Trade Promotion Authority (TPA): Issues, Options, and Prospects for Renewal
Trade Promotion Authority (TPA): Issues,
Options, and Prospects for Renewal
Updated July 24, 2008
J. F. Hornbeck and William H. Cooper
Specialists in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Trade Promotion Authority (TPA): Issues, Options, and
Prospects for Renewal
On July 1, 2007, Trade Promotion Authority (TPA — formerly known as fast
track), expired. TPA is the authority Congress grants to the President to enter into
certain reciprocal trade agreements (FTAs), and to have their implementing bills
considered under expedited legislative procedures, provided he observes certain
statutory obligations in negotiating them. TPA allows Congress to exercise its
constitutional authority over trade, while giving the President added leverage to
exercise his authority to negotiate trade agreements by effectively assuring U.S. trade
partners that final agreements are given swift and unamended consideration.
TPA reflects years of debate, cooperation, and compromise between Congress
and the Executive Branch in finding a pragmatic accommodation to the exercise of
each branch’s respective authorities. The core provisions of the fast track legislative
procedures have remained unchanged since first enacted in 1974, although Congress
has expanded trade negotiation objectives, oversight, and presidential notification
requirements. While early versions of fast track/TPA received broad bipartisan
support, renewal efforts became increasingly controversial as fears grew over real and
perceived negative effects of trade, and as the trade debate became more partisan in
nature, culminating in a largely party-line vote on the 2002 renewal. Any debate on
TPA renewal would likely center on the broad effects of trade on the United States,
with an emphasis on numerous specific issues that may be given greater weight in the
future: labor, environment, and public health provisions; stricter enforcement of trade
agreements; enhanced trade adjustment assistance programs; and revisions to the role
of Congress in trade policy making.
Bilateral agreements with Panama, Peru, Colombia, and South Korea were
signed in time to be considered under the 2002 TPA. The House and Senate passed
implementing legislation for the Peru FTA, which President Bush signed into law on
December 14, 2007. The President sent implementing legislation for the Colombia
FTA to Congress on April 8, 2008, but the House passed a rule suspending the
application of parts of the expedited legislative procedures for this bill alone. The
protracted World Trade Organization (WTO) Doha Round of multilateral
negotiations are still incomplete and may yet result in the remaining key trade
agreement that could compel Congress to consider extending or renewing TPA.
Some observers also suggest that TPA is important to support future bilateral
FTA negotiations, particularly given that many countries appear ready to continue
pursuing FTAs irrespective of U.S. trade policy. Key Members of the House and
Senate, however, have signaled that TPA renewal is not at the top of the legislative
agenda and will require considerable deliberation before it can be passed. Congress
has many options in dealing with TPA: take no action; extend temporarily; revise and
renew; grant permanent authority; or devise some hybrid solution. How this issue
plays out depends on a host of political and economic variables. This report will be
updated as events warrant.
A Brief History of TPA.............................................2
The U.S. Constitution and Foreign Trade ..........................2
The Evolution of the Congressional-Executive Partnership.............3
The Creation of Fast Track Trade Authority.........................5
Subsequent Renewals of Fast Track Trade Authority..................6
The Trade Agreements Act of 1979............................6
The Trade and Tariff Act of 1984.............................6
Omnibus Trade and Competitiveness Act of 1988 (OTCA).........6
The Bipartisan Trade Promotion Authority Act of 2002............7
The Elements of TPA...............................................8
Notification and Consultation...................................10
Trade Agreements Authority and Implementation....................11
Congressional Procedures Outside TPA...........................13
Side Agreements and Letters................................13
Hearings and Mock Markups................................14
Limiting Trade Agreements Authority.............................15
Withdrawal of Expedited Procedures.........................15
Issues for Congress...............................................16
The Need for TPA............................................17
The Role of Congress..........................................18
Trade Policy Issues...........................................18
Environment and Public Health..............................19
Trade Adjustment Assistance...............................19
Trade Remedy Laws......................................19
Temporary Entry of Service Providers (“Mode 4”)...............20
Options for Congress..............................................20
No TPA Renewal.............................................20
Extend TPA Temporarily.......................................21
Renew TPA Authority.........................................21
Grant Permanent TPA Authority ................................21
Prospects for TPA Renewal.........................................22
Appendix A. Timeline for Negotiation, Congressional Consultation, and
Legislative Implementation of Trade Agreements Under TPA.........23
Appendix B. A Short Guide to the Expedited Legislative Procedures for Passage
of Trade Implementing Bills Under TPA..........................24
Trade Promotion Authority (TPA): Issues,
Options, and Prospects for Renewal
On July 1, 2007, Trade Promotion Authority (TPA — formerly known as fast
track) expired, and with it the authority that Congress grants to the President to enter
into certain reciprocal trade agreements, and to have the legislation needed to
implement them considered under expedited legislative procedures. Although the
President has the authority under the Constitution to negotiate free trade agreements
(FTAs), typically implementing legislation and thus congressional action are required
to bring them into force. The United States Trade Representative (USTR) completed
bilateral trade agreement negotiations with Peru, Colombia, Panama, and South
Korea prior to TPA expiration. Congress approved the Peru FTA. The President
sent implementing legislation for the Colombia FTA to Congress on April 8, 2008,
but the House passed a rule suspending the application of parts of the expedited
legislative procedures for this bill alone and has taken no further action on it. (See
footnote 19 on p. 12.) A Doha Round agreement and any future bilateral FTAs cannot
be considered under TPA’s expedited procedures unless those procedures are
renewed by Congress.
For over 30 years, Congress has granted the President TPA/fast track, agreeing
to consider trade implementing legislation expeditiously and vote on it without
amendment, provided the President meets certain statutory negotiating objectives and
consultation requirements. TPA strikes a delicate balance by allowing Congress to
exercise its constitutional authority over trade, while giving the President additional
negotiating leverage by effectively assuring trade partners that a final agreement will
be given swift and unamended consideration by Congress. Earlier incarnations of
TPA, although controversial, were adopted with substantial bipartisan majorities.
Over time, however, trade negotiations have become more complex, Congress has
insisted on tighter oversight and consultation requirements, and the trade debate has
become more partisan in nature, making congressional renewal of TPA, if anything,
even more controversial.
The Democrats’ assumption of control in the 110th Congress may also affect
prospects for TPA renewal by shifting trade policy priorities, as seen in the “New
Trade Policy for America,” a bipartisan position crafted jointly by congressional
leadership and the Bush Administration.1 The “New Trade Policy” framework
incorporates important changes, some with broad social implications, that have
already altered the language of recently signed FTAs with Peru, Colombia, Panama
and South Korea. Among important changes from previous FTAs, signatories must
now: adopt as fully enforceable commitments the five basic labor rights defined in
1 The May 10, 2007 compromise is available on the websites of the House Ways and Means
Committee and the United States Trade Representative (USTR).
the United Nations International Labor Organization’s (ILO) Fundamental Principles
and Rights at Work and its Follow-up (1998) Declaration; adhere to numerous
multilateral environmental agreements (MEAs); and accept pharmaceutical
intellectual property rights (IPR) provisions that could hasten that country’s access
to generic drugs.
The expiration of TPA raises the central question of whether, when and in what
form TPA should be renewed, including to what degree if any, provisions of the
“New Trade Policy America” might be incorporated. Some have argued that TPA
should be renewed to cover, at a minimum, the World Trade Organization’s (WTO)
Doha Development Agenda (DDA) round multilateral agreement, if it can be
concluded, and perhaps also potential future bilateral FTAs. The DDA negotiations,
however, are bogged down and pending FTA negotiations appear dormant. In
addition, the House Democratic Leadership has signaled that TPA is not at the top
of its legislative agenda, indicating that a quick resolution to the TPA debate seems
unlikely to occur.
This report presents background on the development of TPA, a summary of the
major provisions under the recently expired authority, and a discussion of the issues
that have arisen in the debate over TPA renewal. It also explores the policy options
available to Congress and will be updated as the congressional debate unfolds.
A Brief History of TPA
TPA is the product of many years of debate, cooperation, and compromise
between Congress and the Executive Branch. At its foundation lie the respective
constitutional powers granted to Congress and the President, as well as the pragmatic
realization that a certain cooperative flexibility is needed if the United States is to
negotiate trade agreements credibly. The evolution of TPA to date shows, among
other things, that the Congressional-Executive partnership on trade policymaking can
be strained as it adjusts to evolving political and economic conditions and shifting
priorities of the two Branches.
The U.S. Constitution and Foreign Trade
The U.S. Constitution assigns express authority over 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 Constitution assigns no specific responsibility for trade to the President.2
Under Article II, however, the President has exclusive authority to negotiate treaties
and international agreements and exercises broad authority over the conduct of the
nation’s foreign affairs. Both legislative and executive authorities come into play in
the development and execution of U.S. trade agreements and trade policy.
2 Destler, I. M. American Trade Politics. Fourth Edition. Institute for International
Economics. Washington, DC. 2005. p. 14.
The Evolution of the Congressional-Executive Partnership
For roughly the first 150 years of the United States, the Congress exercised its
authority over foreign trade by setting tariff rates on all imported products. The tariff
was the main trade policy instrument and primary source of federal revenue. Early
congressional trade debates pitted Members from northern manufacturing regions,
who benefitted from protectionist tariffs, against those from largely southern raw
material exporting regions, who lobbied for low tariffs. During this period, the
President’s primary role in setting trade policy was to use his foreign affairs authority
to negotiate, bring into force, and implement (with the advice and consent of the
Senate) general bilateral treaties of friendship, commerce, and navigation. These
treaties provided most-favored-nation (MFN) treatment to the goods of the parties
to those treaties with United States; that is, reductions in tariffs on imports from one
trade partner would apply to imports from all other countries with which the United
States had such trade agreements.3
Two 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
producers seeking protection during the height of the Great Depression. The tariffs
led to retaliatory tariffs from the major U.S. trading partners, severely restricting
trade, thus deepening and prolonging the effects of the depression.
The damaging effects of Smoot-Hawley inspired the second major trade
legislative event in the 1930s. Congress, with the guidance and encouragement of
Secretary of State Cordell Hull, himself a former Senator, developed and enacted the
Reciprocal Trade Agreements Act of 1934 (RTAA; P.L. 73-316). The RTAA
authorized the President to negotiate reciprocal agreements that reduced tariffs within
pre-approved levels. The tariffs were applied on an MFN basis. Under the RTAA,
Congress authorized the president to implement the new tariffs by proclamation
without additional legislation. The RTAA is important for several reasons:
!For the first time, Congress expressly delegated to the President
major trade negotiating authority. In so doing, it is argued, Congress
aimed to lessen the protectionist pressure on itself.4
!The Smoot-Hawley tariff was the last general tariff legislation
passed by Congress. While still on the books, the Smoot-Hawley
tariffs are only applied to imports from those few countries, namely
3 Shapiro, Hal and Lael Brainard. Trade Promotion Authority Formerly Known as Fast
Track: Building Common Ground on Trade Demands More than Change. The George
Washington International Law Review. vol 35. no. 1. p. 6. 2003. MFN, also known in
U.S. law as normal trade relations (NTR) status, means that the United States would treat
the imports from that trading partner no less favorably than the imports from other trading
4 Destler, American Trade Politics, pp. 14-15 and Pastor, Robert A. Congress and the
Politics of U.S. Foreign Economic Policy 1929-1976. University of California Press.
Berkeley, 1980. pp. 79-80.
Cuba and North Korea, not receiving MFN status, now called
normal trade relations status (NTR) in U.S. trade laws.
!While delegating some authority, Congress in no way surrendered
its trade authority. Congress subjected the tariff negotiating
authority to periodic review.
Congress renewed presidential reciprocal trade authority eleven times until 1962
through trade agreement extension acts. General tariff levels declined and their
significance as a trade barrier lessened.5 In addition, with the establishment of the
General Agreement on Tariffs and Trade (GATT) in 1948, the major forum for trade
negotiations shifted from bilateral to multilateral negotiations, and trade negotiations
were eventually expanded beyond tariffs.6
Under the Trade Expansion Act of 1962, Congress granted the President
authority for five years to negotiate the reduction or elimination of tariffs and
expanded its role in the process by requiring the President to submit for congressional
review a copy of each concluded agreement and a presidential statement explaining
why the agreement was concluded. It allowed the President to negotiate the GATT
Kennedy Round (1963-1967), the last round in which tariff reduction was the
primary focus of trade negotiations.
Along with a number of tariff reduction agreements (which Congress authorized
the President to implement by proclamation), the GATT countries reached
agreements in two areas related to non-tariff barriers (NTBs), that is, laws and rules
other than tariffs that are used to restrict imports. The first was a customs valuation
agreement that would have required the United States to eliminate the American
Selling Price method of pricing goods at the border. The second was an antidumping
agreement that would have required changes in U.S. antidumping practices.7
Because U.S. adherence to these agreements required changes in U.S. law or
regulations beyond tariff modifications, many in Congress concluded that the
President had exceeded his authority. In fact, Congress passed a resolution in 1966
opposing “nontariff commitments” made by the Johnson Administration that had not
been approved by Congress, setting up the debate that would eventually be resolved
with the creation of the fast track authority for trade agreements.8
5 Shapiro and Brainard, Trade Promotion Authority Formerly Known as Fast Track, p. 11.
6 The General Agreement on Tariffs and Trade (GATT) went into effect in 1948 as a set of
rules governing international trade. Over time, the number of GATT signatories grew and
the body of rules were expanded in a series of negotiations called rounds. During the
Uruguay Round, the signatories agreed to establish the World Trade Organization (WTO)
to administer the GATT and other multilateral trade agreements. The WTO now has 149
7 Destler, I. M. Renewing Fast-Track Legislation. Institute for International Economics.
Washington, DC. September 1997. p. 6.
8 Destler, I. M., American Trade Politics, pp. 71-72.
The Creation of Fast Track Trade Authority
The results of the Kennedy Round made evident that non-tariff barriers would
increasingly dominate the agenda of future multilateral trade agreements, and would
require changes in U.S. law if the United States were to adhere to them.
Congressional concern over presidential encroachment on its legislative authority
prompted Congress to seek a legislative remedy.
After the expiration of the tariff modification authority in the Trade Expansion
Act of 1962, the Administration sought new authority to negotiate the Tokyo Round
in the GATT, which Congress granted in the Trade Act of 1974 (P.L. 93-618). As
before, the act provided the President with the authority to negotiate and implement
the reduction and elimination of tariffs within certain parameters. To address the
issue of agreements that required changes in U.S. law beyond tariff modifications,
the act stipulated that non-tariff barrier agreements entered into under the statute
could only enter into force if Congress passed implementing legislation.
It was argued that subjecting implementing legislation to ordinary congressional
debate and amendment procedures would defeat the purpose for delegating trade
negotiating authority to the President in the first place — to reduce the parochial
pressures implicit in trade policymaking. Many Members also recognized that trade
partners would not be willing to negotiate agreements that would be subject to
unlimited congressional debate and amendments. As stated in the Senate Finance
Committee report accompanying the Trade Act of 1974:
The Committee recognizes ... that such agreements negotiated by the Executive
should be given an up-or-down vote by the Congress. Our negotiators cannot be
expected to accomplish the negotiating goals ... if there are no reasonable
assurances that the negotiated agreements would be voted up-or-down on their
merits. Our trading partners have expressed an unwillingness to negotiate
without some assurances that the Congress will consider the agreements within9
a definite time-frame.
As a solution, Congress agreed that each Chamber would suspend its ordinary
legislative procedures and give trade agreements expedited treatment, which became
known as “fast track.” The relevant committees would be given limited time to
consider implementing bills. Once they reached the floor, the implementing bills
would be subject to time-limited debate and no amendments. In exchange, Congress
required the Executive Branch to consult with relevant committees during the
negotiations and to notify Congress 90 calendar days before signing an agreement.
The act also provided for the accreditation of 10 Members of Congress as advisers
to the U.S. delegation of negotiators. (The Trade Act of 1962 had provided for five
such advisers.) Thus, fast track for trade agreements was born!
9 U.S. Congress. Senate. Committee on Finance. Trade Reform Act of 1974; report...on
H.R. 10710...(S.Rept. 93-1298) November 26, 1974. U.S. Govt. Print. Off., 1974. p. 107.
Cited in CRS Report 97-41, Fast-Track Implementation of Trade Agreements: History,
Procedure, and Other Options, by Vladimir N. Pregelj.
With the trade “negotiating” authority and the “fast track” provisions of the
Trade Act of 1974, the United States participated in the Tokyo Round (1973-1979).
As expected, this round resulted in a number of agreements on NTBs, such as
government procurement practices, product standards, customs regulations, and rules
for administering antidumping and countervailing duty procedures. The Trade
Agreements Act of 1979 (P.L. 96-39) was the first trade agreement bill implemented
by Congress under fast track procedures.
Subsequent Renewals of Fast Track Trade Authority
The core provisions of the fast track procedures have remained virtually
unchanged since they were first enacted. (The next section of this report examines
fast track procedures and the trade agreements authority in more detail.) These
provisions are ensconced in sections 151-154 of the Trade Act of 1974, as amended,
and are not subject to sunset provisions. The ability to use them, however, is subject
to time limits, and Congress has revised them over the years. The initial grant of
trade “negotiating” authority and the authority to enact tariff modifications by
proclamation under the Trade Act of 1974 were in effect for five years ending on
January 2, 1980. A residual presidential authority to proclaim tariff modifications
expired January 2, 1982.
The Trade Agreements Act of 1979. Along with implementing the Tokyo
Round agreements, the Trade Agreements Act of 1979 extended for eight years, until
January 2, 1988, the presidential authority to enter into agreements on non-tariff
barriers but made no other changes to the original authority. The act did not extend
presidential tariff modification authority.
The Trade and Tariff Act of 1984. This act amended the Trade Act of 1974
to provide for the negotiation and implementation of bilateral free trade agreements
that both reduce or eliminate tariffs and address non-tariff barriers. Congress was
taking into account the U.S.-Israel and U.S.-Canada FTAs that were under
consideration. The legislation waived for the U.S.-Israel FTA the requirement of 90-
day notification to Congress prior to entering the agreement. However, for
negotiations with other countries, it required the President to notify the House Ways
and Means Committee and the Senate Finance Committee of his intention to begin
FTA negotiations 60 days prior to entering the negotiations and provided for denial
of fast track consideration if either Committee disapproved of the negotiation within
60 days after receiving the notification. The act also required that agreements that
lead to tariff modifications beyond a certain threshold be subject to congressional
approval via implementing legislation.
Omnibus Trade and Competitiveness Act of 1988 (OTCA). The
OTCA extended the president’s authority to enter into trade agreements before June
1, 1993, but extended the application of fast track procedures only for agreements
entered into before June 1, 1991. Legislation for agreements entered into after that
date, but before June 1, 1993, could be approved under fast track procedures, if the
President requested an extension of such authority and it was not disapproved by
either the House or the Senate. (The President requested the extension, which
survived proposed House and Senate resolutions of disapproval.) The OTCA also
provided that Congress could withhold a trade agreement from fast track
consideration, by passing resolutions of disapproval, if it determined that the USTR
had failed to consult with Congress adequately during the trade negotiations. Under
the OTCA provisions, Congress passed implementing legislation for the North
American Free Trade Agreement (NAFTA) in 1993 (P.L. 103-182).
However, negotiations under the Uruguay Round of the GATT were not going
to finish in time to meet the June 1, 1993 expiration deadline. Congress, therefore,
passed H.R. 1876, signed by the President on July 2, 1993 (P.L. 103-49), extending
the authority and implementing procedures until April 16, 1994, for the Uruguay
Round agreements. The votes reflected strong congressional support for extending
the authority in the House (295-126) and in the Senate (76-16). The law did not
change any other aspects of the fast track authority.
A Hiatus. After the fast track authority expired on April 16, 1994, Congress
did not approve new authority until the Trade Act of 2002 (H.R. 3009; P.L. 107-210).
The eight-year period was the longest hiatus since fast track was initially approved
in 1974. In 1997, both the Senate Finance and the House Ways and Means
Committees reported out legislation to renew fast track. House Republican leaders
pulled it before a floor vote at the request of the Clinton Administration because it
lacked sufficient support in the House. In September 1998, the House voted on fast
track authority legislation, but the bill failed to pass (180-243).
Several reasons may explain the failure of the Clinton Administration and
Congress to get fast track procedures re-authorized. For one, although both the
Republican congressional leadership and the Clinton Administration wanted fast
track authority, the two sides could not agree on how labor and environmental issues
should be addressed in trade agreements negotiated under renewed authority.
Republicans wanted limited coverage while the Clinton Administration and many
Democrats in Congress preferred broader coverage. In addition, the WTO failed to
launch a new round of negotiations at the 1999 Ministerial meeting in Seattle, and
therefore, no major trade negotiations were underway that might have made the
adoption of a fast track statute a political priority.
The Bipartisan Trade Promotion Authority Act of 2002. In 2001,
President Bush requested a renewal of fast track authority, which was renamed in the
legislation “trade promotion authority (TPA),” in part to counter a negative
connotation associated with the fast track name. The renewed authority is contained
in the Bipartisan Trade Promotion Authority Act (BTPAA) of 2002, which was
enacted as Title XXI of The Trade Act of 2002 (P.L. 107-210).
The structure of TPA is consistent with previous negotiating authority. It
includes environmental and labor provisions as “principal negotiating objectives,”
but does not mandate the inclusion of minimal enforceable labor standards in trade10
agreements. The lack of a mandate to include such standards was the source of
much of the opposition from labor groups and many Members of Congress. The act
10 Devereaux, Charan, Robert Z. Lawrence, and Michael D. Watkins. Case Studies in US
Trade Negotiation, Volume 1: Making the Rules. Institute for International Economics.
Washington, DC. September 2006. p. 229.
also created a new mechanism for congressional consultation, the Congressional
Oversight Group (COG), to operate in addition to the congressional trade advisors
that have been appointed under previous versions. (A more detailed discussion of the
notification and consultation requirements appears in the next section.)
The original House version of the BTPAA (H.R. 3005) passed by one vote (215-
214), largely along party lines, with Republicans mostly supporting the bill and
Democrats largely opposing it. The legislation was combined in the Senate with the
renewal of Trade Adjustment Assistance (TAA), the Andean Trade Preference Act
(ATPA), and the Generalized System of Preferences (GSP). It passed 66 to 30. The
conference report on the final bill, H.R. 3009, the Trade Act of 2002, was adopted
by the House (215-212) and Senate (64-34).11
Under the 2002 version of TPA, Congress approved implementing legislation
for FTAs with Chile, Singapore, Australia, Morocco, the Dominican Republic, the
Central American countries, Bahrain, Oman, and Peru. In addition, the United States
signed FTAs with Colombia, Panama, and South Korea just before TPA expired on
July 1, 2007. The United States is also interested in FTA negotiations with Malaysia,
Thailand, the United Arab Emirates, and the members of the South African Customs
Union (SACU), which are currently suspended and would have to be taken up under
some future TPA authority for legislation to considered under expedited procedures.
The United States and more than 150 other members of the WTO are also
engaged the Doha Development Agenda (DDA), a protracted round of multilateral
negotiations set to revise and expand rules for conducting trade in agriculture,
manufactured goods, and services, with an emphasis on meeting the needs of
developing countries.12 Although many argue that TPA is necessary for the U.S.
bargaining position to remain credible, others note that TPA is not required to
complete the negotiations (as the example of the Uruguay Round discussed above
suggests). Should a breakthrough be made on an agreement that the U.S. Congress
would approve, Congress could extend TPA exclusively for the Doha Round at any
time. Most observers acknowledge that the Doha Round probably makes the most
compelling argument for TPA extension at this time.
The Elements of TPA
Through TPA, in its various iterations, Congress has sought to achieve four
major goals in the context of supporting trade negotiations: (1) to define its trade
policy priorities and to have those priorities reflected in trade agreement negotiating
objectives; (2) to ensure that the Executive Branch adheres to these objectives by
requiring periodic notification and consultation; (3) to define the terms, conditions,
and procedures under which trade agreement implementing bills will be approved;
11 For details on votes on this legislation, see CRS Report RS21004, Trade Promotion
Authority and Fast Track Negotiating Authority for Trade Agreements: Major Votes, by
Carolyn C. Smith.
12 For more information on current U.S. trade negotiations, see CRS Report RL33463,
Trade Negotiations During the 110th Congress, by Ian F. Fergusson.
and (4) to reaffirm Congress’s overall constitutional authority over trade by placing
limitations on the trade agreements authority. These four goals, and some important
procedural precedents that fall outside the formal legal TPA process, are examined
Congress exercises its trade policy role, in part, by defining trade negotiation
objectives in TPA legislation. In the 2002 TPA, Congress made clear that trade is
an important aspect of U.S. foreign economic and security policy because it generates
broad benefits for the United States and the global economy. To take the fullest
advantage of these benefits, Congress, drawing on its constitutional authority and
historical precedent, defined the objectives that the President is to pursue in trade
negotiations. Although the Executive Branch has some discretion over implementing
these goals, they are definitive statements of U.S. trade policy that the Administration
is expected to honor, if it expects the trade legislation to be considered under
expedited rules. For this reason, trade negotiating objectives stand at the center of
the congressional debate on TPA.
Congress establishes trade negotiating objectives in three categories: (1) overall
objectives; (2) principal objectives; and (3) other priorities. These begin with broadly
focused goals that encapsulate the “overall” direction trade negotiations are expected
to take, such as enhancing U.S. and global economies. Principal objectives are far
more specific and provide detailed goals that Congress expects to be integrated into
trade agreements, such as reducing barriers to various types of trade (e.g., goods,
services, agriculture, electronic commerce); protecting foreign investment and
intellectual property rights; encouraging transparency, fair regulatory practices, and
anti-corruption; ensuring that countries protect environment and labor conditions and
rights; providing for an effective dispute settlement process; and protecting the U.S.
right to enforce its trade remedy laws. Objectives also include an important
obligation to consult Congress, discussed in detail below.
In the past, language defining trade negotiating objectives has been highly
contested, contributing to the 2002 renewal controversy in which TPA passed
virtually along partisan lines and by only the narrowest of margins.13 This
controversy reflects the importance of TPA negotiating objectives as a template for
future trade agreements negotiated under these guidelines. For example, if the
language of a TPA objective is highly contentious, it stands to reason that the same
issue may prove even more acerbic when a specific trade agreement is brought before
Congress for approval. The labor provisions, which are emphasized repeatedly in all
three groups of negotiating objectives, provide the best illustration. In particular, the
decision not to include minimal enforceable standards anywhere in TPA caused
acrimonious debate over both TPA and the FTAs that later adopted the TPA language
on labor. This issue was perhaps most evident in the debate on the Dominican
Republic-Central America-United States Free Trade Agreement (CAFTA-DR).
13 For a summary of bills authorizing TPA and trade agreements approved under its
provisions, see CRS Report RS21004, Trade Promotion Authority and Fast-Track
Negotiating Authority for Trade Agreements: Major Votes, by Carolyn C. Smith.
Because the structure of trade agreements mirrors TPA objectives, and highly
disputed agreements based on those objectives brought before Congress under TPA
have so far survived, often narrowly, all challenges from opponents, the vote on
renewing TPA/fast track is among the most critical trade votes Congress takes. In
part for this reason, key Members of the 110th Congress have indicated a preference
for proceeding cautiously in pursuing TPA renewal.
Notification and Consultation
The trade agreements authority is extended to the President provided he consults
regularly with Congress, including the Congressional Oversight Group (COG)
created in the 2002 trade act, whose members are accredited as official advisors to
the trade negotiation delegations. Notification and consultation requirements have
been expanded in each renewal of authority. Most of these requirements are found
in their own section within the TPA statute. The timing of these notifications is
detailed in the time line presented in Appendix A. First, the President must conduct
certain notifications and consultations before negotiations begin that include:
1) notifying Congress in writing of his intention to enter into negotiations at
least 90 calendar days prior to commencing negotiations;
2) consulting with the House Ways and Means, Senate Finance, other
relevant committees, and the COG on the nature of the negotiations; and
3) providing special consultations on agriculture, import sensitive agricultural
products, fishing and textile industry tariffs, and other issues.
The president must also conduct specific notifications and consultations before
(and after) agreements are entered into (signed), to include:
1)notifying Congress in writing of his intention to enter into an agreement at
least 90 calendar days prior to doing so;
2) consulting with House Ways and Means, Senate Finance, other relevant
committees, and the COG with respect to the nature of the agreement, how
it achieves the purposes defined in TPA, and any potential effects it may
have on existing laws;
3) notifying the revenue committees at least 180 calendar days prior to
entering into the agreement of any potential changes to U.S. trade remedy
laws that may be required;
4) submitting private sector advisory committee reports to Congress, the
President, and the USTR no later than 30 calendar days after notifying
Congress of his intention to enter into an agreement;14
14 The private sector advisory system was established by Congress in 1974 to ensure that
U.S. trade policy and negotiations benefit from, and reflect, a broad array of private sector
5) providing the U.S. International Trade Commission (USITC) with trade
agreement details at least 90 days before entering into an agreement; and
economy to Congress no later than 90 calendar days after the President
enters into the agreement.
The congressional consultation process is an important part of TPA. It reflects
Congress’s ongoing interest in ensuring that trade policy remains under the purview
of the legislative branch by establishing in law opportunities to affect the nature and
direction of trade negotiations. The effectiveness of the consultation process,
however, has been questioned. The Government Accountability Office (GAO)
evaluated this process based on multiple interviews with current and former
congressional staff and executive branch employees. It found that from 2002 to
2007, the USTR had conducted “extensive” consultations with Members and staff
of Congress on all FTAs that were to be presented to Congress for approval under
A majority of congressional staff, however, indicated that despite the frequency
and high quality of information conveyed, the meetings with USTR officials often
did not allow for sufficient time to provide input into the negotiation process, were
often cast more as briefings than true consultations that imply an exchange of views,
and did not always include last minute changes to draft FTA texts. In short, there
was ongoing concern expressed that the congressional consultation process may need
to be amended to allow for greater congressional input into the crafting of FTAs.16
Trade Agreements Authority and Implementation
As discussed above, when the statutory authority to negotiate trade agreements
was limited to reducing tariffs, the trade agreement was implemented by presidential
proclamation and without further congressional action, provided the tariff rate
reductions were within legislatively pre-approved limits. This process changed when
trade negotiations were expanded to include non-tariff barriers (NTBs). These more
complex agreements led Congress to tighten its control over trade policy by
establishing fast track trade negotiating authority. As set out in the Trade Act of
U.S. interests. It consists of 27 committees and over 700 advisors, coordinated by the Office
of the United States Trade Representative. USTR. 2006 Trade Policy Agenda and 2005
Annual Report of the President of the United States on the Trade Agreements Program.
Washington, DC. March 2006. pp. 252-255.
15 United States General Accountability Office. Report to the Chairman, Committee on
Finance. International Trade: An Analysis of Free Trade Agreements and Congressional
and Private Sector Consultations under Trade Promotion Authority. GAO-08-59.
November 2007. pp. 29 and 41-42
16 Ibid., pp. 29 and 43-46.
1974, NTB agreements could enter into force for the United States only with passage
of implementing legislation.17
At the heart of what is now called TPA are the expedited rules for moving such
trade implementing legislation through Congress, which have been used for nearly
all reciprocal trade agreements.18 Importantly, the fast track procedures are rules of
the House and Senate. Either House may change them at any time with a majority
vote.19 Congress makes these expedited procedures available for a trade
implementing bill provided the President uses the trade agreements authority granted
to him to the satisfaction of Congress, first by entering into agreements that meet
TPA’s overall and principal negotiating objectives, and second by satisfying the
notification and consultation requirements. In addition, under the “trade agreements
authority” section, Congress requires that the President:
1) as mentioned above, at least calendar 90 days prior to signing
the agreement, notify Congress of his intention to do so (to
provide opportunity for congressional input before the
agreement is signed, at which point it can no longer be
2) within 60 calendar days of signing the agreement, provide
Congress with a list of required changes to U.S. law needed for
the United States to be in compliance with the agreement, and;
3) on a day Congress is in session, send a copy of the final legal
text of the trade agreement, a draft implementing bill, statement
17 Under TPA, reciprocal FTAs and multilateral NTB agreements that go beyond tariff
reductions are treated as congressional-executive agreements, which require the approval
of both Houses of Congress. Such approval expresses Congress’ consent to bind the United
States to the commitments of the agreement under international law. This type of agreement
is distinguished from both the executive agreement, requiring only presidential action, and
the treaty, requiring a two-thirds vote of the Senate. Because reciprocal trade agreements
typically result in tariff rate (revenue) changes, the House of Representatives is necessarily
involved. For a more detailed legal discussion, see CRS Report 97-896, Why Certain Trade
Agreements Are Approved as Congressional-Executive Agreements Rather Than as Treaties,
by Jeanne J. Grimmett; and Shapiro, Hal S. Fast Track: A Legal, Historical, and Political
Analysis. Ardsley, NY, Transnational Publishers. 2006. p. 22.
18 The U.S.-Jordan free trade agreement is the exception.
19 Indeed, the House actually did just that on April 10, 2008, when it approved (224-195)
H. Res.1092. That measure states that sections 151 (e)(1) and section 151 (f)(1) of the
Trade Act of 1974 would not apply to H.R. 5724, the implementing legislation for the U.S.-
Colombia FTA. Section 151 establishes the expedited (fast-track) procedures. Section
151(e)(1) establishes the time limits for committee and floor consideration of the
implementing bill. Section 151(f)(1) establishes the procedures for consideration of a
motion in the House for consideration of the implementing bill. Other elements of the
expedited procedures, for example, the prohibition on amendments to the implementing bill
(section 151 (d)) would still apply to H.R. 5724. Also, H.Res. 1092 only applies to the U.S.-
Colombia FTA implementing bill and not to implementing bills for other FTAs, such as
Panama and South Korea, if and when the President submits them to Congress.
of administrative action proposed to implement the agreement,
and supporting statements on how the agreement meets
congressional objectives, changes existing agreements, and
serves the purpose of U.S. commercial interests.
As an important caveat, the TPA expedited procedures are extended only to
implementing bills with provisions limited to those “necessary or appropriate” to
implement the trade agreements, either repealing or amending existing laws, or
providing new statutory authority. This requirement presumably limits the
implementing bill to provisions related to the pending trade agreement, although the
meaning of “necessary or appropriate” has been subject to debate.
Should these requirements be fulfilled to the satisfaction of Congress, it has
agreed to follow certain expedited legislative procedures. In effect, these rules
require that Congress must act on the bill sent over by the White House, and in other
ways represent a significant departure from ordinary legislative procedures. The
rules are defined below (see Appendix B for greater detail) and involve:
1) mandatory introduction of the implementing bill in both Houses of
Congress and immediate referral to the appropriate committees (House20
Ways and Means, Senate Finance, and possibly others);
2) automatic discharge from House and Senate Committees after a limited
period of time;
3) limited floor debate; and
4) no amendment, meaning that Congress must vote either up or down on the
bill, which passes with a simple majority.
Congressional Procedures Outside TPA
In addition to the expedited procedures defined in TPA, Congress, with the
effective consent of the Executive Branch, has followed certain procedures during
the consideration of trade agreement implementing bills that, although not formally
defined in TPA, have been integrated into the process of congressional approval of
trade agreements. Three in particular stand out:
Side Agreements and Letters. Outside of formal TPA statutory
requirements, Congress has insisted on additions or clarifications to trade
agreements. This insistence has resulted, at times, in side agreements and letters.
Side agreements are additional obligations accepted by all parties after the original
trade agreement has been signed. The most notable examples are the environment21
and labor side agreements of NAFTA. Side letters serve as clarifying devices
20 Additional referrals depend on whether there are provisions in the agreement that require
changes in law under the jurisdiction of other committees.
21 Interestingly, while Congress authorized funding for U.S. contributions and for
usually applied to a very specific issue and that can be used to assuage a particular
congressional concern. Side letters are typically addressed from and to the top trade
negotiating representative (e.g. the USTR, trade minister, or equivalent.) Side
agreements and letters accompany the agreement, but neither changes its text and
both require official signatures of all the negotiating parties to come into force.
Hearings and Mock Markups. Congress has insisted on reviewing the
negotiated trade agreement prior to the implementing bill being introduced. This is
done first in hearings before the House Ways and Means, and Senate Finance
Committees, as well as possibly other interested committees. The Ways and Means,
and Finance Committees typically follow with an informal or “mock” markup on an
informal draft version of the implementing bill, which is sent over by the White
House along with a draft of the final text of the trade agreement.
The informal mockup is, in effect, a test run of congressional response to the
trade bill. Because it is only an informal draft bill, there is no real legislation to
“mark up,” but the meetings afford Committee Members an opportunity to comment
on the draft trade agreement, as well as the informal draft implementing legislation,
and offer amendments that serve as important signals to the Administration of
changes to the implementing bill they would like to see made. The two revenue
committees may also decide to hold a mock conference to reconcile any differences
in their mock markups.
Although the agreement at this point has already been concluded, a clarification
or “translation” of key points that do not alter the basic agreement can be made in the
final implementing bill.22 The Administration, however, can exercise discretion in
accepting suggested changes from Congress. For example, while the committees
offered many changes to the CAFTA-DR agreement that the Bush Administration
tried to accommodate, the Administration declined to include the language of an
amendment unanimously supported by the Senate Finance Committee with respect
to the U.S.-Oman FTA implementing legislation, citing TPA’s own requirement that
only legislation “necessary or appropriate” to implement the agreement be included.
The Oman bill passed, but a new bipartisan call for better consultation prior to the
President entering into a trade agreement arose because of dissatisfaction with both23
the Oman FTA and the TPA process.
Informal Agreements. Some Members of Congress have also relied on
promises from the Administration to address issues raised in mock markups. These
often relate to special interests and concerns, and their fulfillment relies on a measure
of good will between Congress and the Administration. In the case of the CAFTA-
participation in the administrative bodies created by the NAFTA side agreements, it did not
expressly approve the agreements themselves. See 19 U.S.C. sections 3471-3472.
22 This idea is elaborated in: VanGrasster, Craig. Is the Fast Track Really Necessary?
Journal of World Trade. Vol. 31, No. 2. April 1997. p. 106.
23 Inside Trade. Grassley Presses USTR To Improve Consultations on FTAs. July 7, 2006.
DR implementing bill, for example, the Bush Administration made accommodations
to sugar, textile, and labor interests to secure congressional support.24
Limiting Trade Agreements Authority
Congress adopted TPA rules on pragmatic grounds as self-limiting conditions
to prevent trade implementing bills from being delayed or obstructed by
congressional procedures that can either keep a bill from moving out of committee,
or delay it on the floor of the House or Senate with extended debate. Trade
agreements can also be the product of a fragile consensus between trade partners, and
TPA procedures were designed to protect such a consensus from unraveling due to
congressional amendments that would change the basic agreement. In crafting TPA,
however, Congress did not agree to surrender its constitutional authority over trade
matters and wrote into TPA a number of provisions that can limit the use of the
Sunset Provision. Each renewal of the trade agreements authority has
provided the use of expedited procedures for trade agreement implementing bills for
a limited time. The 2002 statute made these procedures available for trade
agreements entered into before July 1, 2007. Importantly, however, the act provides
no deadline for submitting implementing legislation for the agreement if it is entered
into before the July 1 deadline.
Extension Disapproval. TPA legislation requires that the President request
an extension of the TPA authority after a certain period of time. The extension is
granted unless either House of Congress adopts a disapproval resolution. Such a
resolution of disapproval may not be considered unless it is reported out of either the
House Ways and Means or Senate Finance Committee. Although such resolutions
have been reported out of committee in the past, none has been passed in either
House of Congress. This process is a reminder to the Executive Branch that the
availability of expedited legislative procedures is a congressional prerogative that can
be denied if Congress becomes dissatisfied with how the President has conducted
trade agreement negotiations.
Procedural Disapproval. The requirement that the President fulfill
consultation and reporting obligations also helps preserve the congressional role on
trade agreements by giving Congress the opportunity to influence the agreement
before it is finalized. Should Congress determine that the President has failed to
meet these requirements, it may decide that the implementing bill is not eligible to
be considered under TPA rules. It would implement this decision by adopting a joint
“procedural disapproval” resolution in both Houses of Congress.
Withdrawal of Expedited Procedures. The Trade Act of 1974, as
amended, provides that the expedited procedures for consideration of trade
implementing bills are enacted as rules of procedures for each House, “with the full
recognition of the constitutional right of either House to change the rules (so far as
24 For details, see CRS Report RL31870, The Dominican Republic-Central America-United
States Free Trade Agreement (CAFTA-DR), by J. F. Hornbeck.
relating to the procedure of that House) at any time.”25 That is, Congress reserves its
constitutional right to withdraw or override the fast track rule, which can take effect
with a vote by either House of Congress.26
This summary suggests that in addition to binding rules, the long-term success
of TPA rests on a cooperative spirit and partnership between the Legislative and
Executive Branches of government, and by extension, between the two major
political parties.27 Many have noted that the sense of such cooperation was absent
under the previous TPA, placing a strain on the trade legislative process in recent
years. In fact, a bipartisan agreement on TPA has been absent since at least 1993, as
evident in the eight-year lapse during the Clinton Administration and the highly
partisan passage of the 2002 TPA renewal. The current dissatisfaction with TPA
results from philosophical differences that have developed, in part, along partisan
lines and raises the distinct possibility that TPA, now lapsed once again, may not be
Issues for Congress
TPA expired on July 1, 2007, and is currently not available for the potentially
most important trade agreement still under negotiation, the WTO multilateral Doha
Development Round, as well as any future bilateral FTAs. President Bush formally
requested TPA renewal on January 31, 2007, and the congressional response ranged
from immediate support to deferred consideration of approval and outright
opposition. Currently, the Democratic Leadership has signaled that TPA renewal is28
not a priority for the immediate legislative agenda. Reluctance to take up TPA
renewal rests with a number of concerns.
First, increasingly Congress is focused on addressing the negative effects of
trade policy and, more broadly, “globalization.” Job displacement, falling wages, the
growing income gap in the United States (and developing countries), and the U.S.
trade deficit all reinforce an overall sense that the costs and benefits of trade are not
being distributed equally and that legislative policy responses in this area should be
paramount. Congress has responded by insisting on significant changes to bilateral
FTAs and introducing new trade adjustment assistance bills. Importantly, each of the
issues mentioned above has causes and potential policy responses rooted as much or
25 Section 151(a)(2) of the Trade Act of 1974 (P.L. 93-618).
26 See Shapiro, Fast Track: A Legal, Historical, and Political Analysis, p. 28.
27 See Carrier, Michael A. All Aboard the Congressional Fast Track: From Trade to
Beyond. George Washington Journal of International Law and Economics. Washington,
28 Brevetti, Rossella and Gary G. Yerkey. President Bush Calls on Congress to Renew
Trade Promotion Authority. International Trade Reporter. February 1, 2007. p. 159 and
Brevetti, Rossella. USTR, Paulson, Gutierrez Urge Renewing TPA, But Pelosi Says It Is
Not a Legislative Priority. International Trade Reporter. July 5, 2007.
more in domestic as international economic policies, complicating both the social
equity and the trade policy debates.29
Second, many Members are also displeased with the perceived inadequate
enforcement of trade obligations undertaken by China and other U.S. trade partners.
It has been further suggested that the United States reprioritize the list of potential
bilateral FTA countries, with perhaps a new emphasis on Japan, the European Union,
and other large economies. Insisting on linking revised trade priorities to TPA
renewal may be another way for Congress to exercise its authority over trade policy.
Third, the Democratic leadership has indicated that TPA renewal will require
lengthy deliberations to craft a new model for future U.S. trade policy, one likely to
incorporate the key provisions of the “New Trade Policy of America,” among others.
There is no perceived need to rush consideration of such a complex issue at this time,
particularly given the slow pace at which the Doha Round is progressing. The
continuing debate on TPA renewal, shaped by these and other factors, may focus on
a number of specific issues, reflecting unresolved concerns over the TPA process in
general and trade policy issues of particular interest to Congress.
The Need for TPA
A recurring question is whether TPA is really necessary. One way to explore
this issue is to consider the alternatives. First, given the breadth and scope of modern
trade accords, executive agreements are generally an insufficient means for fully
implementing trade agreements where the amendment, repeal, or enactment of new
laws is required. Second, the treaty approach presents two problems: the high hurdle
of a two-thirds vote of approval in the U.S. Senate and lack of House action for an
agreement involving revenue.30 Further, Congress has long considered U.S. trade
agreements to be non-self-executing, that is, requiring implementing legislation if
existing law is insufficient to carry out agreement obligations.31
Because legislative action involving both Houses of Congress is needed, the
options appear limited to either a TPA approach, or relying on ordinary rules of
procedure to consider trade implementing legislation. To date, the challenge of
representing the diverse interests of numerous economic stakeholders has several
times led Congress back to the idea of using a carefully structured, time-limited grant
of trade agreements authority, subject to implementing legislation being considered
under streamlined legislative rules, despite the fact that a strategically important, but
commercially insignificant FTA with Jordan was approved without TPA. Some of
the debate over the “need” for renewal may hinge on how important Congress
29 One suggested list of domestic policy options is presented in: Polaski, Sandra. U.S. Living
Standards in an Era of Globalization. Policy Brief 53. Carnegie Endowment for
International Peace. July 2007.
30 See Article 1, section 7, of the U.S. Constitution, which requires that all bills for raising
revenue originate in the House.
31 See U.S. Congress. 103rd Cong., 2nd sess., House, Uruguay Round Agreements Act.
(H.Rept. 103-826) October 3, 1994. p. 25.
perceives it is for the United States to continue trade negotiations in a world that will
continue to integrate irrespective of U.S. policy.
The Role of Congress
If the success of TPA were to be measured simply by the number of trade
agreements that have been approved and implemented under its authority, then it
might be argued that TPA has proven its merit. Many Members of Congress,
however, have complained that in recent years the TPA process has failed,
demonstrating that binding congressional rules of procedure are not sufficient to
guarantee a consensus position or a cooperative working arrangement on trade.32
Such criticism is largely, but not exclusively, made along partisan lines.
Complaints point to multiple problems: (1) trade negotiation objectives that do
not include all key concerns of Congress (e.g., enforceable labor standards) and are
open to interpretation by the Executive Branch; (2) an Executive Branch consultation
process, including the COG, denounced as superficial and unresponsive to
congressional input; (3) the passage of widely unpopular FTAs negotiated under TPA
authority; and (4) ineffectiveness of procedures for deterring the use of TPA (e.g., the
extension disapproval resolution and repeal of fast track rules) because power has at
times been held closely through partisan control of committee chairs.33 In short, there
has been a growing sense for the need to rekindle trust between the Administration
and Congress, as well as ensure greater bipartisan cooperation within Congress on
Trade Policy Issues
Many specific trade issues are likely to emerge in the course of congressional
debate over TPA renewal. The current congressional debate and those over recent
trade agreements point to numerous issues: labor, environment, and public health
standards; trade adjustment assistance; trade remedy laws; and the temporary entry
of service providers known as “Mode-4.”
Labor Standards. Perhaps the single most contentious specific trade issue
for TPA renewal, particularly in the House, has been the treatment of labor standards.
They have been included as negotiating objectives in fast track/TPA authority since
the Omnibus Trade and Competitiveness Act of 1988. The partisan differences were
evident in two competing bills offered during the 2002 renewal, and they are still
reflected today.34 H.R. 3009, introduced by then-House Ways and Means Committee
Chairman Thomas, was eventually enacted as the Bipartisan Trade Promotion
Authority Act of 2002. It established principal negotiating objectives for labor
32 Yerkey, Gary G. Renewal of TPA Seen as Highly Unlikely Next Year, Particularly if
Democrats Triumph. International Trade Reporter. October 26, 2006. p. 1528.
33 Reuters. Bush’s Trade Authority Renewal: Dead on Arrival? October 19, 2006 and
Vaughn, Martin, What If: Trade. The Congressional Daily. October 17, 2006.
34 Brevetti, Rossella. Rep. Rangel to Seek Bipartisan Plan To Renew Trade Promotion
Authority. International Trade Daily. February 1, 2007. p. 158.
standards that include the following: to ensure that a party does not fail to enforce
effectively its own labor laws; to recognize that parties retain the right to exercise
discretion in the allocation of enforcement resources for those laws; to strengthen the
capacity of U.S. trading partners to promote respect for core labor standards; and to
ensure that labor protections do not arbitrarily or unjustifiably discriminate against
U.S. exports or serve as disguised trade barriers.
H.R. 3019, as introduced by then-House Ways and Means Committee Ranking
Member Rangel (now Chairman), would have gone further, requiring that each
country’s labor laws include ILO core labor standards that would be enforceable with
trade sanctions, equal to those applied to commercial and other disputes under a trade
agreement. Replacing the “does not fail to effectively enforce its own laws”
language with mandatory adherence to ILO core labor standards has been a major
difference to be resolved. Enforcing such adherence through trade sanctions is a
second major difference. Congressional leaders and the Bush Administration have
attempted to bridge these differences through the mandatory framework included in
the “New Trade Policy for America.” The first legislative test of this compromise
language was congressional implementing legislation for the bilateral FTA with Peru,
approved by Congress in December 2007. Language reflecting key elements of the
compromise framework is also contained in proposed FTAs with Colombia, Panama,
and South Korea. The next question is whether such language might be incorporated
into a new TPA.
Environment and Public Health. The “New Trade Policy for America”
also provided the basis for key changes to environment and public health
commitments in bilateral FTAs that may also be germane to a new TPA. It calls for
signatory countries to U.S. FTAs to adopt and enforce multiple multilateral
environmental agreements (MEAs) in support of international policies designed to
address global warming and other hazards. Changes to patent and data exclusivity
provisions in intellectual property rights chapters hold out the promise for developing
countries that sign an FTA with the United States to have potentially quicker access
to generic medicines.
Trade Adjustment Assistance. A major congressional response to those
who do not benefit from trade liberalization is trade adjustment assistance (TAA).
In the past, the program has focused primarily on workers and has been funded and
administered through the U.S. Department of Labor. Other programs also exist,
including a small one for firms administered by the U.S. Department of Commerce.
Because the effects of “globalization” and particularly trade liberalization, both
positive and negative, can be far reaching, there is a growing interest in developing
more comprehensive and effective alternatives to TAA programs, which Congress
has not conceptually changed since created in the Trade Expansion Act of 1962
(P.L.87-794). This concept might include expanding the program to the services
sector or other groups negatively affected by “globalization,” and has been identified
as a key legislative initiative in the “New Trade Policy for America.”
Trade Remedy Laws. Congress has repeatedly expressed a bipartisan
interest in ensuring that trade negotiations do not hinder or restrain the use of U.S.
trade remedy laws. Specifically, in the previous TPA, Congress required trade
... to preserve the ability of the United States to enforce rigorously its trade laws,
including the antidumping, countervailing duty, and safeguard laws, and avoid
agreements that lessen the effectiveness of domestic and international disciplines
on unfair trade ...
It can be understood in light of the institutional responsibility Congress has had35
toward safeguarding the interests of constituents. Despite such a clear message
from Congress, the Bush Administration included trade remedy laws as part of the
Doha Round, arguing that doing so was necessary to get developing countries to join
the negotiations. Many Members of Congress subsequently criticized this step.
Individual U.S. trading partners have also demanded that trade remedy laws be part
of U.S. bilateral FTA negotiations.
Temporary Entry of Service Providers (“Mode 4”). The temporary
movement of service providers (to the home country of the buyer of the services),
known in the WTO as “Mode-4,” has been a contentious issue in various trade
negotiations, particularly the Doha Round negotiations on services. Several
developing countries, especially India, have criticized the United States for not
providing greater latitude in the temporary movement of professional services
providers to the United States.
Mode-4 is also an issue of congressional jurisdiction. In July 2003, during
congressional consideration of the implementing bills for the U.S.-Chile and U.S.-
Singapore free trade agreements, some Members of the House and Senate Judiciary
Committees objected to the inclusion of changes in U.S. visa policies to allow
increases in the quotas of workers entering the United States. They argued that
changes in visa rules must be separate from trade legislation that is considered by
Congress under expedited (fast track) procedures. Compromises were reached to
allow the two bills to be voted on, but not without bipartisan warnings from both
Committees that changes in visa policy should no longer be part of bilateral or
multilateral trade agreements.36
Options for Congress
With the expiration of TPA on July 1, 2007, Congress has a number of options
with respect to its possible renewal. Four that span the spectrum are discussed
No TPA Renewal
Congress at present does not appear ready to extend or renew TPA. Although
the lack of TPA may delay action on future reciprocal trade agreements, many sector-
specific and other more narrowly targeted agreements have been concluded in the
past without TPA. The United States has also launched trade negotiations prior to
35 Pastor, Congress and the Politics of U.S. Foreign Economic Policy 1929-1976, pp. 56-58.
36 For more information on immigration issues and trade agreements, see CRS Report
RL32982, Immigration Issues in Trade Agreements, by Ruth Ellen Wasem.
having TPA authority in place. Both situations suggest that the conduct of U.S. trade
negotiations can continue in some form without TPA. Still, trade partners may be
reluctant to negotiate with the United States without TPA since the agreement would
be subject to ordinary legislative procedures and amendment by Congress.
Therefore, one question that Congress faces is whether there are potential trade
agreements outstanding that may compel consideration of TPA extension or renewal.
Extend TPA Temporarily
Congress could extend the current TPA with few or no revisions long enough
to allow the United States to complete a specific agreement. This approach might be
favored by those who are reluctant to renew the authority, but do not want to hinder
the completion of agreements that they view as potentially beneficial to the United
States. For example, Congress extended the authority for 10 months in 1993 to
complete the Uruguay Round agreements, and could do so again for the Doha
Round.37 In as much as labor and environment provisions are not being contemplated
as part of the Doha negotiations, Congress could extend TPA for the sole purpose of
concluding the multilateral agreement, perhaps without compromising the concerns
of those Members who support stronger labor, environment, public health, and other
provisions in bilateral FTAs.
Renew TPA Authority
Under this option, Congress could grant the President new authority with or
without major changes in its structure, and without restricting it to specific agreement
negotiations. Such an approach would give more time to complete pending trade
negotiations and allow for the opportunity to launch new negotiations. In so doing,
this option would provide the President with the flexibility to implement a complex
trade negotiating agenda. Congressional action on this approach implies, however,
that a political agreement could be struck on the overall framework of trade
agreements objectives and negotiating priorities among a majority in Congress, and
between Congress and the President.
Grant Permanent TPA Authority
Some trade policy experts have suggested that Congress could grant the38
President a form of permanent fast track/TPA. The proponents of this option
envision a two-tier procedure: (1) Congress would enact into law permanent fast
track procedures; and (2) before specific negotiations can begin, both Houses of
Congress would have to pass a resolution approving the negotiations and objectives
designed for the specific set of negotiations. Step (2) is designed to satisfy those who
might be concerned that Congress could be surrendering its authority permanently.
37 Some have argued that the circumstances at that time were different from what they are
now because the trade authority had more support in Congress.
38 See for example, Destler, I. M. Renewing Fast-Track Legislation. Institute for
International Economics. Washington. September 1997. pp. 41-43, and Mastel, Greg and
Hal Shapiro. Fast Track Forever? The International Economy. Summer 2006. pp. 54-55.
Supporters argue that the permanent authority would signal to trade partners that
the United States is committed to trade liberalization over the long term. The prior
approval procedure for specific negotiations might address the concern that this
option could result in giving the President a “blank check” to negotiate FTAs with
any country he chooses. One criticism of this approach is that Congress might not
be willing to give “permanent” authority even with the required pre-approval process.
Prospects for TPA Renewal
The 110th Congress began the TPA renewal debate early, but then shifted focus
to addressing the key issues of pending bilateral FTAs with Peru, Panama, Colombia,
and South Korea. Each was signed in time to be considered under the 2002 TPA
authority. The remaining outstanding case for a near-term renewal of TPA is the
Doha Round, although the USTR continues to argue that the lack of TPA could delay
future bilateral negotiations as well, and in any case, other countries will continue to
negotiate trade agreements irrespective of U.S. policy. It falls to Congress to weigh
the costs and benefits of when and if to consider TPA renewal as part of the U.S. trade
policy agenda. The TPA decision will also have significant implications for defining
the future of the congressional-executive relationship for the rest of the Bush
Administration, and perhaps beyond. The outlook is far from clear, however, given
the many controversies that surround TPA and the numerous factors that may
influence Congress’s decision of how or if to act.
Appendix A. Timeline for Negotiation, Congressional Consultation, and Legislative
Implementation of Trade Agreements Under TPA
Appendix B. A Short Guide to the Expedited
Legislative Procedures for Passage of Trade
Implementing Bills Under TPA39
I. Before the formal TPA expedited procedures come into play, the House Ways
and Means and Senate Finance Committees typically hold “mock markups” on
informal drafts of the implementing legislation, voting to approve or
disapprove. The vote and any amendments to the draft legislation, however, are
not binding on the Administration. These meetings provide the last opportunity
to make recommendations to the Administration before it sends final
implementing legislation to Congress, which initiates the expedited procedures.
II. The President sends a final legal draft text of the trade agreement and a draft
implementing bill (with supporting materials) to Congress on a day that it is in
session. The draft bill may, or may not, reflect some or all of any amendments
adopted by committees in the mock markup.
III. Identical bills are subject to mandatory introduction in each House of Congress
on the day received. The bills are referred to the House Ways and Means and
Senate Finance Committees jointly, with others if jurisdiction warrants.40
IV. Each committee has 45 in session days to report the bill or it is automatically
discharged and the bill is placed on the appropriate calendar.41 An
implementing bill subject to TPA procedures is likely to be a revenue bill, in
which case the Constitution requires that the Senate ultimately act on the House
bill. Under these conditions, the Senate Finance Committee has until the later
of the 45th day of session after the Senate bill is introduced or the 15th day of
session after the Senate receives the House bill.
V. In each House, after the implementing bill is reported or discharged, any
Member may offer a non-debatable motion to consider it. Debate is limited to
20 hours evenly divided between those for and against. The measure cannot be
amended, and a motion or unanimous-consent request to suspend this restriction
is not in order. If the chamber has not completed floor action by the 15th day
after the bill is reported or discharged, any Member may bring it to a vote.
VI. A bill passes by simple majority under the statute. Whichever House acts
second (typically the Senate assuming the bill is a revenue bill) considers and
debates its own bill, but takes its final vote on the bill received from the other
39 Title XXI of the Trade Act of 2002 (P.L. 107-210) and section 151 of the Trade Act of
40 For example, the U.S.-Chile Free Trade Agreement implementing bill contained a
provision affecting immigration law, requiring the bill to be referred to the House and
Senate Judiciary Committees.
41 Cumulatively, the whole process can take as long as 90 in session days, potentially lasting
House (typically the House of Representatives).42 This procedure ensures that
both Houses will ultimately act on the same measure, thereby clearing it to be
presented to the President (without the need for conference). Once the
implementing bill is signed, under its terms, the agreement enters into force for
the United States by Presidential proclamation.
42 In fact, the Senate can act, and has acted, on its own bill before receiving the House bill.
In the case of the Chile FTA implementing bill, the Senate Finance Committee reported out
first. When the House bill, which was identical, came over, it was put on the Senate
calendar directly. For the CAFTA-DR bill, the Senate actually voted first on its own bill,
necessitating a later (procedural) vote to substitute the (identical) language of the Senate bill
into the House-passed bill when received. These proceedings in the Senate permitted final
action to occur on the House measure, as constitutionally required.