Democrats Scramble to Modify Trade Bills as Congressional Leadership Prepares Floor Time

Neither chamber is expected to take floor action on trade legislation this week. Republican leadership in the Senate recently placed trade on the floor agenda (see 1504240026), but the body continues to debate congressional oversight legislation for the administration’s nuclear negotiations with Iran. Experts have long-predicted the Senate will act first, and so far it has led the way through the committee process.

The House leaves the Capitol on May 1 for a ten-day recess, and House Republican leadership did not mention trade among its floor priorities for this week (here). That chamber is starting to tackle the appropriations process. The trade legislation that both chambers moved through committee includes TPA, Trade Adjustment Assistance, Customs Reauthorization and a preference package that contains renewals for the African Growth and Opportunity Act, the Generalized System of Preferences and two preference programs for Haiti.

Democrats Show Stronger Opposition in House

Only two Democrats joined all Republicans to endorse TPA at the Ways and Means markup. Those Democratic “yes” votes came from Reps. Ron Kind, D-Wis., and Earl Blumenauer, D-Ore. Ways and Means Chairman Paul Ryan, R-Wis., rejected consideration of an alternative TPA measure during the April 23 markup.

Committee ranking member Sandy Levin, D-Mich., tried to get a vote on the alternative (here), which Levin says would significantly boost congressional influence in the trade negotiation process (here). The alternate bill, when compared the TPA bill approved in each committee, would take a more confrontational approach to currency manipulation, market access mandates and investment policy, said Levin’s office. Ryan said it was non-germane and therefore doesn’t fit committee jurisdiction.

Levin has stayed out of negotiations between Ryan and Finance Committee leadership. His attempt to get a vote on revised TPA bill shouldn’t have surprised anyone, said New Democratic Network President Simon Rosenberg in a recent interview. House Minority Leader Nancy Pelosi, D-Calif., jumped on board the Levin bill before the committee held its markup (here).

Republicans shot down a range of Democratic amendments that aimed to tighten rules of origin, address currency and boost requirements for human rights, among other proposals. Even those Democrats that voted for TPA generally support the Levin alternative, but the business community still sees some Democrats as potential supporters of the approved TPA bill once it hits the House floor, said National Foreign Trade Counsel President Bill Reinsch at an April 24 event.

Lawmakers and onlookers have suggested for months that Republicans, despite their ability to lose 28 votes on any bill because of their commanding majority, may need roughly 50 Democrats to come on board to pass the bill. The Democratic Party's electoral losses in 2014 make it more difficult to achieve those numbers, said Reinsch. However, Reinsch and USAEngage Director Richard Sawaya also said there may only be from 25 to 30 House Republican defectors in the end. “I’d be surprised if there were more defections than there were the number of people who voted against Boehner for Speaker,” said Reinsch. Twenty-five Republicans voted against House Speaker John Boehner, R-Ohio, for that title at the outset of this Congress (here).

Customs Amendment Opens Door for More Interest Allocation to Domestic Producers

The House passed Customs Reauthorization by voice vote. The lawmakers approved an amendment, offered by Rep. Charles Boustany, R-La., to “ensure that post-liquidation interest received from payments collected under a customs bond is available, where eligible for distribution to domestic producers in accordance with [the Continued Dumping and Subsidy Offset Act],” said Boustany in the amendment (here). The amendment also bans CBP from giving the Treasury Department some of that collected interest, Boustany said.

Senate Lawmakers Aim to Advance Controversial Measures

Senate Finance Committee members tacked on a number of amendments on Customs Reauthorization during their April 22 committee markup. A bipartisan group of Finance members endorsed process reform for the Miscellaneous Tariff Bill and a controversial trade remedy measure for currency manipulation (see 1504230001). Finance Chairman Orrin Hatch, R-Utah, also modified the preference bill before the markup to include tariff changes to outerwear and outdoor goods and customs user fees, notably an increase to the Merchandise Processing Fee.

It’s still unclear how the currency amendment will impact the immediate future for Customs Reauthorization, said Reinsch. Finance members, including Republicans, approved that measure in committee with a decisive vote, but many Republicans, such as Hatch, remain staunchly opposed. The bill would allow the Commerce Department to impose countervailing duties on imports from countries that manipulate currency (see 1502120014). Sen. Chuck Schumer, D-N.Y., led the charge to include that amendment during the markup. Due to the currency provision, Schumer may decide to insist Customs Reauthorization is considered on the Senate floor prior to TPA, in order to prevent the bill from falling to the wayside, said Reinsch. “On the negative side, he could say ‘I can guarantee you the TPA bill takes a very long time if we don’t deal with the Customs bill first,’” said Reinsch. Schumer’s office didn’t respond for comment.

The amendment approved during the Finance markup on human trafficking is also likely to attract opposition on the Senate floor, Reinsch added. The amendment, offered and championed by Sen. Bob Menendez, D-N.J., would “prohibit expedited consideration of trade agreements with any country” the State Department identifies as a “tier 3” on its human trafficking scale. The State Department last put Malaysia, one TPP negotiating partner, in that category in 2014 (here). Enactment of that provision would likely complicate the effort to close TPP with all countries involved, said Reinsch. More amendments on currency and TPP investor-state dispute settlement could also pose challenges on the Senate floor, he said.

Prospects for Conference

Senate and House staffers widely agree lawmakers are poised to go to conference on Customs Reauthorization due to the differences between the bills produced in each House. Lawmakers in both Houses failed to reach consensus on the Customs legislation before introduction, and the two bills have significantly different approaches to trade facilitation and enforcement (see 1504240021). Conference could prolong the process of passing that bill into law unless lawmakers insist it moves forward with the other trade bills, said Reinsch. Both chambers will also have to resolve more minor differences between the other three committee-approved trade bills. That reconciliation could be tackled through the amendment process or in conference, Reinsch said.

Labor, Traditional Trade Critics Continue Opposition Fight

Labor and environmental leaders denounced Trade Promotion Authority and Trans-Pacific Partnership talks on during an April 23 conference call. The trade critics said lawmakers abdicate congressional influence over TPP negotiations with TPA and have muscled through TPA legislation to prevent more scrutiny on what the bill contains. “Even though it’s regular order, you have it put forward in a rush to get it done which is unseemly in terms of Washington,” said Communications Workers of America Senior Director George Kohl. “All the different elements that would go into a really considered debate … isn’t happening.” Regular order refers to the conventional way lawmakers move legislation through the committee level to the floor of each chamber, as opposed to shortening that process through a various congressional procedures. Finance Chairman Hatch recently dismissed allegations that he is muscling TPA through the chamber as “nonsense” (see 1504210019).

The AFL-CIO also launched a new round of anti-TPA advertisements in recent days against Finance Democrats Ron Wyden, D-Ore., and Michael Bennett, D-Colo., both of whom are up for re-election in 2016. The largest network of unions in the U.S. continues to rail against the harmful TPP deal that TPA will help secure. “American workers who have lost their jobs due to trade deals are understandably skeptical,” said top AFL-CIO official Eric Hauser on April 24 in an emailed statement. “The best way to regain workers’ confidence is to release the text, not scold the critics.” The AFL-CIO also urged lawmakers to endorse the Levin TPA substitute in the lead-up to the Ways and Means markup.