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U.S. Congressional Update: October 2007

September 30, 2007

Topics this issue:
Congress Moves on U.S.-Peru Trade Promotion Agreement
Colombia and Panama: What’s Next?
Congress Proposes New Hemispheric Aid Initiative
 

Congress Moves on U.S.-Peru Trade Promotion Agreement
 
After months of waiting, Congress has begun the formal process of considering the U.S.-Peru Trade Promotion Agreement (PTPA). On September 27, 2007, the White House formally submitted the U.S.-Peru Trade Promotion Agreement Implementation Act to both the House of Representatives and the Senate. Congress now has 90 days to vote “yes” or “no” on the agreement without the possibility of amendment.
 
In early October, the Senate Finance Committee voted in favor of the PTPA. The next step is full consideration on the Senate floor. On the House side, action is still pending by the Ways and Means Committee before the agreement could be sent to the full House for consideration. Previously, both chambers held “mock” mark-ups—informal business meetings—that had signaled general committee approval for the revised text. Congress is expecting to adjourn for the year by the end of October, so the PTPA votes are expected anytime in the next few weeks. If the agreement passes with solid support, momentum would be built for the pending Colombia and Panama trade agreements.
 
The U.S.-Peru Trade Promotion Agreement, along with the Colombia and Panama trade agreements, began to gain new life when the Office of the United States Trade Representative and Congress agreed to strengthen labor protection laws and environmental protections in the text of the agreements. Two months later, in late July, Peru adopted the revised language even though the Peruvian Congress had already passed the original agreement.
 
Colombia and Panama: What’s Next?
 
The fate of the Colombia and Panama agreements is expected to remain in limbo until next year. However, House Majority leader Steny Hoyer (D-MD) offered some hope of consideration when Congress returns in 2008. In early October, the Majority Leader urged the White House and the business community to work together, and with the Democrats, to address congressional concerns. Congress still does not fully support these trade agreements despite overwhelmingly positive newspaper editorials and extensive outreach by the Panamanian and Colombian governments. In an election year, passage will hinge on bipartisan cooperation.
 
Congress Proposes New Hemispheric Aid Initiative

A new bill in the House and Senate takes a fresh approach to the U.S. aid strategy in the region. In the Senate, Senators Bob Menendez (D-NJ) and Mel Martinez (R-FL) jointly introduced the Social Investment and Economic Development for the Americas Act on October 1, 2007; while in the House, Representative Eliot Engel (D-NY) introduced the same text on September 27, 2007. Representative Dan Burton (R-IN) is the main cosponsor of the House bill. This bipartisan effort seeks to provide $2.5 billion over 10 years to reduce poverty, expand the middle class and invest in key development areas such as education, health care and housing.

A key aspect of the legislation is to work within existing development structures in the region. The U.S. Agency for International Development would focus on basic development issues such as education, housing and health care; the Inter-American Development Bank (IDB) would concentrate on economic development issues such as creating a strong investment climate, educating the workforce, microfinance, and leveraging remittances. Funding would be split evenly between the two organizations. However, no funds would be administered until either the private sector or IDB member countries provide matching funds.
 
The legislation also seeks to boost access to Millennium Challenge Corporation (MCC) funds. One provision calls for working with Latin American and Caribbean countries to help improve eligibility for MCC funding on major development projects. The bills are now pending action by the Senate Committee on Foreign Relations and the House Committees on Foreign Affairs and Financial Services.