US Senate Takes Pending FTAs Forward

by Mike Godfrey, Tax-News.com, Washington

01 July 2011

On June 30, the United States Senate Committee on Finance began to review and make recommendations on proposed legislation to implement the three pending free trade agreements (FTAs) with South Korea, Colombia and Panama, that also includes an extension of Trade Adjustment Assistance (TAA).

The Committee’s Chairman, Democrat Max Baucus announced it will hold a “mock” markup of the draft implementing bills for the FTAs. It was pointed out that Committee mock markups are the standard way that Congress weighs in on FTAs negotiated by the government under fast-track authority, which prohibits amendments to final implementing bills.

It was claimed that the TAA proposal in the legislation to implement the FTA with South Korea “reflected bipartisan, bicameral agreement.” The TAA programme is designed to provide a variety of re-employment services and benefits to workers who have lost their jobs or suffered a reduction of hours and wages as a result of increased imports or shifts in production outside the US.

In Baucus’s opinion, the proposal restores the key eligibility requirements of the programme’s 2009 expansion, which expired in February, and retroactively extends coverage to TAA petitions filed after February 12, 2011. While Baucus professes that it also includes adjustments necessary to secure bipartisan support, TAA extension has encountered opposition from the Republicans as that party has been looking for additional spending cuts in order to reduce the federal government’s fiscal deficit.

Baucus stated that “these FTAs, together with TAA, will boost our economy by billions of dollars and create new jobs and opportunities here at home. This proposal opens lucrative new markets to American ranchers, farmers and small businesses while ensuring US workers have all the help they need to adapt and thrive in the 21st century global economy. We think this package can get the support needed to become law. American workers and our economy can’t afford for us to wait any longer to move forward.”

Baucus pointed out that, subsequent to the government’s review of any amendments that the Senate Finance Committee and the House of Representatives Ways and Means Committee approve on the draft implementing bills, final versions of the implementing bills will be submitted to Congress by the government for a straight majority vote.

Following Baucus’s announcement of the mock markups in the Senate, Republican Dave Camp, the House Ways and Means Committee Chairman, issued a statement criticizing the White House's decision to insist on TAA in return for passage of the FTAs which he said would further delay "what this country needs more than anything else: economic growth and private sector jobs”.

He confirmed, however, that he has been “willing to work with the White House to find a bipartisan path forward on TAA in order to secure passage of the trade agreements”.

Nevertheless, he also emphasized that “the decision on how to move these items through the House is a matter for Republican leadership to determine. In addition, while the underlying policy reflects discussions we have had, the drafts released today by Chairman Baucus include a number of last-minute changes, particularly the offsets for TAA and the implementing bills for the three trade agreements, that I need to review more fully.”

He also added that, from the beginning, “it has been clear that … the Republican position has been that TAA must be cut and reformed. The final result is a programme that has been cut not only from 2009 levels, but also below 2002 levels in several key areas. The programme will revert to 2002 levels and below in some cases at the end of 2013, and will completely expire at the end of 2014.”

The US Chamber of Commerce (USCC) has welcomed the news of the Senate Finance Committee’s mock markups of the pending FTAs. Thomas J. Donohue, the USCC’s president and chief executive officer, said that, on July 1, “the European Union-South Korea FTA will enter into force, and the Canada-Colombia FTA will do so six weeks later, putting American workers and farmers at a competitive disadvantage. A USCC study warned that continued delay by Washington has put 380,000 American jobs at risk.”

He urged “members of both parties to seize this reasonable compromise and move the trade agenda forward. We will do everything in our power to round up the votes.”

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