Trade Promotion Authority: Pros, Cons, History

Does the President Negotiate Secret Trade Deals?

Boehner and Obama agree on TPA
Former Speaker of the House John Boehner and President Barack Obama both agree on Fast Track Authority. Photo by Alex Wong/Getty Images

Definition: The Trade Promotion Authority (TPA) is a legislative procedure the U.S. Congress grants to the President. It permits the administration to negotiate trade agreements without interference. Members can still vote yes or no on a trade deal. But they can't change any elements or filibuster to delay it. For this reason, it's also known as fast-track trade legislation or fast-track.

How It Works

Congress uses the TPA to set trade objectives.

Negotiators must consult with Congress throughout the process.  Members make sure they meet those goals. Once the administration submits the agreement, Congress can't change any details. Otherwise, Congress would second-guess every negotiating point. That makes it more difficult to extract concessions from trade partners.

Fast Track and Trump

President Trump can use the existing TPA until 2021. But he may not need it. He plans to negotiate a series of bilateral agreements. Fast track is only needed for multilateral trade agreements. Here's What Happens If Trump Dumps NAFTA.

Fast Track and Obama

Congress gave President Obama fast-track authority in June 2015. That made it easier to complete negotiations on the Trans-Pacific Partnership. It also allowed tough negotiations on the Transatlantic Trade and Investment Partnership. Both are bigger than North American Free Trade Agreement, the world's largest.

Congress gave every President since FDR some version of a fast-track authority. It supports his constitutional right to negotiate with foreign governments. Congress has the Constitutional right to regulate international commerce.

Obama has been without it throughout his term. Before that, President Bush was given fast-track in 2002, but it expired on June 30, 2007.

Without it, Presidents have a difficult time pushing through new trade agreements. Until 2015, the only agreements Obama signed were negotiated by the Bush Administration. For more, see Regional Trade Agreements.

Advantages

The TPA gives the United States a unified voice. That gives it more power to negotiate trade agreements with foreign governments. Without it, other countries don't want to make any difficult political choices. Those occur in the final stages of negotiations. The unified voice allows the U.S. to push for the best deal for American workers, farmers, and companies.

TPA allows the United States to remain competitive with other countries. They have already negotiated more than 375 trade agreements with each other. How many does the United States have? Just 20. Without TPA, countries will talk to U.S. negotiators, but not complete the deal. That's why there are more than 100 trade agreements in process that are languishing. (Source: U.S. Chamber of Commerce, Renew Trade Promotion Authority.)

Disadvantages

Congress resisted renewal of the TPA for two reasons. First, trade agreements are controversial. They increase economic growth, but cost many industries and workers good jobs.

For example, many jobs went to Mexico after NAFTA was signed. U.S. agribusiness doesn't want to lose Federal subsidies. They have been in place since the Great Depression. But that is a guaranteed negotiating point. Most foreign nations don't want low-cost American imports. They will put their local farmers out of business.

Second, many in Congress would like more input into trade agreement details. They and their constituents feel the President conducts secret negotiations. They are concerned the agreements won't reflect their values. For example, many want stronger labor protections put in place for foreign workers. Partly it's for humanitarian reasons, such as child labor laws or safe working conditions. It's also for profit. These protections also raise the cost of production for foreign competitors

Others in Congress want to protect their constituencies. In any trade deal, some regions suffer more than others. Representatives naturally want to make sure the agreement doesn't cost local jobs. But that's why TPA is needed. Otherwise, some members of Congress would block every trade agreement. TPA ensures that regional interests don't outweigh national interests.

History

The Trade Act of 1974 first gave trade promotion authority to President Nixon. He used it to complete negotiations on the General Agreement on Tariffs and Trade (GATT). Congress recognized the advantages and was willing to overlook the disadvantages. The Trade Act also required the President's negotiators to consult with Congress during negotiations. They must also notify Congress 90 days before signing any agreement. (Source: "Trade Promotion Authority," Coalition of Service Industries.)