TPA scrutinized on Capitol Hill

Senate Finance Committee holds hearing to discuss role of Trade Promotion Authority in today's trading environment.

The Senate Finance Committee held a hearing Thursday featuring business interests to debate the role of Trade Negotiating Authority in today's trade environment.

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

Republican members criticized publicly that the witness list did not include U.S. Trade Representative Michael Froman who apparently turned down an invitation to testify.

Baucus stated some have argued TPA isn't needed and it isn't the right time. "I believe we have an obligation – not just an opportunity, but an obligation – to show the United States leads on global trade," he stated. "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.) said that while TPA has not been in effect, 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 rather market share and being able to compete in that market with other countries that have already established themselves because of previous bilateral agreements.  

In response to questioning, witness David Cote, chairman and chief executive officer of Honeywell International and on behalf of the Business Roundtable and Trade Benefits America coalition, explained 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 GDP, and the fact 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 responded.  

Jim Allen, president of the New York Apple Assn testified that, "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 United States 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 in trade around the world.

Many members of the Senate committee spoke of the need to expand trade, but also recognized the significant challenges ahead in finding Congressional approval for the deal. "Trade bills are always tough, but we work together to get them done," Baucus said in his opening statement. "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 the need for TPA more than it has already. Similar to agreements that were agreed upon in 2011 and the Russia Permanent Normal Trade Relations (PNTR) status, the White House helped advance and move those agreements to passage.

As expected, many Democrats have already voiced concerns with TPA.

On the House side, Camp did not introduce the bill with his Democrat counterpart on the House Ways and Means Committee. House Speaker John Boehner (R., Ohio) has said he will not move forward a bill unless it is bipartisan.

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