Senate Passes Customs Legislation, Preference Package, but Road Ahead Still Challenging
The Senate passed Customs Reauthorization and trade preference legislation on May 14 in heavily-anticipated votes that now pave the way for the chamber to approve a motion to open debate on Trade Promotion Authority and Trade Adjustment Assistance. The May 14 votes come on the heels of the defeat of the procedural motion two days earlier by Democrats (see 1505130015). Senate lawmakers struck a deal on May 13 to move ahead with the four bills, said Majority Leader Mitch McConnell, R-Ky. (here). The chamber will vote to open debate on TPA and TAA at 2:00 p.m.
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Senate lawmakers passed the customs bill 78-20, and the preference legislation, which includes renewals for the African Growth and Opportunity Act, the Generalized System of Preferences and two Haiti tariff elimination programs, 97-1.
Lawmakers also released the amended versions of the two bills as approved by the Finance Committee, which technically replace the contents of two unrelated House bills. Senate leadership filled in those two unrelated bills with customs legislation, S-1269 (here), and the preferences package, S-1267 (here), because of a constitutional requirement that the House originates revenue legislation.
Finance Committee Chairman Orrin Hatch, R-Utah, pushed lawmakers to pass both bills, despite his opposition to the currency language in the customs bill. “Overall, this is a good bill,” said Hatch on the Senate floor, prior to the vote. “A lot of work has gone into it and I know that it reflects the priorities of a number of our members here in the Senate, including myself.” Finance ranking member Ron Wyden, D-Ore., also praised the customs legislation in May 14 remarks as lawmakers prepared to vote on the two measures.
Despite the Senate approval, the customs legislation still faces a difficult road ahead, said a number of lobbyists in the hours before the Senate votes. The House likely won’t act on customs or the preferences legislation until the Senate wraps up legislation work on TPA and TAA, said those lobbyists. If cloture is invoked on TPA and TAA on May 14, the Senate is likely to dedicate next week to an open amendment process, said the trade experts. Both the House and Senate then recess on May 22 for a Memorial Day break.
The currency provision approved in the Senate customs bill is likely to generate significant resistance in the House, said those lobbyists. House Ways and Means Chairman Paul Ryan, R-Wis., one of the key architects of the trade bills, has repeatedly voiced opposition. President Barack Obama, along with cabinet officials, has also warned lawmakers he opposes the provision, The Currency Undervaluation Act, S-433, which passed decisively during the late April Finance Committee markup (see 1504230001). “I imagine Treasury will recommend a veto, but I would not be surprised if [Obama] signed it,” said one lobbyist.
The White House released a statement on May 14 to urge support for the preference bill, but said the customs legislation needs reforms, rejecting in particular the Currency Undervaluation Act, which would apply countervailing duties to in response to currently undervaluation.
Customs Reauthorization will also face an uphill battle with House counterparts over the addition by the Finance Committee of Miscellaneous Tariff Bill process reform, said a number of lobbyists. The committee approved the American Manufacturing Competitiveness Act of 2015, S-998, as part of the customs bill during the markup. The legislation aims to give more impartiality to the tariff suspension submission process (see 1504230001). But House lawmakers still appear hung up on criticism of an underlying MTB bill as an earmark, said the lobbyists. “That may be a problem for Boehner and House leadership,” said one lobbyist. “I think that’s a sleeper issue.” The administration statement said the White House is concerned MTB reform will impact U.S. preference programs.
The differing language on trade enforcement in the customs bill is also likely to complicate House action on the legislation, said the lobbyists. “The customs bill is likely to end up in a conference, because of the differences in the trade remedy and the currency manipulation provisions,” said one lobbyist. “Ninety percent of the bill is the same. But the House really does not want to accept the Senate language.” Another lobbyist predicted Customs Reauthorization will ultimately pass with the Enforcing Orders and Reducing Circumvention Evasion Act and The Leveling the Playing Field Act. Those bills aim to strengthen trade remedies (see Ref:1501130001]). The White House praised the latter bill.