Trade Promotion Authority: Possible Vote on Two-Year Extension
CRS Report for Congress
Trade Promotion Authority:
Possible Vote on Two-Year Extension
Lenore Sek
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Summary
Under the Trade Act of 2002 (P.L. 107-210), Congress approved expedited
legislative procedures (no amendment, limited debate) for trade agreements that were
entered into before July 1, 2005. The Act provided an automatic two-year extension if:
(1) the President requested an extension not later than April 1, 2005; and (2) neither
House of the Congress adopted an extension disapproval resolution before July 1, 2005.
The President submitted the request for an extension on March 30, 2005. An extension
disapproval resolution (S.Res. 100) was introduced in the Senate and referred to the
Senate Finance Committee on April 6, 2005. Under the 2002 Trade Act, a resolution
had to be reported out of committee to be considered on the floor. By July 1, 2005, the
Senate Finance Committee had not reported out S.Res. 100. No extension disapproval
resolution had been introduced in the House. Therefore, the two year extension was not
disapproved, and expedited legislative procedures will apply to trade agreements entered
into before July 1, 2007. This product will not be updated.
Under Title XXI (Bipartisan Trade Promotion Authority Act of 2002) of the Trade
Act of 2002 (P.L. 107-210), Congress approved expedited procedures for legislation to
implement trade agreements, as long as the trade agreements were reached before a
deadline of July 1, 2005. The 2002 Trade Act also provided for an automatic two-year
extension of that deadline, if certain conditions were met. During the first half of 2005,
an issue for the 109th Congress was whether or not to disapprove the two-year extension.
Trade Promotion Authority in Brief
Trade promotion authority (TPA; formerly called fast-track authority) is an
arrangement involving the executive and legislative branches that recognizes the distinct
constitutional responsibilities of those branches regarding trade negotiations and trade
policy. By virtue of the constitutional power to conduct foreign affairs, the President has
authority to negotiate and enter into agreements with foreign countries, including those
agreements dealing with trade and tariff policy. At the same time, the Constitution gives
Congress the primary power over trade policy under Article I, and the Congress decides
Congressional Research Service ˜ The Library of Congress
whether or not to approve statutory changes that are called for under trade agreements that
the President has negotiated.
The basic provisions of TPA were established in the Trade Act of 1974 (P.L. 93-618)
for a limited period of time. Those provisions were renewed periodically, most recently
under the Trade Act of 2002. Under TPA, Congress provides that, if a trade agreement
is reached by a given deadline, it will consider legislation to implement the trade
agreement under expedited procedures that prohibit amendments, limit debate, and set
deadlines on congressional action. As a condition for these procedural restraints,
Congress requires the President to consult with appropriate congressional bodies before
and during the negotiations, notify Congress before beginning any negotiations and before
entering into a trade agreement, provide reports as specified, and meet other conditions
as provided.1 Congress also places restrictions on the purpose of a trade agreement and
on language in an implementing bill. Through these provisions, Congress sets trade
negotiating objectives and is informed of progress in the negotiations, and the President
is assured that a trade agreement will receive a timely, up-or-down vote in Congress.
TPA Extension in the Trade Act of 2002 and Subsequent Action
Under the 2002 Act as amended,2 Congress approved TPA for trade agreements
entered into before July 1, 2005, but also approved an automatic two-year extension of
TPA to cover trade agreements entered into before July 1, 2007, as long as two conditions
were met. First, the President had to request the two-year extension by April 1, 2005.
Together with the request, the President was required to submit: (1) a description of all
major trade agreements that have been negotiated and might be considered under TPA,
and the anticipated schedule for submitting those agreements for congressional approval;
(2) a description of progress in negotiations to achieve the purposes and objectives that
Congress approved in the title, and a statement that this progress justifies continuation of
negotiations; and (3) a statement of the reasons why the extension is needed to complete
the negotiations. In effect, these provisions would require the President to justify how he
had used TPA until then and to describe how he might use it over the next two years.
On March 30, 2005, the President submitted a report of approximately 260 pages that
contains the request for TPA extension.3 The report provided an overview of the
Administration’s trade policy and related that trade policy to trade agreements concluded
under TPA and to trade negotiations in progress. Lengthy appendices included detailed
descriptions of free-trade agreements (FTAs) that had been concluded under TPA
provisions and of FTAs under negotiation,4 as well as a comprehensive summary of each
concluded FTA and how each FTA made progress in achieving the TPA objectives.
1 See CRS Report RL31974. Trade Agreements: Requirements for Presidential Consultations,
Notices, and Reports to Congress Regarding Negotiations, by Vladimir N. Pregelj.
2 Some dates in the 2002 Trade Act were amended by section 2004(a)(17) of the Miscellaneous
Trade and Technical Corrections Act of 2004 (P.L. 108-429).
3 Executive Office of the President. Report to the Congress on the Extension of Trade Promotion
Authority. Available on the U. S. Trade Representative’s web page at [http://www.ustr.gov].
4 For information on negotiations in progress, see CRS Issue Brief IB10123. Trade Negotiations
in the 109th Congress, by Ian F. Fergusson and Lenore M. Sek.
A second condition for the two-year extension of TPA was that neither House of
Congress adopt an extension disapproval resolution before July 1, 2005. The 2002 Trade
Act included the language for such a disapproval resolution. It stated that an extension
disapproval resolution could be introduced in either House of Congress by any Member,
and a disapproval resolution had to be referred in the House of Representatives to the
Committees on Ways and Means and on Rules. Although there is no provision on
committee referral in the Senate, the prescribed procedure appears to presume a referral
to the Committee on Finance, which has jurisdiction over trade matters in the Senate.
Under the 2002 Trade Act, expedited procedures (19 U.S.C. 2192(d) and (e)) would
apply to floor consideration of extension disapproval resolutions. The Act, however,
provided that it was not in order for: (1) the Senate to consider any extension disapproval
resolution not reported by the Committee on Finance; (2) the House of Representatives
to consider any extension disapproval resolution not reported by the Committees on Ways
and Means and on Rules; or (3) either House of the Congress to consider an extension
disapproval resolution after June 30, 2005.
Given these provisions, the committees could take various actions on a disapproval
resolution. A committee could vote to adopt a motion to report a disapproval resolution
favorably or unfavorably (see next section for committee action on extension disapproval
resolutions in 1991). In such cases, the resolution could be brought to the floor. Also, a
committee could vote down a motion to report, or simply not take up the resolution at all.
In these cases, a resolution would be stopped in committee.
On April 6, 2005, Senator Byron Dorgan introduced extension disapproval resolution
S.Res. 100, which was referred to the Senate Finance Committee. In his submission
statement, Senator Dorgan indicated he believed that the Finance Committee would not
allow the resolution to go to the Senate floor.5 In late June 2005, Senator Dorgan and
eight other Senators sent a letter to Senator Charles Grassley, Chairman of the Senate
Finance Committee, calling for the release of S.Res. 100 to the full Senate for an up-or-
down vote.6 By the deadline of June 30, 2005, the Finance Committee had not acted on
S. 100, and there had been no disapproval resolution introduced in the House.
Since both conditions for the two-year extension had been met, the extension became
automatic. TPA was extended to trade agreements entered into by June 30, 2007. In a
press statement on July 1, 2005, U.S. Trade Representative Rob Portman said that the
extension of TPA showed “...Congressional support for U.S. economic leadership and
participation in the global trading system.”7
5 Congressional Record. April 6, 2005, p. S3318.
6 Office of U.S. Senator Byron Dorgan. “Dorgan Calls on Senator Grassley to Bring Fast-Track
Resolution to Floor Before Automatic Renewal.” News Release. June 28, 2005.
7 Office of the U.S. Trade Representative. “Statement of USTR Rob Portman Regarding Today’s
Extension of Trade Promotion Authority and the U.S. Trade Agenda.” Press Release. July 1,
Prior Vote on TPA Extension
A two-year extension of TPA, then called fast-track authority, was considered only
once before. Under the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418),
Congress approved fast-track authority for trade agreements entered into before June 1,
1991, and provided for a two-year extension. The provisions in the 1988 Act were almost
identical to those in the 2002 Act. In 1988, the two-year extension was principally
intended to allow more time for the on-going multilateral trade negotiations (Uruguay
Round) in the World Trade Organization (WTO). By the time then-President George H.
W. Bush requested the two-year extension, however, he had notified Congress of his
intent to negotiate a North American Free Trade Agreement (NAFTA). That agreement,
not the WTO negotiations, became the center of the debate on the two-year extension.8
The debate was also influenced by the political situation at the time: the President was
a Republican, and both Houses of Congress were controlled by the Democratic party.
The President requested the two-year extension on March 1, 1991.9 Disapproval
resolutions were introduced in the House (H. Res. 101) on March 6, 1991, and in the
Senate (S.Res. 78) on March 13, 1991. On March 7, 1991, the Chairmen of the Senate
Finance Committee and of the House Ways and Means Committee sent a letter to the
President saying that the President should address some concerns about environmental
standards, worker rights, and similar issues, before Congress voted on extension of fast-
track procedures. The House Majority Leader sent a letter to the President with a similar
intent on March 27, 1991. On May 1, 1991, the President responded with an extensive
action plan that addressed the concerns raised. On May 9, 1991, the House Majority
Leader introduced a resolution (H.Res. 146) that the President be accountable in meeting
the action plan and other objectives.
On May 23, 1991, the House defeated its disapproval resolution by a vote of 192-
231, but approved H.Res. 146 by a vote of 328-85.10 The next day, the Senate defeated
its disapproval resolution by a vote of 36-59.11 These actions indicated that, while
Congress did not want to prevent the two-year extension, it planned to closely monitor the
negotiations, particularly with respect to a NAFTA.
8 For more information on the earlier debate on extension of trade negotiating authority, see CRS
Report 97-885 E, Fast-Track Legislative Procedures for Trade Agreements: The Great Debate
of 1991, by Lenore Sek.
9 Message from the President of the United States. The Extension of Fast Track Procedures.
House Document 102-51. 102nd Congress, 1st session. March 4, 1991. 588 p.
10 The House Rules Committee ordered reported H.Res. 101 (disapproval resolution) and H.Res.
146, both without recommendation, by voice vote, and subsequently reported both measures. The
House Ways and Means Committee ordered H.Res. 101 adversely reported by a 9-27 vote and
reported the measure. It ordered H.Res. 146 (amended) favorably reported by voice vote and
reported the measure as amended.
11 The Senate Finance Committee ordered reported unfavorably the disapproval resolution S.Res.
Implications for U.S. Trade Policy and Negotiations
To understand the implications of the issue of TPA renewal for U.S. trade
negotiations, it might be helpful to look at the reason why expedited procedures for
implementing bills were approved in the first place. During multilateral negotiations in
the 1960s (the Kennedy Round), the Administration negotiated two non-tariff trade
agreements without explicit authority from Congress. The prevailing view in Congress
was that the President had overstepped his delegated tariff-cutting power in negotiating
these non-tariff trade agreements, and Congress decided not to enact legislation to
implement the two non-tariff trade agreements. This result showed that the two branches
of government would have to be more collaborative, if trade agreements in the future were
to be negotiated and brought before Congress with any likelihood of approval. The
compromise reached in the 1974 Trade Act was that Congress would guarantee an up-or-
down vote without amendment, as long as the President consulted with Congress and
followed its directives in the negotiations.
A central question in considering extension of TPA is whether or not a trade policy
that promotes the negotiation and approval of trade agreements is in the national interest.
Supporters of trade agreements argue that the agreements offer opportunities for U.S.
exporters in markets that otherwise would be closed to them and provide consumers with
a wider selection of low-cost products. They also state that trade agreements increase the
level of trade, which helps the national economy to grow. Opponents of trade agreements
argue that the agreements are often biased toward the business community and do not give
enough consideration to other important objectives, such as saving workers’ jobs or
protecting the environment. Some opponents believe that certain trade restrictions should
be left in place to protect domestic industries.
Another question is, if Congress decides that negotiation of trade agreements should
be part of U.S. trade policy, is TPA necessary for those negotiations? Trade negotiators
generally view TPA and its assurance of an up-or-down congressional vote as important,
if not critical, for their credibility in trade negotiations. They argue that many foreign
countries may not elect to negotiate with the United States if TPA is not in effect. This
is because without TPA’s ban on amendments, Congress can alter an implementing bill
and thereby possibly change the nature of the agreement or the balance of concessions
achieved. Supporters of TPA argue that substantial changes might require renegotiation
and might even kill the agreement. On the other hand, opponents of TPA are reluctant
to give power to the President to conclude a trade agreement that Congress cannot change.
They argue that the ban on amendments under TPA is an abdication of the constitutional
role of Congress to regulate foreign commerce. Some opponents also claim that the
consultation requirements of TPA have been ineffective, because the President has
consulted in-depth with only a small number of Members.
It is generally believed that the expedited procedures of TPA probably have the
greatest effect for negotiations involving a large number of countries. The United States
is currently participating in multilateral talks in the Doha round of negotiations in the
World Trade Organization (WTO). These talks, which began in 2001 and are probably
at least a year from conclusion, involve 148 WTO member countries. Because of the
complexity of such talks, renegotiation of an agreement among 148 countries would be
tremendously difficult, so U.S. negotiators see TPA’s ban on amendments as crucial to
maintaining any final balance of concessions in an agreement. With a two-year extension
of TPA, the current negotiations would continue, and the new deadline of June 30, 2007,
would effectively set the deadline for signing an agreement in the WTO. Without TPA,
negotiations could have continued, but with no clear deadline and the possibility of
amendments in Congress, other countries might have reconsidered the scope and timing
of further talks.
Similar arguments apply to a Free Trade Area of the Americas (FTAA).
Negotiations on an FTAA began in 1994, and 34 countries are participating. Talks so far
have been slow and difficult, and some might argue that, because of the difficulty of these
negotiations, TPA is important because any renegotiation would be highly difficult. On
the other hand, others might argue that TPA does not matter much, because it is unlikely
that an FTAA can be reached by the extended deadline (June 30, 2007).
For smaller regional or bilateral negotiations, the effect of TPA on any set of trade
negotiations might depend on how economically or politically controversial those
negotiations are. The more controversial the talks, the greater the possibility that
substantial amendments would be considered, and the greater the effect of any ban on
amendments with TPA. For example, NAFTA was highly controversial, and it is likely
that without the expedited procedures of fast-track authority (TPA), an implementing bill
would have been substantially amended. In comparison, the free-trade agreement with
Jordan was negotiated without TPA, and the implementing bill was changed little during
congressional consideration.
Several smaller regional or bilateral trade agreements are now under negotiation, and
they were not concluded in time to qualify for TPA without the two-year extension. Most,
if not all, might be concluded in time to qualify for TPA with the two-year extension.
How important might the TPA expedited procedures be, if the Administration concludes
these agreements and submits implementing bills to Congress under those procedures?
It is difficult to say. Agreements under negotiation include free-trade agreements (FTAs)
with Thailand, Panama, the United Arab Emirates and Oman, countries in the Andean
region, and countries in southern Africa. Negotiations probably would have continued
with or without TPA. With TPA, implementing bills will be considered under expedited
procedures without amendment; without TPA, bills would have been considered under
normal legislative procedures and would have been amendable. Some of the negotiations
have controversial aspects, such as claims that worker standards are not adequate, or
arguments that U.S. apparel makers and U.S. sugar producers will face damaging
competition from foreign producers. Some are controversial because they have stronger
political than economic rationales. A two-year extension of TPA could have been more
important for some of these negotiations than for others.
With TPA extended for two years, new negotiations might be considered. For
example, the Administration might propose FTA talks with additional countries in the
Middle East, as part of the Administration’s proposal for a Middle East Free Trade Area,
although time could be an important consideration. If TPA had not been extended, the
Administration probably would have been more restrained in pursuing new trade
negotiations, or might have pursue less controversial negotiations. Regardless of whether
or not TPA was extended, trade agreements entered into before June 30, 2005 (an FTA
with five Central American countries and the Dominican Republic and an FTA with
Bahrain) already qualified for expedited procedures for an implementing bill.