Update: Trade Promotion Authority Still in Danger

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Last week, Senate Finance Committee Chairman Max Baucus (D-MT) stated that he is close to reaching an agreement on renewing Trade Promotion Authority (TPA) with House Ways and Means Committee Chairman Dave Camp (R-MI). This progress comes at a crucial time given that the Obama Administration is in the middle of negotiations for two different trade agreements — the Transatlantic Trade and Investment Partnership (T-TIP) and the Transpacific Partnership (TPP).

TPA allows the President to “fast-track” trade agreements for approval or disapproval by Congress by removing the option for filibuster. Essentially, the TPA forces the House and Senate to accept or reject a trade agreement, without amendment, within 90 days of its submission to Congress by the President. The process enables the United States to negotiate more beneficial trade policies with other countries, because of the reduction in approval time compared to other legislation and because it incentivizes countries to trade concessions with the United States, because they know that Congress cannot rewrite the deal.

With the final ministerial meetings of the TPP set to begin the first week of December, and the third round of T-TIP negotiations two weeks after, a quick renewal of TPA is essential for enhancing the American bargaining position. However, a November 13th letter from 151 House Democrats threatens to derail this process. It alleges that fast-track negotiating power is an inappropriate delegation of congressional authority over trade, particularly in light of the “continued lack of adequate congressional consultation in many areas of the proposed [TPP] pact that deeply implicates Congress’ constitutional and domestic policy authorities.”

House Democrats are not totally incorrect in this area; many trade agreements include provisions on the environment, labor and even drug patents. While being somewhat “non-trade,” unfortunately, they are also quite “trade.” And the impetus behind the TPA, promoting US trade interests with other nations, forces a prioritization of the “trade” side over the “non-trade” side. If the renewal of TPA does not succeed, it will remove U.S. negotiating leverage not only for the TPP and the T-TIP, but also for any future bilateral or multilateral trade agreements. Transparency regarding the progress of these agreements can be achieved without handicapping the negotiating and approval process. Renewed communication between the executive and legislative branches would be a good start, something that Senator Baucus also acknowledges, “The administration has to give its strong support. (For enhanced communication) I’ve asked them to do so.”

Meanwhile, several House Republicans, led by Michele Bachmann, are also threatening to block TPA.  23 members signed a letter last week claiming that TPA is an abrogation of their constitutional authority, “Given these factors, we do not agree to cede our constitutional authority to the executive through an approval of a request for ‘Fast Track Trade Promotion Authority’.”

The fact of the matter is that trade agreements are often difficult to pass because of local issues that pressure Congress. That’s why the President needs fast track negotiating authority—no agreements would ever exist if 535 members of Congress got a chance to rewrite all of them. And since the inception of TPA in 1974, several Presidents have used it to negotiate the free trade agreements that we have now: Clinton and the North American Free Trade Agreement, Bush and free trade agreements with Colombia, Panama and South Korea. Without TPA, the United States runs the risk of becoming a bystander in the ever increasing race towards globalization. It is a necessary piece of legislation that ensures the United States remains competitive on a global scale.

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About the author

Michelle Wein is a Trade Policy Analyst at ITIF, specializing in the connections between international trade, innovation, intellectual property and economic productivity.