Congressional Update: 2009 in Review

• Trade Deals Remain in Standstill
• Honduras and Presidential Nominees
• Preferences
• Immigration
• Appropriations

This year Capitol Hill saw a flurry of activity. But issues such as health care reform, the economy, Iraq, and Afghanistan left little time for lawmakers to focus on policy concerning the Americas. Pending priority items include: ratification of trade agreements with Colombia and Panama, comprehensive immigration reform and preferential tariff reform. Specific legislation such as the Social Investment and Economic Development for the Americas Act introduced by Senator Robert Menendez (D-NJ) and then-Senator Mel Martinez (R-FL) and the Strengthen and Unite Communities with Civics Education and English Skills Act introduced by Senator Kirsten Gillibrand (D-NY) will have to wait until 2010.

Trade Deals Remain in Standstill

Ratification of the pending trade agreements with Panama and Colombia remained in congressional limbo as no clear path forward for either deal emerged. The Colombia agreement, which on November 22 reached the 3-year mark since its completion, continues to face labor and violence concerns from legislators. Colombia is aggressively seeking a number of trade deals with countries such as Australia and Canada and remains a large market for U.S. exporters, including machinery and agricultural goods.  As the Colombian market becomes more open, its global competitiveness continues to increase. At the same time, the U.S. share of total Colombian imports dropped from 44 percent in 2002 to 33 percent in 2008—a potential risk to U.S. exporters*. The Panama agreement, largely unopposed, is also a victim of competing priorities in the congressional calendar. The United States accounted for 54 percent of all Panamanian imports in 2008

Honduras and Presidential Nominees

The ongoing political situation in Honduras remains a concern on Capitol Hill. The ouster of President Manuel Zelaya split the U.S. Congress largely on partisan lines: some Democrats called for the return of Zelaya while some Republicans viewed the removal of Zelaya legal under Honduran law. Senator Jim DeMint (R-SC) put the nominee process on hold for Arturo Valenzuela, tapped to be the Assistant Secretary of State for Western Hemisphere Affairs, and Thomas Shannon, the nominee for Ambassador to Brazil, due to his opposition to the Obama administration’s handling of the Honduran situation. 

The Senator lifted the hold when an accord was stuck between Zelaya and the interim government—an agreement that subsequently collapsed. On November 10, Arturo Valenzuela was sworn in as Assistant Secretary. However, Thomas Shannon remains held up in the Senate by a hold placed by Senator George LeMieux (R-FL) concerning U.S. policy toward Cuba. LeMieux was appointed to his Senate seat in August to fill the remainder of Mel Martinez’s term.

Preferences

Once again, the Latin American countries that enjoy preferential tariffs under the Generalized System of Preferences and the Andean Trade Promotion and Drug Eradication Act face uncertainty as both programs are set to expire on December 31, 2009. The Caribbean Basin Initiative is also set to expire on September 30, 2010. Similar to prior reauthorizations, the congressional calendar has left little time to consider the current preference programs and the decision to reauthorize would only come at the last moment of the current session. 

As for broader reform of preferences, the House Ways & Means Subcommittee on Trade held a hearing on November 17, 2009 on “Operation, Impact, and Future of the U.S. Preference Programs” that focused on possible changes to how the U.S. administers preferences.  In announcing the hearing, Chairman Sander Levin (D-MI), in support of preferences, stated, “The preference programs have been an important part of the effort to expand and shape trade so that its benefits can be more broadly spread. We need to make sure that the framework of these programs plays a role in promoting economic growth and development.” It remains unclear how preference reform and the upcoming expiration of some programs will unfold.

Immigration

The prolonged debate on health care and the economic downturn has delayed comprehensive immigration reform. Nonetheless, President Obama has expressed a desire to see legislation as soon as possible and appointed Homeland Security Secretary Janet Napolitano to expedite the process by closely working with Senate and House leaders. President Obama has highlighted five guiding principles for immigration reform: strengthen border control, improve the immigration system, remove incentives to enter illegally, bring people out of the shadows, and work with Mexico.

Appropriations

Congressional appropriations for 2010, the process that funds U.S. aid and diplomacy efforts, showed strong support for regional initiatives. Colombia continues to receive the bulk of assistance with $520 million directed toward counternarcotics and alternative livelihoods assistance. Under the Merida Initiative, which also provides counternarcotics and security assistance, Mexico and select Central American and Caribbean countries will receive $318.8 million. Global health received nearly $7.8 billion and Development Assistance received nearly $2.5 billion. Both programs fund projects in the Americas, such as HIV/AIDS, Malaria, the strengthening of democracy, and providing education.

*www.wto.org/english/res_e/statis_e/statis_e.htm and tse.export.gov