Trade Promotion Bill Advances

By Chris Clayton
DTN Ag Policy Editor
and
Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) -- The two congressional committees overseeing trade laws are quickly advancing bills this week that would give the White House authority to better negotiate major trade deals.

The Senate Finance Committee late Wednesday approved a series of trade bills, including one to grant President Barack Obama Trade Promotion Authority. The House Ways and Means Committee, after a hearing late Wednesday afternoon, is scheduled to take up the same bills early Thursday.

Trade Promotion Authority would give U.S. trade negotiators better control over final trade agreements because Congress would only vote those agreements yes or no, without trying to amend it. The TPA bill has roughly 150 specific guidelines from Congress directing the Obama administration on priorities for any major trade deal.

Agriculture is considered one of the biggest potential winners in a trade promotion bill that would ideally translate into lowering and ending import tariffs in some countries while also setting trade rules that would make it harder for countries to block U.S. agricultural products from entering their country.

The vote on the TPA bill was 20-6, Senate Finance Committee ranking member Ron Wyden, D-Ore., said in a news release. Six Democrats voted against the bill.

Sen. Chuck Grassley, R-Iowa, a member of the Senate Finance Committee, said Trade Promotion Authority would increase opportunities for U.S. products, including agriculture.

"Iowa farmers, manufacturers and services providers would like access to new markets," Grassley said. "In turn, highly populated countries that are becoming more prosperous would like access to Iowa products. They should have that access. Iowans benefit when their work product is exported worldwide. Trade supports good jobs with good pay."

Congress last passed Trade Promotion Authority in 2002 and allowed it to lapse in 2007. Meanwhile, the White House is close to finalizing the Trans-Pacific Partnership, an agreement with at least 11 other countries that would be the largest trade deal in U.S. history. An even larger trade deal with the European Union is also waiting in the wings.

At Wednesday's hearing in the House, Ways and Means Chairman Paul Ryan, R-Wisconsin, said TPA translated into both promoting American trade and restoring American leadership. He noted the Pacific trade deal affects 40% of global gross domestic product. TPA will send a signal to the world that the U.S. is serious about trade.

"The question on everybody's mind is can the United States close the deal. Can we drive a hard bargain?" Ryan said.

Lawmakers on both sides of the aisle and in both chambers of Congress have expressed concern about secrecy in the Pacific trade talks. Ryan noted the bill would require the full text of any trade agreement to be made public at least 60 days before the pact would go to Congress for an up or down vote. "TPA makes it very clear Congress has final say," Ryan said.

While TPA in the Senate Finance Committee garnered some Democratic support in Wednesday's vote, the president's own party appears far more skeptical of what will come out of any final trade deal. That was evident in the Ways and Means hearing as the committee's ranking member, Sander Levin of Michigan, criticized the Pacific trade deal and fast-track authority.

"This Trade Promotion Authority bill does nothing to get us there," Levin said.

Democrats, in particular, criticized the lack of real enforcement mechanisms to deal with currency manipulation, which they claim caused Americans to lose jobs to Japan in the 1990s and over the past decade to China. The TPA bill is soft on those enforcement provisions.

Levin announced plans to offer an alternative trade promotion bill at the mark up.

U.S. Treasury Secretary Jack Lew said at the hearing that the U.S. "is working tirelessly" to address currency manipulation concerns but the Obama administration did not want to see the issue raised in the TPA bill.

Agriculture Secretary Tom Vilsack also said at the hearing that TPA would help finalize agreements that would reduce exorbitant tariffs on U.S. agricultural products overseas.

"We are convinced this is a multi-billion dollar opportunity to expand access and market opportunities for our producers," Vilsack said.

Ryan noted that leveling the playing field for agricultural products was a key area with respect to the Pacific trade talks and the guidelines in TPA.

"We don't have anything close to reciprocal treatment with our trading partners," Ryan said.

Vilsack added, "The reality is a lot of the commodities we raise in this country are absolutely depending on exports."

Some major trading partners such as Japan and Canada continue to wait until Congress passes Trade Promotion Authority before offering their best deal for the Pacific talks. That heightens the expectations surrounding the visit next week of Japanese Prime Minister Shinzo Abe for a meeting with President Obama. Wednesday's Ways and Means hearing was filled with Japanese media who are also reporting aggressively on the specifics of the TPA language and possible provisions that would affect Japan.

Chris Clayton can be reached at Chris.Clayton@dtn.com.

Follow him on Twitter @ChrisClaytonDTN.

(CZ)

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