29 December 1997
The Journal of Commerce
Richard Lawrence
Congress to study range of trade policies in '98
Fast-track authority tops unfinished business
The new year brings Congress a full plate of trade issues, which includes policies toward China and Cuba, a new Africa trade initiative, and the use of economic sanctions.
WASHINGTON - A broad trade policy agenda, extending well beyond the debate over presidential fast-track negotiating authority, awaits Congress in 1998.
Much of it, such as developing-country trade preferences and encryption product export controls, represents business left unfinished in 1997.
But some relatively new bills, which received little, if any, action this year, are expected to draw serious consideration, among them an attempt to rein in unilateral U.S. economic sanctions.
How Congress proceeds potentially affects billions of dollars in two-way trade.
Congress, for example, will be asked to consider three seperate initiatives giving duty-free benefits to less-developed countries.
In February, the administration will unveil its latest proposal to extend the Generalized System of Preferences -a duty-free program for about 140 developing countries covering thousands of products. The program expires June 30.
The administration, U.S. officials say, will fashion the program so that the least- developed nations win a bigger share of the duty-free benefits. And, others say, a declining federal budget deficit may enable Congress to extend the program for more than just a year or so.
Meanwhile, the House Ways and Means Committee seems certain to act quickly on the Africa Growth and Opportunity Act, which gives sub-Saharan African nations duty-free access for textiles, apparel and other products beyond those covered by GSP.
The measure also creates a high-level U.S.-African economic forum and authorizes U.S.- African free trade areas.
Extending GSP
Pending, too, is legislation offering 26 Caribbean Basin countries the sarne access to the U.S. market that Mexico and Canada get under the North American Free Trade Agreement.
While Congress is widely expected to approve GSP's extension -though perhaps not until autumn, causing the program to again lapse briefly- the fates of the African and Caribbean Basin, initiatives are less certain.
The U.S. textile industry strongly opposes duty and quota-free benefits for sub- Saharan Africa as well as a House Ways and Means Committee proposal to accord duty- free access to Caribbean textiles and apparel not made from U.S. fiber and fabric.
Dimming prospects for the Caribbean bill, the House early last month defeated an attempt to pass it without floor amendments. Regrouping, the bill's House backers will not push the bill again until the fast-track debate is settled, congressional sources say.
The African bill's prospects in the House look good, except for the textiles-apparel provision. But the measure's Senate chances are less clear. Few senators are pushing the measure and business support is broad but thin.
"Not many firms are interested in investing in Africa," one consultant noted.
Meanwhile, China-related legislation is piling up. Just before adjourning, the House approved a series of bills largely aimed at cracking down on China's human rights and trade practices.
Goods produced by forced labor and China's military would come under closer scrutiny and some Chinese officials would be denied U.S. visas.
Senate action on at least some of the bill is expected.
Congress also will review President Clinton's recent decision to permit U.S. nuclear power equipment exports to China.
Both the House and Senate may oppose the measure, congressional sources say, but probably not by the two-thirds voting margin that would prevent the exports from resuming.
A bill giving China permanent "most-favored-nation" trade benefits remains pending, but the administration calls it premature and key business groups have stopped short of endorsing it.
The U.S.-China Business Council, for one, is first waiting to see how U.S.Chinese relations progress, say Robert Kapp, its president.
Momentum on Cuba policy
An effort to tighten U.S. Cuba policy may gather momentum, if, as expected, President Clinton in January again declines to implement the Helms-Burton Act's III, which authorizes U.S. firms and citizens to file lawsuits against foreign entities profiting from U.S. property confiscated by Cuba.
A pending House bill, which has the support of Rep. Ben Gilman, R-N.Y., the House International Relations Committee chairman, would deny the president the authority to suspend the Title III provision.
Rep. Gilman also may be a key player in another, very different bill, requiring the administration and Congress to use more caution before enacting, unilateral trade sanctions against other nations.
A broad-based business coalition, led by the National Foreign Trade Council, is pressing for legislation to help assure that future U.S. unilateral sanction do not unnecessarily Jeopardize U.S. economic interests.
Impact studies would be required before sanctions are applied.
'Need more co-sponsors'
So far, the bill has attracted nine co-sponsors in each the House and Senate.
But, says Frank Kittredge, the National Foreign Trade Council president, "our goal is to get a helluva lot more (co-sponsors)."
Congress will enact the sanctions reform bill in 1998, though it "won't be easy," legislative sources predict.
Chairman Gilman, for one, is characterized as a sanctions advocate.
Virtually no chance, however, is given to a new export controls law in 1998.
No compromise is foreseen between the administration and computer software makers on encryption policy, and U.S. industry is withholding support for a basic new export administration act.
The administration, said Undersecretary of Commerce William Reinsch, will not push for a basic new export control act until it gets "a signal" from Congress that it is ready to act in a "clean, expeditious" fashion.
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