WASHINGTON – A House vote Wednesday to extend an expired trade program for the world's poorer countries lays the groundwork for what could be more politically important consideration of three free trade agreements that both the White House and congressional Republicans say could help put Americans back to work.
The House, on its first day back after a summer break, voted by voice to renew the Generalized System of Preferences, a 35-year-old program that allows duty-free entry for some 4,800 products from about 130 developing countries. The program expired at the end of last year and the bill would extend it through July 2013, while reimbursing U.S. importers for duties they have paid since the beginning of this year.
The bill is also seen as the probable means to jumpstart action on the trade agreements with South Korea, Colombia and Panama that were signed during the George W. Bush presidency but still need to be approved by Congress.
President Barack Obama supports the free trade deals, but both the White House and congressional Democrats say they must be linked to renewal of expired provisions of a program that provides training and financial aid to workers displaced by foreign competition.
Obama has put off formally submitting the free trade bills to Congress until he receives assurances he will get votes on the worker aid program. He is expected to address the issue during his jobs policy address to Congress on Thursday.
Before the August recess, Senate Majority Leader Harry Reid, D-Nev., and Senate Republican leader Mitch McConnell of Kentucky said they had agreed on a path forward for voting on both the free trade deals and the provisions of the Trade Adjustment Assistance program to aid workers. A likely scenario is for the Senate to attach the worker aid program bill to the GSP bill, pass that and send it back to the House for a final vote.
"This is the way they can get TAA through the Senate," said Sen. Orrin Hatch of Utah, top Republican on the Senate Finance Committee. "We are hopeful it will force some action," Hatch said at a news conference at which nine Senate Republicans urged Obama to send the free trade bills to Congress for a vote.
Rep. Sander Levin of Michigan, top Democrat on the House Ways and Means Committee and a strong proponent of TAA, also noted that the Senate probably would link the Generalized System of Preferences bill to the worker aid bill. "If that is the path for renewal of TAA, the Republicans have an obligation to ensure that it happens immediately as a primary action."
Republicans are not enthusiastic about the TAA extension, saying the worker aid program is expensive and picks winners and losers, but Senate Republicans have pledged that they will not stand in the way of a TAA vote if they get a vote on the free trade agreements.
The Republicans at the news conference said the three agreements could increase U.S. exports by more than $10 billion a year and translate into some 250,000 jobs, figures disputed by some critics of free trade policies.
The free trade agreement with South Korea alone is the biggest since the 1994 North American Free Trade Agreement with Canada and Mexico. "This is an obvious place we should all be looking because by expanding exports we will increase jobs," said Sen. Rob Portman, R-Ohio.
Rep. Dave Camp, R-Mich., the chairman of the House Ways and Means Committee, reminded lawmakers that the GSP program was also "critical to the competitiveness of many American manufacturers."
About three-fourths of the duty-free imports under the program are raw materials, components, parts and machinery used to produce goods in the United States. Camp's office said that in 2010 U.S. imports under GSP reached about $23 billion. It said that in 2009 the program saved U.S. importers nearly $577 million in duties.
The U.S. Chamber of Commerce, in a letter urging extension of the GSP program, said it had found in a 2006 study that moving GSP imports from the docks to retail shelves supported nearly 82,000 jobs.