Legislation introduced last week in the U.S. House of Representatives by Ways and Means Committee Chairman Charles Rangel (D-NY) would extend the ATPA until September 30, 2010. (That same bill would extend the Caribbean Basin Initiative (CBI), currently scheduled to expire on September 30, and the Generalized System of Preferences (GSP), currently scheduled to expire on December 31, 2008, to the same date). A long-term extension is also favored by the Chairman of the Senate Finance Committee, Max Baucus (D-MT). In addition, the budget for fiscal year 2009 submitted to Congress last week by President Bush assumes an extension of the ATPA until December 31, 2008 (it also assumes an extension of the CBI until December 31, 2011, and an extension of the GSP until December 31, 2013).

Representatives of the four Andean beneficiary countries have been making the rounds on Capitol Hill over the past several days to urge lawmakers to enact an extension of the program at the soonest possible time so as to maintain continuity and certainty within the business community. While an extension of the ATPA for some length of time seems at this point to be likely, there remain some complicating factors. Foremost amongst these is the pending free trade agreement with Colombia. Members may recall that negotiations on this agreement have been completed, and the agreement was signed by the Presidents of the two countries last year; however, the implementing legislation for the agreement has not yet been submitted to Congress since the agreement has generated pronounced opposition from several quarters, primarily on the basis of that country’s continuing struggles with violence against union officials, as well as “terrorist” groups such as FARC. Supporters of the Colombia FTA, including Senate Finance Committee Ranking Minority Member Charles Grassley (R-IA) assert that an extension of the ATPA will ease pressure for the Administration to press for approval of the agreement. Bolivia and Ecuador also present complications for various reasons, including the fact that unlike Peru and Colombia, these two beneficiary countries have not negotiated free trade agreements with the United States. In addition, many Democrats, particularly in the House, do not want to move on any trade fronts without first solidifying a long-term extension of the Trade Adjustment Assistance (TAA) program to address the plight of U.S. workers that lose their jobs due to import competition.

Of course, all of these matters and more – including the fate once and for all of the Doha Round negotiations under the WTO – are intrinsically connected on some ephemeral level to two other factors: the state of the U.S. economy and the Presidential election season. These two factors, perhaps more than the substantive effect of a particular trade agreement or preference program, will dictate the timing and fate of all trade-related matters as this year progresses.

We will continue to keep Members advised.