After returning from a holiday recess, Congress is moving the trade debate forward. Senator Orrin Hatch and Senator Ron Wyden have introduced the Trade Promotion Authority to the Senate’s Finance Committee, while Representative Paul Ryan is brought the bill to the House Ways & Means Committee today.
The Trade Promotion Authority would provide a crucial step toward the passage of the Trans-Pacific Partnership, which the administration has spent the past five years negotiating. The promotion authority, often called the “fast track” for trade bills, would clear the way for the trade agreement to be introduced to Congress for a simple up or down vote, without the option for amendments.
In the past several decades, many administrations have relied on the TPA to help pass complicated trade bills. Proponents say it protects negotiators from congressional changes that put large-scale, complex international deals at risk. Opponents, which range from the AFL-CIO to the Sierra Club, worry that it doesn’t put American needs first and is undemocratic.
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“For a pragmatic reason, it keeps 535 people from altering an agreement and undercutting a negotiation,” said FDRA President Matt Priest. “We see President Obama’s receiving TPA as an important part of finalizing the Trans-Pacific Partnership agreement.”
The Trans-Pacific Partnership includes 12 countries, from Vietnam to New Zealand, and has been a priority for the Obama administration. Priest says the agreement would reduce footwear tariffs, which totaled $2.7 billion last year alone, with $450 million of product from Vietnam, a growing producer and source for shoes.
Critics of the negotiations — several groups were on Capitol Hill Wednesday protesting the deal — argue that the Trans-Pacific agreement jeopardizes American jobs. They also want more transparency surrounding the deal. The talks have taken place in secret, and opponents have argued that transparency would allow for better debate and an informed vote. Senator Charles Schumer is one of the high-profile members of Congress supporting opponents of the fast-track deal. “You can make the argument that a trade agreement would improve GDP, but if it won’t increase middle-class incomes, then I can’t be for it,” he wrote on Twitter.
The American Apparel & Footwear Foundation is supporting the bill, as are several brands, including, most recently, Gap Inc.
“In a global economy where 95 percent of our customers live outside the U.S., access to markets and materials is critical to the health of U.S. clothing and shoe companies,” said Juanita Duggan, president of the AAFA. “Today’s news that a bipartisan bill on Trade Promotion Authority was introduced is a very welcome development. Congressional approval of TPA will be an important precursor toward completion of the pending trade deals with Europe and the Pacific Rim. We hope Congress approves these and other measures, which are vital for our members in reducing costs, promoting investment, and supporting trade-based jobs, both in the United States and abroad.”
A major question about the agreement that remains unanswered is the absence of China. The country is by far the U.S.’s biggest trade partner and footwear manufacturer, so excluding China from the trade deal also is a point to watch for industry experts. While the final agreement is expected to allow countries to petition to join the trade group, China hasn’t expressed interest. But Priest said the administration’s long-term goal of expanding economic ties with other nations in Asia hasn’t gone unnoticed by China.
“Whatever China’s timeline is for joining the TPP, we’ll be there and be supportive and be making the case for why it’s an important aspect of our relationship. But make no mistake, it will be a political challenge,” added Priest.
One thing is for certain: Now that the legislation has been introduced, both sides are bearing down as the bill moves through committees. Supporters hope to get it passed during the limited six-week session before Memorial Day and Congress’ summer recess.