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Trade Promotion Authority Bill Introduced in House and Senate

Friday, January 10, 2014
Sandler, Travis & Rosenberg Trade Report

Legislation to renew trade promotion authority, which many observers consider a crucial step toward implementing anticipated free trade agreements with Europe and nearly a dozen partners in the Asia-Pacific region as well as a pact to liberalize trade in services, was introduced Jan. 9 in the House and Senate. “This is an important bill to watch,” said Nicole Bivens Collinson, president of trade negotiations and legislative affairs for Sandler, Travis & Rosenberg. “Not only is it a key indicator of whether the U.S. is likely to move ahead on the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, but it could also serve as a vehicle to move other trade legislation like a renewal of the Generalized System of Preferences, a miscellaneous trade bill or an extension of the one-for-one apparel matching program in Nicaragua that promotes the use of U.S. yarns and fabrics.”

A joint press release states that the Bipartisan Congressional Trade Priorities Act of 2014 “establishes 21st century congressional negotiating objectives and rules for the administration to follow when engaged in trade talks, including strict requirements for congressional consultations and access to information.” When these rules are followed, legislation to implement negotiated trade agreements would receive expedited consideration by lawmakers and would not be subject to amendment. TPA would be authorized for four years, with an option to renew for an additional three years.

The legislation was announced by Senate Finance Committee Chairman Max Baucus, D-Mont., and Ranking Member Orrin Hatch, R-Utah, along with House Ways and Means Committee Chairman Dave Camp, R-Mich. Press reports indicate that Senate Finance may hold a hearing on the bill during the week of Jan. 13 and could mark it up the following week, a timeframe that some say reflects Baucus’ anticipated confirmation as ambassador to China in the next few months. The timing for action in the House is less certain, possibly because the bill lacks the support of Ways and Means Ranking Member Sander Levin, D-Mich., who is reportedly working on his own TPA bill to strengthen provisions on labor, transparency, congressional involvement, currency manipulation and other issues. However, members of the New Democrat Coalition said they are “encouraged by the introduction of a bipartisan, bicameral bill” and “look forward to working with our colleagues in considering this bill.”

According to a fact sheet, highlights of the new legislation are as follows.

- includes new negotiating objectives to (1) eliminate trade distortions and unfair competition from state-owned enterprises and ensure that they act based solely on commercial considerations, (2) address forced localization of facilities and related barriers to U.S. goods and services exports, and (3) direct that trade partners avoid manipulating exchange rates

- updates negotiating objectives to facilitate digital trade, including through protections for cross-border data flows, and to recognize the significance of the Internet in international commerce

- includes updated provisions to address cyber theft, protect trade secrets and facilitate legitimate digital trade

- encourages U.S. participation in global value chains and seeks to ensure that trade agreements reflect the increasingly interrelated and multi-sectoral nature of trade and investment activity

- contains new and updated provisions aimed at improved regulatory practices, regulatory coherence and compatibility, stronger transparency in regulations and standards-development processes, and ensuring that government regulatory reimbursement regimes are transparent, provide procedural fairness and are not discriminatory

- directs the president to secure strong dispute settlement mechanisms in U.S. trade agreements and preserves the ability of the U.S. to rigorously enforce its trade laws

- updates labor and environment provisions to reflect the United States’ most recent trade agreements, to require trading partners to adopt, maintain, and not waive or derogate from measures implementing internationally recognized core labor standards in a manner affecting trade and investment and multilateral environmental agreements to which the U.S. is a party, with the same dispute settlement and remedies as for other enforceable obligations

- strengthens congressional oversight by ensuring every member of Congress has access to negotiating texts; requiring the Office of the U.S. Trade Representative to meet and consult with any interested member of Congress at any time; expanding the scope of consultation requirements before, during and after negotiations; creating House and Senate advisory groups on negotiations to oversee trade talks; and allowing any member of Congress to be accredited to attend negotiating rounds

- requires transparency as well as processes for public participation and collaboration through written guidelines on public engagement and on information-sharing with advisory committees

- provides for tougher, enforceable rules against barriers to U.S. agriculture, including sanitary and phytosanitary restrictions and improper use of geographical indications

- affirms that trade agreements cannot change U.S. law without congressional action

- clarifies that trade agreement implementing bills include only such provisions as are strictly necessary or appropriate to implement those agreements

- ensures that TPA (including its oversight and consultation requirements) applies to ongoing negotiations and provides that TPA can be disallowed if an agreement makes inadequate progress in meeting objectives

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