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TPA, Trade Preferences, Customs Reauthorization Approved by Senate Committee

Friday, April 24, 2015
Sandler, Travis & Rosenberg Trade Report

Trade promotion authority legislation and a handful of other trade liberalization measures were approved by the Senate Finance Committee April 22, beginning what is expected to be a relatively speedy trip through the Senate. In addition to TPA, which is generally seen as a key part of securing new free trade agreements with a dozen Asia-Pacific countries and the 28-member European Union, Senate Finance gave bipartisan support to an expansion 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 customs reauthorization bill.

The House Ways and Means Committee was scheduled to meet April 23 to consider its own version of these measures. Both the House and Senate could vote on the bills within the next few weeks, though a conference on customs reauthorization legislation is generally expected to resolve a handful of key differences on trade enforcement.

A number of amendments to the trade bills were made by the committee, including the following.

GSP. Textile and leather travel goods could be designated as eligible for GSP benefits.

Nicole Bivens Collinson, president, international trade and government relations, for Sandler, Travis & Rosenberg, notes that the GSP bill’s retroactive benefits would only be applicable to goods and countries that are GSP-eligible as of the date this bill takes effect, thus excluding imports from Russia and Bangladesh.

Textiles, Apparel and Footwear. A new tariff classification would be created for recreational performance outerwear and import tariffs on water-resistant performance footwear would be lowered. However, an extension of the tariff preference level for textiles from Bahrain was not approved.

MTB. A provision to reform the miscellaneous trade bill process, which lowers import tariffs on manufacturing inputs and other goods, was added to the customs reauthorization bill.

Currency. Two amendments to the customs reauthorization bill to address currency manipulation by foreign countries were approved: one that would require the Commerce Department to consider whether to address currency manipulation through countervailing duties, and one toughening the measures the U.S. could take in response to a finding of currency manipulation in a semiannual Treasury Department report, including blocking the offending country from joining trade agreements with the U.S.

However, the committee rejected an attempt by Sens. Rob Portman, R-Ohio, and Debbie Stabenow, D-Mich., to strengthen the TPA bill’s negotiating objectives with respect to currency manipulation.

Forced/Child Labor. Sen. Sherrod Brown, D-Ohio, said the customs reauthorization bill was amended to eliminate an exemption in current law that allows the U.S. to import products made with forced or child labor if the U.S. does not produce a sufficient amount of those goods to meet domestic consumption levels.

Trade Enforcement. Sen. Maria Cantwell, D-Wash., said the committee approved an amendment that would use “existing revenue collected from enforcing antidumping and countervailing duty laws” to support a new trade enforcement trust fund that would provide resources to federal agencies responsible for the enforcement of free trade agreements.

Manufacturing. An amendment to the customs reauthorization bill adopted by the committee would establish a chief manufacturing negotiator within USTR.

TPA. Inside US Trade reports that the TPA bill was amended to prohibit TPA procedures for trade agreements with “any country that is classified in the most egregious category in a State Department report on human trafficking,” which currently include Malaysia, one of the countries negotiating the Trans-Pacific Partnership.

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