Trade Promotion Authority, Its Pros, Cons and History

Does the President Negotiate Secret Trade Deals?

Boehner and Obama agree on TPA
••• Photo by Alex Wong/Getty Images

The Trade Promotion Authority 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. He needs it to renegotiate the North American Free Trade Agreement because it is a multilateral trade agreement.  But he doesn't need it for the rest of his trade agenda. He has said he only wants to negotiate a series of bilateral agreements. Fast track authority is not needed for those.

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 were bigger than NAFTA, the world's largest. But President Trump pulled out of the TPP and hasn't shown much interest in the TTIP.

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. Congress has the constitutional right to regulate international commerce.

Obama was without it throughout 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. Regional trade agreements, such as NAFTA, TTIP, and the Asia-Pacific Economic Cooperation, keep the United States competitive in the global marketplace.

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 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. They have already negotiated more than 375 trade agreements with each other. How many does the United States have? Just 20. Without a TPA, countries will talk to U.S. negotiators, but not complete any deals. There are more than 100 trade agreements in process that are languishing. 

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 that 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. It’s partly 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 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.

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. 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.)