[CTC] Senate Finance members: IRA-related trade deals require Congress’ approval

[Arthur Stamoulis]

Senate Finance members: IRA-related trade deals require Congress’ approval
 
Inside US Trade,
March 17, 2023 at 8:30 AM

Several Senate Finance Committee members on Thursday expressed disproval of the Biden administration’s plans to negotiate a new critical minerals-focused trade pact with the European Union – and, potentially, similar pacts with other partners – without seeking congressional consent, saying the administration is overstepping its authority.
 
“I have got serious concerns about the administration's approach to implementing a portion of the Inflation Reduction Act that deals with sourcing critical minerals,” Senate Finance Committee Chair Ron Wyden (D-OR) told Treasury Secretary Janet Yellen during a hearing on Thursday. “Free trade agreements cannot be unilaterally decided by the executive branch. They require consultation and consent from the Congress. That includes any agreement on critical minerals."
 
Wyden did not return to the issue during the hearing, focused on the president’s 2024 fiscal year budget and other concerns – but he and other lawmakers expanded on it in comments to Inside U.S. Trade outside the hearing room.
 
“We have made it clear where we stand,” Wyden said when asked about newly launched negotiations with Brussels on an agreement covering critical minerals needed for electric vehicle components. The developing pact, announced last week by President Biden and EU Commission President Ursula von der Leyen, could allow EU manufacturers to benefit from IRA incentives.
 
Wyden said he will take the lead in discussions with his colleagues on the issue.
 
“We feel that our responsibilities in the trade area and every member of the Finance committee, every Democrat and Republican are central to trade policy. We don't think it's a close call,” he added.
 
Ranking member Mike Crapo (R-ID) told Inside U.S. Trade he agreed with Wyden’s comments during the hearing.
 
“I support what they're trying to do,” Crapo said about the administration’s efforts to negotiate the pact with Brussels, “but they need to come to Congress.”
 
According to a report last week by the New York Times, U.S. officials have been discussing similar, potential arrangements with officials in the United Kingdom and Japan. Norway, meanwhile, has expressed interest in treatment similar to the EU’s.
 
Yellen, whose department is developing guidance on the tax credits, has said she does not expect such deals will be submitted to Congress for its approval – and that Treasury has been working to follow Congress’ intent as it implements the law. The credits include a critical minerals sourcing requirement that favors U.S. free trade agreement partners – but the law does not define the meaning of “FTA.” Treasury is set to issue guidance on the requirement this month.  
 
Senate Finance committee member Sen. Todd Young (R-IN) told Inside U.S. Trade the IRA issues involving critical minerals must be “dealt with,” adding, “it's an issue of economic resiliency and national security. So, I want to come up with a solution, but that solution will have to be legislative in nature.” He said he too agreed with Wyden’s comments in the hearing.
 
“I will be pressing the critical minerals deal to be expanded to include some market-access conversations as well,” Young added. He did not elaborate on what such market-access conversations should cover. The Biden administration to date has not expressed interest of pursuing market-access negotiations as part of its talks with trade partners.
 
Young’s office did not return a request for comment on his suggestion.
 
Wyden, Crapo and Young, along with most other members of the Senate Finance Committee, last year called on the administration to seek congressional approval for the Indo-Pacific Economic Framework for Prosperity. Lawmakers from both parties have urged the administration to engage in more robust consultations with Congress on IPEF and other trade arrangements.
 
The Office of the U.S. Trade Representative continues to defend its efforts to consult lawmakers and pursue agreements that do not need congressional approval. The administration does not plan to submit IPEF and similar arrangements to Congress.
 
Sen. Sherrod Brown (D-OH), meanwhile, pressed Yellen during the hearing about Treasury’s implementation of new tax credits he said were crafted to support the U.S. solar industry.
 
“As Treasury finalizes rules will you ensure that China's solar industry can't profit from these credits without developing a genuine domestic supply chain?” he asked the secretary.
 
Yellen noted that “one purpose” of the IRA was "to make sure that we reduce our dependence on China and have a strong domestic capacity.” The “features of the law guarantee that and we're working on guidance to implement the law that will lead to that result,” she added.
 
Sen. Catherine Cortez Masto (D-NV) warned that the U.S. solar industry was not yet ready to meet domestic demand. If the U.S. does not secure needed solar products from elsewhere – and if it does not “deal with the tariffs that are out there that are limiting our access” to those products, she said – “we are going to be limited to the amount that we can grow our clean energy in this country through solar.”
 
Brown and Senate Finance Committee member Bob Casey (D-PA) have urged President Biden to reverse his decision last year to pause any potential tariffs stemming from ongoing circumvention probes into solar imports from four southeast Asian countries. The Commerce Department last December preliminarily determined that several companies in the countries were evading antidumping and countervailing duties on solar products from China, a decision Cortez Masto and several of her colleagues said could hinder U.S. efforts to meet clean energy goals. Commerce is set to issue final determinations on the probes in May.
 
Cortez Masto added that “we want to make sure that we're getting our supplies from countries that we support, that are our friends, that are our partners – absolutely. But until we grow our domestic manufacturing here, we are not going to meet the demand for solar in this country that we need right now."
 
Yellen described the solar incentives in the IRA as “substantial,” adding that “we’re certainly picking up great interest among investors in moving manufacturing here.” -- Maydeen Merino (mmerino at iwpnews.com <mailto:mmerino at iwpnews.com>) and Margaret Spiegelman (mspiegelman at iwpnews.com <mailto:mspiegelman at iwpnews.com>)


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20230320/d2407a40/attachment.htm>