Hatch Nears TPA Deal with Wyden, Slates Another Hearing for April 16 Afternoon

The Senate Finance Committee aims to move forward with Trade Promotion Authority, Trade Adjustment Assistance and an unclear number of other trade bills in the coming days, pursuing a “parallel track” with two separate trade packages, said Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., at a committee trade hearing on April 16. The lawmakers, who have spearheaded trade policy in the Senate, indicated TPA and TAA will be the flagship items of the two packages, respectively.

Committee members aim to continue the trade discussion later on April 16, planning another hearing at 3 p.m. Lawmakers haven’t yet introduced Trade Promotion Authority legislation in either chamber of Congress. At the April 16 hearing, Hatch said he expects a bill “very soon,” but cautioned an agreement with Wyden is “not quite there.” In recent days, Hatch predicted a bill this week as well as the April 16 hearing (see 1504130064). Hatch then said he aims to mark up a bill on April 23, a goal he confirmed at the hearing. Sen. Rob Portman, R-Ohio, in a brief interview said the two committee leaders are still at odds over TAA.

Committee Republicans announced the hearing late the night before. Cabinet-level officials U.S. Trade Representative Michael Froman, Treasury Secretary Jacob Lew and Agriculture Secretary Tom Vilsack championed the merits of trade in testimony, saying that future free trade agreements (FTAs) will boost American competitiveness and level the playing field for U.S. exports. The expedited procedures in TPA, which include a required up-or-down vote and a ban on amendments, are a “critical tool” to lock down implementation legislation for the Trans-Pacific Partnership, said Froman, an argument echoed by Vilsack.

Wyden and Hatch, along with House Ways and Means Committee Chairman Paul Ryan, R-Wis., have collaborated since the outset of the 114th Congress to reconcile differences on TPA (see 1501270001). Over recent months, Wyden has repeatedly declined to comment on the details of his demands or the status of TPA negotiations with Hatch. Wyden said the talks have been “challenging” on April 16, but he is “close to finding common ground.” Hatch said the legislation will include 150 negotiating objectives.

The ranking member has long praised trade under the right circumstances, and he shot down an argument from critics that trade is no longer about traditional market access. “I think opponents have made a number of valid arguments,” though some don't “stand up to the facts,” said Wyden. “There are substantial tariffs on information technology. Colleagues, there are double digit tariffs on American manufacturing, and often there are triple digit tariffs on American agriculture.” Japan is nearing a “40 percent all-in” tariff on U.S. agriculture.

Vilsack said TPA and TPP will help slash tariffs on a wide range of U.S. products in TPP markets. Many lawmakers and industry representatives are urging removal of agriculture barriers in TPP, particularly those in Japan and Canada. The U.S. continues to negotiate market access terms with Japan over several key products, but trade experts say Canada has been unwilling to make substantial concessions on its supply management systems for poultry and other markets. Froman said Canada still has not made an offer that the U.S. is willing to accept. “We are encouraging our Canadian partners to come to the table,” said Froman at the hearing.

Enforcement provisions will play a critical role in the legislative process poised to unfold, said Wyden, a long-time supporter of trade enforcement reform. He, as well as Sen. Sherrod Brown, D-Ohio, have targeted enforcement legislation to revise CBP investigation into duty evasion and other trade remedy improvements (see 1501130001). Brown headlined an anti-TPA protest on April 15 (see 1504120002).

Wyden railed against “excessive secrecy” and “inadequate” transparency and congressional consultations in FTA negotiations. Other Democrats lashed out at three cabinet-level officials at an April 16 hearing. Sen. Chuck Schumer, D-N.Y., the second highest-ranking Democrat on the committee, derided Hatch’s plan to reconvene a hearing on TPA only hours after an agreement on the legislation is reached. “It’s throwing salt in the wound” of the trade policy process, said Schumer, a fierce critic of current trade policy. The current process also means “you don’t see what a treaty is before you have to tie your hands on amendments.” The Office of the USTR hasn’t released any negotiating texts for TPP, though some chapters have been leaked, including a recent investment proposal (see 1503260017).

Schumer said U.S. FTAs have hurt average Americans. “If [an FTA] doesn’t increase middle class incomes…I can’t be for such an agreement,” said Schumer. He and Sen. Debbie Stabenow, D-Mich., called on Congress to pass currency manipulation legislation to put enforceable “disciplines” in place. Both lawmakers jumped on board of a Senate currency bill introduced in February (see 1502120014). Secretary Lew, meanwhile, said diplomacy is working well to crack down on currency manipulations at the G7, G20 and the International Monetary Fund. Democrats largely criticize that tactic as a failure (see 1504140010).

Schumer also lashed out at non-existent and weak enforcement provisions in U.S. FTAs and World Trade Organization accords. China is a clear example of a country unwilling to abide by international rules on trade and investment, said Schumer. “Let’s deal with China’s rapaciousness,” he said. “Let’s at least do something about China. And what some of us have proposed is a strong currency bill.” Sens. Bob Menendez, D-N.J., and Ben Cardin, D-Md., made similar complaints. Menendez said rushing a TPA bill through would be “beneath the committee.” Cardin called on committee leadership to allow private sector stakeholders to testify on TPA at some point in the legislative process.

Sen. Brown, D-Ohio, engaged in a bitter exchange with Froman as the hearing wrapped up. Brown said USTR is denying sufficient access to negotiating texts, claiming the agency is "stone-walling" committee staff. "It begs the question: 'What are you hiding?'," Brown asked rhetorically.

While details of Wyden’s demands on TPA remain unclear, trade expert at the libertarian Cato Institute Dan Ikenson called Wyden’s demands to blunt the expedited procedures in the legislation “reasonable” in an April 15 blog post. Wyden prefers “more channels” for Finance and Ways and Means to shelve the expedited procedures if an agreement doesn’t meet the congressional objectives, referred to some on Capitol Hill as a “circuit breaker” mechanism, said Ikenson. Once such action is completed at the committee level, Wyden then prefers a resolution only needs 60 votes, as opposed to 67, to pass the Senate floor, Ikenson added. “That sounds like a reasonable compromise struck by senators who want TPA legislation to pass,” said Ikenson.