Trade and the 108th Congress: Major Legislative and Oversight Initiatives

Trade will continue to be an active topic for the 108th Congress. However, with the passage of the Trade Act of 2002, it is not expected that the 108th Congress will consider comprehensive legislation that might alter the basic foundation of U.S. trade statutes. Nevertheless, several legislative initiatives and active oversight of a growing number of specific issues can be expected. Legislatively, the Bush Administration later this year is expected to ask Congress to approve free trade agreements (FTAs) it has concluded with Chile and Singapore. If the Administration this year or early next year concludes FTA negotiations with Central America, Morocco, Australia, and the South African Customs Union, it could submit implementing legislation to Congress in 2004. The 108th Congress inherits several disputes where the World Trade Organization (WTO) has ruled that U.S. laws violate world trade obligations and the periods for U.S. compliance have ended or will end in 2003. Barring abolition or significant modification of the several statutes in question, the European Union (EU) could decide to retaliate against U.S. exports this year or next. The largest threat involves a WTO ruling that a U.S. export tax benefit is an illegal subsidy. At the same time, the EU remains in non-compliance with its WTO obligation to allow imports of beef treated with growth hormones. President Bush has asked the 108th Congress to extend permanent normal trade relations (PNTR) status to Russia. While the lack of PNTR has no direct impact on U.S.-Russian trade flows, many policymakers see existing the existing Jackson-Vanik emmigration requirements as a legacy of the Cold War and not appropriate for today's relationship. However, agricultural trade disputes are complicating efforts to move in this direction. Congress will continue efforts of the 107th Congress to rewrite and reauthorize the Export Administration Act of 1979 (EAA). The EAA provides the statutory authority for export controls on sensitive dual-use goods and technologies, items that have both civilian and military applications. Trade preference programs may also receive legislative action this year. Bills to extend and possibly enhance tariff preferences for African countries may be considered. In terms of oversight, Congress is expected to monitor closely an unprecedented number of trade agreements - bilateral, regional, and multilateral -- that the Bush Administration is currently negotiating, or is proposing to negotiate. Considerable attention also is expected to be devoted to the two broadest trade agreements being negotiated -- the Western Hemisphere's Free Trade Area of the Americas and the WTO Doha Development Agenda. Both negotiations are on-going and scheduled to be concluded by January 2005. This report will be updated to reflect legislative and other major developments. For further information, see the CRS reports listed after each section.