Some may consider 2013 to mark the beginning of an important new era in U.S. trade policy. The year began with President Obama proposing an ambitious U.S.–EU trade agreement in his state of the union address and ended with progress at the WTO after 12 years of stagnation. But if we look past the hype and grand expectations for the future, we can see that there was only one major change in U.S. trade policy that actually occurred in 2013.
When the Generalized System of Preferences program expired on July 31, U.S. tariffs increased on imports from more than 120 developing countries.
The program would have been extended but for the opposition of Republican Senator Tom Coburn of Oklahoma. You can read news accounts to learn about the saga in greater detail, but let me give you the annotated summary—a Republican senator put a hold on a bill that would prevent a tax increase because it didn’t include enough other tax increases to overcome the “expense” of Congress failing to raise taxes.
Yes, it defies logic.
Unfortunately, this bizarre incident is more than just a case study into the peculiar facets of American legislative politics, it also brought us the year’s only significant change in U.S. trade law.
But don’t worry. Most observers are confident that Congress will eventually extend the GSP program and retroactively refund all the duties collected since its expiration.
Just so we’re clear, the elected masters of our economy raised taxes on poor people in poor countries (and the Americans those people do business with), but they didn’t mean to and they’re going to fix it. When they get around to that is anyone’s guess.