International Trade Reporter Top Story Archive

The following story is from the April 30 issue of International Trade Reporter
Current Reports:

Rangel Eyes Memorial Day Completion
For Panama Bill With Tax Haven Provisions

A pending free trade pact with Panama that will include provisions on tax havens could be completed by Memorial Day, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) told reporters April 28.

Rangel said the remaining issues concerning a free trade agreement with Panama are relatively minor and include language that would help the United States crack down on the use of Panamanian tax havens.

“No one has really shared with me a Panamanian timetable,” Rangel said. “We're working on the tax [information] exchange treaties. It could be done before Memorial Day.”

Separately, House Majority Leader Steny Hoyer (D-Md.) said April 22 he believed the U.S.-Panama free trade agreement could be submitted by the Obama administration in the near future but added that he was not aware of the administration's exact timing on the deal.

Hoyer told reporters that the Panama agreement was “relatively noncontroversial” and that Panama appeared willing to address outstanding congressional concerns about workers' rights and money laundering.

“[U.S. Trade Representative Ron] Kirk referenced it, [but] I don't think that the president has made a statement on that,” Hoyer said when asked when the administration would be submitting the bill.

“I don't know when the administration is going to submit” the bill, he said.

Hoyer, who recently visited Panama, said during his weekly pen-and-pad briefing that he thought the Obama administration wanted to submit that agreement to Congress “in the relatively near future.”

He told reporters that the U.S. congressional delegation, which recently visited Mexico, Panama, Colombia, and Brazil, met with Panamanian President Martin Torrijos while in Panama.

“And they are taking steps to both confirm the protections of workers to bargain and bargain collectively, to organize, but also to address concerns that have been expressed not only by the United States but by the international community and the G-20 to ensure that the laundering of money, the secreting of money is diminished,” Hoyer said.

Kirk said April 20 that a high-level delegation from Panama was visiting Washington, D.C., this week to engage on issues surrounding the Panama FTA. Kirk said the outstanding issues relate to internationally recognized worker rights and Panama possibly being a tax haven.

The Office of the U.S. Trade Representative said in a report released March 2 that the Obama administration plans to submit the pending FTA with Panama to Congress “relatively quickly” (26 ITR 304, 3/5/09).

Critics of the efforts to pass a free trade agreement with Panama have emphasized the country's lack of transparency on banking issues. Advocacy group Public Citizen has argued that the Panamanian government and various corporate interests have taken advantage of Panama's “comparative advantage” in banking secrecy, tax evasion, and money laundering, and that Congress needs to address those issues with the free trade agreement.

The Panama FTA is one of three pending trade agreements—the others are with Colombia and South Korea—negotiated by the Bush administration that failed to be brought up for a vote last year in the Democratic-led Congress. The Panama and Korean FTAs retain trade promotion authority because they were reached before TPA expired in 2007 and because implementing legislation has not been submitted. Whether the Colombia FTA retains TPA is a matter of debate.

Under trade promotion authority procedures, before the Panama FTA could come up for a congressional vote, the administration would have to submit an implementing bill to Congress. Such submission generally occurs after both the House Ways and Means Committee and the Senate Finance Committee hold so-called “mock markups” to offer their legislative recommendations to the administration.

After formal introduction of the measure, the committees of jurisdiction would report the bill and the House and Senate would have a maximum of 90 days to vote the bill up or down without amendments under Trade Promotion Authority procedures. The House and Senate may act concurrently expediting the process.

Meanwhile, the chairman of the Senate Banking Subcommittee on Economic Policy, Sen. Sherrod Brown (D-Ohio), said April 22 that if the Obama administration were to bring up the Panama and Colombia FTAs for consideration, they would pass Congress, but there would be strong opposition. “There's real concern from a lot of us on the labor violence in Colombia and some of the tax havens in Panama,” he told a meeting of the Washington International Trade Association.

Brown urged that the Government Accountability Office (GAO) issue a report on pending FTAs before any vote. He said he would be asking for the GAO report in the coming week.

He said there was likely to be stronger opposition to the FTAs in the House than the Senate. But even in the Senate, there would unhappy Democrats that would question why the Obama administration would bring up agreements that continue a failed Bush administration policy, he said.

“What's the rush?” Brown asked, referring to congressional passage of the Colombia, Panama, and Korea FTAs. He said that he did not see the peril to U.S. national and economic security in delaying voting on the pending agreements.

The GAO report Brown is requesting would review current trade agreements to determine what was working or not working in those agreements and provide a non-ideological, nonpartisan, fair-minded analysis of the existing trade model. Such a GAO report would be an important step redirecting U.S. trade policy and providing critical solutions for the U.S. recovery from the global economic crisis, Brown said.

“Before we pass trade agreements with South Korea, with Colombia, with Panama, with any new ideas that anybody has, we ought to see if this NAFTA [North American Free Trade Agreement] model, if these trade agreements are working before the House and Senate again vote or again pass a new trade agreement,” Brown said. “We must see evidence that our current trade policies level the playing field for U.S. and foreign companies and for U.S. and foreign workers.”

Brown also said he would be reintroducing in the next few week the Trade Reform Accountability, Development, and Employment Act, a trade enforcement bill. Brown said the bill would provide for a review of existing trade agreements, provides a process for renegotiating existing trade agreements, and outlines principles on labor, environment, investment, and food safety to be included in trade agreements.

Brown said he made three recommendations for overhauling U.S. trade policy to Kirk April 21:

• convene a blue ribbon commission on trade policy that would not delay free trade agreements but provide evidence-based decision making on trade agreements;

• provide stronger enforcement of U.S. trade laws; and

• assert greater congressional authority over trade policy, and not permit up-or-down votes on FTAs as provided for in the now-expired legislative Trade Promotion Authority.

He said that Kirk had said that no decision had been made on whether to reopen NAFTA, and that everything remained on the table.

Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Charles Grassley (R-Iowa) wrote President Obama earlier in the week, requesting the administration begin working on the Korea FTA, even as it considered presenting the Panama and Colombian FTAs to Congress (74 ITD, 4/21/09).

Brown said it was up to proponents of the FTAs to prove that the FTAs were working for the United States, given that past trade policies have brought persistent trade deficits and stagnation of U.S. worker wages.

“I just don't want see us engage in this trade fight for trade agreements that continue a failed policy,” he said, adding that he wanted to embark on a new course in trade on terms that help communities and workers, and not just investors.

Support for China Currency Bill

He said that he believed that there would be support for China currency legislation in Congress given the recent decision by the Treasury Department not to cite China as a currency manipulator in its recently released semiannual report.

Brown said China's massive purchases of U.S. Treasury bonds made it harder and harder for the United States to challenge Chinese economic strategies.

In response to a question on food safety and Chinese imports, Brown said that the answer is to stop giving incentives to transfer manufacturing out of the United States, require traceability on production, and beef up inspections at the border.

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	Home > Top Story Archive >April 30, 2009 Top Story The following story is from the April 30 issue of International Trade Reporter Current Reports: Bilateral Agreements Rangel Eyes Memorial Day Completion For Panama Bill With Tax Haven Provisions A pending free trade pact with Panama that will include provisions on tax havens could be completed by Memorial Day, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) told reporters April 28. Rangel said the remaining issues concerning a free trade agreement with Panama are relatively minor and include language that would help the United States crack down on the use of Panamanian tax havens. Nonetheless, Rangel also said he is not in a rush to get the bill completed. “No one has really shared with me a Panamanian timetable,” Rangel said. “We're working on the tax [information] exchange treaties. It could be done before Memorial Day.” Hoyer See FTA Submitted in Near Future Separately, House Majority Leader Steny Hoyer (D-Md.) said April 22 he believed the U.S.-Panama free trade agreement could be submitted by the Obama administration in the near future but added that he was not aware of the administration's exact timing on the deal. Hoyer told reporters that the Panama agreement was “relatively noncontroversial” and that Panama appeared willing to address outstanding congressional concerns about workers' rights and money laundering. “[U.S. Trade Representative Ron] Kirk referenced it, [but] I don't think that the president has made a statement on that,” Hoyer said when asked when the administration would be submitting the bill. “I don't know when the administration is going to submit” the bill, he said. Hoyer, who recently visited Panama, said during his weekly pen-and-pad briefing that he thought the Obama administration wanted to submit that agreement to Congress “in the relatively near future.” He told reporters that the U.S. congressional delegation, which recently visited Mexico, Panama, Colombia, and Brazil, met with Panamanian President Martin Torrijos while in Panama. “And they are taking steps to both confirm the protections of workers to bargain and bargain collectively, to organize, but also to address concerns that have been expressed not only by the United States but by the international community and the G-20 to ensure that the laundering of money, the secreting of money is diminished,” Hoyer said. Kirk said April 20 that a high-level delegation from Panama was visiting Washington, D.C., this week to engage on issues surrounding the Panama FTA. Kirk said the outstanding issues relate to internationally recognized worker rights and Panama possibly being a tax haven. The Office of the U.S. Trade Representative said in a report released March 2 that the Obama administration plans to submit the pending FTA with Panama to Congress “relatively quickly” (26 ITR 304, 3/5/09). Critics of the efforts to pass a free trade agreement with Panama have emphasized the country's lack of transparency on banking issues. Advocacy group Public Citizen has argued that the Panamanian government and various corporate interests have taken advantage of Panama's “comparative advantage” in banking secrecy, tax evasion, and money laundering, and that Congress needs to address those issues with the free trade agreement. TPA Procedures The Panama FTA is one of three pending trade agreements—the others are with Colombia and South Korea—negotiated by the Bush administration that failed to be brought up for a vote last year in the Democratic-led Congress. The Panama and Korean FTAs retain trade promotion authority because they were reached before TPA expired in 2007 and because implementing legislation has not been submitted. Whether the Colombia FTA retains TPA is a matter of debate. Under trade promotion authority procedures, before the Panama FTA could come up for a congressional vote, the administration would have to submit an implementing bill to Congress. Such submission generally occurs after both the House Ways and Means Committee and the Senate Finance Committee hold so-called “mock markups” to offer their legislative recommendations to the administration. After formal introduction of the measure, the committees of jurisdiction would report the bill and the House and Senate would have a maximum of 90 days to vote the bill up or down without amendments under Trade Promotion Authority procedures. The House and Senate may act concurrently expediting the process. Sen. Brown Sees Passage Meanwhile, the chairman of the Senate Banking Subcommittee on Economic Policy, Sen. Sherrod Brown (D-Ohio), said April 22 that if the Obama administration were to bring up the Panama and Colombia FTAs for consideration, they would pass Congress, but there would be strong opposition. “There's real concern from a lot of us on the labor violence in Colombia and some of the tax havens in Panama,” he told a meeting of the Washington International Trade Association. Brown urged that the Government Accountability Office (GAO) issue a report on pending FTAs before any vote. He said he would be asking for the GAO report in the coming week. He said there was likely to be stronger opposition to the FTAs in the House than the Senate. But even in the Senate, there would unhappy Democrats that would question why the Obama administration would bring up agreements that continue a failed Bush administration policy, he said. “What's the rush?” Brown asked, referring to congressional passage of the Colombia, Panama, and Korea FTAs. He said that he did not see the peril to U.S. national and economic security in delaying voting on the pending agreements. The GAO report Brown is requesting would review current trade agreements to determine what was working or not working in those agreements and provide a non-ideological, nonpartisan, fair-minded analysis of the existing trade model. Such a GAO report would be an important step redirecting U.S. trade policy and providing critical solutions for the U.S. recovery from the global economic crisis, Brown said. “Before we pass trade agreements with South Korea, with Colombia, with Panama, with any new ideas that anybody has, we ought to see if this NAFTA [North American Free Trade Agreement] model, if these trade agreements are working before the House and Senate again vote or again pass a new trade agreement,” Brown said. “We must see evidence that our current trade policies level the playing field for U.S. and foreign companies and for U.S. and foreign workers.” Brown also said he would be reintroducing in the next few week the Trade Reform Accountability, Development, and Employment Act, a trade enforcement bill. Brown said the bill would provide for a review of existing trade agreements, provides a process for renegotiating existing trade agreements, and outlines principles on labor, environment, investment, and food safety to be included in trade agreements. Three Recommendations for Kirk Brown said he made three recommendations for overhauling U.S. trade policy to Kirk April 21: • convene a blue ribbon commission on trade policy that would not delay free trade agreements but provide evidence-based decision making on trade agreements; • provide stronger enforcement of U.S. trade laws; and • assert greater congressional authority over trade policy, and not permit up-or-down votes on FTAs as provided for in the now-expired legislative Trade Promotion Authority. He said that Kirk had said that no decision had been made on whether to reopen NAFTA, and that everything remained on the table. Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Charles Grassley (R-Iowa) wrote President Obama earlier in the week, requesting the administration begin working on the Korea FTA, even as it considered presenting the Panama and Colombian FTAs to Congress (74 ITD, 4/21/09). Brown said it was up to proponents of the FTAs to prove that the FTAs were working for the United States, given that past trade policies have brought persistent trade deficits and stagnation of U.S. worker wages. “I just don't want see us engage in this trade fight for trade agreements that continue a failed policy,” he said, adding that he wanted to embark on a new course in trade on terms that help communities and workers, and not just investors. Support for China Currency Bill He said that he believed that there would be support for China currency legislation in Congress given the recent decision by the Treasury Department not to cite China as a currency manipulator in its recently released semiannual report. Brown said China's massive purchases of U.S. Treasury bonds made it harder and harder for the United States to challenge Chinese economic strategies. In response to a question on food safety and Chinese imports, Brown said that the answer is to stop giving incentives to transfer manufacturing out of the United States, require traceability on production, and beef up inspections at the border. Contact the Webmaster at webmaster@bna.com 1801 S. Bell Street, Arlington, VA 22202 - Phone: 1-800-372-1033 Copyright © The Bureau of National Affairs, Inc. All Rights Reserved.

Top Story

Rangel Eyes Memorial Day Completion For Panama Bill With Tax Haven Provisions

Rangel Eyes Memorial Day Completion
For Panama Bill With Tax Haven Provisions