Obama Submits Pending FTAs To Congress

by Mike Godfrey, Tax-News.com, Washington

05 October 2011

Amidst general calls for a swift Congressional reaction, President Barack Obama has formally submitted the legislation for the three pending free trade agreements (FTAs) between the United States and South Korea, Colombia, and Panama, along with renewal of the Trade Adjustment Assistance (TAA) measures and the expired Generalized System of Preferences (GSP) trade program.

The submission of the FTAs by President Obama follows the approval by the Senate, last month, of H.R. 2832, which extends the GSP until July 31, 2013, and extends and expands TAA until December 31, 2013. GSP is a programme designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products, while TAA provides benefits to US workers who lose their jobs as a result of freer trade.

While the Republican-led House of Representatives had passed a similar GSP-renewal bill earlier in September, but without the TAA re-authorization, the Democrat-led Senate bill, by attaching the re-authorization of TAA, fulfilled a condition insisted upon by the President before introducing the FTAs to Congress.

The Administration has always insisted that all of the legislation should proceed through Congress simultaneously, and had been concerned at the ability of the Republican Party to deliver a TAA renewal in the House at the same time as the FTAs.

In his statement following his submission of the trade legislation, the President therefore called on Congress “to pass them without delay, along with the bipartisan agreement on TAA that will help workers whose jobs have been affected by global competition”.

In addition, the United States Trade Representative Ron Kirk called for swift Congressional action on the FTAs, which would “support tens of thousands of jobs here at home,” adding that “the House should also support jobs for American workers by supporting targeted assistance and training for those who may be displaced by trade. Taken together, the pending FTAs and TAA advance a balanced trade agenda that opens new markets for our exporters and new opportunities for America’s working families. TAA is an essential component of President Obama’s balanced trade agenda.”

Orrin Hatch, the Republican Ranking Member of the Senate Finance Committee, while welcoming the submission of the various agreements, and calling for their swift approval, pointed out that, as the FTAs were “completed under the previous Administration and ready since he took office, the President should have sent these three long-stalled trade agreements to Congress years ago.”

In like manner, Dave Camp, the Republican Chairman of the House Ways and Means Committee said that “the agreements enjoy broad bipartisan, bicameral support and have been delayed for too long. Further delay will only postpone the economic benefits of these agreements and cost Americans jobs as we continue to lose ground to foreign competitors who have already implemented their trade agreements with our partners.”

From the point of view of the country’s businesses, the United States Chamber of Commerce (USCC) welcomed the President’s move. “These agreements are about creating jobs and ensuring a level playing field for trade,” stated its President Thomas J. Donohue. “The trade accords will immediately eliminate tariffs on most US exports to the three countries. In addition to ensuring fairness and accountability, the agreements will open services markets and strengthen intellectual property rights. America’s long timeout on trade has been creating jobs - in other countries. While other nations clinched their own trade deals, American workers have been left to compete with one hand tied behind their backs.”

It remains very unclear that House Republicans will unite behind any package containing TAA re-authorization.

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