On 6 December 2001, in what constitutes an important victory for the
Bush administration, the House of Representatives approved the Bipartisan
Trade Promotion Authority Act of 2001 (HR 3005), sponsored by House
Ways and Means Chairman William Thomas (Republican-California), by the
narrowest of margins. The House vote was 215-214 in favour of granting
the president trade promotion authority (TPA). It also went largely along
party lines, with 194 Republicans and only twenty-one Democrats voting
for the measure, thus laying to rest any pretence of bipartisanship in
trade policy.
When President George W. Bush came into office he declared TPA, formerly
known as fast-track trade negotiating authority, as his principal trade
policy priority. Under TPA, the president may negotiate trade agreements,
which Congress subsequently may accept or reject but not amend. Since
President Gerald Ford first won fast track in 1974, every president has
had such authority until the last such grant, which was approved by Congress
in 1988, expired in 1994. Since then, Congress has refused to renew it,
and has been deadlocked over the issue of including labour and environmental
provisions in future trade agreements.
In drafting his TPA bill, Thomas worked with pro-trade Democrats, promising
that labour and the environment will be addressed in future trade negotiations
and be subject to the same enforcement measures as other trade provisions.
However, most House Democrats continued to argue that the bill still
lacks sufficient safeguards, while lawmakers of both parties from farming,
steel and textile producing states sought assurances for their local industries
and workers. In response, Thomas agreed to support an extra thirteen weeks
of unemployment benefits, two years of tax-free unemployment benefits
and health care vouchers for jobless workers as part of the final House
version of the economic stimulus package (HR 3090).
Crucially, however, the House Republican leadership made last-minute
concessions to Congressman Jim DeMint (Republican-South Carolina), a key
member of the Congressional Textile Caucus.
House Speaker Dennis Hastert (Republican-Illinois), Majority Leader Richard
Armey (Republican-Texas) and Majority Whip Tom DeLay (Republican-Texas)
wrote a letter to DeMint in which they acknowledged the importance of
the textile industry for South Carolina's economy and promised to "pass
legislation to improve the enforcement of existing US trade laws to prevent
illegal and fraudulent imports". The US Customs Service is faulted
by the US textile industry for not making textile fraud, such as illegal
transhipment and smuggling, an enforcement priority.
In the letter, DeMint also received assurances that no bills with trade
provisions will be brought to the House floor until the Caribbean Basin
Trade Partnership Act (CBTPA) is corrected "to require that US knit
and woven fabrics be required to undergo all dyeing, finishing and printing
procedures in the US" to receive CBTPA duty- and quota-free treatment.
In addition, the House Republican leadership pledged that the same
requirement for dyeing, finishing and printing would be included in any
Andean Trade Preferences Act (ATPA) enhancement legislation, which contains
additional textile trade benefits.
The concessions to DeMint were only one set of several last-minute side
deals negotiated by the White House and Republican congressional leaders
to avert the defeat of Thomas' TPA bill. As it turned out, these last-minute
concessions paired with much political arm-twisting by the Bush administration
provided just enough support for TPA.
On 11 December, Senate Finance Chairman Max Baucus (Democrat-Montana)
and Senator Charles Grassley (Republican-Iowa) unveiled a bipartisan TPA
bill of their own, which closely follows the House-passed TPA measure.
The bill, with minor modifications, was marked up by the Senate Finance
Committee on 12 December in an 18-3 vote, clearing the way for a full
Senate vote some time next year. However, in light of continue opposition
to further trade liberalisation from Democratic core constituencies, such
as the AFL-CIO labour federation, it could be difficult to pass TPA legislation
in 2002.
Traditionally, there has been greater bipartisanship on trade issues
in the Senate than in the House of Representatives. Whether this adage
holds true in the case of TPA remains to be seen.
Be that as it may, any TPA bill that the Senate might pass is likely
to strengthen the legislation's labour and environmental provisions as
well as provide for stronger congressional oversight. As such, it is likely
to resemble a separate House TPA bill (HR 3019), which is sponsored by
Democratic Congressmen Charles Rangel (New York), Sander Levin (Michigan)
and Robert Matsui (California) among others.
The differences between these two TPA versions will have to be resolved
in a House-Senate conference. When examined from this vantage point it
becomes clear that the House passage of Thomas' TPA bill, despite its
significant concessions, presents little more than an intermediate step
in what promises to become a prolonged bargaining process. US Trade
Representative Robert Zoellick has admitted as much, greeting House passage
by saying, "The House vote is only the first step, of course".
