Raymond J. Ahearn, Coordinator
Specialist in International Trade and Finance
During the first session of the 112th Congress, Congress approved three long-stalled free trade agreements (FTAs) with South Korea, Colombia, and Panama. Passage of these FTAs was facilitated by agreement to consider legislation extending the Trade Adjustment Assistance (TAA) program that is designed to assist workers displaced by foreign trade. All four bills passed by wide margins. The TAA bill also renewed the General System of Preferences (GSP), a program that allows certain duty-free imports from eligible developing countries. In addition, Congress authorized full U.S. participation in general capital increases (GCIs) at the World Bank and four other regional development banks.
With these issues resolved, Congress may address other international trade and finance issues in the second session. In addition to monitoring implementation of the three FTAs passed in 2011, the most prominent issues include the ongoing Trans-Pacific Partnership (TPP) FTA negotiations, Russia’s accession to the WTO, the Doha Round stalemate and alternative WTO approaches to trade liberalization, China trade and currency developments, the Administration’s trade reorganization proposal, trade sanctions, customs reauthorization, export promotion, trade finance, and the impact that the Eurozone crisis could have on the U.S. economy.
• The Administration’s top trade liberalizing priority this year is the current nine country regional TPP FTA negotiations. If the negotiations move rapidly, the Administration could begin discussions with Congress on the extension of Trade Promotion Authority (TPA)—formerly fast-track negotiating authority.
• Russia is expected to become a member of the WTO early this year. In order for U.S. businesses to gain full commercial benefits from Russia’s accession, Congress may vote on according Russia permanent normal trade relations (PNTR) status.
• Congress can be expected to continue to press China for currency reforms, stronger intellectual property rights protection, and market access liberalization. Congress may also address issues raised by the Federal Circuit’s December 19, 2011, determination that the U.S. countervailing duty law (CVD), as currently written, does not apply to nonmarket economy (NME) countries, such as China and Vietnam.
• On January 13, 2012, President Obama asked Congress for authority to reorganize and consolidate the business-and trade-related functions of six federal entities into one department. Congress could react to the proposal in a number of ways.
• With the WTO Doha Round negotiations entering their 11th year, Congress may examine a range of new ideas on how to break the stalemate, as well as new trade liberalizing proposals that some members of the World Trade Organization (WTO) may undertake.
• Congress approved new trade sanctions on Iran in late 2011, and can be expected to consider additional sanctions on Iran, as well as North Korea and Syria, this year.
• Congress may also consider legislation to reauthorize U.S. Customs and Border Protection (CBP), examine limitations on funding for the Export-Import Bank, monitor the Administration’s National Export Initiative (NEI), and continue oversight hearings on the Eurozone crisis.
Date of Report: February 8, 2012
Number of Pages: 35
Order Number: R41553
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