WASHINGTON — The road ahead on trade for the next Speaker of the House will be paved with tough political battles — and the first big test could come as early as this week if a deal is reached on the 12-nation Trans-Pacific Partnership agreement.
House Speaker John Boehner’s surprise resignation last week could propel Majority Leader Kevin McCarthy to the top perch in the House. The fashion industry is largely confident that if McCarthy is elected, his pro-trade credentials will help advance the trade agenda.
The embattled Boehner shocked Washington on Friday when he revealed his resignation, after fighting for months with conservative Republicans who had threatened to oust him from the speakership. Boehner was a pro-trade advocate throughout his 25-year tenure in the House. Most recently he was credited with helping usher the contentious Trade Promotion Authority legislation through the House against the backdrop of opposition on both sides of the aisle.
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McCarthy is widely considered the front-runner for the Speaker’s gavel. He said Monday that he will run for the post but could face a challenge from a conservative candidate. Rep. Steve Scalise, who is currently House majority whip, could potentially succeed McCarthy as majority leader, although he has not indicated his intention to run.
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McCarthy and Scalise both voted for TPA.
Juanita Duggan, president and chief executive officer at the American Apparel & Footwear Association, said she doesn’t believe Boehner’s resignation will have an impact on the trade agenda.
“The entire leadership [with perhaps one exception] should be considered pro-trade,” Duggan said.
“I honestly don’t think it changes the dynamic at all,” she added, referring to Boehner’s resignation. “You’ve still got Paul Ryan [House Ways and Means chairman] and Orrin Hatch [chairman of the Senate Finance Committee] there. They are going to be the drivers. I also think that the people in leadership who handled TPA are going to remain in the leadership in some job or another.”
Trade ministers and chief negotiators are in Atlanta this week for what many are anticipating could be the final round in the TPP negotiations. The 12 nations involved in the talks are the U.S., Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Chile, Brunei and New Zealand. If completed and implemented, the TPP deal would encompass some 40 percent of global GDP and tear down trade barriers between the 12 countries.
Augustine Tantillo, president of the National Council of Textile Organizations, said: “I’m not sure that there will be a significant void because Congress obviously just did a number of unresolved trade matters earlier this year and there has been a significant amount of work on trade so far.”
He said the executive branch is fully focused on getting TPP finished. “They will worry about the environment on Capitol Hill when and if they are able to sign a final agreement,” Tantillo said.
Under a new speaker, the textile industry is hopeful there could potentially be an opening to advance legislation, known as the miscellaneous tariff bills, which allow duty-free treatment on hundreds of imported products including some textiles, Tantillo said.
Julia Hughes, president of the U.S. Fashion Industry Association, said, “There is a sense there will be continuity among leadership.”
“Negotiators are [in] Atlanta for TPP this week,” said Hughes. “Right now our view from the business community is that there’s no immediate impact or reason to think that it [the resignation] changes the outlook for approval of the Trans Pacific Partnership when it comes to Congress,” Hughes said. “We’ll see what happens in the next few weeks but right now, in talking to other companies, everyone is relatively confident that there is no change in position on trade.”
But some academics are more skeptical about the trade agenda moving forward.
Phillip Swagel, a professor of international economic policy at the University of Maryland, said the change in the House’s leadership could have a “negative impact on the possibility of moving forward on trade policy matters, notably passage of TPP.”
“The new leadership team will be substantively disposed to favor trade agreements, just like Speaker Boehner,” Swagel said. “But the pressure in the Republican Caucus to oppose President Obama will increase, and inevitably this will affect TPP, even when the administration and Congressional Republicans are fundamentally in agreement on the substance. And this is in contrast to Congressional Democrats and Democratic presidential candidates, who will instinctively oppose trade expansions.”