TPA scrutinized on Capitol Hill

TPA scrutinized on Capitol Hill

Senate Finance Committee holds hearing to discuss role of trade promotion authority in today's trading environment.

EVERY president since Franklin D. Roosevelt has sought trade promotion authority (TPA) from Congress, and after seven years without it, Congress is again trying to make its case for the tool that many see as the way to help the U.S. level the trade playing field as well as help negotiators pull key deals across the finish line.

Earlier in January, Senate Finance Committee chairman Max Baucus (D., Mont.) and ranking member Orrin Hatch (R., Utah), along with House Ways & Means Committee chairman Dave Camp (R., Mich.), introduced legislation that would establish strong rules for trade negotiations and congressional approval of trade pacts.

The Senate Finance Committee held a hearing Jan. 16 featuring business interests to debate the role of TPA in trade today. Republican members publicly criticized that the witness list did not include U.S. Trade Representative Michael Froman, who apparently turned down an invitation to testify.

Baucus said some have argued that TPA isn't needed and that it isn't the right time.

"I believe we have an obligation — not just an opportunity, but an obligation — to show that the United States leads on global trade," Baucus said. "For a trade negotiation to work, countries need to know that our negotiators are good for their word. So, we need TPA, and we need a TPA that empowers Congress to play a larger role in negotiations from the beginning."

Sen. Maria Cantwell (D., Wash.) noted that while TPA has lapsed, 83 bilateral agreements have gone into effect around the world. She explained that the issue isn't just about gaining access to a market but to market share and being able to compete in that market with other countries that have already established themselves through previous bilateral agreements.

In response to questioning, witness David Cote, chairman and chief executive officer of Honeywell International, testifying on behalf of the Business Roundtable & Trade Benefits America coalition, explained that there isn't enough recognition about how much the economic world has changed in the last 20 years and also how much it will change in the next 20 years.

"That shift where developing countries are going to become half of the world (gross domestic product) and the fact that other countries are creating agreements, this is our best opportunity to start to influence how those economies develop. It would be a shame if we miss that opportunity. It's a huge trend we need to be addressing as part of our global competitiveness," Cote said.

Jim Allen, president of the New York Apple Assn., testified, "U.S. farm groups support renewing TPA because they know that without the ability to negotiate and ratify trade agreements, they will not be able to eliminate foreign barriers."

The U.S. is the world's leading exporter of agricultural products, reaching a value of $140 billion and providing nearly 1 million U.S. jobs, Allen added. He noted that unscientific sanitary and phytosanitary measures on pesticides and food additives act as barriers to trade around the world.

 

Challenges ahead

Many members of the Senate committee spoke of the need to expand trade but also recognized the significant challenges ahead in obtaining congressional approval for the deal.

"Trade bills are always tough, but we work together to get them done," Baucus said in his opening statements. "This committee has a history of rolling up our sleeves and working together to get a product that will pass the Senate and the Congress."

Many expressed the need for the White House to step up and push for TPA more than it has already — similar to how the White House helped advance and move to passage agreements in 2011 and Russia's permanent normal trade relations status.

As expected, many Democrats have already voiced concerns with TPA. In a Jan. 15 letter, Sens. Al Franken (D., Minn.), Jeff Merkley (D., Ore.), Tammy Baldwin (D., Wis.), Tom Harkin (D., Iowa), Elizabeth Warren (D., Mass.), Christopher Murphy (D., Conn.), Richard Blumenthal (D., Conn.), Carl Levin (D., Mich.), Bernard Sanders (D., Vt.), Edward Markey (D., Mass.), Sheldon Whitehouse (D., R.I.) and Jack Reed (D., R.I.) stated their opposition to TPA as "inadequate for addressing the complex trade agreements of the 21st century."

Also in opposition to TPA are 57 Tea Party-type liberty organizations and the Coalition for a Prosperous America, a nonprofit organization representing the interests of 2.7 million households through agricultural, manufacturing and labor members.

In the House, Speaker of the House John Boehner (R., Ohio) has said he will not move a bill forward unless it is bipartisan.

Volume:86 Issue:03

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