Brady Says Compromise on GSP, MTB, Tariff Exclusions Can Be Found

The top Republican on the House Ways and Means Committee, Rep. Kevin Brady, R-Texas, said he doesn't think the chatter among lobbyists that the trade title could be dropped from a compromise China package has any merit (see 2205310033). Lobbyists were reacting to a leaked timeline that said the negotiations should be finished, and the new legislative language done, by June 21. The House is scheduled to leave Washington for two weeks at the end of the day on June 24.

Brady said he's skeptical that things will wrap up by either of those dates "unless discussion and negotiations pick up the pace dramatically," he said. He also said: "On the trade title, we're nowhere close to resolution on those issues," on a phone call with reporters June 6.

However, Brady said he hopes that trade wouldn't be left behind, and also said, "I don't see a need to abandon the discussions" to find trade provisions from the Senate and House trade titles that a majority of conferees will support.

One of the theories for jettisoning trade is that both Senate Minority Leader Mitch McConnell, R-Ky., and the Democratic leaders of both chambers want to pass subsidies for domestic semiconductor manufacturing, and feel there is enough support to get a narrower bill into law more quickly.

Brady, however, says he's "very skeptical" of the core premise of the law, that the semiconductor industry needs taxpayer dollars, and he said he's particularly opposed to giving it tax incentives, when China has targeted 10 industries it wants to dominate in the future, not just semiconductors. Only one Republican in the House voted for its China package, though it's not clear how many felt the core premise was fine, but that it was larded up with too many liberal priorities.

On trade, Brady said he thinks conferees can find common ground to pass a renewal of the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill. He added, "I'm hopeful we can find common ground on a fair, timely and transparent exclusion process."

The Senate bill, but not the House bill, directs the Office of the U.S. Trade Representative to re-open an exclusion process to all importers of goods on the Section 301 tariff lists, tells the agency what should be considered in granting exclusions, and says that exclusions should last for 18 months. However, it does not guarantee a broader exclusion process will begin, because it gives the USTR the ability to tell Congress it determined "that maintaining an exclusion process ... would impair the ability of the United States to maintain effective pressure to remove unreasonable or discriminatory practices." USTR has lobbied to remove this provision, arguing that it would undermine America's leverage with China.

Brady said that without exclusions, small and medium-sized manufacturers will lose out to competitors because they haven't yet been able to source their inputs or the equipment they use to manufacture goods outside China. He said they should not be punished for not having the capability or financing to find new sources.

There was a non-binding motion to instruct conferees to retain that language, but it only drew 53 votes.