WASHINGTON — Amid volatile election-year politics that will influence the debate, Congress is reconvening with a trade agenda that has China’s monetary and import policies and consumer product safety as priorities.
This story first appeared in the January 15, 2008 issue of WWD. Subscribe Today.
Sens. Barack Obama (D., Ill.) and Hillary Clinton (D., N.Y.), the front-runners for their party’s presidential nomination, have expressed skepticism about existing and pending trade pacts, saying they will review all deals and insist on stronger labor and environmental standards in any agreements. Both candidates have said they will scrutinize the trade relationship with China and its currency regulations.
“The hope is…China would be on the top of the trade agenda,” Rep. Sander Levin (D., Mich.), chairman of the House Ways & Means subcommittee on trade, said in an interview.
Democrats plan to introduce a comprehensive China bill, Levin said. The legislation will address issues such as currency undervaluation, allowing the application of countervailing duty laws to subsidized imports from China and preserving the use of zeroing — the method used by the U.S. to calculate antidumping duties that the World Trade Organization’s appellate body has said is against global trade rules.
Levin said the China bill will also seek to strengthen U.S. Customs enforcement of contaminated imports, addressing product safety concerns, as well as pirated and counterfeit products. Consumer Product Safety Commission legislation will likely seek to tighten lead jewelry standards and increase penalties for contaminated products.
In addition, lawmakers are expected to consider an overhaul and expansion of a program intended to assist workers who lose their jobs because of shifts in global trade caused by free trade accords that have been championed in the White House.
“My instinct is that since it’s an election year, Democrats will be loathe to cross a traditional ally like the unions [on issues] they feel so strongly about,” said Brian Pomper, former chief international trade counsel for Democrats on the Senate Finance Committee. “Once you have [the party’s presidential nominee] in a month or so, I think Democrats will be unwilling to get out in front of their nominee” in considering controversial trade deals.
The House returns today and the Senate on Jan. 22, marking the second year of Democratic control of Congress and a watershed because of one of the most unpredictable White House races in decades for both Democrats and Republicans.
Industry officials said Chinese apparel and textile quotas are in the forefront. Textile manufacturers and organized labor, arguing they have suffered huge job losses because of lower priced Chinese imports, plan a major effort to push the Bush administration and Congress to extend the quotas that expire at the end of the year on Chinese imports.
Clothing importers and retailers, who brought in $23 billion of apparel made in China for the year ended Nov. 30, are preparing to fight any extension of the quotas because it limits sourcing options.
Levin said the China quotas will be “part of the consideration,” although that specific focus may not be in the legislation lawmakers introduce. “The whole issue of textile imports from China, the conditions under which they are made and the impact on other countries” will have to be considered, he said.
With China in the spotlight, pending free trade deals with Colombia, South Korea and Panama might not be resolved.
Levin said the South Korean pact — facing opposition because of barriers to U.S. exports of beef and autos in that nation — “needs to be renegotiated.” And, he said, “There needs to be concrete results in Colombia in terms of the end of violence against people trying to exercise their rights.”
Organized labor and many lawmakers oppose the Colombian trade deal because of the assassinations of hundreds of union activists in that country that are believed to have been carried out by paramilitary groups.
The Bush administration has pushed for lawmakers to support the two trade agreements, citing declines in assassinations in Colombia and touting the benefits of South Korea’s market to U.S. exporters and national security implications.
“We hope that the broader Bush trade agenda is stopped in its tracks, particularly ones with Colombia, South Korea and Panama,” said Mark Levinson, chief economist at UNITE HERE, the apparel industry’s main union, which endorsed Obama last week. “We think it is clear the American public, both Democrats and Republicans, is extremely skeptical of any new trade deals before we fix the broken trade model.”
Levinson said the new labor and environmental template for trade agreements crafted between Congress and the Bush administration needs to be strengthened before pacts are considered.
Another priority for the industry is pressing Congress to pass an extension of a trade preference program with Colombia, Peru, Ecuador and Bolivia that expires at the end of February. U.S. companies receive duty free benefits under the program. Levin, who is seeking a two-year extension of the trade program with the Andean countries, said he was confident the legislation will pass with bipartisan support.