Rules Eyed To Strengthen Enforcement Of Trade Rules

Fri. May 9, 2008


Legislation aimed at beefing up trade enforcement measures appears to be moving ahead in both chambers. House Ways and Means Committee Democrats discussed the issue this week and are developing a bill, although the timing for introduction was unclear. Across the Capitol, a bipartisan group is urging Senate Finance Chairman Max Baucus to move the issue, although expanding Trade Adjustment Assistance for laid-off workers is his "No. 1 trade priority," a spokeswoman said. She added Baucus does want to move a trade enforcement bill at some point as well.

Baucus and House Speaker Pelosi have said movement on TAA is a pre-requisite for allowing a vote on the Colombia Free Trade Agreement. Pelosi wants additional economic measures in place beforehand, however, and some in both chambers are arguing trade enforcement must be a part of any deal. "We should not be agreeing to any new trade agreements until we enforce the ones that we have," said Sen. Debbie Stabenow, D-Mich., a member of the Finance Committee. Sen. Olympia Snowe, R-Maine, has taken a similar position, sources said. "That's the most important thing, more important than trade assistance. [TAA is] after the fact, when people have already lost their jobs," said Rep. Bill Pascrell, D-N.J., a Ways and Means panel member who voted for the Peru trade pact last year.

There also remains broad support for moving legislation aimed at penalizing China for devaluing its currency, which has led to a surge in cheaper Chinese imports. The top priority for lawmakers from states hard hit by job losses has been a bill introduced in both chambers that would make China's currency manipulation a violation of U.S. trade law, allowing companies to sue for damages. Stabenow introduced the Senate version, co-sponsored by Sens. Jim Bunning, R-Ky., and Evan Bayh, D-Ind. Both remaining Democratic presidential candidates, Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York, have signed onto the bill. But bills in both chambers have stalled, in part because of concerns about the broader impact on the economy and relations with China. The sensitivity has given rise to alternative methods of dealing with China and what lawmakers see as the Bush administration's lack of will to enforce trade rules.

House Ways and Means Trade Subcommittee Chairman Sander Levin, D-Mich., laid out a number of options for panel members at a meeting Wednesday. Those include provisions allowing the U.S. to impose countervailing duties on nonmarket economies, including China, that in effect have subsidized their exports to the detriment of domestic manufacturers. That would be modeled after a bill introduced by two Ways and Means members, Reps. Artur Davis, D-Ala., and Phil English, R-Pa. Also possibly on the table is a provision known as "Super 301" authority, under which the administration may threaten retaliation unless foreign countries open their markets to U.S. goods.

Baucus has introduced a bill with Stabenow and Sen. Orrin Hatch, R-Utah, with countervailing duty provisions, as well as a measure that could require the White House to abide by International Trade Commission decisions on whether to grant import relief to U.S. companies. Stabenow said she did not know whether approval of that bill or a variation on it would help move the Colombia trade agreement, but added, "It certainly wouldn't hurt."

by Peter Cohn