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Legislative Update: TPA, Trade Preferences, Export Promotion

Monday, July 01, 2013
Sandler, Travis & Rosenberg Trade Report

Efforts to advance the trade agenda in Congress continue to move in fits and starts, with little apparent progress on major items in the last few weeks. A renewal of trade promotion authority to expedite a raft of new and ongoing trade negotiations is still somewhere on the horizon, as is a wide-ranging customs reauthorization bill. Looming closer is the expiration of two trade preference programs at the end of July, which could increase costs for U.S. manufacturers and consumers.

Trade Promotion Authority. The last congressional grant of TPA (also known as fast track), which allows the president to submit trade agreements to Congress for a straight up-or-down vote, expired in 2007. However, with several multilateral negotiations underway or set to begin in the near future, the White House, Congress and the trade community are preparing to advance TPA legislation this year.

At his confirmation hearing before the Senate Finance Committee, U.S. Trade Representative Mike Froman said President Obama is asking that TPA be renewed “as soon as possible.” Committee leaders appeared to take that statement as a formal request, but no TPA bill has yet been introduced. In the House, Republican leaders on trade issues also support a TPA renewal but according to an Inside US Trade article there is growing opposition among Democrats concerned about delegating to the president the constitutional authority of Congress to regulate foreign trade.

Trade Preferences. The Generalized System of Preferences and the Andean Trade Preferences Act are due to expire July 31. Business groups are actively pressing lawmakers to not let GSP expire because the resulting loss of duty breaks on imported inputs would be costly for domestic manufacturers, but there appears to have been little legislative action toward this objective so far. On the other hand, it is seen as increasingly likely that Congress will let the ATPA lapse due to concerns that Ecuador, the only remaining beneficiary, has violated the program’s eligibility requirements. Ecuadorian officials said this week that they are unilaterally giving up ATPA preferences to eliminate leverage some U.S. officials were looking to exercise in a diplomatic dispute.

DHS Funding. The House of Representatives approved June 6 a fiscal year 2014 appropriations bill for the Department of Homeland Security (H.R. 2217) that would cut U.S. Customs and Border Protection’s overall budget by nearly $10 million but would provide $105 million to phase in 1,600 new CBP officers, $132.9 million for the Automated Targeting System (a $19 million increase from the previous year targeted specifically at ATS enhancements), $42 million for the Customs-Trade Partnership Against Terrorism (including $2 million to “mitigate reductions to the C-TPAT program, to bolster international cargo security partnerships and to facilitate trade”), $13 million to “re-baseline” the Container Security Initiative, $140.8 million for the Automated Commercial Environment and International Trade Data System, and $4.75 million to continue textile transshipment enforcement.

The bill also directs DHS to submit by Jan. 1, 2014, an alternative strategy for the screening of all inbound cargo containers; requests a report from CBP by Feb. 1, 2014, on the extent and frequency of customs fraud, including the circumvention of duties and misclassification of imported goods from China; directs CBP to ensure that textile transshipment seizures, detentions and special operations are maintained at least at the level of prior years; and limits the expenditure of funds for preclearance operations in new locations until specific requirements are met.

With respect to U.S. Immigration and Customs Enforcement, the bill would provide $5.34 billion in funding, down $44.5 million from FY 2013. ICE is also directed to report on the number of agents dedicated to commercial fraud and intellectual property rights investigations and the number of investigations that result in charges and to maintain its textile transshipment enforcement activities at least at the level of prior years.

Export Promotion. The House Foreign Affairs Subcommittee on Trade approved June 26 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. Similar legislation was introduced in the Senate on June 18.

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. 2263/S. 1102 – to abolish the Export-Import Bank of the United States

H.R. 2281/S. 1111 – to combat cyber espionage of intellectual property of U.S. persons

S. 1114 – to provide for the identification of misaligned currency and require action to correct the misalignment (introduced June 7 by Sen. Brown, referred to the Senate Committee on Banking, Housing and Urban Affairs)

S. 1124 – to establish requirements with respect to bisphenol A (introduced June 10 by Sen. Feinstein, referred to the Senate Committee on Health, Education, Labor and Pensions)

S. 1136 – to authorize the extension of preferential tariff treatment for certain textile goods imported from Nicaragua (introduced June 11 by Sen. Feinstein, referred to the Senate Committee on Finance)

H.R. 2380 – to amend the Agricultural Trade Act of 1978 to repeal the market access program (introduced June 14 by Rep. Chabot, referred to the House Committee on Agriculture)

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