This is a joint post with Jenny Ottenhoff.
Last month, one of us wrote that Congress seemed to have compromised and reached a bipartisan deal to extend the rule (known technically but awkwardly as the third-country fabric rule) that allows poor African countries to export clothing to the United States duty-free under the African Growth and Opportunity Act. We should have known better. This week, Senate Majority Leader Harry Reid (D-NV) was finally ready to bring a package of trade items, including the rule extension, to the floor for passage by unanimous consent when two senators put holds (subscription required) on it over completely unrelated issues – despite the fact that they actually support the extension.
Surprisingly, one of those senators is Bob Menendez (D-NJ). Senator Menedez sits on the Senate Foreign Relations Subcommittee on International Development and Foreign Assistance, Economic Affairs, and International Environmental Protection and is a well-known champion of development issues. But he is putting thousands of African jobs at risk by using the AGOA rule as leverage to renew a completely unrelated subsidy program supporting 300 jobs at two factories in New Jersey. (The other hold is by Senator Tom Coburn (R-OK) over the budget offset for the package.)
Aside from the bipartisan squabbling that has already held this provision up for months, the real issue here is time. The rule is due to expire in just over two months, and Congress is little more than a week away from leaving town until mid-September (and then they will only be in session for 2.5 weeks until after the election). The procedures for passing this legislation are even more convoluted than usual, thanks to the deep lack of trust between the parties. We won’t go into the details, but it has to be passed first by the Senate, then by the House, and then again by the Senate before it can become law. And even if the provision gets passed before August recess, it’s long past the time when retailers typically place their orders for the next season, meaning that sales have likely already been disrupted.
Time is short to get this done and we find it deeply distressing that such a strong friend of development as Senator Menendez would stoop to using these methods in this way. Even if he eventually gives way and (with Senator Coburn’s acquiescence as well) allows the bill to move forward, this is sad affirmation of the lack of interest in assisting poor countries lamented on this blog last month.