May Legislative Update
May 22, 2014

Obama Administration Graduates Russia from Trade Preference Program

On May 7, President Obama notified Congress that he intends to graduate Russia from the Generalized System of Preferences (GSP) program because the country no longer meets the statutory eligibility requirements.  The GSP program expired last June when efforts to renew it failed to move in the Senate due to procedural objections.  According to the President’s notification, the decision to remove Russia was based on the determination that the country is sufficiently advanced in economic development and improved in trade competitiveness that continued preferential treatment under the GSP is not warranted.  Senate Finance Chairman Ron Wyden, (D-OR) issued a release in support of the President’s decision stating, “Russia clearly no longer meets GSP eligibility requirements.”  Wyden went on to state, “I look forward to extending this important program as quickly as possible, so that it may continue creating new opportunities for U.S. companies to build economic ties with developing countries and drive economic growth.”  For a copy of the President’s transmission, click here; and for Chairman en’s press release, click here

U.S. Trade Representative Testifies Before Senate Committee on Finance

After a brief postponement on the hearing date, U.S. Trade Representative Michael Froman returned to Capitol Hill to testify before the Senate Committee on Finance on the President’s 2014 Trade Agenda on May 1.  Ambassador Froman reiterated the intention of the U.S. Trade Representative’s (USTR) Office to conclude negotiations on the Trans-Pacific Partnership (TPP) before the end of the year.  He also called President Obama’s most recent trip to Japan as accomplishing a “milestone achievement” that made “significant progress in our bilateral market access discussions” and “identified a path forward on agriculture and autos.”  Resolving both of these issues with Japan is crucial to the completion of the agreement. 

In his opening statement, Senate Finance Chairman Ron Wyden (D-OR) highlighted the “new breed of trade challenges” that future reciprocal market-opening agreements must address.  Among the issues the Chairman drew attention to included digital trade, trade secret theft, competition with state-owned and run enterprises, indigenous innovation and currency manipulation.  In addition, Wyden emphasized that trade negotiations must be more transparent, and that this is a growing expectation of the general public.  

Ranking Member Orrin Hatch (R-UT) began his opening statement by expressing disappointment that Ambassador Froman declined an earlier invitation to attend a Senate Finance hearing on Trade Promotion Authority.  He went on to state that failure to renew TPA creates a “serious, and perhaps fatal, flaw in the President’s agenda” and expressed deep skepticism that USTR could conclude a high-standards agreement without TPA.  In addition to criticizing the Administration for not seeking TPA more vigorously, he also expressed concern regarding the President’s enforcement record, including the failure to bring a single case against Russia, despite numerous World Trade Organization violations. 

Additional information about the hearing, including a webcast, Member’s opening statements, and Ambassador Froman’s testimony, click here.

Ways and Means Trade Subcommittee Debate LNG Exports in Light of Ukraine Situation

The House Committee on Ways and Means, Subcommittee on Trade discussed the trade implications of U.S. energy policy and explored the possibility of exporting liquefied natural gas (LNG) at a hearing on May 1.  The reduction of barriers to LNG exports have been a frequent topic of debate in Congress, and have received even greater attention as of late due to its geopolitical implications involving the situation in Ukraine.  Those in favor of LNG exports cite the potential significant increases in U.S. supplies of natural gas as an opportunity for the United States to become a player of influence in energy security and the global energy market.  Those who oppose, however, fear that increases in LNG exports will negatively impact domestic energy prices, resulting in a burden on U.S. consumers.  

The Subcommittee invited Matthew J. Klaben, on behalf of the National Association of Manufacturers; Judy Hawley of the Port Commission; Daniel J. Weiss with the Center for American Progress; and Sarah O. Ladislaw with Center for Strategic and International Studies, to testify.  To see full versions of the witnesses’ testimony, click here.

New Confirmations of Key Trade-Related Political Posts

At the beginning of this month, the Senate Committee on Finance held hearings for the nominations of two key trade-related positions in the Executive Branch. 

The Committee confirmed Stefan M. Selig as Under Secretary for International Trade at the Department of Commerce.  He most recently served as the Executive Vice Chairman of Global Corporate and Investment Banking at Bank of America Merrill Lynch, and possesses significant experience in mergers and acquisitions.  Selig is expected to play a pivotal role in the Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (T-TIP), and other ongoing trade agreement negotiations.  According to his testimony before the Committee, he plans to, “develop strategies to increase U.S. exports that boost growth and support good jobs throughout the United States” and “attract, retain, and expand foreign direct investment in the United States.”  Selig earned a bachelor’s degree from Wesleyan University and an M.B.A. from Harvard Business School.  To read his full statement, click here.  

Darci Vetter was also nominated and confirmed as Chief Agricultural Negotiator at the Office of the U.S. Trade Representative (USTR).  In her prior role at the Department of Agriculture, her key responsibilities involved international trade negotiations and export assistance programs, coordinating the Department’s international food aid programs, and overseeing the Department’s international activities.  She also previously worked as an International Trade Advisor on the Democratic Staff of the Finance Committee and as the Director for Agricultural Affairs at USTR.  In her testimony, she committed to “leveling the playing field for our farmers and ranchers, and holding our trading partners accountable by enforcing trade rules to ensure our products are treated fairly” and “advancing our ongoing negotiations – TPP and T-TIP – where we are pursuing high-standard trade agreements that will create significant new market access opportunities for U.S. agriculture.”  Vetter grew up in Nebraska on a family farm, received a B.A. from Drake University and a M.P.A. from the Woodrow Wilson School at Princeton University.  To read her full statement, click here.