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Congress May Act On Trade Legislation

James A. Morrissey, Washington Correspondent

Now that health care reform has been enacted into law, Congress may consider some of the trade issues that have been pending for some time, since some of the same committees that shepherded the health care legislation through Congress also have jurisdiction over international trade.

There are a number of trade issues in various stages of consideration that are of particular importance to U.S. textile and apparel manufacturers, retailers and other importers.

At the top of the agenda for textile manufacturers is legislation granting duty-free entry into the United States of components that do not compete with domestic manufacturers.  Those duty suspensions expired in December, and many U.S. manufacturers, in addition to textile producers, feel the ability to import duty-free components is a key element in a making them competitive. The legislation has widespread support but has been held up for unrelated issues.

There most likely will be legislation granting expanded trade preferences to Haiti. Congress, the Obama administration, textile and apparel manufacturers, and importers all are united in their desire to help that devastated nation get back on its feet. Since apparel manufacturing was the largest single sector in Haiti's economy prior to the earthquake, providing 25,000 jobs and accounting for 80 percent of that nation's export earnings, textile and apparel trade will be at the heart of an expanded trade and aid effort. A major sticking point at this time is just how much yarn and fabric from Asia and other countries outside of the region will be allowed in duty-free apparel imports. U.S. textile lobbyists have been meeting with congressional staffers working on the legislation in an effort to ensure the legislation does not go too far and have a major impact on U.S. job losses.

A bipartisan group of senators is sponsoring the Currency Exchange Rate Oversight Reform Act, which is designed to crack down on currency manipulation by China and other countries in order to gain an advantage in international trade. The legislation directs the Treasury Department to take "priority action" when it determines that a country is "fundamentally misaligning its currency." The bill is likely to have considerable support in Congress, but it is opposed by the Obama administration, so it's not likely to be enacted. However, its existence does tend to put pressure on the U.S. and Chinese governments to negotiate a solution to the currency problem.

There's a chance that legislation can be enacted to grant U.S. Customs and Border Protection additional resources and authority. The U.S. textile industry is pushing hard on this one, but importers are warning that it should not go so far that it will stifle trade.

The House Trade Working Group, with more than 100 members, is supporting far-reaching legislation calling for a review of all existing trade preference agreements and setting guidelines for any new agreements. Among other things, it would replace the President's fast track negotiating authority with procedures requiring more congressional involvement and oversight. Nothing this far-reaching will be enacted, but parts of the legislation could be included in other measures that might move through Congress, particularly if there is an effort to renew the President's expired fast track authority.

April 27, 2010