WASHINGTON — Senators voiced bipartisan skepticism about President Obama’s initiative to double exports in five years, pressing U.S. Trade Representative Ron Kirk at a hearing Wednesday for details on how the administration could achieve such an ambitious goal.
Kirk was questioned as House Ways & Means chairman Charles Rangel (D., N.Y.), a champion of trade benefits for developing countries, said he was temporarily stepping down from his powerful post. Rangel’s decision came after the House ethics committee admonished him for taking corporate-sponsored trips to a Caribbean conference. He is also the focus of a broader ethics investigation.
Initiatives to overhaul U.S. trade preference programs and a bill to renew tariff breaks on imported products that expired last year, with an adverse impact on apparel and textile companies, face new uncertainty without Rangel’s muscle to push them through the committee, which controls legislation on taxes and trade.
It was unclear whether Rangel, who kept his seat on the committee, will be able to regain the chairmanship or who would replace him in the interim. The most senior Democrat on the committee is Rep. Fortney “Pete” Stark of California.
The President’s trade agenda was the focus of a Senate Finance Committee hearing, where senators expressed concern about the administration’s export initiatives, inaction on pending free trade agreements with Colombia, Panama and South Korea, and trade aid for Haiti’s apparel industry, which will take years to recover from a catastrophic earthquake.
Sen. Max Baucus (D., Mont.), the committee chairman, asked Kirk how the administration could double exports in five years and create an estimated 2 million jobs.
“It may be ambitious, but most people are looking at that and scratching their heads,” Baucus said.
Baucus said to achieve that goal, U.S. exports would have to grow about 15 percent annually, “almost double the yearly average since 1960.”
He said Canada spends 50 percent more than the U.S. on export promotion, while the U.K. matches the U.S., and he questioned how Kirk could accomplish major initiatives when the President’s proposed 2011 budget would decrease the USTR’s funding by $1 million to $48 million. The Commerce Department’s International Trade Administration, a partner with the USTR in export promotion, would receive a 20 percent increase to $534.4 million.
Kirk acknowledged he would have to make “tough choices,”but said there are “some common sense things we can do” to promote exports, namely putting more emphasis on helping small businesses obtain export financing through the Small Business Administration and other programs. Kirk also pointed to potential market opportunities for U.S. exporters in a regional trade agreement, known as the Trans-Pacific Partnership, which is under negotiation with several countries.
Many Republican and Democratic senators renewed their call for Kirk and the administration to send pending trade agreements with Colombia, Panama and South Korea to Congress for a vote. The pacts, negotiated by the Bush administration, have stalled over concerns by leading Democrats and labor groups over barriers to U.S. auto and beef exports in South Korea, assassinations of trade unionists in Colombia and tax havens in Panama.
Sen. Chuck Grassley (R., Iowa) asked when the administration planned to move on the trade deals. Kirk said his teams have met with all three governments and are seeking to resolve the issues.
“This administration believes that, properly negotiated, these are important and critical components of our export strategy and we have not given up on any of them,” Kirk said.
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