Trade Promotion Authority: Its Pros, Cons, and History
Does the President Negotiate Secret Trade Deals?
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.
How the Trade Promotion Authority 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
History of the TPA
The Trade Act of 1974 first gave official Trade Promotion Authority to President Nixon. He used it to complete negotiations on the General Agreement on Tariffs and Trade. 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.
Congress has given every president since Franklin Roosevelt some version of a fast-track authority. It supports the president's constitutional right to negotiate with foreign governments and Congress's constitutional right to regulate international commerce.
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 (TPP). It also allowed tough negotiations on the Transatlantic Trade and Investment Partnership (TTIP). But President Trump pulled out of the TPP and didn't show interest in getting the TTIP off the ground.
Obama was without it throughout much of his term. Before that, President Bush was given fast-track in 2002, but it expired on June 30, 2007. Without fast-track, presidents have a difficult time pushing through new trade agreements. Until 2015, the only agreements Obama signed had already been negotiated by the Bush administration.
Fast-Track and Trump
President Trump was allowed to use the existing TPA that was in force under Obama, which remains in effect until July 1, 2021, under the Biden administration, unless Biden and Congress approve an extension. Trump used it to renegotiate NAFTA into the new United States-Mexico-Canada Agreement (USMCA), which he would not have been able to without Congress apart from using TPA. He didn't need it for the rest of his trade agenda, which focused on bilateral agreements.
Advantages of the TPA
The TPA gives Congress and the President a unified voice in trade negotiations. That gives the U.S. 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 United States to push for the best deal for American workers, farmers, and companies.
The TPA allows the United States to remain competitive with other countries, which have already negotiated more than 400 trade agreements with each other. The U.S. only has 20 such agreements. Without a TPA, countries will talk to U.S. negotiators, but not complete any deals. There are more than 100 trade agreements in a process that are languishing.
Regional trade agreements, such as the United States-Mexico-Canada Agreement (formerly NAFTA), TTIP, and the Asia-Pacific Economic Cooperation, keep the United States competitive in the global marketplace.
Disadvantages of the TPA
Congress resisted renewal of the TPA from 2007 to 2015 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. 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 that the president conducts secret negotiations, and they are concerned the agreements won't reflect their values. For example, many want stronger labor protections put in place for foreign workers. This is partly for humanitarian reasons, such as child labor laws or safe working conditions, but 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.
These conflicts illustrate why the TPA is needed. Otherwise, some members of Congress would block every trade agreement. The TPA ensures that regional interests don't outweigh national interests.