Trade Promotion Authority (TPA) And The Role Of Congress .
Trade Promotion Authority (TPA) and theRole of Congress in Trade PolicyWilliam H. CooperSpecialist in International Trade and FinanceJanuary 13, 2014Congressional Research Service7-5700www.crs.govRL33743CRS Report for CongressPrepared for Members and Committees of Congress
Trade Promotion Authority (TPA) and the Role of Congress in Trade PolicySummaryOn July 1, 2007, Trade Promotion Authority (TPA—previously known as fast track) expired. TPAis the authority Congress grants to the President to enter into certain reciprocal trade agreements,and to have their implementing bills considered under expedited legislative procedures, providedthe President observes certain statutory obligations. TPA defines how Congress has chosen toexercise its constitutional authority over a particular aspect of trade policy, while giving thePresident added leverage to negotiate trade agreements by effectively assuring U.S. trade partnersthat final agreements will be given timely and unamended consideration. On July 30, 2013,President Obama requested that Congress reauthorize TPA. On January 9, 2014, legislation torenew TPA—the Bipartisan Congressional Trade Priorities Act of 2014—was introduced in theHouse (H.R. 3830) and in the Senate (S. 1900). The legislation would reauthorize TPA for fouryears with the possibility of a three-year extension. Alternative bills may also be introduced.TPA reflects decades of debate, cooperation, and compromise between Congress and theexecutive branch in finding a pragmatic accommodation to the exercise of each branch’srespective authorities over trade policy. The expedited legislative procedures have not changedsince first codified in the Trade Act of 1974. Congress, however, has required that the authority touse TPA be periodically reauthorized, and at times has chosen to revise trade negotiationobjectives, the consultative mechanism, and presidential notification requirements. While earlyversions of fast track/TPA received bipartisan support, later renewal efforts have been morecontroversial, culminating in a more partisan vote on the 2002 TPA renewal. Future debates onTPA renewal may center on trade negotiation objectives, congressional oversight of tradenegotiations, trade agreement enforcement, and clarifying the congressional authority overapproval of reciprocal trade agreements and trade policy more generally, among others.TPA renewal has become a more pressing issue in the 113th Congress because current tradenegotiations on the Trans-Pacific Partnership (TPP) the Transatlantic Trade and InvestmentPartnership (TTIP) and the Trade in Services Agreement (TISA) are in progress. Technically, TPAis not necessary to begin or even conclude trade negotiations, but it is widely understood to be akey element of defining congressional authority, and of passing trade agreement implementinglegislation. Therefore, its renewal can be construed as signaling serious congressional support formoving ahead with trade negotiations. Addressing congressional concerns over the definition andoperation of TPA may be a central part of the debate.Although there appears to be support for renewal of TPA in Congress, the details of the legislationare likely to be subject to considerable debate, including the specific treatment of any relatedTAA program reauthorization. This report presents background and analysis on the developmentof TPA, a summary of the major provisions under the expired authority, and a discussion of theissues that have arisen in the debate over TPA renewal. It also explores some of the policy optionsavailable to Congress.Congressional Research Service
Trade Promotion Authority (TPA) and the Role of Congress in Trade PolicyContentsIntroduction. 1A Brief History of TPA . 2The U.S. Constitution and Foreign Trade . 2The Evolution of the Congressional-Executive Partnership . 2Creation of “Fast Track Trade Negotiating Authority”. 4Subsequent Renewals of Trade Agreements Authority . 5The Trade Agreements Act of 1979. 5The Trade and Tariff Act of 1984 . 5Omnibus Trade and Competitiveness Act of 1988 (OTCA) . 6A Hiatus . 6The Bipartisan Trade Promotion Authority Act (BTPAA) of 2002 . 7The Elements of TPA . 8Trade Agreements Authority. 8Implementation of Trade Agreements . 9Expedited Legislative Procedures . 10Negotiating Objectives . 10Notification and Consultation. 11Limiting Trade Agreements Authority. 12Sunset Provision . 13Extension Disapproval . 13Procedural Disapproval . 13Withdrawal of Expedited Procedures . 13Congressional Procedures Outside TPA . 14Hearings and “Mock Markups”. 14Side Agreements and Letters . 15Informal Agreements . 15Possible Issues for Congress . 15The Need for and Timing of TPA . 16Definition and Scope of Negotiating Objectives . 16Consultation and Notification. 17Trade Agreement Enforcement . 17Technical Considerations. 18Options for Congress . 18Current Legislation . 19FiguresFigure B-1. Congressional Timeline . 21AppendixesAppendix A. Congressional Trade Agreements Authority Requested by and Granted toPresidents Since 1934 . 20Congressional Research Service
Trade Promotion Authority (TPA) and the Role of Congress in Trade PolicyAppendix B. Congressional Timeline under TPA . 21Appendix C. A Short Guide to the Expedited Legislative Procedures for Passage of TradeImplementing Bills Under TPA . 22ContactsAuthor Contact Information. 23Acknowledgments . 23Congressional Research Service
Trade Promotion Authority (TPA) and the Role of Congress in Trade PolicyOn July 1, 2007, Trade Promotion Authority (TPA—previously known as fast track)expired. TPA is the authority that Congress grants to the President to enter into certainreciprocal trade agreements, and to have the requisite implementing legislationconsidered under expedited legislative procedures. Although the President has the authority underthe Constitution to negotiate international agreements, typically a reciprocal trade agreementrequires an implementing bill and, therefore, congressional action to bring it into force. ManyMembers of Congress have advocated for renewal of TPA .On July 30, 2013, President Obamarequested that Congress reauthorize TPA. On January 9, 2014, legislation to renew TPA—theBipartisan Congressional Trade Priorities Act of 2014—was introduced in the House (H.R. 3830)and in the Senate (S. 1900). The legislation would reauthorize TPA for four years with thepossibility of a three-year extension. Alternative bills may also be introduced during the secondsession of the 113th Congress.Although there appears to be support for renewal of TPA in Congress, the details of the legislationare likely to be subject to considerable debate, including the specific treatment of any relatedTAA program reauthorization.1 This report presents background and analysis on the developmentof TPA, a summary of the major provisions under the expired authority, and a discussion of theissues that have arisen in the debate over TPA renewal. It also explores some of the policy optionsavailable to Congress.IntroductionThe 112th Congress exercised TPA authority and procedures in passing implementing bills forU.S. bilateral free trade agreements (FTAs) with Colombia, Panama, and South Korea on October12, 2011, concluding action on the last three FTAs signed prior to the expiration of TPA in 2007.Four other trade negotiations in progress that could result in agreements that would likely requireTPA to pass implementing legislation include: 1) the multilateral Doha Development Round ofthe World Trade Organization (WTO); 2) the Trans-Pacific Partnership (TPP); 3) the TransatlanticTrade and Investment Partnership (TTIP); and 4) the Trade in Services Agreement (TISA).For more than 30 years, Congress has granted the President TPA/fast track authority, agreeing toconsider trade agreement implementing legislation expeditiously and to vote on it withoutamendment, provided the President meets certain statutory negotiating objectives andconsultation requirements, and the implementing bill contains the necessary and limitedqualifying provisions. TPA strikes a delicate balance by clarifying how Congress chooses toexercise its constitutional authority over a particular aspect of trade policy, while presumablygiving the President additional negotiating leverage by effectively assuring U.S. trade partnersthat a final agreement will be given timely and unamended consideration by Congress.2Earlier incarnations of TPA, although controversial, were adopted with substantial bipartisanmajorities. Over time, however, trade negotiations have become more complex. Congress also hasinsisted on tighter oversight and consultation requirements, and the trade debate has become more1For a discussion of TAA and trade policy, see CRS Report R41922, Trade Adjustment Assistance (TAA) and Its Rolein U.S. Trade Policy, by J. F. Hornbeck2Such a presumption may be questioned given that the three FTAs approved in 2011 languished for over three yearswithout congressional action.Congressional Research Service1
Trade Promotion Authority (TPA) and the Role of Congress in Trade Policypartisan in nature, making congressional renewal of TPA more controversial. The expiration ofTPA raises the central questions of whether, when, and in what form TPA renewal might take.A Brief History of TPATPA is the product of many decades of debate, cooperation, and compromise between Congressand the executive branch. At its foundation lie the respective constitutional powers granted toCongress and the President, as well as the pragmatic realization that a certain cooperativeflexibility is needed if the United States is to negotiate reciprocal trade agreements credibly. Theevolution of TPA to date shows, among other things, that the congressional-executive partnershipon trade policymaking can be strengthened or strained as it adjusts to evolving political andeconomic conditions, as well as shifting priorities of the two branches.The U.S. Constitution and Foreign TradeThe U.S. Constitution assigns express authority over the regulation of foreign trade to Congress.Article I, Section 8, gives Congress the power to “regulate commerce with foreign nations . ”and to “ . lay and collect taxes, duties, imposts, and excises. ” In contrast, the Constitutionassigns no specific responsibility for trade to the President.3 Under Article II, however, thePresident has exclusive authority to negotiate treaties and international agreements and exercisesbroad authority over the conduct of the nation’s foreign affairs. Both legislative and executiveauthorities come into play in the development and execution of U.S. trade agreements.The Evolution of the Congressional-Executive PartnershipFor roughly the first 150 years of the United States, Congress exercised its authority over foreigntrade by setting tariff rates on all imported products. The tariff was the main trade policyinstrument and primary source of federal revenue. Early congressional trade debates pittedMembers from northern manufacturing regions, who benefitted from protectionist tariffs, againstthose from largely southern commodity exporting regions, who advocated low tariffs. During thisperiod, the President’s primary role in setting trade policy was to use his foreign affairs authorityto negotiate, bring into force, and implement (with the advice and consent of the Senate) generalbilateral treaties of friendship, commerce, and navigation. These treaties “included a U.S.commitment to most-favored-nation (MFN) treatment” or non-discrimination in the application oftariffs for all treaty partners.4Two legislative events occurred in the 1930s that radically changed the shape and conduct of U.S.trade policy. The first was the “Smoot-Hawley” Tariff Act of 1930 (P.L. 71-361), which setprohibitively high tariff rates in response to U.S. producers seeking protection at the outset of theGreat Depression. The act led to retaliatory tariffs by major U.S. trade partners, which severelyrestricted trade and contributed to the deep and prolonged effects of the depression.3I. M. Destler, American Trade Politics, 4th ed. (Washington, D.C.: Institute for International Economics, 2005), p. 14.Hal Shapiro and Lael Brainard, “Trade Promotion Authority Formerly Known as Fast Track: Building CommonGround on Trade Demands More Than a Name Change,” The George Washington International Law Review, vol. 35,no. 1 (2003), p. 6. MFN, also known in U.S
approval of reciprocal trade agreements and trade policy more generally, among others. TPA renewal has become a more pressing issue in the 113th Congress because current trade negotiations on the Trans-Pacific Partnership (TPP) the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Se
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of P.L. 114-26) renewed the "trade promotion authority" (TPA) under which implementing bills for trade agreements that address non-tariff barriers to trade (and certain levels of tariff reduction) are eligible for expedited (or "fast track") consideration by Congress under the "trade authorities
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