Trade Promotion (Fast-Track) Authority in the Trade Act of 2002

CRS Report for Congress
Trade Promotion (Fast-Track) Authority in the
Trade Act of 2002
Lenore Sek
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Summary
On August 6, 2002, President George W. Bush signed the Trade Act of 2002 (P.L.
107-210). Title XXI of the act granted “trade promotion authority” (TPA) to the
President. Those provisions included negotiating objectives for trade agreements. They
also stipulated that if the notification and consultation requirements and other conditions
specified were met by the President, implementing legislation could be considered under
expedited legislative procedures (limited debate and no amendment). This report gives
an overview of the TPA provisions in the Trade Act of 2002, which could apply to a
number of ongoing trade negotiations. It will not be updated.
On July 27, 2002, the House passed (215-212) the conference report on H.R. 3009
(H.Rept. 107-624), the Trade Act of 2002. The Senate approved (64-34) the conference
report on August 1, 2002. The President signed the measure (P.L. 107-210) on August

6, 2002. Title XXI of the Trade Act of 2002 granted “trade promotion authority” (TPA)

to the President. Under TPA, if congressionally specified conditions are met, the
President may negotiate and enter into trade agreements with later implementing
legislation considered by the Congress under expedited legislative procedures (limited
debate and no amendment).¹

¹ This report is an update of CRS Report RL31445, Trade Promotion (Fast-Track) Authority: A
Comparison of Bills Approved by the House and by the Senate with Notes on the Conference
Report (H.R. 3009), by Lenore Sek and William H. Cooper. For further information, see also the
following: CRS Report RL31844, Trade Promotion Authority (Fast-Track Authority for Trade^th
Agreements): Background and Developments in the 107 Congress, by Lenore Sek; CRS Report
RL31974, Trade Agreements: Requirements for Presidential Consultations, Notices, and Reports
to Congress Regarding Negotiations, by Vladimir N. Pregelj; CRS Report RL32011, Trade
Agreements: Procedure for Congressional Approval and Implementation, by Vladimir N. Pregelj;
and CRS Report RS22102, Trade Promotion Authority: Possible Vote on Two-Year Extension,
by Lenore Sek.
Congressional Research Service ˜ The Library of Congress

Provisions in the Trade Act of 2002
Short Title and Findings. The title of the legislation is the Bipartisan Trade and
Promotion Authority Act of 2002. Two of the three findings link national security and
trade. The third finding states that support for trade negotiations requires that dispute
settlement procedures neither add to nor diminish rights and obligations and specifically
refers to the WTO dispute bodies.
Trade Negotiating Objectives. The 2002 act sets out what Congress considers
to be the goals the President must accomplish in negotiating trade agreements in order for
those agreements to receive expedited treatment under TPA. This section is divided into
subsections on “Overall Trade Negotiating Objectives,” “Principal Trade Negotiating
Objectives,” “Promotion of Certain Priorities,” “Consultations,” and “Adherence to
Obligations Under Uruguay Round Agreements.”
Overall Trade Negotiating Objectives. The act contains nine overall
objectives. Four objectives have broad trading goals: obtain more open market access;
reduce trade barriers; strengthen trading disciplines; and promote U.S. and world
economic growth. Four other objectives specifically relate to labor and the environment:
ensure mutually supportive trade and environment policies; promote respect for workers
and children; work against weakening of environmental or labor laws; and promote the
international convention on the worst forms of child labor. Another objective calls for
fair and equal treatment for small businesses.
Principal Trade Negotiating Objectives. The act has 17 specific objectives.
Some objectives seek the reduction or elimination of barriers in the trade of goods and
services, in foreign investment, and in electronic commerce. Others focus on the WTO
by calling for broader participation and negotiations on transparency, dispute settlement,
extended topics (civil aircraft, rules of origin), and border taxes. One objective seeks
protections for labor and the environment, such as assurance that parties will enforce their
environmental and labor laws, and another calls for commitments by countries to
vigorously enforce their laws prohibiting the worst forms of child labor. One objective
calls for establishment of rules and standards to stop corruption, and another calls for
disincentives for governments to use regulatory practices to give advantages to domestic
interests. Other objectives call for further protection of intellectual property rights (IPR),
reciprocal trade in specific sectors (agriculture and textiles), and preservation of U.S. trade
remedy laws.
Promotion of Certain Priorities. The act lists 12 Presidential actions that
Congress considers necessary in order to maintain U.S. competitiveness. Almost all of
these actions relate to protections for labor or the environment. A few actions relate to
other domestic objectives such as health and safety, to U.S. trade remedy laws, and to
currency movements.
Consultations. The act requires the U.S. Trade Representative (USTR) to consult
with congressional revenue committees and other committees with jurisdiction, with the
Congressional Oversight Group, and with congressional trade advisors. Consultation
requirements are also addressed later in the act.

Adherence to Obligations Under Uruguay Round Agreements. The act
requires the President to take into account the degree to which trading partners adhere to
obligations under the Uruguay Round Agreements.
Trade Agreements Authority. Under Section 2103(a), the act approves authority
for the President to negotiate tariff agreements and proclaim changes in tariff levels within
specified limits. It requires that, if expedited procedures (“trade authorities procedures”)
for an implementing bill will apply, such agreements be entered into before June 1, 2005,
or by June 1, 2007.²
Under Section 2103(b), the action approves authority for the President to enter into
other tariff and nontariff trade agreements by the same deadlines as for tariff agreements.
These agreements would have to make progress in meeting the negotiating objectives, and
the President would have to satisfy the outlined consultation and assessment
requirements. Legislation to implement these trade agreements would be considered
under trade authorities procedures, if provisions of the legislation: (1) approved the trade
agreement and any statement of administrative action; and (2) were necessary or
appropriate to implement the trade agreement, if statutory changes are required to
implement the trade agreement. The act calls such legislation an “implementing bill.”
Trade authorities procedures would apply to an implementing bill for trade
agreements if: (1) the President requests the extension and provides specified information
by March 1, 2005³; and (2) neither house of Congress adopts an extension disapproval
resolution before June 1, 2005⁴. The act requires reports by private sector trade advisors
and by the U.S. International Trade Commission (ITC).
Consultations and Assessment. The President, at least 90 days before starting
negotiations under Section 2103(b), would be required to provide notice of intent to enter
into negotiations and other information. Before and after giving notice, the President
would have to consult with the revenue committees and such other committees the
President deems appropriate, and the newly established Congressional Oversight Group
(COG, described later).
For agriculture negotiations, the act requires the President to assess how U.S. tariffs
on agricultural products compare to foreign tariffs on similar products and decide whether
negotiations will address any disparity. It requires the President to consult with the
revenue committees and the agriculture committees and establishes special consultation
and assessment procedures for import sensitive agricultural products. The act requires the
President to assess U.S. and foreign tariffs on textiles and apparel and to consult with the
revenue committees on tariffs and negotiating objectives.
The act requires that, before entering into an agreement under Section 2103(b), the
President must consult with the revenue committees, other committees of jurisdiction, and

² Deadlines for tariff and for other tariff and nontariff trade agreements were amended to July

1, 2005 and July 1, 2007 under P.L. 108-429.

³ Deadline changed to April 1, 2005 under P.L. 108-429.
⁴ Deadline changed to July 1, 2005 under P.L. 108-429.

the COG. It specifies what the consultation should cover. It also provides that at least
180 calendar days before entering into a trade agreement (90 days for an agreement with
Chile or Singapore), the President must report to the revenue committees on proposals
that might be in the final agreement that would amend U.S. trade remedy laws, and how
these proposals relate to the negotiating objective on trade remedies. The act provides
that a resolution may be introduced with respect to the President’s report. This resolution
would state that the proposed changes in the President’s report were inconsistent with the
trade remedy negotiating objective. Special legislative procedures would apply to the
resolution as long as the revenue committee of that chamber had not reported out another
resolution with respect to the President’s report and the committee had not reported out
a disapproval resolution under section 2105(b) [lack of notice or consultations].
The act requires private sector advisors to submit a report on trade agreements to the
President, the Congress, and the USTR not later than 30 days after the President notifies
Congress of the intent to enter into a trade agreement. It requires the President to give
details of the agreement to the ITC before entering into the agreement, and requires the
ITC to submit an economic assessment to Congress within 90 days after the President
enters into the agreement.
Implementation of Trade Agreements. The act set out procedures for
Presidential notification of Congress before entering into an agreement and submission
to Congress of legislation to implement trade agreements negotiated under trade
promotion authority. The President, at least 90 calendar days before entering into an
agreement, must notify Congress of the intent to enter into the agreement. Within 60 days
of entering into the agreement, the President must submit a description of legal changes
for compliance. Procedures include deadlines for notification and for submission and
require supporting information. No deadline is given for submitting implementing
legislation, but when the President does submit the legislation, the legislation must be
submitted together with a statement of administrative action and other supporting
information. The act described this supporting information. It also puts legal limits on
any understanding with a foreign government that was not disclosed to Congress before
introduction of an implementing bill.
In addition, the act stipulates that an implementing bill will not receive expedited
treatment if, within a 60-day period, both Houses of Congress agree to a procedural
disapproval resolution regarding the trade agreement because of the lack of notification
or consultation with Congress on the part of the President. The act sets out procedures
for considering procedural disapproval resolutions. It requires the Secretary of Commerce
to submit a report with a strategy to address congressional concerns about whether WTO
dispute settlement panels and the WTO Appellate Body have added to U.S. obligations
or diminished U.S. rights. If the report is not provided, the trade promotion procedures
will not apply to the implementing bill.
Treatment of Certain Trade Agreements for Which Negotiations Have
Already Begun. The act allows an exemption from pre-notification requirements for
certain trade agreements. This exemption applies to a trade agreement that (1) is entered
into under the WTO, entered into with Chile, entered into with Singapore, or establishes
a Free Trade Area of the Americas; and (2) results from negotiations that started before
enactment of the TPA bill.

Congressional Oversight Group. The act establishes a new congressional
advisory body called the Congressional Oversight Group (COG). Members of COG are
the chairman and ranking member of the revenue committees, three other members from
each of those committees (no more than two from the same party), and the chairman and
ranking member from any other committees with jurisdiction. Under the act’s provisions,
COG members are official advisers to the U.S. delegation in trade negotiations and
consult with and provide advice to the USTR on the formulation of objectives, negotiating
strategies, and other trade matters.
The act requires the USTR, in consultation with the chairman and ranking member
of the revenue committees, to develop guidelines for the exchange of information between
the COG and the USTR. The guidelines provide for, among other things: regular,
detailed briefings on negotiating objectives, access to documents, coordination during
negotiations, and consultation on compliance and enforcement.
Other Provisions. The act requires the President to submit, along with the final
text of the trade agreement, a plan for implementing and enforcing the trade agreement.
The plan must include (along with cost analyses) descriptions of additional border
personal needed, additional personnel for monitoring and implementing the trade
agreement, additional U.S. Customs Service equipment, and the impact on State and local
governments.
The act states that trade promotion authority is likely to increase the trade activities
of the primary committees of jurisdiction and Members (through the creation of COG),
and that the primary committees of jurisdiction should have adequate staff for these
increased activities.
It requires the ITC to report on the five agreements implemented under expedited
procedures in the past. It also identifies the Assistant USTR as responsible for ensuring
small business interests are considered in trade negotiations.
Outlook
The Administration has concluded a free-trade agreement (FTA) with Bahrain, and
legislation to implement the FTA might be presented to Congress by year-end 2005 or in

2006. Such legislation could be considered under the TPA provisions.

In addition, the United States is participating in several bilateral, regional, and
multilateral trade initiatives, and if these are concluded by the TPA deadline,
implementing legislation might be considered under the TPA provisions. Negotiations
are underway with the Southern African Customs Union (SACU), Panama, Thailand,
three Andean nations (Colombia, Peru, and Ecuador), the United Arab Emirates, and
Oman. Further, the United States and other countries in the Western Hemisphere are
negotiating a Free Trade Area of the Americas, and 148 countries including the United
States are negotiating a multilateral trade agreement in the World Trade Organization.
As stated earlier, the TPA provisions apply to trade agreements entered into by
mid-2007. If a trade agreement is entered into after TPA expires, implementing
legislation would be considered under normal legislative procedures. Thus, expiration of
TPA is an important consideration in the timing of negotiations.