Congress Closer to Trade Bill

OMAHA (DTN) -- Leaders on the Senate Finance Committee introduced a bill Thursday to give the Obama administration Trade Promotion Authority that would ideally close a deal on a 12-country Pacific trade agreement.

Committee Chairman Orrin Hatch, R-Utah, introduced the bill with committee ranking member Ron Wyden, D-Oregon, and House Ways and Means Chairman Paul Ryan, R-Wis.

The Obama administration had Treasury Secretary Jacob Lew, Ag Secretary Tom Vilsack and U.S. Trade Ambassador Michael Froman testify at a Senate Finance Committee hearing earlier in the morning on TPA. The White House considers Trade Promotion Authority essential to finalizing the Trans Pacific Partnership as well as advancing talks for a possible trade deal with the European Union. Depending on the boost in market access, agricultural products would be considered major winners in such trade deals, particularly to sell more food and feedstuffs to the growing middle class in Asia.

Trade reflects perhaps the one major policy area in which the Obama administration and congressional Republicans are in agreement in opposition to some Democrats.

"This may be the only issue where the new Congress and the administration can reach an agreement for the benefit, yes for the middle class, but for everybody with regards to income," said Sen. Pat Roberts, a Republican from Kansas who chairs the Senate Agriculture Committee.

The Trade Promotion Authority bill, called the "Bipartisan Congressional Trade Priorities and Accountability Act," contains 113 pages and more than 150 provisions to explain negotiating objectives Congress expects to achieve in any major trade deal. That bill, though, has yet to be made public or see a final agreement between Hatch and his committee ranking member, Sen. Ron Wyden, D-Oregon.

Froman said in his testimony the U.S. has added 900,000 manufacturing jobs in the last five years, but the country remains hindered by tariffs in other countries. At the same time, China continues to negotiate on a separate trade deal that would lower trade barriers for its products.

"The importance of trade to America's economic well-being has never been clearer," Froman said. He added shortly after, "We cannot change the status quo by sitting on the sidelines."

U.S. agricultural trade value over the last six years has been the highest in history, Agriculture Secretary Vilsack noted. Ag exports reached $153.5 billion in fiscal-year 2014, a record. Still, the secretary noted high tariffs and other barriers remain. Moreover, Vilsack said agricultural ministers and trade negotiators from other countries in the Trans Pacific Partnership talks are holding back on their best trade offers until Congress acts.

"They are not interested in putting their final or best offer on the table until they are assured that whatever trade agreement that comes from the negotiations is ultimately provided an up-or-down vote and not subject to modifications or amendments," Vilsack said.

Responding to questions from Hatch, Vilsack said TPA gives Congress the ability to set boundaries and a framework for trade deals while still voting on final approval for any agreement.

Wyden said he was looking forward to more extensive talks over the next week to reach a deal on TPA, which is also often called fast-track authority. However, Wyden noted he's heard repeatedly from opponents of new trade agreements at recent town-hall meetings. Critics don't trust the process going on right now, particularly because details of the Pacific trade talks remain secret.

"If you believe in trade and want more of it, the last thing you need is all of this secrecy and skepticism about what it is all about," Wyden said.

Still, Wyden said he differed with opponents of new trade deals who do not believe average Americans benefit from big trade agreements. Wyden noted the tariffs some industries face for particular products. "Triple-digit tariffs on American agriculture," in some countries, Wyden said. "I think Japan has an all-in tariff of 40% on American agriculture," Wyden said.

Vilsack said if the Pacific trade deal is reached and completed, that U.S. poultry producers would no longer see a 240% tariff in Japan. Moreover, specific rules would prevent countries from arbitrarily slapping on non-tariff restrictions -- commonly called in trade parlance "sanitary and phytosanitary" measures.

One country so far not revealing its best offer in TPP is Canada. Sen. Tom Carper, a Democrat from Delaware, asked Froman if the Trans Pacific Partnership would allow for resetting the North American Free Trade Agreement (NAFTA). Carper noted NAFTA effectively excluded Canada from buying U.S. poultry products and Carper comes from the Delmarva Peninsula, which is a dominant poultry region.

"We are encouraging our Canadian partners to come to the table on this issue. We have not yet seen the kind of engagement on agricultural market access from them that we would like to see," Froman said.

All TPP countries are expected to achieve "a certain level of market access" for products "and we hope Canada will be able to achieve that," Froman said.

Froman also assured Iowa Sen. Charles Grassley, a Republican who chairs the Judiciary Committee, the Pacific trade deal does not have any provisions or carve outs that would increase immigration. Grassley had said earlier in the week that immigration provisions could be the one area that would cause him to oppose TPA.

Thursday's hearing, though, also highlighted disagreement among Democrats over TPA and the committee process. Sen. Charles Schumer of New York, who is considered a favorite to replace Sen. Harry Reid as minority leader, railed on the fact the hearings were being held on a bill that had not been unveiled. Schumer and others said they want new hearings after the bill is released rather than going straight to a markup and committee vote next week.

A full copy of the TPA bill can be viewed at http://www.finance.senate.gov/…

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

Follow him on Twitter @ChrisClaytonDTN

(AG/CZ)

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