June 23, 2016

Global Gateways Trade Capacity Act Passes Senate Foreign Relations Committee

Bill Seeks to Improve U.S. Assistance for Expanding Trade in Developing Countries

WASHINGTON – U.S. Senators Bob Corker (R-Tenn.) and Ben Cardin (D-Md.), the chairman and ranking member of the Senate Foreign Relations Committee, today applauded committee passage of the Global Gateways Trade Capacity Act (S.2201), their bipartisan legislation to improve the effectiveness of U.S. assistance for expanded trade in developing countries.

“We need to reform U.S. foreign assistance to promote economic growth that can improve living standards and make societies more self-sufficient and more resilient to destabilizing forces,” Senator Corker said. “Through better coordination and input from the private sector, this legislation will allow us to deliver trade capacity assistance in a far more focused and strategic manner that will expand markets for American businesses by helping the developing world eliminate barriers to trade and investment.”

“Bureaucratic inefficiencies and border delays in developing countries are a drag on economic growth and development. Those borders are also notorious centers for corruption. This bill will promote the kind of efficient border proceedings that are essential to fighting corruption and promoting good governance,” Senator Cardin said. “The legislation builds on the important role USAID continues to play in trade capacity building as part of a whole of government approach, assuring that our efforts are effectively and efficiently coordinated. Small and medium businesses and humanitarian organizations in developing countries will be among those who benefit the most from streamlined, transparent and efficient borders.”

Many countries face infrastructure and institutional limitations that limit their ability to trade with the U.S. and the world. The Global Gateways Trade Capacity Act will improve coordination and accountability for existing U.S. trade capacity assistance to better identify and eliminate existing constraints for emerging economies. The legislation also will establish a five-year pilot program to assist qualifying developing countries with implementation of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA).

The Global Gateways Trade Capacity Act of 2016 includes the following key provisions:

1)    Effective Interagency Coordination – Currently, 28 different U.S. government entities distribute between $600 million and $1 billion a year in trade capacity assistance. The bill directs the president to establish an interagency coordinating committee chaired by the Secretary of State, in consultation with the administrator of the U.S. Agency for International Development and the U.S. Trade Representative, to ensure strategic planning and effective coordination of those programs.

2)    Private Sector Input – The bill directs the president to create a private sector trade advisory committee that will provide advice on U.S. trade assistance.

3)    Biennial Strategic Plan – The interagency agency coordination committee must develop and submit to Congress a biennial joint strategic plan that seeks to improve coordination among agencies, enhance private sector consultation, identify impediments to effective trade assistance, set priorities to focus on the best value, establish performance measures and targets, and provide estimates for resources to achieve these objectives.

4)    Trade Facilitation Pilot Program – The bill directs the Secretary of State, with the U.S. Trade Representative and U.S. Agency for International Development, to form a five-year pilot program to promote developing country implementation of the TFA and trade facilitation reforms. The TFA will help improve regulatory transparency and reform and streamline customs procedures in developing countries. The Organization for Economic Cooperation and Development (OECD) estimates that the TFA, if fully implemented, could reduce trade costs for low-income countries by as much as 14 percent and for middle to higher-income countries by as much as 13 - 15 percent. The OECD also found a global reduction in trade costs by only one percent would boost worldwide income by as much as $40 billion, well over half of which would go to developing countries.

Full bill text is available here

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