The White House said Thursday it opposes trade enforcement legislation introduced by Senate Finance Chairman Max Baucus, who nonetheless said he would press on with a markup next month.
Democrats in both chambers want to move an enforcement bill, particularly before accepting any more free trade agreements. At a Finance hearing Thursday, Warren Maruyama, general counsel for the U.S. trade representative, said the administration cannot support Baucus' bill because it could hamper existing enforcement efforts and provoke retaliation.
Trade enforcement legislation has been hung up since last year over how aggressively to target China's devalued currency, which many lawmakers, manufacturers and unions say has led to a surge of cheaper imports and resulting job losses.
The issue has provoked a strong reaction from major exporters such as Boeing and U.S. diplomats wary of angering the Chinese, however. Baucus' new bill, which he introduced with Sens. Debbie Stabenow, D-Mich., and Orrin Hatch, R-Utah, attempts to sidestep the China currency issue.
The measure would, pending congressional consultation, require USTR to seek remedies at the World Trade Organization from countries employing allegedly unfair trade practices; create a new Senate-confirmed trade enforcement officer at USTR; allow Congress to review International Trade Commission import-relief decisions; enable U.S. companies to seek countervailing duty relief from imports subsidized by non-market economies like China, and create an outside commission to review WTO decisions. Baucus said USTR "can and should do more."
Maruyama argued the administration is already enforcing trade laws. "Every single person working [at USTR] knows that enforcement is part of the job and that our job is to hold other governments to their word," he said. He said USTR has recently initiated several cases against the European Union including for subsidies to aircraft-maker Airbus.
Baucus said it was "a little strange" for the White House to be criticizing his bill so early in the process. The administration is working to shore up support for the Colombia Free Trade Agreement, but Baucus insisted he would not engage in "horse trading."
He did reiterate the White House must agree to a beefed-up trade adjustment assistance bill for displaced workers if the Colombia deal were to have any chance.
He said he was working toward a bipartisan agreement but did not commit to a TAA markup next month.
The enforcement bill might still bog down on the floor with China-specific amendments, however, and Baucus will need more bipartisan support, including from Finance ranking member Charles Grassley.
Grassley has some leverage in that his top trade priority is the Colombia deal, which he reiterated at the hearing while noting that the administration is already effectively enforcing trade law.
"If we really want to get serious about enforcement, we should renew the president's trade promotion authority and send our negotiators out to solve the problems that aren't currently subject to rules," Grassley said.
House Democrats are taking a more cautious approach on trade enforcement, although Ways and Means Trade Subcommittee Chairman Sander Levin, D-Mich., said he is readying a bill.
Sources said the measure might have some similar components as the Senate version, and like Baucus' bill, avoid directly targeting China currency practices.
Levin said it was premature to comment, but that discussions with Ways and Means Chairman Charles Rangel and House Speaker Pelosi are ongoing.
He expressed confidence the House could take up a bill this year, but, like Baucus, did not consider trade enforcement a condition for free-trade agreements. "This is not up for bargain," Levin said.
Rep. Phil English, R-Pa., a Ways and Means member who was worked with Levin on bipartisan trade bills, said there will be pressure to move a bill this year because of economic concerns.
"If this is a centrist approach ... I would say it would probably pass the House and might pass by a veto-proof majority," English said.
Then again, he said Democrats have been promising a bill since March 2007, and that the legislative calendar and pre-election partisan warfare might drown out any movement.
This article appears in the May 24, 2008 edition of NJ Daily.