Senator Jeff Sessions, an Alabama Republican and ranking member on the Budget Committee, is an avowed free trader. Yet, Sessions is holding up the renewal of the Generalized System of Preferences, a trade agreement that has been around since the mid 1970’s. The GSP gives preference to 131 developing nations to sell certain goods in the United States. By all accounts it has been wildly successful. It has helped create 80,000 jobs in the United States and brings in $20 billion a year worth of imports. So what could Sessions object to?
Exxel Outdoors in Haleyville, Ala. makes sleeping bags. If GSP is renewed the company could be forced to lay off dozens of workers if competing sleeping bags are allowed in from Bangladesh. Yes, that’s dozens – versus the thousands of jobs the GSP creates, including several dozen jobs in Bowling Green, Ky. where a company called CellCorp is partnering with Bangladeshis to import those sleeping bags. Kentucky is represented by Senate Minority Leader Mitch McConnell, thus pitching Sessions against not only his leader but almost every other member of Congress. GSP is so popular it passed the House by voice vote. And the potential damage to Exxel is so small the U.S. International Trade Commission declined their petition for an exemption because the commission did not deem the import threat great enough. Sessions office did not respond to a request for comment.
Sessions isn’t alone in his trade shenanigans. Two other trade programs have been allowed to expire in the last two months mostly due to partisan bickering. The next set of trade bills are on a kind of pyramid – or Ponzi scheme depending on how you look at it. Republicans want to see the long-stalled Colombian and Panamanian Free Trade agreements passed so they, led by Senator Jon Kyl, an Arizona Republican, refused to renew the Trade Adjustment Assistance program, which helps U.S. workers displaced by imports. This angered Democrats, who in turn allowed the 20-year-old Andean Trade Preference Act to expire on Feb. 12. Dems have said they’ll renew ATPA when TAA is also passed. So, both these programs are now dependent on if and when the Colombian and Panamanian pacts pass. These have been held up by labor objections, though U.S. Trade Representative Ron Kirk pledged last week to redouble efforts to resolve labor’s complaints and push them through.
In most economic downturns, countries purposefully become more protectionist. In this downturn, it seems, the U.S. is blundering into it.