Earlier this week, with strong bipartisan support and vibrant endorsement by top Republicans –- including incoming Ways & Means Chairman Dave Camp and Trade Subcommittee Chairman Kevin Brady –- the House passed the Omnibus Trade Act of 2010 (H.R. 6517). The bill contains measures that are critical to manufacturing in America: more than 300 new duty-suspension provisions (tranche 2 of the Miscellaneous Tariff Bill or MTB), extension of the Generalized System of Preferences (GSP) for developing countries, and extension of the Andean Trade Preferences, which provide our strong ally and partner Colombia with continued duty-free access to the United States. It is vitally important that the Senate pass this bill as soon as possible.
This bill appears to be stuck in the Senate, with opposition to several specific provisions. But if ever there’s a time for seeing the big picture — the big JOBS picture — this is it. Rejection of the bill would hurt manufacturers in the United States while being seen as a slap in the face of one of our closest allies, Colombia. Indeed, allowing the preference programs to expire will have a chilling economic and diplomatic impact. These programs benefit developing economies struggling to recover from the global downturn, as well as the American manufacturers who use those countries’ exports in their supply chain and production lines.
And not proceeding on the bill’s 300 new MTB provisions will result in what’s effectively a tax increase on inputs and raw materials needed by American manufacturers but unavailable in the United States. Enactment of MTB is one of the most important short-term actions Congress can take to preserve and expand good American jobs, cut the costs of doing business in the United States and boost American manufacturing exports. U.S. manufacturers large and small use the MTB’s tariff suspension provisions to obtain raw materials, proprietary inputs and other products that are not available in our nation. Without the MTB, the cost of these companies’ products will inevitably increase, forcing them to pass higher costs on to consumers and making their products less competitive. These higher costs translate into lost jobs for American workers.
The last MTB package passed the Senate this summer by unanimous consent, i.e., with no opposition, so it shouldn’t be controversial. Blocking it would be the real political problem.
Of course it would be great for U.S. manufacturing exports if the U.S.-Colombia FTA were in existence – and it would be even better to have all three pending FTAs implemented and driving increased U.S. exports, to the tune of what the U.S. International Trade Commission estimates to be about $15 billion annually. And it’s our top trade goal in 2011 to have them passed as quickly as possible. We’ve been cheered by the comments from Congressmen Camp and Brady, when they have vowed in recent weeks to bring the three pending FTAs with Colombia, Korea and Panama up for approval in 2011. Trade agreements generate exports, which creates growth and jobs here in America.
But holding out on passage of the pending Omnibus Trade bill is going to create pain and won’t hasten the arrival of the three pending FTAs in Congress. Playing politics with trade has cost manufacturing in America plenty over the last few years. We don’t need to exacerbate the situation at this point. The next year will bring a new emphasis on how important trade is to our economy and our growth. The Senate today has a chance to put an earnest money deposit down on the 2011 trade agenda by passing H.R. 6517.