Eternal Vigilance Needed on Trade Carve‐Outs
A bill that would have set a troubling precedent indeed was killed in the Senate last week. I’ve written previously about the Trade Adjustment Assistance program, and its fate has been tied up with the Generalized System of Preferences, a scheme by which certain developing countries gain duty‐free access to the U.S. market for many of their goods. Congress was trying — and failed — to pass an extension of the programs together, along with the Andean Trade Preference Act.
Well, in an effort to extend for eighteen months the stimulus‐enhanced TAA program (they were less fulsome in their enthusiasm for the other part of the bill; the barrier‐reducing ATPA), Senators Bob Casey (D‑PA) and Sherrod Brown (D‑OH) introduced what they deemed to be a legislative “fix” to the thorny problem of how to extend all these programs in the face of Sen. Jeff Sessions (R‑AL) opposition to the GSP so long as sleeping bags were included in the program (there just happens to be a sleeping bag manufacturer in his state). Their solution? Just carve out sleeping bags from the GSP.
Section 202 of the proposed bill was literally titled “Ineligibility of Certain Sleeping Bags for Preferential Treatment Under the Generalized System of Preferences”. The Senators didn’t even go to the trouble of carefully wording and designing the provision so that it — oh, hey, look at that! — just happened to pertain to exactly the product for which a carve‐out was being sought. No, in this case all subtleties were thrown to the wind. They even, should any confusion remain, helpfully provided the specific H.S. number (the code used by customs officials to identify a good) for the sleeping bags in question.
(I should note here that administrative reviews — processes built into the GSP to avoid what legislators deem undue harm to domestic interests — had already shown that the conditions for GSP ineligibility for sleeping bags were not met. )
While this bill thankfully failed, it serves as a timely reminder that legislators will not allow anything so minor as the rule of law (in this case an administrative review) to prevent them from seeking favors for certain constituents. Thank goodness that effort was thwarted this time: a precedent whereby any Senator (or House member, for that matter) can get a carve out from general trade liberalization for their special interest friends would see the post‐war progress on freer trade — imperfect though that may be — quickly unravel.
An additional note: in their press releases, Senators Casey and Brown both alluded to the “fact” that the TAA helps workers “either get back to work or regain some measure of the financial security that has been stripped from them due to unfair foreign trade.” [emphasis mine] TAA has no such condition attached: workers eligible for the stimulus‐enhanced TAA didn’t even have to prove that they lost their job because of a trade agreement, let alone any condition that the trade was “unfair” (i.e., a result of dumping or subsidization — and see here why those charges are themselves canards). Unless, of course, the Senators consider any trade that threatens domestic producers’ interests to be “unfair”.
