Both the House Ways and Means Committee and the Senate Finance Committee approved language to implement three pending free trade agreements in mock markups, just days after a purported deal to move the FTAs toward final passage fell apart.
The House Committee passed language for implementation of the South Korea agreement by a vote of 22 to 15; language for implementation of the Panama agreement by a 22 to 15 vote; and language for implementation of the Colombia agreement by a 22 to 14 vote. The Committee did not consider any language addressing renewal of trade adjustment assistance (TAA), the key sticking point preventing the legislation from passing in early July.
The Senate Committee passed language for implementation of the South Korea agreement and renewal of TAA by a 13 to 11 vote; language to implement the Panama agreement by a 22 to 2 vote; and language to implement the Colombia agreement by an 18 to 6 vote.
Much of the voting was done along party lines despite bipartisan support for the trade measures; however, language approved in the mock markup process does not move forward as a formal bill.
This is a traditional step taken by congressional committees with jurisdiction over trade agreements so that members of Congress can express views prior to the formal submission of implementing legislation by the White House. Once the final legislative language is submitted, Congress as part of the president’s Trade Promotion Authority (TPA — previously known as “fast-track,” which was in effect at the time the three trade agreements were reached in 2006 and 2007 during the Bush administration) has 90 days to either approve or reject them, without opportunity for amendment.
Trade adjustment assistance
According to Senate Finance Committee Chairman Max Baucus (D-MT), the proposal will provide an economic boost of billions of dollars to the U.S. economy, restore key TAA programs and create new opportunities and open new markets for U.S. workers, ranchers, farmers and small businesses across the country.
Baucus and camp had negotiated an agreement with the Obama administration on renewing TAA through the end of 2013. Under the agreement, TAA would continue to be available to service workers, and displaced workers would receive a 72.5% tax credit to compensate for out-of-pocket health care costs — down from the 80% level granted under the 2009 economic stimulus law that expired in February, but greater than the 65% that existed previously.
The package also contained reforms to unemployment insurance and a reduction in the number of weeks displaced workers would receive TAA support — down to 117 weeks from the 156 weeks that was granted in the economic stimulus law. But the agreement did not specify the procedure Congress would use to reauthorize TAA, leading to the holdup of the bill passing earlier this summer.
Disagreement delays action
Disagreements, including among Republicans, over how to handle legislation renewing TAA delayed congressional ratification of the free trade agreements well into July.
Although Republicans in both the House and Senate agree that the worker-assistance program should be considered separately from the trade agreements, they differ on which procedures to implement. House Republicans are considering holding separate votes on TAA and the South Korean trade agreement before combining them and sending the complete package to the Senate. But Senate Republicans want the TAA measure tied to the renewal of the president’s TPA, which allows ratification of negotiated trade agreements without amendments.
If Congress and the Obama administration do not agree on a procedure soon, the White House is expected to send the trade agreements to Congress with TAA included as part of the South Korea pact. Attaching TAA to the Korea deal would protect the worker program under fast-track trade procedures, thereby getting votes on both sides of the aisle, and ensuring that Congress votes on the pacts within 90 days.