespan more than 20 years after it was created to provide an alternative to drug production in Bolivia, Colombia, Ecuador and Peru. Ecuador is the last remaining beneficiary, but there are concerns that it has violated the ATPA’s eligibility requirements and the current government recently renounced the program. According to a Reuters article, congressional staff say lawmakers “have no plans” to pass a renewal. Imports from Ecuador will, however, remain eligible for duty preferences under GSP.

Trade Promotion Authority. Although new U.S. Trade Representative Mike Froman told the Senate Finance Committee more than a month ago that President Obama is asking Congress to renew TPA “as soon as possible,” there appears to have been little follow-up from the White House and as a result efforts to develop and introduce a TPA bill have slowed. TPA (also known as fast track) allows the president to submit trade agreements to Congress for a straight up-or-down vote, and supporters says a renewal of this authority will be needed to implement the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership agreements currently under negotiation.

Export Promotion. The House Foreign Affairs Committee approved July 24 legislation (H.R. 1409) that aims to improve the promotion of exports of U.S. goods and services. Under this bill the Trade Promotion Coordinating Committee would be required to, among other things, coordinate export promotion activities across the federal government, clearly outline the role of each agency in each part of the export process, and provide on the Internet a detailed listing of current and future federal and state-led trade missions, trade fairs and related activities. The State Department would have to direct ambassadors to develop country-by-country commercial diplomacy plans aimed at increasing U.S. exports and assess the effectiveness of U.S. embassies in carrying out commercial diplomacy and helping U.S. exporters.

Other. Following is a list of additional trade-related legislation that has been introduced recently. The texts of these bills are or will shortly be available on the Library of Congress Web site.

H.R. 2664 – to create the America Star Program, a voluntary, standardized labeling program that would indicate to consumers the extent to which products are U.S.-made (introduced July 17 by Rep. Carney and referred to the House Committee on Energy and Commerce)

H.R. 2740 – to provide for the identification of corporate tax haven countries and increased penalties for tax evasion practices in haven countries that ship U.S. jobs overseas (introduced July 18 by Rep. McNerney and referred to the House committees on Ways and Means and Oversight and Government Reform)

H.R. 2771 – to repeal the requirements under the Natural Gas Act for obtaining authorization for the exportation or importation of natural gas (introduced July 22 by Rep. Poe and referred to the House committees on Energy and Commerce and Foreign Affairs)

H.R. 2791 – to prohibit U.S. exports of certain electronic waste to countries that are not members of the European Union or the Organization for Economic Cooperation and Development and to assess the recycling and recovery of rare earth metals from electronics (introduced July 23 by Rep. Gene Green and referred to the House committees on Energy and Commerce and Science, Space and Technology)

S. 1357 – to extend the trade adjustment assistance program (introduced July 24 by Sen. Baucus and referred to the Senate Committee on Finance)

H.R. 2806 – to provide that importation of certain containers containing de minimis residual matter shall be excepted from the customs laws of the United States (introduced July 24 by Rep. Marchant and referred to the House Committee on Ways and Means)

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