	Placing Trade Issues In Context

A number of economic factors influence U.S. trade policy: domestic economic conditions;growing trade deficits; the impact of trade (exports and imports) on various states, regions, andindustries; the importance of trade to the U.S. economy; and the geographical distribution of U.S.exports and imports; among other factors. It is also influenced by political factors, such as the roleand concerns of Congress in trade policy, the role and agenda of the President, and the differentperspectives that the two branches bring to the trade debate and foreign policy considerations. Trade Issues

The 109th Congess has already faced some trade issues, and will likely confront more,requiring consideration and debate during the second session. participation in the WTO as it does every five years under U.S. law. (8) 
The Doha Development Agenda Negotiations. Compliance with WTO Decisions. (11) 

		Bilateral and Regional Trade Negotiations and Agreements

Following the consideration and approval by 109th Congress of two free trade agreements --the DR-CAFTA and the U.S.-Bahrain FTA -- during the first session, the Bush Administration willlikely ask for consideration of several new bilateral and regional free trade agreements during thesecond session. Furthermore, under the law granting trade promotion authority, the executive branch must consultwith the Congress as trade agreement negotiations proceed. Congressional leadership on trade policy in both political partieshave indicated that trade enforcement will be a priority for the remainder of the 109th Congress. However, allfour countries, as well as others, are seeking accession to the World Trade Organization (WTO). (15) 
Tariff Preferences. The Congress mightconsider legislation to reauthorize the EAA. In addition, on March 3, 2005 the Senate passed a joint resolution to block the implementation ofthe rule. (26) 
China. Each issue or set of issues bears its own implications as Members of Congress weigh the merits anddisadvantages. In most cases, the 109th Congress will be considering and debating each issueseparately. However, the cumulative effect of each debate may have wider implications for U.S.trade policy. As the 109th Congress addresses these issues, its decisions may define U.S. trade policyin the long term. Free Trade or Protectionism? Shaping the International Trade System

The trade issues that the 109th Congress faces and how the Congress deals with them couldhave an impact on the international trading system. In some cases, these areas are interlinked, while in others,they are distinct.
The second session of the 109th Congress is expected to face an extensive trade agendaconsisting of a wide range of issues. In some respects these issues are distinct, each with its ownpolicy and economic implications. In other respects the issues are interrelated. They have emergedfrom common sets of domestic political, foreign policy, and economic factors and affect or areaffected by the concerns of Members of Congress, of other policymakers and of many interestgroups. These issues and how policymakers deal with them will define overall U.S. trade policy.
During the first session, the 109th Congress dealt with a number of critical trade issues. TheBush Administration requested and received a two-year extension of its trade promotion authority. The Congress also debated U.S. participation in the World Trade Organization (WTO) as itconsidered, but did not pass, a congressional resolution to withdraw from the WTO. In addition, theAdministration sent and the Congress passed legislation to implement a free trade agreement withfive Central American countries plus the Dominican Republic, the DR-CAFTA, and passedimplementing legislation for a free trade agreement with Bahrain. Furthermore, the 109th Congressrepealed two trade programs that had been declared illegal by the WTO. During the second session,the 109th Congress may be called on to debate more free trade agreements, trade relations with China,and tariff preferences for developing countries, among other issues. The Congress might alsocontinue to monitor the Doha Development Agenda negotiations proceeding in the WTO.
Each issue or set of trade issues bears its own implications as Members of Congress weighthe merits and disadvantages. In most cases, the 109th Congress will be considering and debatingeach issue separately. However, the trade issues as a whole have implications for a wider debate onU.S. trade policy. As the 109th Congress addresses these issues, its decisions will have implicationsfor key questions that help define U.S. trade policy in the long-term.
This report will generally cover the trade issues as they unfold. However, it will not tracklegislation per se. The report will be updated as events warrant.