Compromise Agreement on Omnibus Trade Bill
 
July 29, 2002
 

After weeks of negotiation on the omnibus trade bill, a compromise agreement between the House and Senate negotiators could lead to passage of the long-awaited bill renewing trade promotion authority, trade adjustment assistance, and renewal of the Andean Trade Preference Act (ATPA) and Generalized System of Preferences (GSP) programs.

Trade Promotion Authority. The agreement renews for five years the President's authority to negotiate trade deals that reduce barriers to trade in goods, services, foreign investment, e-commerce and U.S. agricultural trade. In turn, the bill charges U.S. trade negotiators with ensuring that trade deals meet the following objectives: i) adequate enforcement of international labor standards; ii) promotion of sustainable development; iii) improvement in procedures for settling investor-state disputes; and iv) preservation of the ability of the United States to rigorously enforce its trade remedy laws. Additionally, the President is required to notify the Senate Finance and the House Ways & Means Committees of any proposed changes to U.S. trade laws and to explain how proposed changes are consistent with the negotiating objectives established in this legislation. The bill establishes a process by which the entire Congress may vote on a resolution on whether proposed trade law provisions are consistent with the negotiating objectives. The resolution would be non-binding and the effect of a vote against a proposed provision is unclear.

Trade Adjustment Assistance. The agreement almost triples the existing program benefits through an extension of income benefits up to 2 1/2 years and expansion of the training budget. The bill also adds such new elements as providing health insurance to displaced workers, expanding coverage to secondary workers and to workers affected by a firm moving overseas, and providing wage insurance for older workers.

Andean Trade Preference Act. The agreement renews the ATPA program retroactively from its expiration date of December 4, 2001, up through February 2006. The bill also extends the ATPA to include previously excluded products, with unlimited access for apparel assembled in the Andean countries from U.S. fabric and yarn, and requires the President to establish a mechanism for petitions on limiting a country's benefits.

Generalized System of Preferences. The agreement renews the GSP program retroactively from its expiration date of September 30, 2001, up through December 2006.

The bill must now be approved by the House and the Senate, and the leadership of both chambers have signaled their intentions to bring the bill up for a vote before the start of the August recess. Senate approval is virtually assured as the compromise package contains a significant portion of the provisions approved in the Senate version by a 2-to-1 vote. House leaders also are promising approval of the package, although the close vote (215 to 214) by which the House version was passed indicates that, at best, this vote also will be a close call. The President is expected to sign the bill if it is presented to him.