September Legislative Update
September 18, 2014

House and Senate Hold Separate Hearings To Consider Reauthorization of Expiring African Trade Preference Program

Two congressional hearings were held in late July to examine issues related to the reauthorization of the African Growth and Opportunity Act (AGOA), which expires in September 2015.  AGOA is a preference program that provides eligible African countries with duty-free access to the U.S. market, largely in the textile and apparel sector.  The House Ways and Means Trade Subcommittee held a hearing on July 29, entitled “Advancing the U.S. Trade Agenda: Trade with Africa and the African Growth and Opportunity Act,” with witnesses from the private and public interest sector, including Ben Leo, Senior Fellow, Director of Rethinking U.S. Development Policy, Center For Global Development; William C. McRaith, Chief Supply Chain Officer, PVH Corp.; and Witney Schneidman, Senior International Advisor, Covington & Burling LLP; Nonresident Fellow, Africa Growth Initiative, Brookings.  The Senate Finance Committee held a hearing on July 30, entitled “The African Growth and Opportunity Act at 14: The Road Ahead,” with U.S. Trade Representative Michael Froman.

While Members at both hearings expressed broad support for the renewal of AGOA, it remains unclear when Congress would consider legislation.  Members downplayed the likelihood it would happen this year, though many in the private sector, including African companies,  are calling for a long-term extension well before the program expires to provide certainty and continuity.  During the House Ways and Means hearing there was discussion of a 15 year extension; however, Ranking Member Charles Rangel (D-NY) suggested that further consideration of that timeframe is necessary to avoid “locking anyone in.”

During the Senate Finance Committee hearing Ambassador Froman stated there were four things of interest with respect to reauthorization of AGOA: (1) renewal of the third-country fabric provision for a period of time to ensure investment and sourcing; (2) expansion of eligible products; (3) review of “rules of origin” to allow more sourcing of non-African materials, and (4) updating country eligibility requirements to consider compliance with internationally recognized labor rights and the existence of sanitary and phytosanitary (SPS) barriers to agricultural and other products.   There also was discussion about graduating South Africa from AGOA and pursuing a bilateral trade agreement, which would be similar to EU’s approach with South Africa and other African countries.  

For more information about the hearings, including opening statements, copies of testimony and recorded webcasts, click here for the House Ways and Means Trade Subcommittee hearing, and here for the Senate Finance Committee hearing.

 

Senate Finance Subcommittee Examines Lessons Learned from Korea-U.S. FTA

The Senate Committee on Finance, Subcommittee on International Trade, Customs, and Global Competitiveness held a hearing to examine the effects of the U.S.-Korea Free Trade Agreement (“FTA”) two years following its passage.  On July 16, Committee Members heard testimony from Stephen E. Biegun, Vice President, International Governmental Affairs, Ford Motor Company; Sean Murphy, Vice President & Counsel, Qualcomm; Shawna Morris, Vice President, Trade Policy, National Milk Producers Federation & U.S. Dairy Export Council; and Michael Rue, Owner, Rue & Forsman Ranch, Inc., on behalf of USA Rice Federation.

In her opening remarks, Subcommittee Chairwoman Debbie Stabenow (D-MI) expressed that the U.S.-Korea FTA had “fallen short of our hopes,” citing that the trade deficit between the two countries had “increased by nearly 50 percent” since the agreement.  The Subcommittee’s Ranking Member, Johnny Isakson (R-GA) acknowledged that “there have been challenges” with the U.S.-Korea FTA, but emphasized the “$7 billion in Korean investment” that the agreement opened the way for across the United States.         

Opening statements of the Chairwoman and Ranking Member can be found here and here, respectively.  Additional information on this hearing can be found here

House Ways and Means Subcommittee on Trade Holds Hearing on the Advancing the U.S. Trade Agenda at the World Trade Organization

On July 16, the House Committee on Ways and Means, Subcommittee on Trade, held a hearing on advancing various aspects of the U.S. trade agenda at the World Trade Organization (“WTO”).  This hearing followed the WTO’s 9th Ministerial Meeting that took place last December in Bali, where negotiations concluded on the Trade Facilitation Agreement (“TFA”).  The TFA, which covered provisions on customs reforms and agriculture, is currently at a standstill given India’s objections that the agreement could compromise its food security.  

Chairman Devin Nunes (R-CA) focused the Subcommittee hearing on the following issues: (1) implementation of the Trade Facilitation Agreement and opportunities created by the agreement; (2) the potential benefits of an ambitious agreement to expand the Information Technology Agreement; (3) the launch of the recently notified environmental goods agreement; (4) the important role of ongoing monitoring and enforcement activities; and (5) future work of the WTO.  Chairman Nunes stated in a hearing advisory an interest to “explore ways the WTO could more effectively address today’s behind-the-border barriers to trade.” 

Ambassador Michael Punke, Deputy U.S. Trade Representative and U.S. Ambassador and Permanent Representative to the WTO, was the only witness who testified.  For additional information about the hearing, click here

Senate Finance Committee Advances Holleyman as Deputy U.S. Trade Representative

Robert Holleyman was confirmed by the Senate Committee on Finance on July 31 to be a Deputy U.S. Trade Representative, with the rank of Ambassador.  Holleyman’s confirmation will still require a vote on the Senate floor.  He replaces Demetrios Marantis, who resigned earlier this year. At his confirmation hearing, Holleyman was introduced by Sen. Mary Landrieu, a longtime friend. 

Holleyman is the founder and CEO of Cloud4Growth, a cloud technology consulting firm. He formerly led the Business Software Alliance as the trade association’s president and CEO for 23 years.  Holleyman currently serves on the White House’s Advisory Committee for Trade Policy and Negotiations, the principal advisory committee for the U.S. government on trade matters.  He earned his bachelor’s degree from Trinity University and his J.D. from Louisiana State University Law Center. 

For more information on Holleyman’s nomination hearing, click here