The American Insurance Association (AIA) commended the U.S. House of Representatives for passing legislation to grant Trade Promotion Authority (TPA) to the President.
“This legislation is important to insurance consumers around the world,” noted Robert E. Vagley, AIA president. Vagley also said that TPA would have a positive impact on the U.S. balance of trade by leading to expanded overseas marketing opportunities for U.S.-based insurance companies.
The AIA has lobbied the House in favor of legislation granting the President the new trade authority since last year. “House passage of TPA legislation…will provide the President with new opportunities to open the world to U.S. exporters and products, including insurance,” said Vagley. “U.S. insurance companies face significant barriers in doing business overseas, and this new authority for the President will provide him with new authority to eliminate those barriers through new negotiations with other countries.”
Although the House debate was mired down in provisions related world labor and environmental standards, Vagley pointed out in a recent letter to House members that “property and casualty insurers are particularly proud that many of their insurance products — particularly catastrophic, property-related, and workers’ compensation insurance — serve to improve the environmental and labor conditions of any country that opens its markets to them.”
A comprehensive AIA report outlining the positive impact that property-casualty insurance products have on the environment and worker safety in developing markets accompanied Vagley’s letter.
The Senate is expected to begin consideration of TPA legislation early next year. TPA, formerly known as “fast-track” authority, would allow the President to negotiate and finalize a trade agreement with another country.
Without TPA, a trade agreement can be amended by Congress.
“Many countries have expressed a reluctance to negotiate free trade agreements with the U.S. because they cannot be sure that these agreements will get enacted without congressional alteration,” noted John Savercool, vice president of federal affairs for AIA. “With TPA, the U.S. can begin to pursue a variety of new trade agreements that will result in more U.S. insurance products being sold overseas.”
“To achieve the benefits of free, open trade in insurance for U.S. domiciled companies, the President needs an effective TPA bill,” he added. “Only then are we likely to tear down the barriers that prevent U.S. companies from selling their products overseas.”
Savercool said that the House vote will give further momentum to pending U.S. trade agreements with Chile, Singapore, and a host of South American countries. Also, the vote will dispel any notion that the U.S. will not play a leadership role in the upcoming global trade round in the World Trade Organization that will begin early next year.
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