LEGISLATION IN LIMBO
Byline: Joanna Ramey
WASHINGTON — Getting trade legislation through Congress is always a bit dicy, but in these days of war and anthrax scares there are are even more hurdles to overcome.
There are two trade bills on deck, the status of which any business dependent on importing and exporting is watching nervously, with apparel and textile importers near the front of the line.
Awaiting a House vote are renewal of presidential trade promotion authority, which President Bush said last week on his way to China is needed to solidify the coalition against terrorism and would also give his overall trade agenda a lift, and expansion of Andean duty-free import benefits to include apparel.
In the wings is an administration proposal to grant Pakistan duty and quota breaks on apparel and textile imports. Pending legislation, being drawn up by the White House in conjunction with the National Security Council and State Department is intended to prop up Pakistan’s crippled economy and to thank Pakistan for its assistance in the war in Afghanistan against terrorism. A Pakistan relief bill is expected to be introduced soon, with a White House request for immediate action.
While lawmakers struck trade from their must-do list after the Sept. 11 terrorist attacks, TPA and the Andean bill did get a quick boost a few weeks later when the Ways and Means Committee approved both actions and sent them to be scheduled for a full House vote.
But then came the next roadblock to daily business: the specter of anthrax contaminating Capitol Hill. As a precaution and to make room for anthrax testing, the House last Wednesday adjourned and the Senate scaled back business. Today, the legislative branch of government is scheduled to reopen completely, barring any evidence of anthrax contamination beyond one wing of a Senate office building, where some 30 staffers for Senate Majority Leader Tom Daschle (D., S.D.) tested positive for exposure to the potentially deadly bacteria.
“The entire schedule is so fluid,” said Dale Apley, Kmart Corp.’s vice president for public policy, who lobbies Congress on retail issues and is finding it difficult to discern how legislative priorities may have again shifted.
On an almost daily basis, Bush repeats his call for Congress to grant him TPA in time for the scheduled launch Nov. 9 of another round of World Trade Organization trade-liberalizing talks. He also wants TPA to energize negotiations to create a Free Trade Area of the Americas and embark on other free-trade deals.
TPA is seen by supporters as crucial because with the power, Congress can only vote trade pacts up or down, and can’t amend them, which assures trading partners that negotiations won’t be undone. Bush and other officials and economists also characterize TPA and the resulting expanded trade as needed to help dig the economy out what many think is now a recession.
However, TPA is mired in an almost decade-long struggle by many Democrats who want to have labor and environmental standards become a routine part of trade pacts, so that a country’s low wages and protections aren’t used to their advantage.
While the TPA bill awaiting a House vote contains labor and environmental language, the result of negotiations between Ways and Means Committee Chairman Bill Thomas (R., Calif.) and four moderate Democrats, the compromise apparently isn’t enough to garner the sufficient Democrat votes needed for passage.
Rep. Jim Moran (D., Va.), one of the Democrats who negotiated the compromise, said about 20 lawmakers in his party have agreed to back the bill.
“We need more than 20 Democrat votes, clearly,” Moran told WWD. “I think we can get them, but it’s nip and tuck, right now.”
It’s not just the Democrats acting as TPA spoilers. Lawmakers from both parties are using their TPA votes as leverage to garner support for domestic industries, including textiles, steel and agriculture.
Even if TPA meets with success in the GOP-controlled House, Sen. Max Baucus (D., Montana), chairman of the trade-bill writing Finance Committee, is offering his own bill with stronger labor and environmental provisions and ways to enhance the role of Congress in trade negotiations. Baucus is trying to get House leaders to incorporate his changes in their bill.
But time in the legislative calendar is running short. While Congress hasn’t set an adjournment date, it’s widely viewed that lawmakers are anxious to leave town by Thanksgiving, about a month from now. However, because there is one more year left in the current Congress, pending trade legislation could still be voted on next year.
Majority Leader Daschle, who said he generally supports TPA, said scheduling it for a vote isn’t a priority and listed a handful of government funding and anti-terrorism bills that are more vital. He also added, “I will not be supporting any bill,” emphasizing the need for strong environmental and labor provisions.
The fate of the Andean trade bill is tied to TPA, at least in the House, where Republican leaders have said TPA must go first. In any event, because trade legislation by law must originate in the House, the Senate couldn’t now act, even if it were so inclined.
“Until TPA gets resolved in the House, nothing else on the trade agenda is going to move,” said Erik Autor, vice president and international trade counsel for the National Retail Federation.
This might be bad news for expanding the Andean Trade Preference Act, which already drops duties on most non-apparel products from Colombia, Peru, Ecuador and Bolivia. The popular act is set to expire Dec. 3 and Congress may just vote to renew it without adding apparel or footwear duty-dropping provisions.
“I think there is still time this year to do it,” Steve Lamar, vice president of the American Apparel & Footwear Association, said of the expanded bill’s potential for passage.
The Andean bill also has been made sweeter for importers with a provision increasing the amounts of knitted-apparel and T-shirts made in the Caribbean Basin of regional fabric, which can enter the U.S. duty-free under a trade bill passed last year. These garments would have to be made of U.S.-made yarn containing U.S.-grown cotton.
The Andean bill, which has similar regional and U.S.-fabric-only textile provisions, also increases duty-free benefits for African-made apparel. In addition, the measure extends these benefits to knit-to-shape garments made in the Caribbean Basin or Africa and includes merino wool in the list of African-made products getting tariff breaks.
The expanded Andean bill has widespread support in the House, where it’s expected to be approved. In the Senate, textile-state senators, who in the past have scaled back apparel-liberalizing legislation, are poised to attack the Andean bill.
“You are going to run into the usual Hollings-Helms opposition,” said Sen. Charles Grassley (R., Iowa), the top Republican on the Finance Committee, referring to Sens. Ernest Hollings (D., S.C.) and Jesse Helms (R., N.C.), fierce defenders of the domestic textile industry, which opposes the Andean bill.
Doug Bulcao, director of government relations for the American Textile Manufacturers Institute, said mills oppose the Andean bill because it would harm them, even though benefits would be extended to apparel made from regional or U.S. fabric and Andean countries now account for a fraction of all U.S. apparel imports.
“With the industry doing as badly as it’s doing — it’s literally being decimated by a combination of low-wage imports and a strong dollar — we are going to fight something that will make things worse,” Bulcao said.