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Friday, February 1, 2013

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 known 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 over trade policy. The expedited legislative procedures have not changed since first codified in 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, later renewal efforts have been more controversial, culminating in a more partisan vote on the 2002 TPA renewal. Future debates on TPA renewal may center on trade negotiation objectives, congressional oversight of trade negotiations, trade agreement enforcement, and clarifying the congressional authority over approval of reciprocal trade agreements and trade policy more generally, among others.

The 112
th Congress exercised TPA authority and procedures in passing 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 2007 TPA expiration. There are several trade negotiations in progress or proposed that could influence the content and timing of TPA renewal. One is the Trans-Pacific Partnership (TPP), a regional FTA that the United States is negotiating with 10 other countries. In addition, the United States and some other members of the World Trade Organization (WTO) are attempting to address part of the long dormant Doha Development Agenda (DDA) round of negotiations by negotiating separate agreements on services trade and trade facilitation, among others. The United States and the European Union (EU) are also discussing the possibility of negotiating a comprehensive bilateral agreement.

TPA renewal may become a pressing issue in the 113
th Congress, particularly if current trade negotiations continue to progress. Technically, TPA is not necessary to begin or even conclude trade negotiations, but it is widely understood to be a key element of defining congressional authority, and of passing trade agreement implementing legislation. 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 narrow extension for a particular agreement, such as the TPP. In either case, addressing congressional concerns over the definition and 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: January 14, 2013
Number of Pages: 27
Order Number: RL33743
Price: $29.95

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