Why the TPA Is Needed
The Trade Promotion Authority (TPA) bill currently moving through Congress is attracting controversy. It is worth explaining the background to why TPA is necessary in complex trade agreements.
TPA is a temporary power that Congress grants to the president to negotiate international agreements. Even though the U.S. Constitution already gives the president this authority, most trade agreements require implementing bills and thus congressional action to enforce them. While under TPA, Congress retains the authority to decide on whether to approve a particular deal, the final agreements cannot be amended and have to be considered in a timely manner.
The TPA, formerly known as the “fast-track,” is a result of years of cooperation and concessions between the legislative and executive branches. First introduced as the Trade Act of 1974, it served as a response to the increasing dominance of non-tariff barriers in multilateral trade negotiations. Since the GATT Kennedy Round, the focus of the trade agenda has shifted from tariffs to more complicated issues that require changes in laws in order for the U.S. to abide by the agreements. To address these concerns, in addition to the authority to renegotiate tariffs, Congress introduced expedited treatment, together with limited-time debate and an absence of amendments for trade deals negotiated under TPA.
The “fast-track” was established to form a consensus on the U.S. trade policy between the two branches, as well as facilitate the development and approval of trade agreements. TPA sends a strong signal to foreign partners of congressional support for an FTA, which is particularly important when negotiation new issues that affect the U.S. global competitiveness. Since it was first introduced, TPA has been renewed numerous times, and played a major role in implementation of various trade agreements.
TPA has been used to conclude the Tokyo (1979) and Uruguay (1994) Rounds under the GATT. Moreover, the Reagan administration obtained TPA for the U.S.-Israel (1985) and U.S.-Canada (1988) FTAs; the George H.W. Bush administration completed the North American Free Trade Agreement (NAFTA, 1993); and the George W. Bush administration concluded negotiations on FTAs with Chile (2003), Singapore (2003), Australia (2004), Morocco (2004), Dominican Republic-Central America (2005), Oman (2006), Peru (2007), Colombia (2011), South Korea (2011), and Panama (2011).
Nevertheless, groups opposing TPA claim that “fast-track” has not been necessary to start or finalize the aforementioned negotiations. Likewise, they argue that TPA is unconstitutional as it takes away power from the Congress, and lacks transparency. The claims, however, are unjustified, since Congress still keeps the authority to define trade policy objectives, and decide on implementation of any U.S. trade agreement. TPA also foresees consultation and notification requirements for the executive branch to follow through any negotiation process, therefore ensuring that Congress and stakeholders are involved in every stage of the trade agreement negotiations.
The U.S. is currently involved in a couple of important trade negotiations, including the Trans-Pacific Partnership (TPP), Trans-Atlantic Trade and Investment Partnership (TTIP), Trade in Services Agreement (TISA) and the latest WTO Doha Round. The TPA could play a major role in finalizing these agreements. However, the renewal of the latest Bipartisan Trade Promotion Authority Act (BTPAA) of 2002, which unlike previous TPAs was passed with a partisan vote, shows that current negotiations might not be as simple.