The Administration strongly supports Senate passage of the Bipartisan
Trade Promotion Authority Act of 2002 (TPA), the Andean Trade
Preference Expansion Act (ATPA), and extension of the Generalized
System of Preferences (GSP) program and the Trade Adjustment
Assistance (TAA) programs. Passage of TPA, ATPA, GSP, and TAA
will send a strong signal of U.S. leadership in supporting free,
fair, and open markets, and will promote a vibrant U.S. economy.
At the same time, the Administration strongly opposes the
TAA proposal in the Daschle Substitute for H.R. 3009 (the
vehicle for considering these components) in its current form.
In addition, the Administration opposes any amendments that
would undermine the careful balance struck in the TPA bill
that the Finance Committee approved by a vote of 18-3, which
forms the core of the manager's amendment now before the Senate.
The Administration looks forward to working with the Congress
to provide the President with the authority and flexibility
to secure the greatest possible trade opportunities for America's
farmers, workers, producers, and consumers, and the ability
to provide effective adjustment assistance for trade-impacted
TPA offers the President the tools he needs to assert American
trade leadership, strengthen the U.S. economy, and expand
opportunities for American exporters. Passing TPA now is more
important than ever with the recent launch of the new global
trade negotiations, which offers the best hope for opening
new markets for American goods and services and for providing
better job opportunities for every sector of our economy.
Only with Senate passage of TPA can the President strike the
best deals for America. TPA gives our negotiating partners
the certainty they need to move to their "bottom lines," knowing
the President and the Congress are united at the bargaining
Without TPA, our influence on the world's trading system has
waned. In recent years, as global trade has grown, the United
States has stood on the sidelines watching other countries
increasingly set the rules of the trading game. There are
now more than 150 trade agreements in the world; the United
States is party to only three. What we have sacrificed is
America's leadership role on trade.
To reassert that leadership, the Administration supports passage
of the Bipartisan Trade Promotion Authority Act, which will
reestablish the traditional trade partnership between the
Executive Branch and the Congress. In addition, TPA will ensure
that America's trade negotiating objectives reflect the views
of our elected representatives and will preserve Congress'
authority to approve or disapprove any trade agreement the
The Administration opposes any change that would undermine
the careful balance struck in the Bipartisan Trade Promotion
Authority Act, as reported by the Senate Finance Committee
with a bipartisan 18-3 vote. In particular, the Administration
strongly opposes amendments that would exclude certain subjects
or sectors from TPA. A key element of TPA is the requirement
for Congress to consider and vote on trade agreements as a
whole. If Congress excludes certain items from consideration
under TPA procedures, as the Dayton Amendment proposes, it
will invite our trading partners to exclude issues of their
own from future negotiations, particularly in areas like agriculture
that are of vital interest to U.S. exporters. The net effect
would be to undercut the President's ability to negotiate
trade agreements that best serve America's interest.
In addition, the proposed Kerry Amendment would fundamentally
weaken longstanding protection for U.S. companies abroad,
leaving our investors vulnerable to unfair treatment by foreign
governments. Therefore, the Administration opposes the Kerry
Trade Preference Expansion Act (ATPA)
Renewal and expansion of the Andean trade preference program
are high priorities for the Administration, as the proposed
ATPA represents a critical intersection of our trade and anti-narcotics
policies. To achieve a program with the greatest potential
benefit to the region and to the United States, the Administration
supports as much expanded product coverage as can be agreed
to by Congress this year. Through strengthening the legitimate
economies of the beneficiary countries, the ATPA will be a
key component of our efforts to combat the scourge of narcotics
in the Andean region and in the United States. There are clear
links between drug trafficking and terrorism, and it is in
our national interest to combat the drug trade and to promote
healthy, strong economies and democracies.
System of Preferences
We also urge Congress to reauthorize the GSP program, which
expired on September 30, 2001. This program reinforces our
trade policy agenda by encouraging designated developing and
emerging economies to open their markets, comply more fully
with international trading rules, and assume greater responsibility
for the international trading system. It also helps to maintain
U.S. international competitiveness by lowering costs for U.S.
business, as well as reducing prices for American consumers.
The Administration strongly supports reauthorization of TAA
programs. While increased trade will generate significant
benefits for American workers, the Administration believes
that solid TAA programs are vital for responding to the adjustment
challenges that trade can create.
The primary objective of TAA programs is to provide training
and assistance for trade-impacted workers to help get them
back to work as quickly as possible. The Administration is
committed to ensuring that trade-impacted workers receive
these services quickly and effectively. The Administration
also supports improvements to the TAA programs to streamline
service delivery and expand benefits where necessary to ensure
that the needs of the workers most affected by trade are met
while they upgrade their skills and look for work.
The Administration is eager to work with Congress on effective
enhancements to the TAA programs; however, the Administration
strongly opposes the TAA proposal in the Daschle Substitute
Amendment. The expansions in the Daschle Substitute severely
distort the primary purpose of the programs and hinder the
ability of workers legitimately affected by trade to receive
the assistance they need. The Administration is concerned
that the Daschle Substitute is very costly, increasing the
size of the programs by at least 300 to 400 percent. These
expansions are so extensive and overreaching that they threaten
passage of TPA and an improved, effective TAA program.
Specifically, the Administration opposes the Daschle Substitute's
last minute addition of health insurance assistance for steel
retirees. The Administration shares concerns about the security
of retiree health insurance benefits in the steel and other
industries, and the Administration has proposed assistance
with health care costs for retirees and others who lose their
employer health insurance benefits. But TAA has never been
a retirement program, and the needs of steel and other retirees
should be addressed in a different forum with the benefit
of proper committee consideration. A rough estimate suggests
that adding steel retirees to TAA programs could potentially
cost more than $800 million per year -- almost twice the entire
cost of the current programs. This would divert resources
away from the primary purpose of the TAA programs -- retraining
and reemploying individuals still in the workforce. This late
addition of unrelated issues complicates earnest bipartisan
efforts to reach agreement on trade legislation.
Moreover, the health insurance credit proposed in the substitute
is not an effective approach to help workers obtain health
coverage that best suits their needs. Despite the high cost
of the substitute to the federal government and new mandates
on states and businesses, many workers would have few, if
any, choices of coverage. Among other things, the substitute
prohibits use of the credit to obtain coverage in the individual
market, and will even force some TAA-eligible workers to give
up their existing individual coverage. Allowing trade-impacted
workers greater flexibility to use the credit is one way to
lower the cost of providing coverage and to enable more workers
to obtain the coverage they need, without disrupting employer
Finally, while the Administration understands that there may
be a need to address certain categories of workers who do
not currently qualify for TAA benefits, the unprecedented
expansions in the Daschle Substitute go too far. The Substitute
adds major new categories of coverage that will be difficult
to administer, many of which have questionable links to trade.
These expansions could severely interfere with access to existing
benefits for workers truly impacted by trade.
The Administration urges Congress to address these concerns
and quickly reauthorize and improve the TAA programs. Authorization
for these programs expired in September 2001, and the Administration
is concerned that delay in reauthorizing these programs could
seriously impair states' ability to continue existing services.
The Administration looks forward to working with Congress
to ensure their speedy reauthorization.
Any law that would reduce receipts or increase direct spending
is subject to the PAYGO requirements of the Balanced Budget
and Emergency Deficit Control Act (BEA) and could cause a
sequester of mandatory programs in any fiscal year through
2006. The requirement to score PAYGO costs expires on September
30, 2002, and there are no discretionary caps beyond 2002.
The Administration will work with Congress to ensure fiscal
discipline consistent with the President's budget and a quick
return to a balanced budget. The Administration will also
work with Congress to ensure that any unintended sequester
of spending does not occur.