Hatch: “I think we’re going to get [TPP] done in lame-duck”

Posted on by Dan Anthony

That is what Senate Finance Committee Chairman Orrin Hatch (R-UT) reportedly told The Hill newspaper yesterday. Hatch, as chairman of the committee with jurisdiction over trade issues and one of the architects of the Trade Promotion Authority (TPA), would play a key role in moving TPP implementing legislation through the Senate.

Since TPP negotiations concluded last year, Hatch has expressed concerns about certain provisions related to biologic drugs. That issue has not been resolved, but the article notes that “Hatch said he is getting assurances from the White House that a solution is in the works that will address the trade deal’s problems.”

Given his key position, Hatch’s support is necessary for any successful effort to pass TPP this year. Yet much work remains to educate Members of Congress about the potential benefits of TPP for American companies and workers. Importers with a stake in TPP can show their support for passage in 2016 by adding their names to the free TPP importers list here. Those who are unsure about potential gains can learn more at our TPP Import Benefits page.

“Low” US Tariffs Cost American Companies $17 Million A Day on Imports from TPP Countries

Posted on by Dan Anthony

Alan Wm. Wolff, a senior trade negotiator in both Republican and Democratic administrations, wrote a good commentary for Fortune today on “Why Mitch McConnell Should Move Ahead on the Pacific Trade Deal.” It gave four specific reasons that passing TPP is in the U.S. national interest, including: safeguarding America’s stake in Asia, boosting the U.S. economy, constructing 21st century trading rules, and maintaining U.S. credibility.

However, the statement that “U.S. trade and investment barriers are already low” needs some clarification. We’ve shown previously that average tariffs on imports from TPP countries can be quite high. Those taxes are paid by the end consumer, whether they are U.S. manufacturers trying to remain competitive in the global marketplace or families trying stretch paychecks as far as possible. And it is possible for barriers to be low but still very costly.

In fact, companies importing from TPP countries currently pay about $17 million per day in tariffs. That is nearly double the amount paid in 2009, as shown in the chart below.

tpp_average_daily_tariffs

In fact, the daily tariff cost has increased every year since 2009. This is true despite ever-lower tariffs on imports from countries with previously signed FTAs. For example, the U.S.-Australia FTA went into effect in 2005 but U.S. tariffs on some products are subject to 18-year phaseouts. While those products will not be duty free until 2022, the face a slightly lower rate every year. And yet cost for American importers continues go grow.

The fact that U.S. importers pay significant tariff costs does not undercut any of the arguments made by Wolff. Indeed, they strengthen the argument that Congress should consider the TPP agreement this year, as they are another cost to American companies, workers, and families for every day of delay.