After years without a major trade package, the House took a giant step forward by passing the conference report of H.R. 434, which will greatly expand trade with 48 sub-Saharan African and 25 Caribbean nations, and greatly benefit the retail industry.

The retitled "Trade and Development Act of 2000" was approved by a strong 309 to 110 vote, with 183 Republicans and 126 Democrats voting in favor of the measure.

For sub-Saharan African nations, the bill grants duty and quota free benefits for apparel made from U.S. yarn and fabric; apparel made from African fabric, capped at 1.5 percent of U.S. imports but increasing to 3.5 percent over 8 years; and apparel made from third-country fabric exported from African nations with an annual per capita income of less than $1,500 (which includes all but 6 countries in Africa).

"This is the first time that we really treated countries in this continent they way we treated the rest of the world," said Representative Charles Rangel (D-NY), a lead sponsor of the bill.

Caribbean nations receive duty and quota free benefits on apparel assembled from U.S. yarn and fabric; knit and knit-to-shape apparel made with regional fabric, capped at 250 million square meters, which would grow over four years; and T-shirts, with a cap of up to 4.2 million dozen.

The measure includes a list of eligibility requirements that countries need to meet before trade benefits are granted, including a provision pushed by Senator Tom Harkin (D-IA) that would withhold benefits if countries fail to implement their obligations to eliminate the worst forms of child labor, as defined by the International Labor Organization. There are also provisions to prevent transshipment from other nations, such as China.

The Senate is set to take up the conference report next week. "I think there's going to be broad support," said Senate Minority Leader Tom Daschle (D-SD). President Clinton is a strong supporter of the trade package. "This important measure will strengthen our economic partnership with these nations, lower trade barriers and help developing nations to lift their people out of poverty," said the President after the House vote.

If you have any questions, please contact Erik Autor at (202) 626-8104.

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Without benefit of hearings or testimony, the House Judiciary Committee passed a five-year extension of the moratorium on Internet taxation. The Committee failed to tackle the thorny issue of state sales and use taxes on remote commerce.

"While retailers oppose new taxes on the Internet, the industry believes that Congress should not extend the current moratorium without addressing the inequality in state sales and use tax systems," said Steve Pfister, NRF's Senior Vice President for Government Relations.

The rash action was pushed by a House leadership anxious to pass politically appealing tax measures during an election year. Some Members of the Committee expressed their concerns over the expedited markup and the lack of hearings. "There is still a year to go on the moratorium," said Representative Jerrold Nadler (D-NY). "I don't understand the rush." Ranking Democrat John Conyers (D-MI) called the markup a "contorted process."

The measure, introduced by Representative Chris Cox (R-CA), originally contained a permanent extension of the moratorium. However, Representative Bob Goodlatte (R-VA) offered an amendment to only extend the moratorium by 5 years until October 2006. The bill, passed by a 29 to 8 vote in the Committee, is scheduled for floor action next week.

NRF sent a letter to Members of the Judiciary Committee protesting the hasty markup. "Refusing to address the sales and use tax issue in the same context as other Internet tax issues ensures that an unlevel tax playing field will continue to exist," the letter read.

A hearing on the Advisory Commission on Electronic Commerce (ACEC) report is scheduled for May 17 in the Commercial and Administrative Law Subcommittee of the Judiciary Committee. A second hearing on the more controversial sales and use tax issue is tentatively scheduled for early June.

If you have any questions, please contact Scott Cahill or Sarah Whitaker at (202) 783-7971.

On Wednesday, the House unanimously passed H.R. 4182, the Worker Economic Opportunity Act. The measure creates an exemption to the Fair Labor Standards Act (FLSA) that clarifies that employers do not need to include profits from stock options when calculating overtime pay. The House action follows unanimous passage of a companion measure in the Senate last month.

The bills were drafted in response to a recent advisory letter by the Labor Department. However, after the protests generated by the letter, Labor Secretary Alexis Herman came out in support of the measure.

Representative Cass Ballenger (R-NC) said the bill "rewards employers and motivates workers." President Clinton has endorsed the measure and is expected to sign it into law shortly.

NRF helped develop and actively lobbied for swift passage of the legislation. If you have any questions, please contact Katherine Graham at (202) 626-8195.

Retailers are again targeted in a new bill introduced by Senators John McCain (R-AZ) and Joe Lieberman (D-CT) aimed at preventing the sale of certain movies, video games, and music to children.

The bill, the "Media Violence Labeling Act of 2000" (S. 2497) would create a uniform labeling system for videos, albums and video games, and requires retailers to enforce the age restrictions developed. Any retailer that does not enforce the restrictions would face fines of up to $10,000. Similar measures were rejected in the House during debate on the Juvenile Justice bill last year.

The bill has been referred to the Senate Commerce Committee, which McCain chairs. The Senator said he would hold hearings on the issue. NRF will monitor any action on the legislation and work to ensure retailers are not forced to become the nation's cultural police.

Policy Council - June 13, 2000, Washington, DC
Washington Leadership Conference - June 13-14, 2000, Washington, DC
For registration information, contact Emily Wild at (202) 626-8131.

According to Forrester Research, by 2004 an estimated 7% of U.S. retail sales will be made using the Internet, compared with roughly 2% currently.

Washington Retail Insight is published by the National Retail Federation, 325 7th Street, NW, Suite 1000, Washington, DC 20004. Please contact Mike Epstein at (202) 783-7971 or e-mail with comments, suggestions, or for subscription information.