Trade Legislation in the 108th Congress

When the 108th Congress convened in January 2003, few observers predicted that trade would be a top legislative concern. Congress, just six months earlier, had passed by a narrow margin the Trade Act of 2002 ( P.L. 107-210 ), the first major piece of trade legislation in almost a decade. Nevertheless, trade remained a top-level domestic and foreign policy issue in 2003 and 2004. The 108th Congress completed work on a number of major trade bills. Most notably, bills to implement free trade agreements (FTAs) with Chile, Singapore, Australia, and Morocco, and to enhance trade benefits for the countries of Sub-Saharan Africa were passed and signed by the President. Legislation repealing an export tax benefit long ruled a violation of U.S. World Trade Organization (WTO) obligations passed, thereby moving the European Union closer to ending sanctions on $4 billion of U.S. exports. In addition, Congress passed a miscellaneous tariff bill that eliminated or suspended tariffs on hundreds of products and repealed the 1916 Antidumping Act, which also had been ruled a violation of WTO provisions. The implementing bills for the four FTAs were passed by wide margins, running contrary to predictions of some observers that Congress was turning protectionist or anti-trade. All agreements received strong backing from the business community, but encountered resistance from organized labor. They eventually will eliminate tariffs on almost all traded goods, cover trade in services, and provide enhanced protection for intellectual property rights. While the overall effects of any of the agreements on the U.S. economy are expected to be minimal, each agreement provides U.S. exporters and investors with additional market openings and opportunities. Protection for the U.S. steel industry was a prominent concern of the 108th Congress. In 2003, many Members supported the steel industry's efforts to persuade President Bush to extend the import restraint regime he had imposed in 2002, while others supported steel-consuming industries' efforts to roll back the import restraints. The more globalized U.S. economy contributed to rising concerns in Congress about whether U.S. companies were increasingly "offshoring" or relocating service sector jobs to low-wage developing countries, as well as to generalized anxiety about job losses associated with China's growing trade prowess and its policy of pegging its currency to the dollar. Congress also engaged in an intensive debate generated by growing consumer interest in purchasing more affordable prescription drugs from abroad. The issue was addressed in elements of three bills introduced in the Senate and one bill which passed the House in 2003. A number of export policy issues were also the subject of legislative activity in the 108th Congress. While policies that promote exports through financing and efforts to open foreign markets attracted a limited amount of legislative activity, the restrictive component of export policy, particularly economic sanctions targeting Burma, Cuba, and Syria, received more attention. This report will not be updated.