For 80 years U.S. Presidents have negotiated trade agreements based on objectives jointly established by the President and Congress. That partnership during the last 40 years has been under legislation earlier called ‘fast-track authority’ and more recently Trade Promotion Authority (TPA). The Obama Administration has almost completed the Trans-Pacific Partnership (TPP) free trade agreement (FTA) negotiations and has begun the Transatlantic Trade and Investment Partnership (TTIP) talks without such a partnership agreement with Congress.
The Administration has not ignored Congress. It has followed the notification requirements in the TPA passed under President Bush in 2002 that expired on June 30, 2007. It has informally consulted with Congress, given testimony at formal Congressional hearings and met with a broad array of business leaders and labor union representatives.
TPA has two critical provisions – the negotiation objectives and a vote in the House and Senate without amendments on the final product. The ‘fast-track authority’ label came from this no amendment, up or down vote on an agreement. But this vote comes only after the President has negotiated an agreement based on jointly set objectives. It is somewhat awkward to set objectives after most of the negotiating is completed, but that is what is needed.
Senator Wyden (OR-D), chair of the Trade Subcommittee of the Senate Finance Committee that is writing the first draft of the TPA bill for the Senate, recently spoke about his views on what is effective trade policy. He said if the goal of TPA renewal is to establish trade objectives that enable more people to win from trade, the process can benefit from broad input. The U.S. economy is much different than it was ten years ago and different provisions are needed in TPA.
At the top of his list was the internet as “the shipping lane of 21st Century goods and services.” The current WTO rules were written before the internet and don’t neatly apply to the digital economy and a growing number of protectionist barriers. Data flows must be kept open and trade rules must ensure that foreign markets are not more legally hazardous than the U.S. market. Other 21st Century issues included in his list were forced localization, currency manipulation, and state-owned enterprises.
Senator Wyden made a reference to “that which enabled the unprecedented support for trade accords with Peru, Colombia, Korea, and Panama.” These FTAs were originally negotiated by the Bush Administration in 2007, but the Colombian, Korean and Panamanian agreements were not passed by Congress until 2011. He was referring to enhanced labor, environmental and intellectual property obligations that were agreed to by the White House and the House and Senate in May 2007. Those provisions show how in five years the objectives of policy had changed and required renegotiation of provisions of the existing TPA.
Wyden also indicted support for Senators Baucus (MT-D) and Hatch (UT-R) and their Trade Facilitation and Enforcement Act (also known as the customs reauthorization bill) which would have Customs and Border Protection focus more on facilitating trade and enforcing trade remedy laws. He also supported continuing the Trade Adjustment Assistance Act (TAAA) which provides assistance for workers and businesses that have been negatively impacted by more open trade. According to Inside U.S. Trade, Wyden considers TAAA a “key piece of a comprehensive trade agenda.” Republicans have been critical of TAAA and this is a point of disagreement in the House and the Senate.
Without TPA members of the Senate and House have used letters to Administration officials to lay out details for negotiations. Senators Baucus and Hatch in a February letter set out their priorities for a U.S.-EU trade agreement in the hope that they would serve as a ‘framework’ for negotiators. Their priorities include more agriculture market access for U.S. exporters and a firm commitment from the EU to base sanitary and phytosanitary (SPS) measures on ‘sound science.’ Last month 60 members of the Senate signed a letter urging the Administration to include disciplines on currency manipulation in trade agreements. A similar letter was signed in June by 230 House members.
The House Ways and Means Committee identified renewal of TPA as its top trade priority for the year; with new Trade Subcommittee Chairman Nunes (CA-R) saying TPA was a top priority for him personally when he took over the subcommittee in January. House members have been particularly interested in SPS issues related to the TPP FTA talks. In early September, 76 members sent a letter to U.S. Trade Representatives Michael Froman voicing their concerns. These are the kinds of issues better worked out before negotiations begin, rather than dealing with them after the Administration has taken a position.
President Obama has stated in recent months that he needs TPA and believes he can get bipartisan support, but has not lobbied Congress to get approval as some other presidents have done. A Ways and Means Committee Democratic trade council has said this TPA will be different than the 2002 bill with more Congressional oversight and more transparency in the negotiating process. Bills are being written in the House and Senate Trade Subcommittees, but past target completion dates have been missed no new ones announced. The ongoing disputes over the federal budget and debt limit could further delay the process.
Groups like the U.S. Chamber of Commerce and the National Association of Manufactures have announced support for TPA, but have not commented about the details of the bills. Their concerns have been about the process of the President and the Congress working together to set negotiating objectives.
The objectives in the final TPA legislation will be far broader than those in past years. Regardless of the details, TPA is a fundamental requirement for an effective U.S. trade negotiating structure, not to be taken lightly, and essential to enabling the U.S. to pursue a broad trade agenda. Passing a TPA partnership bill now is late in the process, but still indispensable to good governance.