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Mar
3
Meryl Tiemann
Small Business Exporters Association (SBEA)
Inside Washington
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Trade Promotion Authority (TPA)

On Jan. 9, bipartisan leaders from both the House and Senate jointly introduced Trade Promotion Authority (TPA) legislation that will put in place the necessary mechanisms and special procedures for the negotiation, consideration, and implementation of future trade agreements.

Senate Finance Committee Chairman Max Baucus (D-Mont.), ranking member Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) came together and introduced the Bipartisan Congressional Trade Priorities Act of 2014 (H. R. 3830 and S. 1900) which will restore the president’s authority to negotiate trade deals by including strict requirements for Congressional consultations and access to information. TPA was last renewed in 2002 and expired in 2007.

The Bipartisan Congressional Trade Priorities Act of 2014 addresses many of the trade challenges facing the U.S. in the global marketplace, including: competition from state-owned enterprises; localization barriers to trade; and restrictions on cross-border data flows.

TPA-2014 updates labor and environment provisions to reflect recent trade agreements, as well as market access priorities for goods and services. It strengthens oversight by Congress and the public by adding consultation and reporting requirements. TPA-2014 also provides for tougher, enforceable rules against barriers to U.S. agriculture. And for the first time, TPA-2014 sets out a clear directive on currency manipulation, something that was being pushed by members on both sides of the aisle.

The Baucus-Hatch-Camp measure would allow for TPA for four years. Similar to the 2002 measure, the bill would set an expedited legislative path for confirmation of trade agreements and would allow members of Congress only and up-or-down vote, and bar amendments, on a final trade deal.

The U.S. will need TPA to secure approval of the Trans-Pacific Partnership (TPP). Trade negotiators for the 12 countries taking part are closing in on a final agreement, and a minister-level meeting has been mooted for February. Some think President Barack Obama’s trip to Asia in April could become an “action-forcing” event that brings the talks to a conclusion.

Similarly, the United States and the European Union (EU) are pursuing an ambitious and comprehensive trade pact dubbed the Transatlantic Trade and Investment Partnership (TTIP). As negotiators dig into the substance of the agreement, 2014 may be a bit of a slog. Some opponents are making themselves heard, especially in Europe. However, President Obama will travel to Europe in late March to take part in a U.S.-EU Summit, and this and other opportunities to focus high-level attention on the agreement should help keep the talks on track.

In the House, Ways and Means ranking member Sander Levin (D-Mich.) has been working on an alternative version of a trade negotiating authority bill, as he has said trade promotion authority needs to permit members a bigger role in picking potential trading partners and give them greater authority throughout trade negotiations, such as with the deals the administration is working on now, the TPP and TTIP.

The White House issued a statement welcoming introduction of the trade bill, calling it “an important step towards Congress updating its important role in trade negotiations.” The White House also said it stands ready to work with Congress on such measures as Trade Adjustment Assistance, which is popular with Democrats and provides training and funding for workers who have lost jobs because of trade pacts.

NSBA and its international trade arm—the Small Business Exporters Association (SBEA)—on its own and in coordination with the Trade Benefits America coalition, is mounting an ambitious advocacy campaign for TPA.

Export-Import Bank Update

Chairman Hochberg Testifies: Senate Banking Committee

On Jan. 28, Export-Import Bank of the United States (Ex-Im Bank) Chairman and President Fred Hochberg testified before the Senate Committee on Banking, Housing, and Urban Affairs at a hearing entitled “Oversight and Reauthorization of the Export-Import Bank of the United States.” 

Chairman Hochberg offered testimony highlighting many of the Ex-Im Bank’s achievements in recent years and its numbers from 2013. Highlights of the testimony include:

 • Ex-Im supported an estimated 205,000 U.S. jobs in FY 2013;

• Ex-Im generated more than $1 billion for the U.S. taxpayers in FY 2013;

 • Exports from the United States were up in 2013, but authorizations from Ex-Im Bank were off from the prior year, indicating that as the global economy continues to strengthen, exports are being financed not only by commercial banks but also by capital markets;

 • In FY 2013, the Bank financed a record 3,413 small businesses—nearly 90 percent of Ex-Im’s transactions;

 • Ex-Im financed more small businesses in the last five years than the prior eight years combined;

 • The Bank also financed more minority and woman-owned businesses in the last five years than the prior sixteen years combined.

 Congress has mandated the Bank make available 20 percent of their financing to meet the needs of small businesses. In FY 2013 Ex-Im financed a total of $6 billion in small business exports, of which $5.2 billion was for the direct support of American small-business exporters. Total small business exports include those directly exported by small business to a foreign buyer, plus small business inputs into the supply chain of larger U.S. companies’ products which are ultimately exported.

Additionally, to address the needs of their small business customers, Ex-Im Bank implemented a number of new financial products. Their most popular product, Express Insurance, received an innovation in government award from Harvard’s Kennedy School and has helped more than 800 small businesses get a prompt response to their application.

Export-Import Nominee 

The Senate Banking, Housing and Urban Affairs Committee advanced, in an en bloc voice vote, the nomination of Wanda Felton to be first vice president of the Export-Import Bank. Felton was appointed as the first vice president of the Export-Import Bank in 2011.

House Democrats Letter Calls for Ex-Im Reauthorization Hearing

Twenty-six Democratic members of Congress recently sent a letter to House Financial Services Chairman Jeb Hensarling (R-Texas) and Chairman of the Subcommittee on Monetary, Policy and Trade John Campbell (R-Calif.) requesting they schedule a hearing to begin examining issues surrounding the reauthorization of the Ex-Im Bank, since its charter will expire on Sept. 30, 2014.

They emphasized the committee adopted, without objection, an amendment to its Oversight Plan in Feb. 2013 recognizing that the Ex-Im bank is as self-sustaining agency mandated to contribute to the employment of U.S. workers through financing U.S.-manufactured goods and services. They proceed to state that the failure to reauthorize the Bank’s charter in a timely manner would jeopardize the ability of U.S. firms to compete with their global competitors and would tip the playing field in favor of foreign firms.

The letter urges the committee to begin taking the steps necessary to ensure a timely Export-Import Bank reauthorization, stating that the U.S. businesses that rely on the various export credit services that the Bank provides, need certainty in the reauthorization process for long-term business planning purposes. Finally, they affirm Congress can reach a bipartisan reauthorization agreement, as they have consistently done in the past that meets the overall objective of supporting U.S. exports and jobs.

New Export Data

The United States has set another annual record for the fourth consecutive year by exporting $2.3 trillion in goods and services in 2013, according to data released by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department.

According to the data, the total December exports of $191.3 billion and imports of $230.0 billion resulted in a goods and services deficit of $38.7 billion, up from $34.6 billion in November, revised. December exports were $3.5 billion less than November exports of $194.8 billion. December imports were $0.6 billion more than November imports of $229.4 billion.

The data also reveals that U.S. exports supported nearly 10 million American jobs in 2013.

Exports of goods and services over the last twelve months totaled $2.3 trillion, which is 44.0 percent above the level of exports in 2009. During the same timeframe, exports have been growing at an annualized rate of 9.5 percent when compared to 2009.

Among the major export markets (i.e., markets with at least $6 billion in annual imports of U.S. goods), the countries with the largest annualized increase in U.S. goods purchases, when compared to 2009, occurred in Panama (25.9 percent), Russia (20.3 percent), Peru (19.6 percent), Hong Kong (19.2 percent), United Arab Emirates (19.1 percent), Colombia (18.5 percent), Chile (17.1 percent), Ecuador (16.8 percent), Argentina (16.3 percent), and Indonesia (15.5 percent).

USTR Jim Sanford Testifies: House Small Business Committee  

On Jan. 28, the Small Business Subcommittee on Agriculture, Energy and Trade, led by presiding Chairman Richard Hanna (R-N.Y.) held a hearing titled, “Small Business Trade Agenda: Status and Impact of International Agreements.”

The committee heard from its sole witness James Sanford, Assistant United States Trade Representative for Small Business, Market Access and Industrial Competitiveness, on the administration’s efforts to open new markets for small exporters and help create new jobs.

This hearing comes at an important time, as Congress has a number of trade policy initiatives in the pipeline, including the possible renewal of Trade Promotion Authority (TPA), as well as the Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (TTIP), and ongoing negotiations at the World Trade Organization (WTO).

In his testimony, Sanford highlighted that USTR is pursuing a robust trade agenda that supports small businesses and broader economic growth by tearing down barriers and creating new overseas opportunities for U.S. farmers, ranchers, manufacturers and service providers of all sizes. He went on to say that they are working to level the playing field so that workers and businesses can compete and win in a global economy.

NSBA and SBEA have been urging for years—decades, even—that more must be done to emphasize the needs of small business within the scope of U.S. trade in order to enhance exporting opportunities for small U.S. companies. Finally, over the past few years, there has been an aggressive movement by the administration to increase exports and this has also been a contributing factor to the upward trend of growth in smaller and newer exporters than just three years ago. Sanford stated that USTR is collaborating with other agencies, including the Departments of Commerce and State and the Small Business Administration, to connect more U.S. small businesses to regional partners and to foster entrepreneurship.

During the hearing, Sanford stated that the USTR welcomed the introduction of the Bipartisan Congressional Trade Priorities Act of 2014, as it is an important step towards Congress updating its important role in trade negotiations.



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