The Republicans made huge gains in the mid-term election, and these gains will affect Congress’s international trade legislation agenda. The impact of the Republican gains on trade legislation in the “lame duck” session of Congress for the rest of this year remains unclear. The Republican take-over of the House of Representatives, however, will result in activity in the next Congress that emphasizes trade expansion rather than trade enforcement. Only time will tell whether this will lead to any dramatic shift in the Administration’s trade policy agenda or result in legislative initiatives that become law.
The Lame Duck Session. Several important U.S. trade programs will expire at the end of this year unless renewed. These include both the Generalized System of Preferences (“GSP”) and the Andean Trade Preferences Act (“ATPA”), as well as funding for the expanded Trade Adjustment Assistance (“TAA”) program authorized in the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”). In addition, a Miscellaneous Tariff Bill (“MTB”), popular with many trade and business groups, is under consideration. The MTB would provide duty-free treatment on a number of manufacturing inputs and other products not made domestically. Finally, the Currency Reform for Fair Trade Act (H.R. 2378) passed the House in September on a strong bipartisan vote and is pending in the Senate. While the currency bill still may move in the “lame duck” session, the conventional wisdom is that little, if any, of the pending trade legislation will be passed in this session. This is due to the lack of time, the uncertainty over a legislative vehicle to which to attach such legislation, and the varying degrees of opposition in the Senate to each of these pieces of legislation. The most likely trade legislation to move before the end of the year would be a short-term extension (no more than two years) of GSP and ATPA.
The 112th Congress. The key Republican leaders in the House who will set the legislative and oversight agenda on trade are known as pro-trade, pro-business individuals. These leaders include Dave Camp (R-Michigan) and Kevin Brady (R-Texas), the incoming chairs of the Ways and Means Committee and its Trade Subcommittee, respectively. Congressman Brady already has made it known that he will push the Administration to complete work on and send to Congress for approval the three pending Free Trade Agreements (Korea, Colombia, Panama) negotiated during the Bush Administration. He also will push to enact rapidly any pending trade legislation not passed in the lame duck session. One exception is the Currency Reform for Fair Trade Act, which he vigorously opposes. Congressman Brady also will support the Administration’s efforts to conclude negotiations on the Trans-Pacific Partnership and the long-running Doha Round. He also will champion renewal of trade promotion authority if it appears that the Administration is close to finishing those efforts. Both Congressmen Camp and Brady can be expected to block any trade legislation of a restrictive or WTO-inconsistent nature. Less dramatic changes are in store regarding trade in the Senate, where the Democrats lost seats but still retained their majority. Max Baucus (D-Montana) will continue as Chairman of the Senate Finance Committee. Orrin Hatch (R-Utah) will move up to be the Ranking Republican in place of Charles Grassley (R-Iowa), who takes over that position in the Judiciary Committee.