What Congressional Elections Mean for US-China Trade

By Stephanie Henry

Though China did not play a major role in many congressional midterm elections, the makeup of the new republican-led Congress may have a significant impact on US-China commercial and trade issues in 2015 and beyond.

At the start of the 114^th Congress in January, republicans will hold at least 52 seats in the Senate—retaking the majority and the chairmanships for each committee. Republicans also strengthened their majority in the House, gaining at least 13 seats, with several races still to be determined.

With the Senate changeover, chances for President Barack Obama’s stalled trade agenda have improved. Senior republicans, including prospective Senate Majority Leader Mitch McConnell (R-KY), have vowed to cooperate with the administration on this issue. “Most of my members think that America’s a winner in international trade,” McConnell said in an interview with Time magazine.

Committee leadership shifts in the Senate

Other China-related priorities will likely shift along with leadership changes in the Senate and the House. The Senate Foreign Relations Committee, now chaired by Sen. Robert Menendez (D-NJ), is expected to be chaired by Ranking Member Bob Corker (R-TN). Corker will oversee the committee vetting the US-China bilateral investment treaty (BIT), once it is completed. Corker has been a consistent supporter of free trade, including opposing currency legislation when the Senate took it up in 2011.

Other committees with jurisdiction over China issues will also see leadership changes, including the Senate Finance Committee. Ranking Member Orrin Hatch (R-UT) is expected to take over the committee chairmanship from Sen. Ron Wyden (D-OR). In his time as chair, Wyden focused on several China-related issues, including digital trade, cybertheft, energy, and trade enforcement. Hatch may focus on enforcement issues, especially in the areas of intellectual property rights and innovation. Hatch has been a supporter of free trade in the Senate, opposing currency legislation in 2011 and voting in support of Permanent Normal Trade Relations with China in 2000.

The Finance Committee’s jurisdiction covers issues including trade agreements, customs, and tariff and import quotas. The committee is also charged with vetting nominees to key trade posts in the Departments of Treasury and Commerce and the Office of the US Trade Representative. Though most of those posts are currently filled, the new republican majority will determine the future of any prospective nominees.

Turnover in the House

In the House, republicans already hold the majority and therefore all committee chairmanships. But turnover could affect existing China-related legislation. For example, past Commerce, Justice, and Science appropriations bills had provisions that restricted US agencies’ procurement of IT systems from countries deemed “cyber threats,” such as China. The bill was overseen by the House Appropriations’ Commerce, Justice, and Science Subcommittee Chair Frank Wolf (R-VA-10), who is retiring at the end of 2014. The next chair of the subcommittee will be determined by the republican caucus. It is unclear if the next chair will hold views similar to Wolf’s on China issues.

The House Ways and Means Committee will also see turnover in its chair, as Dave Camp (R-CA) retires from his post. Rep. Paul Ryan (R-WI) is seeking to replace him. Ryan called for China to be labelled a “currency manipulator” during the 2012 Mitt Romney campaign, but he has taken a less ardent view in the House. In 2010, for example, he voted against legislation that would have expanded presidential tariff-setting powers against countries with “fundamentally undervalued” currencies. Also voting against the bill was a potential challenger to Ryan’s chairmanship, Rep. Kevin Brady (R-TX). Brady has a strong voting record on trade, and has called for Congress to focus on other issues in the China trade relationship, including intellectual property rights protection, innovation, and the unfair advantages given to domestic companies.

The Ways and Means Subcommittee on Trade will also likely see a shift in chairmanship, as current Chair Devin Nunes (R-CA) is expected to seek the post left vacant by outgoing Chair of the House Permanent Select Committee on Intelligence Rep. Mike Rogers (R-MI). Congressmen Dave Reichert (R-WA) and Charles Boustany (R-LA) are reportedly both interested in the subcommittee chairmanship. While both congressmen take very pro-trade views on China, Reichert could focus more heavily on agriculture-related issues, while Boustany might focus more on energy concerns. Boustany is current co-chair of the US China House Working Group.

While the Ways and Means Committee is likely to focus next year on the conclusion of Trans-Pacific Partnership negotiations and renewal of Trade Promotion Authority, other China-related issues may also arise. Such issues may include investment barriers in China, BIT negotiations, trade secret theft, compliance with international trade rules, conclusion of the Information Technology Agreement negotiations, and domestic economic reforms in China.

[author] Stephanie Henry ([email protected]) is manager of government affairs at the US-China Business Council’s Washington, DC office. [/author]

(Photo by US Department of Agriculture via Flickr)