Finance Ranking Member Says No TAA Without Traditional Trade Agreement Negotiations

The top Republican on the Senate Finance Committee said renewing the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill didn't happen last year because Democrats pushed "social policy and environmental policy in MTB and GSP."

While Sen. Mike Crapo, R-Idaho, expressed some optimism that GSP and MTB could pass with both parties' support, it's not clear whether the linkage of Trade Adjustment Assistance to GSP and MTB will continue to stall the programs' renewal.

According to the U.S. Department of Labor, about 63,000 workers weren't able to apply for TAA between July 1, 2021, and June 30, 2022, either because they lost their jobs to countries that the U.S. does not have a free trade deal with, such as China or Vietnam, or because they are service workers, and the expansion of TAA that covered call center workers and the like had expired. Since July 1, 2022, the administration said, about 23,000 workers have been unable to start benefits, either because an investigation can't be done on whether they qualify, or because they were certified after an announcement but before they were laid off, and the job losses came after June 30 last year.

Crapo said during a speech at the Washington International Trade Association conference Feb. 14 that Republicans do not support TAA renewal unless they get what they want -- a comprehensive trade agreement with tariff reductions in a number of sectors.

"If there were an actual trade agreement before Congress, I think you would see an openness" from Republicans to consider TAA "in the context of that trade agreement," he said.

Crapo argued that GSP and MTB deserve to move on their own, and that Congress should do so quickly. He said when he visited the Philippines, Taiwan and India, those countries' politicians told him they are "eager for us to pass MTB and GSP. Because they want to be our trading partners. But if we don't do it with them, they will have to move to China. And China is openly courting them."

He said it's so important "to get at least these measures enhanced and to move forward."

The Trump administration pushed India out of GSP over Indian trade policy issues that are longtime irritants for U.S. exporters. Before that, India was the largest participant in GSP.

When asked after his talk if GSP and MTB could pass in the next two months, Crapo said, "I never give timelines on how fast legislation can happen."

Crapo complained that the administration's "frameworks" and trade initiatives don't accomplish enough for U.S. exporters, and that both Democrats and Republicans are telling U.S. Trade Representative Katherine Tai that she needs to consult more with Congress about what they want to see in those trade negotiations.

"Part of that is an effort on our part to tell them they need to expand the content of these negotiations to be something worthy of requiring congressional approval," he said.

Crapo, who described his comments on Biden's trade policy as "stern," also criticized how the administration is approaching disputes with Mexico and Canada under the USMCA. "The administration has been lackluster in enforcing the USMCA," he said.

WITA CEO Ken Levinson asked Crapo about using trade to fight climate change. Crapo was critical of the Inflation Reduction Act, about which he said: "Rather than confront China's abusive trade practices, the administration is unfortunately emulating it by adopting a debt-financed industrial policy for us at home, which will add trillions to the U.S. national debt. This is a huge mistake. Competing with China on irresponsible spending is a race that everyone will lose."

He also said that all the Republicans on the Finance Committee sent a letter last year warning that the electric vehicle credits that favor North American parts and assembly would "alienate our allies at the very time we need to work with them. And that is exactly what happened." The right way to fight climate change with trade, he said, is to "lift barriers for fairly traded green products," including by negotiating an environmental goods agreement at the WTO.