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NFTC: Election Results Likely Mean Export Control Legislation Is Dead
Date: 11/10/2010
Written By: Inside US-China Trade

The pending Republican party's takeover of the House of Representatives after last week's midterm elections likely means that efforts to pass legislation to reform the U.S. system of export controls will grind to a halt, National Foreign Trade Council (NFTC) President Bill Reinsch said at a Nov. 5 press briefing.

In the run-up to the election, Reinsch said that administration officials were already starting to prepare to alter their strategy on export controls from seeking legislation to purely administrative action, given that Republicans were widely predicted to make massive electoral gains in the House.

One business source said that companies would still welcome administrative reforms on export controls, even if those reforms were not secured more permanently through legislation. Sources have long said that most of what the administration is seeking to accomplish can be done administratively.

Several obstacles sit in the way of export control legislation, according to Reinsch. First, he pointed out that House Foreign Affairs Committee Ranking Member Ileana Ros-Lehtinen (R-FL) is slated to chair that committee starting next year.

Ros-Lehtinen has been critical of the administration's export control reforms as well as the efforts by Rep. Howard Berman (D-CA), who currently heads up the Foreign Affairs Committee, to write a new dual-use export control law.

Berman has developed a draft bill that would revise the Export Administration Act, which authorizes dual-use export controls. After industry groups criticized a draft of the bill, a scheduled hearing and markup on Berman's bill were canceled this fall.

Reinsch also signaled that the elections could deflate the ongoing efforts by the administration to draft its own bill. While the administration hopes to have it finalized by April, he speculated that it may not see much action given the more challenging environment in Congress and the fact that most reforms can be accomplished administratively.

Though the Democrats maintained control of the Senate, Reinsch said he did not foresee much support for export control legislation from Sen. Tim Johnson (D-SD), who is expected to take over as chairman of the Senate Banking Committee once Sen. Chris Dodd (D-CT) retires at the end of the year.

Reinsch speculated that export controls would not be high on the committee's priority list under Johnson, and that it would likely wait for House action before beginning any initiatives on its own.

The election results last week also cast doubt on the future of the Currency Reform For Fair Trade Act (H.R. 2378), which seeks to offset currency manipulation by countries such as China through U.S. countervailing duty (CVD) law, Reinsch said.

Reinsch said it was too early to tell whether Congress will consider currency legislation in the upcoming lame-duck session. He said no one will commit to doing so before seeing the outcome of the G-20 summit of world leaders, which is taking place Nov. 11-12 in Seoul.

The House passed H.R. 2378 earlier this fall. Sen. Charles Schumer (D-NY) has expressed an interest in moving his own currency legislation -- which differs from the House version -- during the lame-duck session, although some sources believe Schumer may be amenable to moving the House version instead.

Speaking at the same press briefing, NFTC Vice President For Tax Policy Catherine Schultz also suggested that trade issues were unlikely to come to the forefront of the lame-duck session, since Congress must focus on other, more pressing issues, including spending bills for the 2011 fiscal year.

As for next year, Reinsch said it would be "much harder" for the new Congress to pass currency legislation. He highlighted the fact that even though House Ways and Means Committee Ranking Member Dave Camp (R-MI) cast a vote in favor of the House bill in September, he qualified his support for the bill.

In Camp's floor statement, he stressed that the bill "will not address many more pressing trade concerns with China and will not advance the goal of doubling exports in five years."

Concerning other trade issues, NFTC Vice President for Regional Trade Initiatives Chuck Dittrich expected that the Republican-controlled House would likely hold more congressional hearings on trade issues, like the three pending free trade agreements, in order to put pressure on the administration to bring them to a vote.