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Thursday, January 20, 2011

Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy

J. F. Hornbeck
Specialist in International Trade and Finance

William H. Cooper
Specialist in International Trade and Finance

On July 1, 2007, Trade Promotion Authority (TPA—previously fast track), expired. TPA is the authority Congress grants to the President to enter into certain reciprocal (free) trade agreements (FTAs), and to have their implementing bills considered under expedited legislative procedures, provided he observes certain statutory obligations in negotiating them. TPA defines how Congress has chosen to exercise its constitutional authority over a particular aspect of trade policy, while presumably giving the President added leverage to exercise his authority to negotiate trade agreements by effectively assuring U.S. trade partners that final agreements will be 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 over trade policy. The core provisions of the fast track legislative procedures have not changed 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 have become increasingly controversial as fears have grown over the negative effects of trade, and as the trade debate has become more partisan and constituent driven, culminating in a party-line vote on the 2002 renewal. Debate on TPA renewal may center on clarifying key aspects of: the congressional role in making trade policy; Congress’s oversight of trade negotiations; trade agreement enforcement; and further refinement of trade negotiation objectives on labor, environment, and public health issues, among others.

A congressional decision on TPA renewal could affect multiple trade negotiations and pending agreements. The 112
th Congress has inherited agreements with Colombia, Panama, and South Korea that were signed in time to be considered under the 2002 TPA. In the cases of Panama and South Korea, it appears that implementing legislation, should it be introduced, would still be eligible for fast-track expedited procedures. Colombia, however, presents a different scenario because implementing legislation was introduced in the House during the 110th Congress, only to be denied such expedited procedures by a House-passed resolution. Because subsequent Parliamentarian rulings in the House and the Senate differed on the possible future use of fast track for the Colombia FTA, an initial debate may involve clarifying the rules under which an implementing bill might be considered. In addition, the status of TPA renewal could affect or be influenced by progress made toward the Trans-Pacific Partnership (TPP) Agreement or the World Trade Organization (WTO) Doha Round of multilateral negotiations.

The prospects for renewing TPA are unclear and depend on one’s perspective as to whether having TPA in place benefits the U.S. negotiation position. Technically, TPA is not necessary to begin or even conclude trade negotiations, but it is widely understood to be a key element of getting a trade implementing bill passed in Congress, and so its renewal can be construed as signaling U.S. support for moving ahead with trade negotiations. When Congress decides to consider the issue, it has many options including: 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, including congressional action on restoring a “political compact” that sits at the center of a functioning TPA process.

Date of Report: January 4, 2011
Number of Pages: 22
Order Number: RL33743
Price: $29.95

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