Democrats on the Ways and Means Committee offered ambitious plans in a sweeping competition bill released Tuesday night to expand the Trade Adjustment Assistance program, advance tougher requirements that countries must meet to receive trade breaks, and make it difficult for China and other nonmarket countries to ship goods to the U.S. through the mail duty-free.
Committee Democrats said a Senate competition bill fell short of their goals by omitting the Trade Adjustment Assistance program and by renewing the Generalized System of Preferences without requiring participating countries to meet more stringent labor and human rights standards. The Senate bill also would reauthorize the miscellaneous tariff program of time-limited tariff reductions and eliminations on industrial products and chemicals without excluding finished goods.
Ways and Means Chairman Richard E. Neal, D-Mass., said the Senate bill broke with requirements that legislation with tax implications originate with his committee, failed to meet workers’ needs, and was not tough enough on China’s trade practices and policies that put the U.S. at a disadvantage.
In a statement, Neal said the House draft bill “ensures American workers, manufacturers, and farmers have all the tools they need to succeed in the world economy. This legislation is the boldest, best option we have to stand up to China’s harmful actions and support American workers, and I look forward to discussing these proposals further during our conference on the package with the Senate.”
The top Republican on the House Science, Space and Technology Committee, Rep. Frank D. Lucas of Oklahoma, criticized the competitiveness package in a statement Tuesday night, saying Democratic leaders should have sought consensus with the Senate. “At first glance, this bill actually weakens our ability to deal with the malign influence from China,” Lucas said.
The trade section summary by the Ways and Means Committee would provide more benefits and make it easier for farmers, workers, communities and businesses adversely affected by trade to receive help through the TAA program. The Ways and Means Committee approved a proposed expansion in September as part of what was then a $3.5 trillion budget reconciliation package.
When the reconciliation package was reduced to a $2 trillion top line in November, a slimmed down version of the program survived.
The competition draft bill released Tuesday would reestablish an assistance program for communities where the Labor Department has certified workers, companies or farmers are hurt by trade and that meet other criteria such as being historically economically distressed or having a per capita income that is 80 percent or less of the national average.
A company could qualify for the TAA program if it has seen a decrease in either employment or sales because of trade rather than having to meet both conditions. The goal is to provide assistance before a company lays off workers. The draft would also make it easier for workers to qualify for financial and job retraining.
The TAA in the competition bill would have a 2028 expiration. The program reverted to one with fewer benefits and limited to workers in manufacturing on July 1, 2021, after Democrats and Republicans could not agree on an extension. The program will expire completely if not reauthorized by July of this year.
Trade program renewals
Two trade programs that expired Dec. 31, 2020, would be renewed under the House legislation, but with changes.
The Generalized System of Preferences lowered U.S. tariffs on selected imported goods largely from developing countries that met certain criteria, and the miscellaneous tariff program provided time-limited reductions in duties on imported products that manufacturers say are unavailable from U.S. sources.
But Earl Blumenauer, chairman of the Ways and Means Trade Subcommittee, said countries participating in GSP should meet stronger accountability requirements to continue to receive tariff breaks on selected goods.
Blumenauer, D-Ore., said new criteria for removing countries from GSP were needed and that there should be more frequent reviews by the president and the executive branch to determine if countries are meeting eligibility standards. The draft bill would add environmental protection, human rights, rule of law and anti-corruption standards as eligibility requirements.
Last week, Blumenauer introduced legislation that would prevent companies in countries with nonmarket economies such as China and that are on a watch list of trade violators maintained by the U.S. Office of the Trade Representative from mailing goods to customers that are valued at $800 or less. The limit, known as the de minimis, is the maximum value a country sets for duty-free entry of foreign goods.
Blumenauer said the exclusions was necessary because companies in nonmarket economies evaded duties by breaking orders into multiple shipments of products that could be the work of forced labor and involve intellectual property theft that put U.S. companies at a disadvantage.
The draft bill released Tuesday includes Blumenauer’s legislation.
Under the draft competition bill, participating countries would have to meet standards for recognizing and protecting workers’ rights and also would be reviewed for economic empowerment of women. The Office of the U.S. Trade Representative and the deputy undersecretary of labor for international affairs would be directed to review the laws and legal rights protected in GSP countries annually in such areas as employment conditions and protections against violence and harassment, including actions based on gender.
The GSP would be reauthorized through Dec. 31, 2024.
The bill would also reauthorize legislation for the miscellaneous tariff program to allow for new tariff breaks beginning Oct. 15, 2022, and Oct. 15, 2025. Under the process, the U.S. International Trade Commissions vets requests from manufacturers for lower tariffs and sends recommendations to lawmakers for action.
Congress last approved a miscellaneous tariff bill in 2018 that eased duties on 1,662 products that weren't produced domestically.
The trade provisions in the competition bill would require certification that a product is not a finished good or product. Critics say finished good compete with domestic producers and could affect domestic supply chain.