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Fast track (trade)

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The fast track authority for brokering trade agreements is the authority of the President of the United States to negotiate international agreements in an expedited manner and with limited congressional oversight. Renamed the trade promotion authority (TPA) in 2002, the TPA is an impermanent power granted by Congress to the President. It remained in effect from 1975 to 1994, pursuant to the Trade Act of 1974 and from 2002 to 2007 pursuant to the Trade Act of 2002. Although it technically expired in July 2007, it remained in effect for agreements that were already under negotiation until their passage in 2011. In June 2015, a third renewal passed Congress and was signed into law by President Barack Obama.

Under the TPA, the President's trade negotiations must follow guidelines and negotiating objectives set by Congress. If the negotiations follow the negotiating objectives, the implementing bill may pass Congress on a majority vote instead of the typically required two-thirds majorities. Congress may not amend or filibuster the implementing bill. The TPA is the mechanism used by the U.S. government to pass the North American Free Trade Agreement as well as other congressional-executive agreements. It has been praised for allowing the government to negotiate trade deals which would otherwise have been impossible to complete. However, it has also been criticized for usurping congressional powers and for lacking transparency.

Content and scope

The TPA had the effect of delegating congressional power to the executive branch with limitations.[1] Fast track agreements are enacted as "congressional-executive agreements" (CEAs), which are negotiated for by the executive branch following set guidelines from Congress, and are approved by a majority in both chambers of Congress.[2] Without the TPA legislation, the President's power to negotiate trade deals is restricted by Article II, Section 2, of the U.S. Constitution which states that: "[The President] shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur."[3]

If a trade agreement that reduces tariffs or non-tariff barriers to trade negotiated by the executive branch meets the guidelines set by Congress , the TPA allows Congress to "consider the required implementing bill under expedited procedures pursuant to which the bill may come to the floor without action by the leadership."[4] The implementing bill is guaranteed an up-or-down vote with no amendments.[4] An implementing bill may go through the expedited process if it follows the congressional guides and: (1) the trade agreement was negotiated during a set time period for which the TPA is in effect; (2) the agreement follows negotiation objectives set by the statute; and (3) during the negotiation process, the executive branch sent required notifications and conducted consultations with Congress and other stakeholders.[4] The 2002 version of the authority created an additional requirement for 90-day notice to Congress before negotiations could begin.[1]

The 1979 version of the authority changed the name of the STR to the U.S. Trade Representative.[1]

Congressional procedure

If the President transmits a fast track trade agreement to Congress, then the majority leaders of the House and Senate or their designees must introduce the implementing bill submitted by the President on the first day on which their House is in session. (19 U.S.C. § 2191(c)(1).) Senators and Representatives may not amend the President’s bill, either in committee or in the Senate or House. (19 U.S.C. § 2191(d).) The committees to which the bill has been referred have 45 days after its introduction to report the bill, or be automatically discharged, and each House must vote within 15 days after the bill is reported or discharged. (19 U.S.C. § 2191(e)(1).)

In the likely case that the bill is a revenue bill (as tariffs are revenues), the bill must originate in the House (see U.S. Const., art I, sec. 7). After the bill passes in the House, it is sent to the Senate where the Senate Finance Committee. (19 U.S.C. § 2191(e)(2).) On the House and Senate floors, each Body can debate the bill for no more than 20 hours, and thus Senators cannot filibuster the bill and it will pass with a simple majority vote. (19 U.S.C. § 2191(f)-(g).) Thus, it is possible that the entire Congressional consideration of a bill takes no longer than 90 days.

Negotiating objectives

According to the Congressional Research Service, Congress categorizes trade negotiating objectives in three ways: overall objectives, principal objectives, and other priorities. The broader goals encapsulate the overall direction trade negotiations take, such as enhancing the United States' and other countries' economies. Principal objectives are detailed goals that Congress expects to be integrated into trade agreements, such as "reducing barriers and distortions to trade (e.g., goods, services, agriculture); protecting foreign investment and intellectual property rights; encouraging transparency; establishing fair regulatory practices; combating corruption; ensuring that countries enforce their environmental and labor laws; providing for an effective dispute settlement process; and protecting the U.S. right to enforce its trade remedy laws". Consulting Congress is also an important objective.[5]

Principal objectives include:

  • Market access: These negotiating objectives seek to reduce or eliminate barriers that limit market access for U.S. products. "It also calls for the use of sectoral tariff and non-tariff barrier elimination agreements to achieve greater market access."
  • Services: Services objectives "require that U.S. negotiator strive to reduce or eliminate barriers to trade in services, including regulations that deny nondiscriminatory treatment to U.S. services and inhibit the right of establishment (through foreign investment) to U.S. service providers."
  • Agriculture: There are three negotiating objectives regarding agriculture. One lays out in greater detail what U.S. negotiators should achieve in negotiating robust trade rules on sanitary and phytosanitary (SPS) measures. The second calls for trade negotiators to ensure transparency in how tariff-rate quotas are administered that may impede market access opportunities. The third seeks to eliminate and prevent the improper use of a country’s system to protect or recognize geographical indications (GI). These are trademark-like terms used to protect the quality and reputation of distinctive agricultural products, wines and spirits produced in a particular region of a country. This new objective is intended to counter in large part the European Union’s efforts to include GI protection in its bilateral trade agreements for the names of its products that U.S. and other country exporters argue are generic in nature or commonly used across borders, such as parma ham or Parmesan cheese.”
  • Investment/Investor rights: “The overall negotiating objectives on foreign investment are designed “to reduce or eliminate artificial or trade distorting barriers to foreign investment, while ensuring that foreign investors in the United States are not accorded greater substantive rights with respect to investment protections than domestic investors in the United States, and to secure for investors important rights comparable to those that would be available under the United States legal principles and practices."[6]

The 2002 and 2015 versions of the TPA set trade negotiation objectives on worker rights, labor issues, and environmental standards. The 2002 version stated a country which the executive branch negotiated a trade agreement with had to follow their own labor and environmental standards, while the 2015 version added that the country had to follow their own set standards but also had to follow "internationally recognized" core labor standards and environmental standards.[4]

Enactment and history

Congress started the fast track authority in the Trade Act of 1974, § 151–154 (19 U.S.C. § 2191–2194). This authority was set to expire in 1980, but was extended for eight years in 1979.[7] By that grant of authority and procedure, Congress then enacted implementing legislation for the U.S.-Israel Free Trade Area and the U.S.-Canada Free Trade Agreement. TPA authority was renewed from 1988 to 1993 to allow for negotiation of the North American Free Trade Agreement (NAFTA), and the commencement of the Uruguay Round, of the General Agreement on Tariffs and Trade (GATT).[8] With this grant of authority, Congress eventually enacted legislation implementing NAFTA. TPA authority was then further extended to April 16, 1994,[9][10][11] the day after the Uruguay Round concluded in the Marrakech Agreement, transitioning GATT into the World Trade Organization (WTO). Under this authority, Congress ultimately passed the implementing legislation for the Uruguay Round Agreements Act.

In the second half of the 1990s, fast track authority languished due to opposition from House Republicans.[12] Republican Presidential candidate George W. Bush made fast track part of his campaign platform in 2000.[13] In May 2001, as president he made a speech about the importance of free trade at the annual Council of the Americas in New York, founded by David Rockefeller and other senior U.S. businessmen in 1965. Subsequently, the Council played a role in the implementation and securing of TPA through Congress.[14]

At 3:30 a.m. on July 27, 2002, the House passed the Trade Act of 2002 narrowly by a 215 to 212 vote with 190 Republicans and 27 Democrats making up the majority. The bill passed the Senate by a vote of 64 to 34 on August 1, 2002. The Trade Act of 2002, § 2103–2105 (19 U.S.C. § 3803–3805), extended and conditioned the application of the original procedures. Under the second period of fast track authority, Congress enacted implementing legislation for the U.S.–Chile Free Trade Agreement, the U.S.–Singapore Free Trade Agreement, the Australia–U.S. Free Trade Agreement, the U.S.–Morocco Free Trade Agreement, the Dominican Republic–Central America Free Trade Agreement, the U.S.–Bahrain Free Trade Agreement, the U.S.–Oman Free Trade Agreement, and the Peru–U.S. Trade Promotion Agreement. The authority expired on July 1, 2007.[15]

In October 2011, the Congress and President Obama enacted into law the Colombia Trade Promotion Agreement, the South Korea–U.S. Free Trade Agreement, and the Panama–U.S. Trade Promotion Agreement using fast track rules, all of which the George W. Bush administration signed before the deadline.[16] By 2013, the majority of United States free trade agreements were implemented as congressional-executive agreements.[17] Unlike treaties, such agreements only require a majority of the House and Senate to pass.[17] Under the TPA, Congress authorizes the President to negotiate "free trade agreements ... if they are approved by both houses in a bill enacted into public law and other statutory conditions are met."[17]

TPP and 2015 reauthorization

US House Vote on the Trade Promotion Authority Bill, 18 June 2015

In early 2012, the Obama administration indicated that renewal of the authority was a requirement for the conclusion of Trans-Pacific Partnership (TPP) negotiations, which had been undertaken as if the authority were still in effect.[18] In December 2013, 151 House Democrats signed a letter written by Rosa DeLauro (D-CT) and George Miller (D-CA), which opposed the fast track trade promotion authority for the TPP. Several House Republicans opposed the measure on the grounds that it empowered the executive branch. In January 2014, House Democrats refused to put forward a co-sponsor for the legislation, hampering the bill's prospects for passage.[19] On 16 April 2015, several U.S. Senators introduced "The Bipartisan Congressional Trade Priorities and Accountability Act of 2015", which is commonly known as TPA Fast-track legislation.[20] The bill passed the Senate on 21 May 2015, by a vote of 62 to 38, with 31 Democrats, five Republicans and both Independents opposing.[21][22] The bill went to the U.S. House of Representatives, which narrowly passed the bill 218-208, and also removed the Trade Adjustment Assistance portions of the Senate bill.[23] The TPA was passed by the Senate on 24 June 2015, without the TAA provisions, requiring only the signature of the President before becoming law.[24][25] President Obama expressed a desire to sign the TPA and TAA together,[26] and did sign both into law on 29 June, as the TAA was able to make its way through Congress in a separate bill.[27] The TPA law is known as the Bipartisan Congressional Trade Priorities and Accountability Act of 2015,[28] and the TAA law is known as the Trade Preferences Extension Act of 2015.[29]

The ultimate approval of this legislation conferred on the Obama administration "enhanced power to negotiate major trade agreements with Asia and Europe." Through the TPA, Obama could "submit trade deals to Congress for an expedited vote without amendments."[24] The successful conclusion of these bilateral talks was necessary before the other ten TPP members could complete the trade deal.[30]

Political views on the TPA

Arguments in favor

According to AT&T executive chairman Randall L. Stephenson, the TPA is "critical to completing new trade agreements that have the potential to unleash U.S. economic growth and investment". Jason Furman, who was chairman of Obama's Council of Economic Advisers, also said "the United States might become less competitive globally if it disengaged from seeking further trade openings: 'If you're not in an agreement—that trade will be diverted from us to someone else—we will lose out to another country'".[31] According to I.M. Destler of the Peterson Institute for International Economics, fast track "has effectively bridged the division of power between the two branches. It gives executive branch (USTR) negotiators needed credibility to conclude trade agreements by assuring other nations' representatives that Congress won't rework them; it guarantees a major Congressional role in trade policy while reducing members' vulnerability to special interests”.[32] Additionally, according to President Reagan's Attorney General Edwin Meese III, "it is extremely difficult for any U.S. President to negotiate significant trade deals if he cannot assure other nations that Congress will refrain from adding numerous amendments and conditions that must then be taken back to the negotiating table". The very nature of Trade Promotion Authority requires Congress to vote on the agreements before they can take effect, meaning that without TPA, "those agreements might never even be negotiated".[33]

Arguments against

Groups opposed to Trade Promotion Authority claim that it places too much power in the executive branch, "allowing the president to unilaterally select partner countries for ‘trade’ pacts, decide the agreements' contents, and then negotiate and sign the agreements—all before Congress has a vote on the matter. Normal congressional committee processes are forbidden, meaning that the executive branch is empowered to write lengthy legislation on its own with no review or amendments." Article II, Section 2. He (the President) shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur...[34] Democratic members of Congress and general right-to-know internet groups are among those opposed to trade fast track on grounds of a lack of transparency. Such Congressional members have complained that fast track forces "members to jump over hurdles to see negotiation texts and blocks staffer involvement. In 2012, Senator Ron Wyden (D-Ore.) complained that corporate lobbyists were given easy access while his office was being stymied, and even introduced protest legislation requiring more congressional input."[35]

References

  1. ^ a b c Tucker, Todd; Wallach, Lori (2009). "The Rise and Fall of Fast Track: Regime 5 – 1975–2008". Public Citizen's Global Trade Watch. Archived from the original on July 31, 2012. Retrieved June 30, 2012.
  2. ^ Devereaux, Charan; Lawrence, Robert; Watkins, Michael (2006). Case Studies in US Trade Negotiation, Vol. 1: Making the Rules. Columbia University Press. pp. 57–63. ISBN 978-0881323627.
  3. ^ "Article II Section 2 | Constitution Annotated | Congress.gov | Library of Congress". constitution.congress.gov. Retrieved January 14, 2021.
  4. ^ a b c d Trade Promotion Authority (TPA): Frequently Asked Questions, (2019). Congressional Research Service. Retrieved from https://fas.org/sgp/crs/misc/R43491.pdf on 2021-01-14.
  5. ^ Cooper, William. "Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy" (PDF). Congressional Research Service. Retrieved July 30, 2014.
  6. ^ Beth, Richard; Cooper, William; Ferguson, Ian. "Trade Promotion Authority (TPA): Frequently Asked Questions". Cornell University ILR School. Retrieved July 31, 2014.
  7. ^ Trade Agreements Act of 1979, Pub. L. 96–39, 93 Stat. 144
  8. ^ Omnibus Trade and Competitiveness Act of 1988, Pub. L. 100–418
  9. ^ Pub. L. 103–49, enacted July 2, 1993, codified at 19 U.S.C. § 2902(e)
  10. ^ U.S. International Trade Commission (August 2003). The Impact of Trade Agreements: Effect of the Tokyo Round, U.S.-Israel FTA, U.S.-Canada FTA, NAFTA, and the Uruguay Round on the U.S. Economy (PDF). p. 3.
  11. ^ U.S. House Committee on Ways and Means (June 2001). Overview and Compilation of U.S. Trade Statutes. p. 225.
  12. ^ Steve Charnovitz, "Archer Slow on Fast Track," Journal of Commerce, June 4, 1997.
  13. ^ "George W. Bush on Free Trade". www.ontheissues.org.
  14. ^ Council of the Americas role in securing the TPA – see David Rockefeller's Memoirs, 2002, (p.438).
  15. ^ "Bush losing trade negotiating authority; Democrats not eager to renew it". Associated Press. June 30, 2007. Archived from the original on July 3, 2007. Retrieved June 30, 2007.
  16. ^ "Democrats Balk at Obama's Pacific Trade Accord Fast Track". Bloomberg.
  17. ^ a b c "Why Certain Trade Agreements Are Approved as Congressional-Executive Agreements Rather Than as Treaties" (PDF). Retrieved February 4, 2013.
  18. ^ "White House wants trade promotion authority: Kirk". Reuters. February 29, 2012. Retrieved June 30, 2012.
  19. ^ Zach Carter and Michael McAuliff (9 January 2014). "House Democrats Balk At Efforts By Obama, Boehner On Controversial Pacific Trade Deal". The Huffington Post. Retrieved 10 January 2014.
  20. ^ Weisman, Jonathan (April 16, 2015). "Deal Reached on Fast-Track Authority for Obama on Trade Accord". The New York Times. ISSN 0362-4331. Retrieved April 17, 2015.
  21. ^ Senate votes Archived July 21, 2016, at the Wayback Machine, The New York Times, 21 May 2015. Retrieved 20 September 2015.
  22. ^ Ted Barrett (May 22, 2015). "Senate passes 'fast track' trade promotion bill". CNN. Retrieved June 29, 2015.
  23. ^ Susan Davis (June 18, 2015). "House passes 'fast track' trade bill". USA Today. Retrieved June 29, 2015.
  24. ^ a b Jonathan Weisman (June 14, 2015), "Trade Authority Bill Wins Final Approval in Senate", The New York Times, retrieved August 8, 2015
  25. ^ "Senate passes fast-track trade bill". CBS News. Associated Press. Retrieved June 26, 2015.
  26. ^ Steven Dennis (June 17, 2015). "Obama Won't Sign TPA Without TAA 'Path' (Video) (Updated)". Retrieved June 29, 2015.
  27. ^ Danielle Haynes (June 29, 2015). "Obama signs fast-track trade, worker assistance bills into law". UPI. Retrieved June 29, 2015.
  28. ^ "Text - H.R.2146 - 114th Congress (2015-2016): Defending Public Safety Employees' Retirement Act".
  29. ^ "Text - H.R.1295 - 114th Congress (2015-2016): Trade Preferences Extension Act of 2015".
  30. ^ Japan, U.S. Seek Trade Pact Deals on Rice, Auto Parts, Bloomberg, April 19, 2015, retrieved August 8, 2015
  31. ^ Lowrey, Annie. "Obama and the G.O.P Facing Opposition to Trade Pacts". The New York Times. Retrieved July 29, 2014.
  32. ^ Destler, I.M. "The Need for Fast Track Authority" (testimony before the subcommittee on trade committee on ways and means, USHR, 30 September 1997)". Peterson Institute for International Economics. Retrieved July 29, 2014.
  33. ^ Riley, Bryan. "Trade Promotion Authority and Economic Freedom". The Heritage Foundation. Retrieved July 29, 2014.
  34. ^ "Fast Track: An Undemocratic Path to Unfair 'Trade'". Public Citizen.
  35. ^ Carter, Zach; McAuliff, Michael. "Why House Democrats Might Kill Obama's Big Trade Deal". The Huffington Post. Retrieved July 29, 2014.

Further reading

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