Congress has made little movement on trade of late, and the country’s Finance Committee is laden with issues to resolve — the focus of which has been Trade Promotion Authority (TPA).
At the American Apparel and Footwear Association’s (AAFA) Executive Summit last week, Senator Orrin Hatch (R-Utah) discussed what’s happening with the nation’s trade agenda, emphasizing a need to renew TPA — presently his top trade priority.
TPA, also called fast track, allows the president to present a trade agreement before Congress for a straight up or down vote without amendment, but without renewal, in-action agreements are stagnating.
“Put simply,” Hatch explained in his address, “Without TPA, our trading partners will not put their best offers on the table because they will have no guarantees that the agreement they sign will be the same one Congress considers.”
He added, “The Obama Administration is currently negotiating some of the most ambitious trade agreements in our nation’s history. The first is the Trans-Pacific Partnership, or TPP, an Asia-Pacific trade agreement being negotiated between the United States and eleven other countries. And, on the other side of the world, the U.S. is negotiating an agreement with the twenty-eight countries of the European Union.”
The two agreements combined cover more than 60 percent of global trade and stand to position the U.S. as a leader in trade well into the future, Hatch said.
“I’m working very, very hard on TPA and I’ve got to have Democratic support. We’re doing some things that will really lift America from its doldrums,” Senator Hatch said following his speech. “Right now the Senate is in a logjam.”
Turning to Africa, Sen. Hatch said the African Growth and Opportunity Act (AGOA) has to be renewed before the end of the summer.
The agreement, set to expire at the end of September, allows sub-Saharan African countries duty-free access to the U.S. market, provided they abide by the law, support human rights, promote poverty reduction and don’t engage in corruption. Trade with beneficiary countries has more than tripled since the agreement’s enactment in 2000, Sen. Hatch said, and U.S. direct investment in Africa has grown nearly six-fold in that time.
“Of course, right now, only a small number of Sub-Saharan African countries are reaping the benefits of AGOA and American exporters continue to face challenges in Sub-Saharan Africa’s growing markets. We need to do more to ensure the program reaches its full potential,” Sen. Hatch said.
Of the 43 nations eligible for the privilege program, only nine are taking advantage of it, including Benin, Lesotho, Liberia, Tanzania, Ethiopia and Madagascar.
“I’m working with my colleagues on the Finance Committee to craft a reauthorization bill that will improve upon AGOA’s success, to remove obstacles to trade in Sub-Saharan Africa and allow both that region and our job creators here at home to benefit from expanded market access,” Sen. Hatch said.
A third trade priority on the Finance Committee agenda is renewing the Generalized System of Preferences (GSP) program, which allows for duty-free tariff treatment for certain products from designated developing nations.
“Although the GSP program was initially created to assist with economic growth in the developing world, it now assists hundreds of our businesses here in the United States,” Sen. Hatch said. “Across our country, manufacturers and importers benefit by receiving inputs and raw materials at a lower cost. But, unfortunately, these U.S. businesses have faced high tariffs on these imports since the program expired in 2013. Without the GSP program in place, American companies paid over $600 million in tariffs in 2014.”
The senator stressed his sincere hope that the program be renewed “as quickly as possible.”
After touching on the Finance Committees laundry list of moves to make, Sen. Hatch closed his address saying, “It’s going to take bipartisanship to realize these goals. And, it’s going to take no small amount of compromise. But, I believe that, if we want to do good things for the American people, we’re going to have to work together.”