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Thursday, August 23, 2012

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 know as fast track) expired. TPA is the authority Congress grants to the President to enter into certain reciprocal trade agreements, and to have their implementing bills considered under expedited legislative procedures, provided the President observes certain statutory obligations. TPA defines how Congress has chosen to exercise its constitutional authority over a particular aspect of trade policy, while giving the President added leverage to negotiate trade agreements by effectively assuring U.S. trade partners that final agreements will be given timely and unamended consideration.

TPA reflects decades 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 expedited legislative procedures have not changed since first enacted into permanent law as sections 151-154 of the Trade Act of 1974. Congress, however, has required that the authority to use TPA be periodically reauthorized, and at times has chosen to revise trade negotiation objectives, the consultative mechanism, and presidential notification requirements. While early versions of fast track/TPA received bipartisan support, more recent renewal efforts have been more controversial. Concerns have grown over the negative effects of trade, and elements of the trade debate have become increasingly split along party lines, culminating in a largely partisan vote on the 2002 TPA renewal. Future debates on TPA renewal may center on clarifying key aspects of the congressional role in influencing and approving reciprocal trade agreements; Congress’s oversight of trade negotiations; trade agreement enforcement; and further refinement of trade negotiation objectives, among others.

The 112th Congress exercised TPA authority and procedures in passing three implementing bills for reciprocal free trade agreements (FTAs) with Colombia, Panama, and South Korea on October 12, 2012, concluding action on the last FTAs signed prior to the expiration of trade promotion authority in 2007. There are two other trade negotiations in progress that could result in agreements that would likely require TPA. The first is the 11-year-old multilateral Doha Development Round of the World Trade Organization (WTO), which is widely considered unlikely to be completed in its current form. The second is the proposed Trans-Pacific Partnership (TPP) FTA, for which negotiations are in progress.

TPA renewal may become a pressing issue in the 113th Congress, particularly if congressional interest focuses on supporting current trade negotiations. Technically, TPA is not necessary to begin or even conclude trade negotiations, but it is widely understood to be a key element of passing trade agreement implementing legislation, and therefore, its renewal can be construed as signaling serious congressional support for moving ahead with trade negotiations. Congressional action on TPA may also depend on whether Congress wishes to take up a broad recasting of the trade agreements authority, or a more simplified extension for a particular agreement, such as the TPP. In either case, addressing congressional concerns over the operation of TPA may be part of the debate.

Should Congress decide to consider reauthorizing TPA, it has many options including, but not limited to: (1) taking no action; (2) extending temporarily; (3) revising and renewing; or (4) granting permanent authority. How this issue evolves also depends on a host of political and economic variables, including congressional action on reinvigorating a “political compact” that sits at the center of a well-functioning TPA process.

Date of Report: August 9, 2012
Number of Pages: 27
Order Number: RL33743
Price: $29.95

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