The 114th Congress features a Republican majority that is larger than any since 1928 and ready to flex that GOP muscle. While a Democratic White House could create speed bumps to GOP efforts to advance certain legislative initiatives, both sides have said trade policy is an issue where they might find common ground.

Following last November’s mid-term elections, Republicans now hold 246 seats in the House of Representatives and 54 in the Senate. However, absent a filibuster-proof majority of 60 seats in the Senate, there will still be some horse trading going on.

It will likely begin early in the term, as Congress reconvened on January 6 and is scheduled work six straight weeks. With key congressional leaders identifying trade as an issue they want to focus on sooner than later, here are some issues that could finally move ahead in the coming weeks and further boost domestic economic growth and employment.

Miscellaneous Trade Bill

The U.S. Job Creation and Manufacturing Competitiveness Act of 2013 (H.R. 6727) backed by Republican and Democratic leaders includes more than 2,000 provisions that would temporarily reduce or eliminate import tariffs on goods no longer made in the U.S., many of which are used by U.S. manufacturers in the production of value-added goods. These provisions have been fully vetted by the International Trade Commission, the departments of Commerce, State, Agriculture and the Treasury, the U.S. Trade Representative’s Office and other government agencies with oversight of the covered products.

Many of these duty breaks were previously in place but expired, leaving U.S. companies to pay duties on goods that are no longer made domestically or are not controversial. This has resulted in an approximate $748 million tax on U.S. manufacturers and an estimated $1.86 billion economic loss over a three-year period.

Congress could reintroduce this legislation or, given that the previous MTB expired three years ago, may decide to restart the process, which could provide even more benefits for U.S. companies.

Customs Reauthorization

The bipartisan Trade Facilitation and Trade Enforcement Reauthorization Act of 2013 (S 662) would reauthorize U.S. Customs and Border Protection for the first time since 2000 and update mechanisms that bind the agency’s hands at U.S. borders. There have been significant changes over the past 15 years in government policies and priorities as well as the manner in which business is conducted, and this bill is designed to give CBP the necessary tools to reflect those changes.

Each of these issues represent real jobs, real employment and real people.

For example, one provision would benefit e-commerce companies by easing requirements and eliminating additional duties for returned goods that cross borders. Other provisions would instruct CBP on how to better address the business community, prevent circumvention of trade remedies and move goods more effectively. An addendum to the bill introduced in July 2014 (H.R. 5291) includes further changes to the tariff schedule governing CBP’s conduct to reflect business practices that have continued to evolve.

Tariff Preference Levels

The Central America-Dominican Republic Free Trade Agreement includes a provision that allows a certain amount of trousers made in Nicaragua of non-U.S.-origin fabrics to enter the U.S. duty-free each year as long as an equal number of trousers made from U.S. fabric made from U.S. yarns (made from U.S.-grown cotton) is also shipped to the U.S. This tariff preference level has not only bolstered U.S. exports of fabric to Nicaragua but also helped build an apparel industry in that country, thus contributing to economic and social stability in the least-developed of the CAFTA-DR partners. However, the TPL expired at the end of 2014. A retroactive implementation may save some U.S. yarn spinner and fabric making jobs.

Similarly, the Bahrain FTA includes a TPL allowing apparel and home furnishings to be imported duty-free into the U.S. without regard to the origin of the fabric or yarn. This TPL represents less than 0.1 percent of all apparel imports into the U.S., but at the same time it plays a critical role in the ability of a U.S. company in Florida that further processes such inputs from Bahrain to keep its 200+ employees on the job.

It is also important to Bahrain, which is home to the U.S. Navy’s Fifth Fleet, an expanding number of U.S. military personnel and a key partner in maintaining U.S. geopolitical interests in the Middle East. Bahrain’s three apparel manufacturers and one home furnishing manufacturer employ about 1,000 Bahrainis and 6,000 expats, but if the TPL expires in mid-2015 those jobs could be lost, possibly sparking economic and social unrest and, more importantly, negatively impacting U.S. jobs.

African Growth and Opportunity Act

AGOA was enacted in 2000 to emphasize trade over aid for Africa. In the ensuing 15 years AGOA has been extended many times, but each time only for a year or two. There has been some question as to why this program did not result in significant penetration of the U.S. market by African nations, and the reasons include many African nations not being ready to capitalize on program benefits as well as U.S. companies pursuing easier other opportunities before looking at Africa.

Now, however, there is a convergence in some African countries of a preparedness to enter the global market in a meaningful way, with full support of the government and the rule of law, and U.S. companies ready to invest. However, consequential investment will not be made unless there is sufficient time for investment depreciation, so supporters are looking to extend AGOA for another 15 years.

In The Spotlight

Most members of Congress in both parties see renewal as a logical step to help Africa help itself, but no legislative action has yet been taken. In the meantime, AGOA expires at the end of September, a short time in congressional terms, and lawmakers have shown an increasing proclivity to let trade programs expire, as in the case of GSP, the Andean Trade Preferences Act and the MTB.

Generalized System of Preferences

GSP offers unilateral duty-free access to the U.S. market for approximately 5,000 products from most of the world’s developing countries. GSP had been in place since the 1970s but expired July 31, 2013.

The amount of trade covered by GSP in 2013 amounted to less than one percent of total U.S. imports, but it has a significant impact on U.S. consumers as well as beneficiary countries. Several different bipartisan bills to renew GSP were introduced in the 113th Congress but failed to move.

Educational Toys

The Elimination of Tariffs on Education for Children Act (H.R. 4748), which garnered 27 cosponsors from both parties, including 21 members of the House Ways and Means Committee, would eliminate the import tariff on electronic educational toys for children. While Congress removed tariffs on toys and computers decades ago, computerized toys designed to teach children are not considered toys (because they do more than provide amusement) or computers (because they cannot be programmed) and thus fall into an “other” category under the Harmonized Tariff Schedule of the U.S. that is subject to import duties.

The 114th Congress has a chance to enact meaningful legislation that will do more than name a new bridge or post office, actions that accounted for ten percent of the bills passed by Congress over the past two years. Each of the issues above represent real jobs, real employment and real people. Both Democrats and Republicans have identified trade as an issue on which they can work together, so it’s time to put that to the test and get these bills passed before June.

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Nicole Bivens Collinson
About The Author Nicole Bivens Collinson
Nicole Bivens Collinson is a well-known international trade authority in Washington, DC and has over 25 years of experience in government, public affairs and lobbying. She leads Sandler, Travis & Rosenberg’s international trade and government relations practice.




www.strtrade.com


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