Archive
CRS — Why Certain Trade Agreements Are Approved as Congressional-Executive Agreements Rather Than Treaties
Why Certain Trade Agreements Are Approved as Congressional-Executive Agreements Rather Than Treaties (PDF)
Source: Congressional Research Service (via U.S. Department of State Foreign Press Center)
U.S. trade agreements such as the North American Free Trade Agreement (NAFTA), World Trade Organization agreements, and bilateral free trade agreements (FTAs) have been approved by majority vote of each house rather than by two-thirds vote of the Senate—that is, they have been treated as congressional-executive agreements rather than as treaties. The congressional-executive agreement has been the vehicle for implementing Congress’s long-standing policy of seeking trade benefits for the United States through reciprocal trade negotiations. In a succession of statutes, Congress has authorized the President to negotiate and enter into tariff and nontariff barrier (NTB) agreements for limited periods, while permitting NTB and free trade agreements negotiated under this authority to enter into force for the United States only if they are approved by both houses in a bill enacted into public law and other statutory conditions are met; implementing bills are also accorded expedited consideration under the scheme. This negotiating authority and expedited procedures are commonly known as Trade Promotion Authority (TPA).
Congress most recently granted the President tempor ary trade negotiating authority utilizing this approach in the Bipartisan Trade Promotion Au thority Act of 2002 (BTPAA), contained in Title XXI of the Trade Act of 2002, P.L. 107-210. Although the authority expired during the 110th Congress, agreements entered into before July 1, 2007, remained eligible for congressional consideration under the expedited procedure. The President had entered into free trade agreements with Colombia, Korea, and Panama before this date, each of which awaited congressional approval at the time. In Oct ober 2011, Congress approved the three pending agreements, making a total of 11 free trade agreements approved under the BTPAA process.
In addition, the United States Trade Representative (USTR), on behalf of the President, notified the House and Senate in December 2009 by letter that the President intended to enter into negotiations aimed at a regional, Asia-Pacific trade agreement, called the Trans-Pacific Partnership (TPP). Notwithstanding the expiration of BTPAA authorities, the USTR stated that the Obama Administration would be observing the relevant procedures of the act with respect to notifying and consulting with Congress regarding these negotiations. Notably, discussions to reinstate TPA through legislation have recently gained attention. In March 2013, the Acting U.S. Trade Representative, Demetrios Marantis, stated that the Obama Administration will work with Congress to enact new TPA legislation.
CRS — International Trade and Finance: Key Policy Issues for the 113th Congress
International Trade and Finance: Key Policy Issues for the 113th Congress (PDF)
Source: Congressional Research Service (via U.S. Department of State Foreign Press Center)
The U.S. Constitution grants authority over the regulation of foreign commerce to Congress, which it exercises in a variety of ways. These include the oversight of trade policy generally, and more particularly, the consideration of legislation to approve trade agreements and authorize trade programs. Policy issues cover such areas as: U.S. trade negotiations; tariffs; nontariff barriers; worker dislocation from trade liberalization, trade remedy laws; import and export policies; international investment, economic sanctions; and the trade policy functions of the federal government. Congress also has an important role in international finance. It has the authority over U.S. financial commitments to international financial institutions and oversight responsibilities for trade- and finance-related agencies of the U.S. Government.
The 112 th Congress approved U.S. bilateral free trade agreements with Colombia, Panama, and South Korea, extended the Trade Adjustment Assistance (TAA) programs through December 31, 2013, and reauthorized the Generalized System of Preferences (GSP) through July 31, 2013. In addition, Congress authorized permanent normal trade relations (PNTR) status for Russia and Moldova, reauthorized the U.S. Export-Import Bank, and approved full U.S. participation in general capital increases for the World Bank and four regional development banks.
The 113th Congress may revisit many of these issues and address new ones. Among the more potentially prominent issues are:
1. Negotiations for comprehensive reciprocal trade agreements with major trading partners, including the Trans-Pacific Partnership (TPP) with 11 countries from the Western Hemisphere and Asia, and new negotiations with the European Union for the Transatlantic Trade and Investment Partnership (TTIP) Agreement;
2. Possible renewal of Trade Promotion Author ity (TPA), allowing the President to enter into reciprocal trade agreements, and providing trade negotiating objectives and expedited legislative procedures to consider trade agreement implementing bills; and the possible related issue of TAA program reauthorization;
3. U.S.-China trade relations including investment, intellectual property rights protection, currency reform, and market access liberalization;
4. International finance issues including implications of the ongoing Eurozone debt crisis for the U.S. economy, oversight of international financial institutions, and negotiations to conclude new bilateral investment treaties (BITs);
5. Oversight of the stalemated World Trade Organization (WTO) Doha Round negotiations and separate new trade negotiations (e.g. services) that some members of the WTO have undertaken;
6. Review of the President’s export control reform initiative and possible renewal of the Export Control Act (EAA), and review of trade sanctions;
7. Oversight of the President’s request for new authority to reorganize and consolidate the business- and trade-related functions of six federal entities; the Export-Import Bank, and the Administration’s National Export Initiative;
8. Reauthorization of U.S. Customs and Bord er Protection (CBP) and expiring trade preference programs (e.g., the GSP and the Andean Trade Preference Act).
A list of CRS reports covering these issues is provided at the end of the report.
Twelve Ways to Build Trust in the ICT Global Supply Chain
Twelve Ways to Build Trust in the ICT Global Supply Chain
Source: Brookings Institution
The globalization of commerce and trade has created many benefits. Supply costs have been reduced for many products. Computers and other items can be made of parts from a number of different locales. Countries can specialize in particular goods and companies can focus on the things they do best. Raw materials may come from one area, while manufacturing and production lie elsewhere, and sales and marketing take place in still another place. In this as well as other examples, contemporary commerce involves a complex interchange of hundreds or thousands of individuals, organizations, technologies, and processes across a variety of different continents.
But long supply chains and inadequate or nonexistent product evaluation before deployment, create a situation where widespread vulnerabilities exist in products and networks that can be exploited by others during design, production, delivery, and post-installation servicing. There are industry-wide risks associated with procurement, transportation, and management. Everything from raw materials and natural disasters to market forces, national laws, and political conflict can be problematic. Problems in one area can cascade elsewhere and magnify risks dramatically for the system as a whole.
In this paper, West discusses twelve ways to build trust in the Information and Communications Technology (ICT) global supply chain. With the assistance of a group of leading experts brought together at the Brookings Institution in February, 2013 plus follow-up interviews, he explores the operational threats and technological vulnerabilities that we face, and makes recommendations to identify best practices, standards, and third-party assessment for supply chain assurance.
West argues that vulnerabilities in the supply chain and product development, generally, facilitate a myriad of attack and exploitation techniques, such as unauthorized remote access after product deployment for many malicious activities, degradation of ICT networks, and damage to critical infrastructures. West suggests that developing agreed-upon standards, using independent evaluators, setting up systems for certification and accreditation, and having trusted delivery systems will build confidence in the global supply chain as well as the public and private sector networks that sustain them. These and other types of evaluations make information available to purchasers and therefore give them a firmer basis for product selection.
CRS — The Trans-Pacific Partnership Negotiations and Issues for Congress
The Trans-Pacific Partnership Negotiations and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. On March 15, 2013, Japanese Prime Minister Shinzo Abe announced that Japan would seek to participate in the TPP negotiations. U.S. negotiators and others describe and envision the TPP as a “comprehensive and high-standard” FTA that aims to liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO). The broad outline of an agreement was announced on the sidelines of the Asia-Pacific Economic Cooperation (APEC) ministerial in November 2011, in Honolulu, HI. If concluded as envisioned, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries. Congress has a direct interest in the negotiations, both through influencing U.S. negotiating positions with the executive branch, and by passing legislation to implement any resulting agreement.
The 16th round of negotiations concluded in Singapore on March 14, 2013, and the 17th round is scheduled to be held in Lima, Peru in May 2013. The current goal is to reach an agreement in time for the October 2013 APEC summit in Indonesia. For this deadline to be achieved, outstanding negotiating positions may need to be tabled soon in order for political decisions to be made. The negotiating dynamic itself is complex: decisions on key market access issues such as dairy, sugar, and textiles and apparel may be dependent on the outcome of controversial rules negotiations such as intellectual property rights or state-owned enterprises.
Twenty-nine chapters in the agreement are under discussion. The United States is negotiating market access for goods, services, and agriculture with countries with which it does not currently have FTAs: Brunei, Malaysia, New Zealand, and Vietnam. Negotiations are also being conducted on disciplines to intellectual property rights, trade in services, government procurement, investment, rules of origin, competition, labor, and environmental standards and other issues. In many cases, the rules being negotiated are intended to be more rigorous than comparable rules found in the WTO. Some topics, such as state-owned enterprises, regulatory coherence, and supply chain competitiveness, break new ground in FTA negotiations. As the countries that make up the TPP negotiating partners include advanced industrialized, middle income, and developing economies, the TPP, if implemented, may involve substantial restructuring of the economies of some participants.
The TPP serves several strategic goals in U.S. trade policy. First, it is the leading trade policy initiative of the Obama Administration, and is a manifestation of the Administration’s “pivot” to Asia. If concluded, it may serve to shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. FTA partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy—possibly providing impetus to future multilateral liberalization under the WTO.
As the negotiations proceed, a number of issues important to Congress are emerging. One is whether the United States can balance its vision of creating a “comprehensive and high standard” agreement with a large and expanding group of countries, while not insisting on terms that other countries will reject. Another issue is how Congress will consider the TPP, if concluded. The present negotiations are not being conducted under the auspices of formal trade promotion authority (TPA)—the latest TPA expired on July 1, 2007—although the Administration informally
New From the GAO
New GAO Report
Source: Government Accountability Office
PUERTO RICO
Characteristics of the Island’s Maritime Trade and Potential Effects of Modifying the Jones Act
GAO-13-260
EU reports on progress in fight against protectionism
EU reports on progress in fight against protectionism
Source: European Commission
The Commission is today able to report about some success in its strategy to fight global trade barriers. The efforts of the European Commission to fight protectionism over the last year bear fruit and could create better trade and investment conditions for EU companies. Yet the struggle against protectionism continues. The resistance of Europe’s strategic partners to the plea for open markets comes into the limelight in the European Commission’s third annual Trade and Investment Barriers Report published today. In particular, China, India, Mercosur and Russia do not escape criticism.
According to the report, the European Commission in 2012 achieved progress towards eliminating some of the most trade distortive barriers hindering global activities of EU companies:
- The EU victory in the WTO case against China on access to raw materials brings to an end a fundamental disadvantage affecting the competitiveness of the European industries;
- Many years of difficult negotiations over the Russian accession to the WTO resulted last year in the significant lowering of import duties;
- EU trade diplomacy made progress toward the opening of the Indian market to EU telecommunication equipment, tyres and steel products. The bilateral discussions conducted with Japan are making it easier for EU producers of liquor, beef meat and processed foods to respond to the Japanese appetite.
Yet not all of the 25 key trade and investment barriers identified by the European Commission last year could be satisfactorily addressed. Several long-standing obstacles, together with a number of new trade-distortive measures taken by our partners in 2012, still stand in the way of European companies looking for markets outside the EU.
CRS — Arab League Boycott of Israel
Arab League Boycott of Israel (PDF)
Source: Congressional Research Service (via U.S. Department of State Foreign Press Office)
The Arab League, an umbrella organization comprising 22 Middle Eastern and African countries and entities, has maintained an official boycott of Israeli companies and Israeli-made goods since the founding of Israel in 1948. The boycott is administered by the Damascus-based Central Boycott Office, a specialized bureau of the Arab League.
The boycott has three tiers. The primary boycott prohibits citizens of an Arab League member from buying from, selling to, or entering into a business contract with either the Israeli government or an Israeli citizen. The secondary boycott extends the primary boycott to any entity world-wide that does business in Israel. A blacklist of global firms that engage in business with Israel is maintained by the Central Boycott Office, and disseminated to Arab League members. The tertiary boycott prohibits an Arab League member and its nationals from doing business with a company that deals with companies that have been blacklisted by the Arab League.
Since the boycott is sporadically applied and ambiguously enforced, its impact, measured by capital or revenue denied to Israel by companies adhering to the boycott, is difficult to measure. The effect of the primary boycott appears limited since intra-regional trade and investment are small. Enforcement of the secondary and tertiary boycotts has decreased over time, reducing their effect. Thus, it appears that since intra-regional trade is small, and that the secondary and tertiary boycotts are not aggressively enforced, the boycott may not currently have an extensive effect on the Israeli economy.
Despite the lack of economic impact on either Israeli or Arab economies, the boycott remains of strong symbolic importance to all parties. The U.S. government has often been at the forefront of international efforts to end the boycott and its enforcement. Despite U.S. efforts, however, many Arab League countries continue to support the boycott’s enforcement. U.S. legislative action related to the boycott dates from 1959 and includes multiple statutory provisions expressing U.S. opposition to the boycott, usually in foreign assistance legislation. In 1977, Congress passed laws making it illegal for U.S. companies to cooperate with the boycott and authorizing the imposition of civil and criminal penalties against U.S. violators. U.S. companies are required to report to the Department of Commerce any requests to comply with the Arab League Boycott.
The current list of countries that request U.S. companies to participate or agree to participate in boycotts prohibited under U.S. law includes Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen.
This report provides background information on the boycott and U.S. efforts to end its enforcement. More information on Israel is contained in CRS Report RL33476, Israel: Background and U.S. Relations, by Jim Zanotti.
CRS — China’s Economic Rise: History, Trends, Challenges, and Implications for the United States
China’s Economic Rise: History, Trends, Challenges, and Implications for the United States (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Prior to the initiation of economic reforms and trade liberalization 34 years ago, China maintained policies that kept the economy very poor, stagnant, centrally-controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) averaging nearly 10% through 2012. In recent years, China has emerged as a major global economic and trade power. It is currently the world’s second-largest economy, largest merchandise exporter, second-largest merchandise importer, second-largest destination of foreign direct investment (FDI), largest manufacturer, largest holder of foreign exchange reserves, and largest creditor nation.
The global economic crisis that began in 2008 greatly affected China’s economy. China’s exports, imports, and FDI inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package, loosening monetary policies to increase bank lending, and providing various incentives to boost domestic consumption. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, while several of the world’s leading economies experienced negative or stagnant economic growth. From 2008 to 2011, China’s real GDP growth averaged 9.6%, although it slowed to 7.8% in 2012.
Some economic forecasters project that China will overtake the United States as the world’s largest economy within a few years (although U.S. per capita GDP levels are expected to remain much larger than those of China for many years to come). However, the ability of China to maintain a rapidly growing economy in the long run will depend largely on the ability of the Chinese government to implement comprehensive economic reforms that more quickly hasten China’s transition to a free market economy; rebalance the Chinese economy by making consumer demand, rather than exporting and fixed investment, the main engine of economic growth; and boost productivity and innovation. China faces numerous other challenges as well that could impede future economic growth, such as widespread pollution, growing income disparities, an undeveloped social safety net, and extensive involvement of the state in the economy. The Chinese government has acknowledged that its current economic growth model needs to be altered. In 2006, the Chinese government formally outlined a goal of building a “harmonious socialist society” by taking steps to lessen income inequality, improve the rule of law, enhance environmental protection, reduce corruption, and improve the country’s social safety net (such as expanding health care and pension coverage to rural areas). In addition, the government has announced plans to rebalance the economy and boost innovation.
China’s economic rise has significant implications for the United States and hence is of major interest to Congress. On the one hand, China is a large (and potentially huge) export market for the United States. Many U.S. firms use China as the final point of assembly in their global supply chain networks. China’s large holdings of U.S. Treasury securities help the federal government finance its budget deficits. However, some analysts contend that China maintains a number of distortive economic policies (such as an undervalued currency and protectionist industrial policies) that undermine U.S. economic interests. They warn that efforts by the Chinese government to promote innovation, often through the use of subsidies and other distortive measures, could negatively affect many leading U.S. industries. This report surveys the rise of China’s economy, describes major economic challenges facing China, and discusses the implications of China’s economic rise for the United States.
New From the GAO
New GAO Reports
Source: Government Accountability Office
AGRICULTURAL QUARANTINE INSPECTION FEES
Major Changes Needed to Align Fee Revenues with Program Costs
GAO-13-268, Mar 1, 2013
GOVERNMENT OPERATIONS
Characteristics of Presidential Appointments that do not Require Senate Confirmation
GAO-13-299R, Mar 1, 2013
END-STAGE RENAL DISEASE
CMS Should Improve Design and Strengthen Monitoring of Low-Volume Adjustment
GAO-13-287, Mar 1, 2013
EXPORT PROMOTION
Small Business Administration Needs to Improve Collaboration to Implement Its Expanded Role
GAO-13-217, Jan 30, 2013
Coal: A key player in expanded U.S. energy exports
Coal: A key player in expanded U.S. energy exports
Source: Bureau of Labor Statistics
In a November 2012 report that received significant attention in the media, the International Energy Agency (IEA) predicted that the United States will be nearly energy self-sufficient by the year 2035.1 Justifications for this claim include reports of declining oil consumption, the unlocking of natural gas resources through new technologies, and overall increases in U.S. energy production.2 As natural gas becomes more inexpensive and renewable energy sources continue to increase in usage, the energy mix in the United States (and other countries) is expected to change. The IEA estimates that 40 percent of world electricity generation was fueled by coal in 2011.3 Coal is the only major energy source for which the United States demonstrates a trade surplus.4 In 2011, the last calendar year for which data are available, the United States exported more than $16 billion worth of coal, while importing only slightly less than $3 billion in coal. Furthermore, coal is expected to remain one of the largest fuel sources in worldwide energy consumption for at least the next two decades. Second only to oil in meeting the energy needs of the world, coal generates more electricity for the United States and the world than any other single fuel.
With the key role that coal currently plays in the U.S. trade balance, and is expected to play in the future, it is interesting to look at recent volatile export price movements of this important U.S. resource.
Intellectual Property Rights: Fiscal Year 2012 Seizure Statistics
Intellectual Property Rights: Fiscal Year 2012 Seizure Statistics
Source: U.S. Customs and Border Protection
In Fiscal Year (FY) 2012, DHS and its agencies, CBP and ICE, remained vigilant in their commitment to protect American consumers from intellectual property theft as well as enforce the rights of intellectual property rights holders by expanding their efforts to seize infringing goods, leading to 691 arrests, 423 indictments and 334 prosecutions. Counterfeit and pirated goods pose a serious threat to America’s economic vitality, the health and safety of American consumers, and our critical infrastructure and national security. Through coordinated efforts to interdict infringing merchandise, including joint operations, DHS enforced intellectual property rights while facilitating the secure flow of legitimate trade and travel.
In recent years, the internet has fueled explosive growth in the numbers of small packages of counterfeit and pirated goods shipped through express carriers and mail. In FY 2012, we heightened our efforts against the sources of these small shipments: the websites involved in the trafficking of counterfeit and pirated goods. In FY 2012, 697 such sites were taken down by ICE, with CBP handling the forfeitures. The number of IPR seizures remained somewhat consistent from 24,792 in FY 2011 to 22,848 in FY 2012. We believe the strategy of pursuing the sources of counterfeit goods will provide long-term results in decreasing the flow of counterfeit merchandise into commerce.
The MSRP of seized goods increased from $1.11 billion in FY 2011 to $1.26 billion in FY 2012, with an average seizure value of more than $10,450. At the same time, CBP and ICE made valuable advances to enhance their ability to combat IP theft in the future, including:
• Nearly 60 sessions of Integrated IPR Field Training were conducted at high-risk ports of entry to improve frontline enforcement efforts;
• The National Defense Authorization Act of 2012 was implemented, allowing for enhanced information-sharing between CBP and trademark holders to identify counterfeits;
• Numerous new authentication tools were procured and deployed to modernize infringement determination efforts and expedite release of authentic shipments;
• IPR Strike Units were created to provide a deterrent effect, aiding the enforcement process;
• The European Police Office (Europol) and the Nuclear Regulatory Commission joined the National Intellectual Property Rights Coordination Center (IPR Center). The IPR Center now has 21 domestic and international partner agencies working together to combat IP theft.
New From the GAO
New GAO Reports
Source: Government Accountability Office
Cuba Democracy Assistance
USAID’s Program Is Improved, but State Could Better Monitor Its Implementing Partners
GAO-13-285, Jan 25, 2013
Space
Launch Services New Entrant Certification Guide
GAO-13-317R, Feb 7, 2013
Sex Offender Registration and Notification Act
Jurisdictions Face Challenges to Implementing the Act, and Stakeholders Report Positive and Negative Effects
GAO-13-211, Feb 7, 2013
Sex Offender Registration and Notification Act
Survey of States and Territories on Implementation of the Act (GAO-13-234SP, February 2013), an E-supplement to GAO-13-211
GAO-13-234SP, Feb 7, 2013
Sub-Saharan Africa
Case Studies of U.S and Chinese Economic Engagement in Angola, Ghana, and Kenya; a Supplement to GAO-13-199
GAO-13-280SP, Feb 7, 2013
Sub-Saharan Africa
Trends in U.S. and Chinese Economic Engagement
GAO-13-199, Feb 7, 2013
CRS — Permanent Normal Trade Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties
Permanent Normal Trade Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
U.S.-Russian trade is governed by Title IV of the Trade Act of 1974, which sets conditions on Russia’s normal trade relations (NTR), or nondiscriminatory, status, including the “freedom-ofemigration” requirements of the Jackson-Vanik amendment (section 402). Changing Russia’s trade status to unconditional NTR or “permanent normal trade relations status (PNTR)” requires legislation to lift the restrictions of Title IV as they apply to Russia and authorize the President to grant Russia PNTR by proclamation. On November 16, 2012, the House passed (365-43), and on December 6, 2012, the Senate passed (92-4) H.R. 6156, which does just that, among other things. The legislation also included provisions—the Magnitsky Rule of Law Accountability Act of 2012—that impose sanctions on individuals linked to the incarceration and death of Russian lawyer Sergei Magnitsky. H.R. 6156 also authorizes PNTR status for Moldova. President Obama signed the legislation into law on December 14, 2012.
PNTR for Russia became an issue for the 112th Congress because, on August 22, 2012, Russia joined the WTO after having completed a 19-year accession process. The WTO requires each member to accord newly acceding members “immediate and unconditional” most-favored-nation (MFN) status, or PNTR. In order to comply with WTO rules, the United States has to extend PNTR to Russia.
CRS — Trade Adjustment Assistance for Workers
Trade Adjustment Assistance for Workers (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Trade Adjustment Assistance for Workers (TAA) provides federal assistance to workers who have been adversely affected by foreign trade. It was most recently authorized by the Trade Adjustment Assistance Extension Act of 2011 (TAAEA; Title II of P.L. 112-40).
To be eligible for TAA, a group of workers must establish that they were separated from their employment either because their jobs moved outside the United States or because of an increase in directly competitive imports. Workers at firms that are suppliers to or downstream producers of TAA-certified firms may also be eligible for TAA benefits. Under current law, both production and service workers are eligible for TAA.
After the Department of Labor verifies the role of foreign trade in the group’s job losses, workers may apply for individual benefits. These benefits are funded by the federal government and, with limited exception, administered by the states.
• Reemployment services are available to assist trade-affected workers in planning for and returning to employment. Training is the largest reemployment service expense. Eligible training programs include a variety of public and private options and may not exceed 104 weeks. In lieu of or in addition to training, workers may receive employment services such as case management, skills assessment, and job search assistance. Workers may also receive allowances for job searches outside their local commuting area and relocation expenses once a new job has been secured. Under current law, annual expenditures on reemployment services are capped at $575 million.• Trade Readjustment Allowance (TRA) is an income support for TAA-certified workers who have exhausted their unemployment insurance (UI) and are enrolled in an eligible training program. TRA payments are equal to the workers’ final UI benefit. Workers may receive UI and TRA for a combined total of 117 weeks and 130 weeks under certain circumstances.
• Reemployment Trade Adjustment Assistance (RTAA) is available to TAAcertified workers age 50 and over. This program supplements the wages of eligible workers who secure new employment at a lower wage.
• A Health Coverage Tax Credit (HCTC) is also available to TAA-certified workers. This program offers a refundable tax credit equal to 72.5% of expenditures on a qualified health plan. Unlike other TAA benefits, the HCTC is administered through the federal tax code and not by state agencies.
Eligibility and benefits for TAA are scheduled to be reduced beginning on January 1, 2014. The program will operate under these reduced provisions for one year before authorization for appropriations expires on December 31, 2014.
This report provides background on the TAA program. After a brief introduction, it discusses TAA eligibility and benefits as set by TAAEA. It then describes how the program is funded and administered. The report concludes by presenting data on recent application activity and benefit usage.
CRS — Rising Economic Powers and U.S. Trade Policy
Rising Economic Powers and U.S. Trade Policy (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
A handful of developing countries are becoming major players in the global economy due, in part, to their large populations, rising trade flows, and rapidly growing economies. These evolving economies are likely to be of increasing interest to the 113th Congress. Led by China, these rising economic powers (REPs) include Brazil, India, Indonesia, Mexico, Russia, and Turkey. Based on purchasing power parity estimates, China, India, Brazil, and Russia are now among the 10 largest economies in the world and Mexico (#11), Indonesia (#15) and Turkey (#16) are not far behind. With large economies and rising shares of world trade flows, the REPs have greater involvement in World Trade Organization (WTO) negotiations and dispute settlement cases, have protested with greater frequency U.S. economic and trade policies, and are more able and willing to deflect or reject U.S. trade and market access demands.
Although they have made great economic strides, any of these REPs could stumble if they do not take steps to improve their business climates by undertaking a range of trade, regulatory, and structural reforms. At the same time, other large developing countries that have enormous economic potential, such as Egypt, Iran, Nigeria, and Vietnam could rise if they successfully address underlying political and economic challenges.
U.S. exports to the REPs and other developing countries have become an increasingly important source of growth for the U.S. economy. If the United States is to maximize its export potential and boost its living standards, U.S. exporters and investors may need to have better access to the REP markets. Trade and investment barriers remain considerably higher in most of the REPs than in the United States and other advanced countries. Efforts have stalled in these countries to reduce their barriers further, and several REPs have reactivated industrial policies or found ways to take advantage of gaps in the world trade rules to promote home companies at the expense of foreign companies.
The United States’ ability to persuade these emerging economic powers to embrace the principles of free and fair trade is constrained by growing differences over the role of the state in economic activity. The more interventionist practices and philosophies of REP governments coincide with a desire to maintain “policy space” to promote development of their economies via policies that often appear to violate the letter or spirit of WTO rules and obligations. Persuading the REPs that a strengthened multilateral trading system is squarely in their national economic interests and a way to move their domestic economic reforms forward remains a challenge.
As global power and prosperity is reconfigured, U.S. trade policymakers face a number of overlapping and complex issues relating to the role of future trade liberalizing negotiations, U.S. leverage in influencing REP economic reforms, and the management of the global trading system. Given the checkered history of the Doha Round, future progress on trade liberalization within the WTO may require new approaches. Principles that have guided multilateral trade negotiations in the past, such as unconditional most-favored-nation (MFN) and special and differential treatment (S&D), may need to be reexamined. Similarly, if the United States wishes to negotiate free trade agreements (FTAs) with large and more significant trading partners, it may need to consider deviations from its standard FTA template. At the same time, ongoing Trans-Pacific Partnership (TPP) negotiations and a potential comprehensive U.S. FTA with the European Union (EU) could serve as incentives for the REPs to view multilateral or bilateral negotiations more favorably.
CRS — U.S. Trade and Investment Relations with sub-Saharan Africa and the African Growth and Opportunity Act
Source: Congressional Research Service (via U.S. Department of State Foreign Press Center)
Following the end of the apartheid era in South Africa in the early 1990s, the United States sought to increase economic relations with sub-Saharan Africa (SSA). President Clinton instituted several measures that dealt with investment, debt relief, and trade. Congress passed legislation that required the President to develop a trade and development policy for Africa. Between 1960 and 1973, Africa’s economic growth was relatively strong, followed by a period of stagnation and decline for the subsequent two decades in many SSA countries. Current perspectives, however, indicate that many of the fastest-growing countries in the world are on the African continent, and the International Monetary Fund (IMF) projects that the SSA region will grow in terms of real GDP by 5.3% in 2012 and 2013.
In 2000, Congress approved new U.S. trade and investment legislation for SSA in the African Growth and Opportunity Act (AGOA; Title I, P.L. 106-200). According to U.S. trade statistics, U.S. trade with SSA has comprised 1% to 2% of U.S. total trade with the world. AGOA extends preferential treatment to U.S. imports from eligible countries that are pursuing market reform measures. Data show that U.S. imports under AGOA are mostly energy products, but imports of other products have grown significantly. AGOA mandated that U.S. officials meet regularly with their counterparts in SSA, and 11 of these meetings have been held to date. The 11 th AGOA Forum was held from June 14 to June 15, 2012, in Washington, DC.
AGOA also directed the President to provide U.S. government technical assistance and trade capacity support to AGOA beneficiary countries. Government agencies that have roles in this effort include the U.S. Agency for International Development, the Assistant U.S. Trade Representative for Africa (established by statute under AGOA), the Overseas Private Investment Corporation, the Export-Import Bank, the U.S. and Foreign Commercial Service, and the Trade and Development Agency. In AGOA, Congress declared that free-trade agreements should be negotiated, where feasible, with interested SSA countries. Related to this provision, negotiations on a free-trade agreement with the Southern African Customs Union (SACU), which includes South Africa and four other countries, began in June 2003, but were suspended in April 2006.
The 112 th Congress enacted legislation to extend through September 2015 an expiring provision in AGOA, which allows apparel made in lesser-developed countries to be made of yarns and fabrics from any country and still receive duty-free treatment, subject to a cap (P.L. 112-163). This amendment to AGOA also added South Sudan to the list of SSA countries eligible for AGOA benefits. Eligible countries may become AGOA beneficiaries subject to approval by the Administration.
Legislation is pending to further enhance U.S.-SSA trade relations. H.R. 4221 and S. 2215 seek to increase U.S. exports to Africa, in part, through strategies aimed at further developing relationships between the United States and African countries on a government-to-government level, fostering private sector U.S.-African ties, and targeting more U.S. export financing toward trade with Africa. An amended version of S. 2215 was ordered reported by the Senate Foreign Relations Committee in September 2012. H.R. 656, a separate initiative, would create at the State Department a Special Representative for United States-Africa Trade, Development, and Diaspora Affairs that would also promote U.S. trade and investment ties with SSA.
New From the GAO
New GAO Reports
Source: Government Accountability Office
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EXPORT CONTROLS
CMS INNOVATION CENTER
DOJ WORKFORCE PLANNING
Grant-Making Components Should Enhance the Utility of Their Staffing Models
GAO-13-92
INTERNATIONAL AFFAIRS
Follow-up on the Haiti Earned Import Allowance Program
GAO-13-219R
INMATE REENTRY PROGRAMS
Enhanced Information Sharing Could Further Strengthen Coordination and Grant Management
GAO-13-93
SUPPLEMENTAL SECURITY INCOME
![defense icon, source: [West Covina, California] Progressive Management, 2008](http://www.gao.gov/images/rip/defense.jpg "defense icon, source: [West Covina, California] Progressive Management, 2008")
WEAPONS ACQUISITION REFORM
Reform Act Is Helping DOD Acquisition Programs Reduce Risk, but Implementation Challenges Remain
CRS — Financing the U.S. Trade Deficit
Financing the U.S. Trade Deficit (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)
The U.S. merchandise trade deficit is a part of the overall U.S. balance of payments, a summary statement of all economic transactions between the residents of the United States and the rest of the world, during a given period of time. Some Members of Congress and other observers have grown concerned over the magnitude of the U.S. merchandise trade deficit and the associated increase in U.S. dollar-denominated assets owned by foreigners. International trade recovered from the global financial crisis of 2008-2009 and the subsequent slowdown in global economic activity that reduced global trade flows and, consequently, reduced the size of the U.S. trade deficit. Now, however, U.S. exporters face new challenges with economies in Europe and Asia confronting increased risks of a second phase of slow growth. This report provides an overview of the U.S. balance of payments, an explanation of the broader role of capital flows in the U.S. economy, an explanation of how the country finances its trade deficit or a trade surplus, and the implications for Congress and the country of the large inflows of capital from abroad. The major observations indicate that
• Foreign private investors reduced their purchases of U.S. Treasury securities in 2011 after rising sharply in 2010 in response to financial requirements in home markets and continued uncertainty associated with disruptions in global financial markets. During the same period, foreign private investors reduced their purchases of U.S. corporate stocks and bonds in 2011, while foreign official purchases of U.S. Treasury securities continued at a strong pace. The inflow of capital from abroad supplements domestic sources of capital and likely allows the United States to maintain its current level of economic activity at interest rates that are below the level they likely would be without the capital inflows.• Foreign official and private acquisitions of dollar-denominated assets likely will generate a stream of returns to overseas investors that would have stayed in the U.S. economy and supplemented other domestic sources of capital had the assets not been acquired by foreign investors.
CRS — The Asia-Pacific Economic Cooperation (APEC) Meetings in Vladivostok, Russia: Postscript
The Asia-Pacific Economic Cooperation (APEC) Meetings in Vladivostok, Russia: Postscript (PDF)
Source: Congressional Research Service (via U.S. Department of State Foreign Press Center)
Russia hosted the Asia-Pacific Economic Cooperation’s (APEC) week-long series of senior-level meetings in Vladivostok on September 2-9, 2012. The 20 th APEC Economic Leaders’ Meeting, the main event for the week, was held September 8-9, 2012. It was the first time that Russia had hosted the APEC meetings, as well as the first APEC Economic Leaders’ Meeting at which all the members were also members of the World Trade Organization (WTO).
U.S. expectations for the 20th APEC Economic Leaders’ Meeting were relatively low for a number of reasons. First, several of the members’ leaders either did not attend (e.g., President Obama), were effectively lame ducks (e.g., President Hu Jintao of China), or were facing political uncertainty at home (e.g., Prime Minister Yoshihiko Noda of Japan), making it difficult for the members to consider major commitments. Second, in the eyes of U.S. officials involved in the preparations for the meetings, Russia’s lack of experience and past lack of commitment to APEC weakened the pre-meeting preparations for the Leaders’ Meeting. Third, by holding the Leaders’ Meeting in September (rather than in November, as in previous years), Russia foreshortened the time to work on various initiatives. Fourth, recent events and initiatives, including the ongoing Trans-Pacific Partnership trade agreement negotiations, have raised questions within the Obama Administration about APEC’s role on the promotion of greater economic integration in the AsiaPacific region.
Despite the low U.S. expectations, U.S. officials indicate that they think the week-long event in Vladivostok was relatively productive. Below is a summary of the main results of these meetings, according to senior officials in the Obama Administration:
• The 21 APEC members agreed to lower their tariffs on 54 categories of environmental goods to no more than 5% by 2015.• The APEC members endorsed a model chapter on transparency for reference when negotiating multilateral or bilateral trade agreements.
• The APEC members agreed to cooperate in developing policies and technology to promote sustainable agriculture, including encouraging the harmonizing of domestic regulations on food safety.
• An APEC report concluded that its members had improved the ease of doing business by an average of 8.2% between 2009 and 2011, fulfilling nearly a third of APEC’s goal to obtain a 25% improvement by 2015.
• The APEC members agreed to continue to promote technological innovation by developing non-discriminatory, market-driven innovation policies and fostering greater communication between academia, businesses, and governments.
U.S. officials are apprehensive, however, about APEC’s prospects for the next two years when first Indonesia and then China will be the host members.
This report also examines the role of Congress with respect to APEC, including appropriations necessary to finance APEC’s secretariat and U.S. support of APEC activities.
The Transformational Use of Information and Communication Technologies in Africa
The Transformational Use of Information and Communication Technologies in Africa
Source: World Bank
This new flagship report – eTransform Africa – produced by the World Bank and the African Development Bank, with the support of the African Union, identifies best practice in the use of ICTs in key sectors of the African economy.
Under the theme "Transformation-Ready", the growing contribution of ICTs to Agriculture, Climate Change Adaptation, Education, Financial Services, Government Services and Health is explored. In addition, the report highlights the role of ICTs in enhancing African regional trade and integration as well as the need to build a competitive ICT industry to boost innovation, job creation and the export potential of African companies.
