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U.S. Trade: The Great Congressional Conspiracy

It’s hard to argue with numbers.

The American people just don’t like the 113th Congress–the numbers tell us that.

What else do the numbers say?

Since the current administration started in 2008, we are now in our third Congress (each session lasts two years). There are only a few critical months remaining for the 113th Congress, which include fifty working days until the August recess (before the elections in November).

*the 111th Congress passed 385 bills

*the 112th Congress passed 284 bills

*the 113th Congress passed eighty-six bills to date, and NONE have to do with TRADE!

If you add up the results of the combined three Congressional sessions, they have passed 755 bills in five years. Clearly, that number is below the 908 bills from the Congress of 1948, when former President Harry Truman officially labeled them as a “do nothing Congress” (for their work during a TWO year period).

Can the 113th catch up? Not likely.

However, passing new bills is only one aspect of what Congress is supposed to be doing.

In fact, House Speaker John Boehner thinks they should be judged on repealing bills, instead of creating new ones.

Maybe he is right, or maybe he is reading from a playbook with the intent to abrogate America’s trade agenda. Could that be true? Could there be a Congressional conspiracy against trade?

One could formulate a whole host of theories. Perhaps the Republicans (who are pro-trade) are trying to hang up the Democrats (who are not entirely pro-trade) so that, as the economy falters, the Republicans can blame the Democrats. That theory would at least make some sense, but why would any reasonable legislative body do such a stupid thing?

Congress continues to fall asleep, while our national economy is sinking. With the average real GDP growth rate for the last sixty-six years at 3.23%, it’s interesting to watch what happens, as Congress continues to deny us the right to openly trade.

The years are going up and the percent of growth keeps dropping.

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It’s hard to argue with numbers. The facts show that Congress is preventing trade growth, and the numbers show us that economic advancement is in decline.

In 2010, real GDP growth rate was 2.77%.

In 2011, real GDP growth rate was 2.01%.

In 2012, real GDP growth rate was 1.95%.

In 2013, real GDP is still being calculated.

For those who make their living from trade, Congress is an unreliable partner. There’s no consistency to anything they do of late, especially when theyfail to renew existing trade legislation. As an example, below are five important bills that have expired, or are about to expire:

TPA — Trade Promotion Authority expired in 2007 — failure to renew means that the White House can’t “fast track” legislation like the Trans-Pacific Partnership.

MTB — Miscellaneous Tariff Bill – expired at the end of 2012 and has probably cost upwards of $600 million a year. MTB makes an allowance for raw materials (used in American Manufacturing) to arrive in the U.S. duty free — raw material that is typically not available in the U.S.

GSP — Generalized System of Preferences — failed to renew in July of 2013 — meaning that U.S. manufacturers who constructed their business model to acquire raw material or component parts from least developed countries are paying duties since August of 2013, estimated at the rate of $2 million a day. At the same time, less developed countries (LDC’s) are losing critical business that provides relief from poverty.

TPL — Tariff Preference Levels — for Nicaragua — are scheduled to expire this year, and those who have invested heavily down there are about to get toasted. A guaranteed TPL level permits a manufacturer to assort U.S. fabric with a limited amount of foreign fabric, to create a more viable mix. Anyone in business knows this is a good idea, yet this could easily go away, creating hardship for Nicaragua and for the U.S. investors who placed business there.

AGOA — African Growth and Opportunity Act – is set to expire in 2015. People have worked long and hard to develop Africa, and a failure to renew will just put the cork back in the bottle.

Clearly, for any of these bills to work, there has to be some mutual trust. Unfortunately trust in trade legislation is out the window. It seems that our government wants bills to expire, and doesn’t want to issue new ones.

You can make up a number, but you can’t deny what that number means.

Eight percent of the American public believes that Congress is doing a good job. That means that 92 percent of Americans are thinking something else.

We send them to Washington to work for us, the people, but what are they doing down there?

Nero fiddled, while Rome burned to the ground. Congress is starting to make Nero look good.

It’s all about the numbers.

As spring training for baseball season is finishing up, one thinks of famous quotes from all-star Yogi Berra: “You have to give 100 percent in the first half of the game. If that isn’t enough, In the second half, you have to give what is left.”

Of the eighty-six bills that the 113th Congress did pass, I would draw your attention to the importance of legislation HR 1071. That bill specified the size of the precious-metal blanks that will be used in the production of The National Baseball Hall of Fame commemorative coins.

Well, that’s America for you: we can pass a bill about commemorative baseball coins, but we actually let the GSP legislation expire. An estimated two million dollars of raw material cost down the drain every day for productive business enterprise, and yet baseball fans still get their coins. What on earth is Congress thinking?

It’s all about the numbers.

rickRick Helfenbein is President of TellaS Ltd (Luen Thai USA) and Chairman of the American Apparel and Footwear Association. He is a strong advocate of a robust US Trade Agenda and often lectures on the subject of supply chain and international trade at prestigious universities around the country. He participates annually in the Consortium for Operational Excellence in Retailing at Harvard University and the Wharton School of Business.