Fast track (trade)
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The fast track negotiating authority for trade agreements is the authority of the President of the United States to negotiate international agreements that Congress can approve or disapprove but cannot amend or filibuster. Also called trade promotion authority (TPA) since 2002, fast track negotiating authority is a temporary and controversial power granted to the President by Congress. The authority was in effect from 1975 to 1994, pursuant to the Trade Act of 1974, and from 2002 to 2007 by the Trade Act of 2002. Although it expired for new agreements on July 1, 2007, it continued to apply to agreements already under negotiation until they were eventually passed into law in 2011. In 2012, the Obama administration began seeking renewal of the authority. In June 2015, the TPA passed the Senate and currently awaits the signature of the President.
Enactment and history
Congress started the fast track authority in the Trade Act of 1974, § 151–154 (19 U.S.C. § 2191–2194). This authority was set to expire in 1980, but was extended for eight years in 1979. By that grant of authority and procedure, Congress then enacted implementing legislation for the U.S.-Israel Free Trade Area, the U.S.-Canada Free Trade Agreement.
It was further renewed in 1988 for five years to accommodate negotiation of the regional North American Free Trade Agreement (NAFTA), and the initiation of the global Uruguay Round, being conducted within the framework of the General Agreement on Tariffs and Trade (GATT). By that grant of authority and procedure, Congress ultimately enacted NAFTA's implementing legislation.
It was then extended to 16 April 1994, which was one day after the Uruguay Round concluded in the Marrakech Agreement, which was to transform the GATT (as an organization) into the World Trade Organization (WTO). And pursuant to that grant of authority and procedure, Congress then considered and passed the implementing legislation, the Uruguay Round Agreements Act.
In the second half of the 1990s, fast track authority languished due to opposition from House Republicans.
Republican Presidential candidate George W. Bush made fast track part of his campaign platform in 2000. In May 2001, as president he made a speech about the importance of free trade at the annual Council of the Americas in New York, founded by David Rockefeller and other senior U.S. businessmen in 1965. Subsequently, the Council played a role in the implementation and securing of TPA through Congress.
At 3:30 a.m. on July 27, 2002, the House passed the Trade Act of 2002 narrowly by a 215 to 212 vote with 190 Republicans and 27 Democrats making up the majority. The bill passed the Senate by a vote of 64 to 34 on August 1, 2002. The Trade Act of 2002, § 2103–2105 (19 U.S.C. § 3803–3805), extended and conditioned the application of the original procedures.
Under the second period of fast track authority, Congress enacted implementing legislation for the U.S.–Chile Free Trade Agreement, the U.S.–Singapore Free Trade Agreement, the Australia–U.S. Free Trade Agreement, the U.S.–Morocco Free Trade Agreement, the Dominican Republic–Central America Free Trade Agreement, the U.S.–Bahrain Free Trade Agreement, the U.S.–Oman Free Trade Agreement, and the Peru–U.S. Trade Promotion Agreement. The authority expired on July 1, 2007.
In October 2011, the Congress and President Obama enacted into law the Colombia Trade Promotion Agreement, the South Korea–U.S. Free Trade Agreement, and the Panama–U.S. Trade Promotion Agreement using fast track rules, all of which the George W. Bush administration signed before the deadline.
In early 2012, the Obama administration indicated that renewal of the authority is a requirement for the conclusion of Trans-Pacific Partnership (TPP) negotiations, which have been undertaken as if the authority were still in effect. In July 2013, Michael Froman, the newly confirmed U.S. Trade Representative, renewed efforts to obtain Congressional reinstatement of "fast track" authority. At nearly the same time, Senator Elizabeth Warren questioned Froman about the prospect of a secretly negotiated, binding international agreement such as TPP that might turn out to supersede U.S. wage, safety, and environmental laws. Other legislators expressed concerns about foreign currency manipulation, food safety laws, state-owned businesses, market access for small businesses, access to pharmaceutical products, and online commerce.
In early 2014, Senator Max Baucus and Congressman Dave Camp introduced the Bipartisan Congressional Trade Priorities Act of 2014, which sought to reauthorize trade promotion authority and establish a number of priorities and requirements for trade agreements. Its sponsors called it a "vital tool" in connection with negotiations on the Trans-Pacific Partnership and trade negotiations with the EU. Critics said the bill could detract from "transparency and accountability". Sander Levin, who is the ranking Democratic member on the House Ways and Means committee, said he would make an alternative proposal.
If the President transmits a fast track trade agreement to Congress, then the majority leaders of the House and Senate or their designees must introduce the implementing bill submitted by the President on the first day on which their House is in session. (19 U.S.C. § 2191(c)(1).) Senators and Representatives may not amend the President’s bill, either in committee or in the Senate or House. (19 U.S.C. § 2191(d).) The committees to which the bill has been referred have 45 days after its introduction to report the bill, or be automatically discharged, and each House must vote within 15 days after the bill is reported or discharged. (19 U.S.C. § 2191(e)(1).)
In the likely case that the bill is a revenue bill (as tariffs are revenues), the bill must originate in the House (see U.S. Const., art I, sec. 7), and after the Senate received the House-passed bill, the Finance Committee would have another 15 days to report the bill or be discharged, and then the Senate would have another 15 days to pass the bill. (19 U.S.C. § 2191(e)(2).) On the House and Senate floors, each Body can debate the bill for no more than 20 hours, and thus Senators cannot filibuster the bill and it will pass with a simple majority vote. (19 U.S.C. § 2191(f)-(g).) Thus the entire Congressional consideration could take no longer than 90 days.
According to the Congressional Research Service, Congress categorizes trade negotiating objectives in three ways: overall objectives, principal objectives, and other priorities. The broader goals encapsulate the overall direction trade negotiations take, such as enhancing the United States' and other countries' economies. Principal objectives are detailed goals that Congress expects to be integrated into trade agreements, such as "reducing barriers and distortions to trade (e.g., goods, services, agriculture); protecting foreign investment and intellectual property rights; encouraging transparency; establishing fair regulatory practices; combating corruption; ensuring that countries enforce their environmental and labor laws; providing for an effective dispute settlement process; and protecting the U.S. right to enforce its trade remedy laws". Consulting Congress is also an important objective.
Principal objectives include:
- Market access: These negotiating objectives seek to reduce or eliminate barriers that limit market access for U.S. products. "It also calls for the use of sectoral tariff and non-tariff barrier elimination agreements to achieve greater market access."
- Services: Services objectives "require that U.S. negotiator strive to reduce or eliminate barriers to trade in services, including regulations that deny nondiscriminatory treatment to U.S. services and inhibit the right of establishment (through foreign investment) to U.S. service providers."
- Agriculture: There are three negotiating objectives regarding agriculture. One lays out in greater detail what U.S. negotiators should achieve in negotiating robust trade rules on sanitary and phytosanitary (SPS) measures. The second calls for trade negotiators to ensure transparency in how tariff-rate quotas are administered that may impede market access opportunities. The third seeks to eliminate and prevent the improper use of a country’s system to protect or recognize geographical indications (GI). These are trademark-like terms used to protect the quality and reputation of distinctive agricultural products, wines and spirits produced in a particular region of a country. This new objective is intended to counter in large part the European Union’s efforts to include GI protection in its bilateral trade agreements for the names of its products that U.S. and other country exporters argue are generic in nature or commonly used across borders, such as parma ham or Parmesan cheese.”
- Investment/Investor rights: “The overall negotiating objectives on foreign investment are designed “to reduce or eliminate artificial or trade distorting barriers to foreign investment, while ensuring that foreign investors in the United States are not accorded greater substantive rights with respect to investment protections than domestic investors in the United States, and to secure for investors important rights comparable to those that would be available under the United States legal principles and practices."
Fast track agreements were enacted as "congressional-executive agreements" (CEAs), which must be approved by a simple majority in both chambers of Congress.
Although Congress cannot explicitly transfer its powers to the executive branch, the 1974 trade promotion authority had the effect of delegating power to the executive, minimizing consideration of the public interest, and limiting the legislature's influence over the bill to an up or down vote:
- It allowed the executive branch to select countries for, set the substance of, negotiate and then sign trade agreements without prior congressional approval.
- It allowed the executive branch to negotiate trade agreements covering more than just tariffs and quotas.
- It established a committee system, comprising 700 industry representatives appointed by the president, to serve as advisors to the negotiations. Throughout trade talks, these individuals had access to confidential negotiating documents. Most members of Congress and the public had no such access, and there were no committees for consumer, health, environmental or other public interests.
- It empowered the executive branch to author an agreement's implementing legislation without Congressional input.
- It required the executive branch to notify Congress 90 days before signing and entering into an agreement, but allowed unlimited time for the implementing legislation to be submitted.
- It forced a floor vote on the agreement and its implementing legislation in both chambers of Congress; the matters could not "die in committee."
- It eliminated several floor procedures, including Senate unanimous consent, normal debate and cloture rules, and the ability to amend the legislation.
- It prevented filibuster by limiting debate to 20 hours in each chamber.
- It elevated the Special Trade Representative (STR) to the cabinet level, and required the Executive Office to house the agency.
The 1979 version of the authority changed the name of the STR to the U.S. Trade Representative.
The 2002 version of the authority created an additional requirement for 90-day notice to Congress before negotiations could begin.
Arguments in favor
- Helps pass trade agreements: According to AT&T Chairman and CEO Randall L. Stephenson, Trade Promotion Authority is "critical to completing new trade agreements that have the potential to unleash U.S. economic growth and investment". Jason Furman, chairman of Obama's Council of Economic Advisers, also said "the United States might become less competitive globally if it disengaged from seeking further trade openings: 'If you're not in an agreement—that trade will be diverted from us to someone else—we will lose out to another country'".
- Congress is allowed more say and members are shielded: According to I.M. Destler of the Peterson Institute for International Economics, fast track "has effectively bridged the division of power between the two branches. It gives executive branch (USTR) negotiators needed credibility to conclude trade agreements by assuring other nations' representatives that Congress won't rework them; it guarantees a major Congressional role in trade policy while reducing members' vulnerability to special interests”.
- Assurance for foreign governments: According to President Reagan's Attorney General Edwin Meese III, "it is extremely difficult for any U.S. President to negotiate significant trade deals if he cannot assure other nations that Congress will refrain from adding numerous amendments and conditions that must then be taken back to the negotiating table". The very nature of Trade Promotion Authority requires Congress to vote on the agreements before they can take effect, meaning that without TPA, "those agreements might never even be negotiated".
- Unconstitutional: Groups opposed to Trade Promotion Authority claim that it places too much power in the executive branch, "allowing the president to unilaterally select partner countries for ‘trade’ pacts, decide the agreements' contents, and then negotiate and sign the agreements—all before Congress has a vote on the matter. Normal congressional committee processes are forbidden, meaning that the executive branch is empowered to write lengthy legislation on its own with no review or amendments." Article II, Section 2. He (the President) shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur...
- Lack of transparency: Democratic members of Congress and general right-to-know internet groups are among those opposed to trade fast track on grounds of a lack of transparency. Such Congressmen have complained that fast track forces "members to jump over hurdles to see negotiation texts and blocks staffer involvement. In 2012, Senator Ron Wyden (D-Ore.) complained that corporate lobbyists were given easy access while his office was being stymied, and even introduced protest legislation requiring more congressional input."
On May 21, 2015, the United States Senate utilized the fast-track process to move a trade bill known as the Trans-Pacific Partnership (TPP) between the U.S. as well as Japan and 10 other countries. On June 12, 2015, following a surprise visit from President Obama to Capitol Hill, the House voted on three amendments related to trade, including the renewal of trade promotion authority. The House overwhelmingly voted against a related measure, Trade Adjustment Assistance, which would have had to have passed in order for the rest of the trade measures to go through. Therefore, TPA ultimately failed in the House. On June 24, 2015, the TPA passed the Senate, now requiring only the signature of the President before it is enacted in to law.
- Trade Agreements Act of 1979, Pub.L. 96–39, 93 Stat. 144
- Omnibus Trade and Competitiveness Act of 1988, Pub.L. 100–418
- Pub.L. 103–49, enacted July 2, 1993, codified at 19 U.S.C. § 2902(e)
- U.S. International Trade Commission (August 2003). The Impact of Trade Agreements: Effect of the Tokyo Round, U.S.-Israel FTA, U.S.-Canada FTA, NAFTA, and the Uruguay Round on the U.S. Economy (PDF). p. 3.
- U.S. House Committee on Ways and Means (June 2001). Overview and Compilation of U.S. Trade Statutes. p. 225.
- Steve Charnovitz, "Archer Slow on Fast Track," Journal of Commerce, June 4, 1997.
- Council of the Americas role in securing the TPA – see David Rockefeller's Memoirs, 2002, (p.438).
- "Bush losing trade negotiating authority; Democrats not eager to renew it". Associated Press. 2007-06-30.
- "Democrats Balk at Obama's Pacific Trade Accord Fast Track". Bloomberg.
- "White House wants trade promotion authority: Kirk". Reuters. Feb 29, 2012. Retrieved 2012-06-30.
- "letter 13 June 2013 to Michael Froman" (PDF). website of U.S. Sen. Elizabeth Warren. June 13, 2013. Retrieved July 20, 2013.
- "Baucus, Hatch, Camp Unveil Bill to Bring Home Job-Creating Trade Agreements". The United States Senate Committee on Finance. January 9, 2014.
- The staff of the Senate Finance Committee and Ways and Means Committee. "Overview of the Bipartisan Congressional Trade Priorities Act of 2014" (PDF). Retrieved 2014-01-10.
- Hughes, Krista (2014-01-09), U.S. lawmakers propose fast-track bill for trade agreements, Reuters,
Representative Sander Levin, the top Democrat on the Ways and Means panel, declined to join the proposal and said he was working on separate legislation. [...] Critics of the fast-track power say it erodes transparency and accountability and does not protect local workers, which unions say is of particular concern with the Trans-Pacific Partnership, or TPP.
- Cooper, William. "Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy" (PDF). Congressional Research Service. Retrieved 30 July 2014.
- Beth, Richard; Cooper, William; Ferguson, Ian. "Trade Promotion Authority (TPA): Frequently Asked Questions". Cornell University ILR School. Retrieved 31 July 2014.
- Tucker, Todd; Wallach, Lori (2009). "The Rise and Fall of Fast Track: Regime 5 – 1975–2008". Public Citizen's Global Trade Watch. Retrieved 2012-06-30.
- Lowrey, Annie. "Obama and the G.O.P Facing Opposition to Trade Pacts". The New York Times. Retrieved 29 July 2014.
- Destler, I.M. "The Need for Fast Track Authority" (testimony before the subcommittee on trade committee on ways and means, USHR, 30 September 1997)". Peterson Institute for International Economics. Retrieved 29 July 2014.
- Riley, Bryan. "Trade Promotion Authority and Economic Freedom". The Heritage Foundation. Retrieved 29 July 2014.
- "Fast Track: An Undemocratic Path to Unfair 'Trade'". Public Citizen.
- Carter, Zach; McAuliff, Michael. "Why House Democrats Might Kill Obama's Big Trade Deal". The Huffington Post. Retrieved 29 July 2014.
- "Senate passes fast-track trade bill". CBS News. AP. Retrieved 26 June 2015.
- Dauster, William G. Trade Promotion Authority Annotated. Washington, D.C.: Government Printing Office, 2007. Senate print 110-10.
- Rockefeller, David. Memoirs, New York: Random House, 2002.
- Smith, Carolyn C. Trade Promotion Authority and Fast-Track Negotiating Authority for Trade Agreements: Major Votes. Washington, D.C.: Congressional Research Service, 2006.
- Todd Tucker and Lori Wallach. The Rise and Fall of Fast Track Trade Authority. Washington, D.C.: Public Citizen, 2009.
- Hornbeck, J.F., and Cooper, William H. Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy. Washington, D.C.: Congressional Research Service, 2011.