Election Fears Fuel Senate Reluctance to Move on Trade Agenda, Says Rep. Paulsen

The departure of former Senate Finance Chairman Max Baucus, D-Mont., in February to take on the role as China ambassador and the takeover of the chairmanship shortly thereafter by Sen. Ron Wyden, D-Ore., continues to prevent progress on TPA due to the differing priorities and relationships the two lawmakers have on Capitol Hill, said Paulsen. But Senate leadership also remains a significant roadblock for TPA passage, he added. Senate Majority Leader Harry Reid, D-Nev., has not publicly rescinded opposition to the legislation (see 14013025). Reid’s dismissal of TPA “really put cold water" on forward movement, he said. That was the second "bucket of cold water on this,” said Paulsen, referring to Wyden's takeover of the chairmanship as the first. Also, "the administration doesn’t want to rock the boat too much before going into the mid-term elections. They don’t want to get their Democratic allies all worked up. And so they think, ‘maybe we’ll just punt.’”

Democrats in both chambers have widely rejected the TPA bill introduced in both the House and Senate in January (see 14021307). Some prominent election analysts predict Republicans could take control of the Senate in the mid-terms by a razor thin margin (here). In that event, “it’s likely you’d see more swift action,” said Paulsen. “The administration would embrace trade right away. There’s not going to be a confrontation there because we already have this agreement with the USTR and their whole agency essentially moving this topic forward.” The Office of the U.S. Trade Representation (USTR) generally supports TPA, but has declined to comment on the bill introduced in January. The House is able to move immediately on that bill if it can get 50 member votes in favor, said Paulsen.

GSP and MTB bills are less controversial, but the Senate is also reluctant to move forward in these areas before elections conclude, said Paulsen. The House Ways and Means Committee, of which Paulsen is a member, has had some recent “conversations” about MTB, said Paulsen. But the Senate wants to “go slow” on these bills and “take action on a lot of these issues post-election,” he added. “To me that’s counterintuitive because these have always been bipartisan. There has always been success on them and you’d think members of Congress would be more anxious to get some wins,” said Paulsen. The Senate Finance Committee, however, may be considering action on GSP at the moment, Paulsen said. Wyden is aiming to move on GSP as soon as possible, said a Senate Finance Committee spokesman, while declining to offer a details on timing.

Despite some indications that lawmakers remain focused on the trade agenda, the paralysis on Capitol Hill is worsening an “anemic” economy, said Paulsen. Congress is standing on the “oxygen tube” of the U.S. trade community by failing to enact regulatory and tax legislative changes, and failing to press ahead on trade opportunities, said Paulsen. This is a new era where trade agreements must encapsulate emerging issues, like state-owned enterprise rules and the digital economy, he added. “Just focusing on tariffs … just focusing on import quotas and other traditional barriers of trade … that’s really no longer enough,” said Paulsen. “This is different. This is more about finding these 21st century trade solutions that will streamline trade and non-tariff barriers and will interconnect the regulations across borders that will help reduce foreign regulatory barriers to our exports.” -- Brian Dabbs