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Correction: House-Passed Deficit Bill Excludes Restriction on FTA Legislation |
As previously reported in the July 29 WorldTrade\INTERACTIVE, the House of Representatives approved by voice vote July 28 the End the Trade Deficit Act (H.R. 1875). However, that WTI article reported on the details of H.R. 1875 as introduced, whereas congressional staff have brought to our attention that the bill was substantially modified before being passed by the House. These changes affect the issues to be reviewed by a new Emergency Trade Deficit Commission and include the removal of a provision that would have prohibited the White House from submitting legislation to implement any free trade agreement before this commission submits its report to Congress and the White House.
The House-passed version of H.R. 1875 would require the Emergency Trade Deficit Commission to examine the nature, causes and consequences of the U.S. trade deficit and provide recommendations on how to address and reduce structural trade imbalances, including with respect to the U.S. merchandise trade deficit.
In examining the causes of the trade deficit the commission would have to assess the impact of numerous factors, including currency practices; tariff and non-tariff barriers and the lack of reciprocal market access as a result of those barriers; investment, offset and technology transfer requirements; labor and environmental standards; policies that assist foreign manufacturers; border tax adjustments; free trade agreements; investment flows into and out of the U.S.; and the extent to which U.S. foreign policy interests influence U.S. economic and trade policies.
In reviewing the consequences of the deficit the commission would have to identify and quantify the impact of the trade deficit on the overall domestic economy, assess the effects of trade deficits in the areas of manufacturing and technology on U.S. defense production and innovation capabilities, and assess the impact of significant, persistent trade deficits on U.S. economic growth.
In making its recommendations to the president and Congress, the commission would be required to identify specific strategies for achieving improved trade balances with those countries with which the U.S. has significant, persistent sectoral or bilateral trade deficits, identify trade policy tools (including enforcement mechanisms) that can be more effectively used to address the underlying causes of structural trade deficits, identify domestic and trade policies that can enhance the competitiveness of U.S. manufacturers domestically and globally, address ways to improve the coordination and accountability of federal departments and agencies relating to trade, and examine ways to improve the adequacy of the collection and reporting of trade data.
The commission would have to submit to Congress and the president within 16 months of the bill’s enactment a report that includes its findings and conclusions with respect to the issues specified as well as any recommendations for administrative and legislative actions it may consider necessary.
As passed by the House, the bill does not include a provision in the version that was originally introduced that would have prohibited the president from submitting to Congress “any free trade agreement, or any legislation implementing a free trade agreement” until the commission’s report has been submitted to Congress and the White House and reviewed in hearings by the House Ways and Means and Senate Finance committees. |
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