TRALAC - Trade Law Centre

AGOA renewal: Now to the Democrats

Wednesday, 24 June 2015 Published: | Witney Schneidman and Walker Williams

Source: Brookings Institution

The prospects for the reauthorization of the African Growth and Opportunity Act (AGOA) either improved or became more complicated on Tuesday, depending on whether you are a Republican or Democratic member of Congress.

The key event was the vote by the Senate for “cloture,” or to end the debate on Trade Promotion Authority (TPA), which allows senators to give an up-or-down vote on trade legislation.

The cloture vote passed by the slimmest margin after 13 out of 14 pro-trade Democrats joined 47 Republicans to vote in support of the measure, putting aside concerns that a related program to assist workers displaced by global trade, known as Trade Adjustment Assistance (TAA), might not pass the Senate and the House later this week.

If the Senate votes for the final approval of TPA, also known as “fast-track,” on Wednesday, which it is expected to do, the bill would then go to President Obama for his signature and the administration would be well positioned to conclude the Trans-Pacific Partnership (TPP) free trade agreement. In fact, the new rules of the TPA would be in place for six years, which will enable the slower moving Trans-Atlantic Trade and Investment Partnership trade negotiations to be completed as well.

Once TPA clears the Senate, attention will turn to AGOA and the workers’ training program.

The argument for passing AGOA is well understood in Congress. Over the past several weeks, the Senate voted 97 to 1 and the House voted 394 to 37 to reauthorize AGOA for another 10 years.

The problem is the workers’ education and retraining program, TAA, which was created in 1962 during the Kennedy administration. Traditionally Republicans have opposed the program while Democrats have strongly supported it. Tables turned two weeks ago, however, when House Democrats, with the strong support of organized labor, environmentalists, and some liberal activists, withdrew their support of TAA when it became apparent that there were enough members of Congress to support fast-track, which Democrats have strongly opposed.

This is where it gets dicey for AGOA and the Democrats.

President Obama supports the workers’ assistance program, fast-track, and the Trans-Pacific Partnership free trade agreement. He is also very supportive of extending AGOA. Senate Majority Leader Mitch McConnell (R-KY) strongly supports the same agenda. As a result, this unusual alliance of Republican and Democratic leaders has agreed to tie AGOA and other preference programs to TAA in one bill.

This move requires a new piece of legislation and a new vote in the Senate, which will probably take place on Thursday. If it is approved by the Senate, the new AGOA/TAA bill could go to the House for a vote as early as Friday or even next week.

And therein lies the dilemma for House Democrats.

For months, Africa experts have been urging Congress to renew AGOA as soon as possible. Earlier this week, we recommended separating AGOA from TAA and sending a reconciled version to President Obama for his signature. This move no longer seems possible after yesterday’s actions in the Senate. As Rep. Steny Hoyer (D-MD), the No. 2-ranking Democrat in the House noted, there is now “a different context” around AGOA, as it now concerns TAA. In addition, the context might change yet again, as there is the possibility that the renewal of the Export-Import Bank might also be tied to this bill.

If AGOA, tied to TAA, is defeated in the House later this week it is unclear when AGOA would be renewed. In order to preserve the U.S.-Africa trade relationship, which is blossoming, and for the U.S. to continue to be a major commercial player on the continent, AGOA— the cornerstone of U.S. commercial engagement in Africa—must be passed as soon as possible.

 

Note: This piece reflects the views of the authors only and not the Brookings Institution nor the Africa Growth Initiative.

 

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