USTR Lighthizer Welcomes Extension of Trade Promotion Authority

On July 2, 2018, U.S. Trade Representative Robert Lighthizer today issued the following statement about the extension of Trade Promotion Authority:

"The President is pleased that Congress has extended Trade Promotion Authority (TPA) for three more years, which he requested as part of his Trade Agenda. Extension of TPA is critical to negotiating accountable, enforceable and reciprocal trade deals that will benefit American workers, farmers and ranchers. The Trump Administration is pursuing a number of potential bilateral free trade agreements, and TPA extension means we may continue to aggressively pursue these opportunities."

TPA was set by the 2015 law to expire at the end of June, however the law also provided for extension through June 2021 if the President requests an extension and neither House of Congress adopts an extension disapproval resolution.

ITC Launches Investigation Related to the President's Request to Extend Trade Promotion Authority

On april 13, 2017 the U.S. International Trade Commission (USITC) announced that it has instituted an investigation related to the President’s request to Congress for an extension of his trade authorities procedures.

The President submitted a request to Congress on March 20, 2018, for an extension of trade authorities procedures, commonly known as trade promotion authority. At the same time, the USTR notified the USITC of the President’s request. The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (Bipartisan Trade Act) requires the USITC, having been notified of the President’s request, to provide a report to Congress that contains a review and analysis of the economic impact on the United States of all trade agreements implemented between the date of the enactment of the Bipartisan Trade Act and the date of the President’s notification to Congress. 

The USITC is unaware of any trade agreements that were implemented under the Bipartisan Trade Act between the date of its enactment and March 20, 2018. While at least one trade agreement was negotiated during this period, the Trans-Pacific Partnership Agreement, it was not implemented during this period.

The USITC, an independent, nonpartisan, factfinding federal agency, will provide the required report to the USTR by June 1, 2018. 

The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record. Written submissions should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC, 20436, and should be submitted at the earliest practical date but no later than 5:15 p.m. on May 2, 2018.

Fast Track Calendar Means No Vote on TPP before February

Agathon Associates Calendar for Passing an Agreement under Trade Promotion Authority ("TPA").

Agreement is reached among the negotiating partner nations.
(In the case of the Trans-Pacific Partnership ("TPP') that happened in the early hours of Monday, October 5, 2015. TPP has not yet been signed.)

The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 sets out certain deadlines--

• §106(a)(1)(A) President must notify Congress at least 90 days before entering (signing) an FTA.
  (Note that the President may "enter into trade agreements" but the agreements do not become effective in U.S. law until voted affirmatively in both houses of Congress.)

• §106(a)(1)(B) President must publish text of FTA at least 60 days before entering (signing) FTA.

• §106(a)(1)(C) President must submit description of changes to law to implement the FTA within 60 days of signing.

• §106(a)(1)(D) at least 30 days before submitting implementing bill to Congress the President must submit statement of administrative action proposed and final legal text of agreement.

• §106(a)(1)(E) President submits implementing bill.

• §106(a)(1)(F) Implementing bill passes. >§106(a)(1)(G) at least 30 days before agreement enters into force President submits notice to Congress that the partner(s) has/have taken necessary measures to comply.

That calendar places early to mid February as the soonest Congress can vote on the TPP. 2016 is an election year, and with trade being controversial, Congress could delay and take TPP up in a lame duck session after the November elections.

Agathon Associates Analysis of TPA in General.

Under TPA procedures, a free trade agreement ("FTA") is approved as a Congressional-Executive Agreements, rather than a treaty. This is due to the separation of powers under the U.S. Constitution --

• "[The President] shall have power, by and with the advice and consent of the Senate, to make treaties, provided two-thirds of the Senators present concur." – Article 2, Sec. 2

• "Congress shall have power to lay and collect duties..." – U.S. Constitution, Article 1, Sec. 8

• "All bills for raising revenue shall originate in the House of Representatives..." – Article 1, Sec. 7

Therefore, an FTA is not, in the US, a "treaty." Treaties are negotiated by the President and approved by two-thirds of the Senate with no vote in the House. An FTA adjusts duties, which affects revenue and is therefore (Art. 1, Sec. 7) a "money bill," which must originate in the House.

TPA in general--

• Under TPA procedures the negotiation is entirely in the hands of the Executive (however Congress may include negotiations objectives in the TPA bill), but the President must negotiate an agreement that can get a majority vote in each of the houses of Congress, where his party may not have a majority.

• TPA is important as a signal to our negotiating partners that Congress has confidence in the President to negotiate an agreement that can be passed by Congress.

• TPA is also important as the bill provides a vehicle for Congress to instruct the President, via the negotiation objectives set forth in the TPA bill, as to what he needs to do to get those majorities in the House and Senate.

• However, it is not the case, as some have said, that you must have TPA to do an FTA.

  • If you have the votes to pass the FTA you have the votes in the House to bring the FTA up for a vote under a "closed rule," meaning no amendments are allowed. It is commonly stated that Senate does not have the "closed rule," however, that is clearly mistaken, as TPA is, effectively, a closed rule, and if the Senate can operate under a closed rule in the case of TPA it can find a way to use a closed rule without TPA. (Which brings us to one of Trumbull's maxims, "At any given time the rules are what the majority says the rules are.")

  • The Jordan FTA was implemented in 2001, though not under TPA. It was passed by a voice vote in the House followed by a voice vote in the Senate.

Clients of Agathon Associates, subscribers to Agathon Associates' Trade Advisor Service, and students in TMD 433 at the University of Rhode Island can learn more about TPA at http://agathonassociates.com/textile-pri/tpa/index.htm. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Column on Fast Track from the Boston Post-Gazette Newspaper

Res Publica
Not So Fast!
by David Trumbull -- April 24, 2015

This week Congress started work on a Trade Promotion Act ("TPA"). Formerly called "fast track," TPA is an Act of Congress that authorizes the President to negotiate and sign a free trade agreement ("FTA") with another country or countries, with the provision that the FTA will be brought to congress for approval by both houses on an up-or-down vote with no amendments. TPA is important because no nation would negotiate with the U.S. if Congress, after the agreement is reached, could amend the agreement. TPA also puts a bill on a "fast track" in that it imposes a relatively compressed time schedule for consideration and vote on the bill.

My progressive friends say that fast track is a way to ram through Congress unpopular trade deals that kill U.S. jobs, grant special favors to nations with poor environmental and labor standards, and reward multinational corporations who, through a system of legalized bribery, have inordinate power in Washington. My TEA Party friends say that fast track is an unwise (possibly unconstitutional) handing over to the Executive of Congresses power to determine trade policy with a tendency to promote dangerous foreign entanglements. Both are, of course, at least partially correct.

What is fast track or TPA?

Under TPA procedures, a free trade agreement ( "FTA") is approved as a Congressional-Executive Agreements, rather than a treaty. This is due to the separation of powers under the U.S. Constitution --

• "[The President] shall have power, by and with the advice and consent of the Senate, to make treaties, provided two-thirds of the Senators present concur." – Article 2, Sec. 2

• "Congress shall have power to lay and collect duties..." – U.S. Constitution, Article 1, Sec. 8

• "All bills for raising revenue shall originate in the House of Representatives..." – Article 1, Sec. 7

Therefore, an FTA is not, in the US, a "treaty." Treaties are negotiated by the President and approved by two-thirds of the Senate with no vote in the House. An FTA adjusts duties, which affects revenue and is therefore (Art. 1, Sec. 7) a "money bill," which must originate in the House.

Under TPA procedures the negotiation is entirely in the hands of the Executive (however Congress may include negotiations objectives in the TPA bill), but the President must negotiate an agreement that can get a majority vote in each of the houses of Congress, where his party may not have a majority.

TPA is important as a signal to our negotiating partners that Congress has confidence in the President to negotiate an agreement that can be passed by Congress.

TPA is also important as the bill provides a vehicle for Congress to instruct the President, via the negotiation objectives set forth in the TPA bill, as to what he needs to do to get those majorities in the House and Senate.

However, it is not the case, as some have said, that you must have TPA to do an FTA. If you have the votes to pass the FTA you have the votes in the House to bring the FTA up for a vote under a "closed rule," meaning no amendments are allowed. It is commonly stated that Senate does not have the "closed rule," however, that is clearly mistaken, as TPA is, effectively, a closed rule, and if the Senate can operate under a closed rule in the case of TPA it can find a way to use a closed rule without TPA. (Which brings us to one of Trumbull's maxims, "At any given time the rules are what the majority says the rules are.")

The U.S.-Jordan FTA was implemented in 2001, though not under TPA. It was passed by a voice vote in the House followed by a voice vote in the Senate.

Is fast track or TPA constitutional?

A federal appeals court held in 2001 that the issue of whether the NAFTA should have been approved as a treaty was a nonjusticiable political question (Made in the USA Found. v. United States, 242 F.3d 1300 (11th Cir. 2001)). The U.S. Supreme Court denied review in the case. In other words, if you think Congress violates the Constitution by treating FTAs as Congressional-Executive Agreements rather than as treaties, the only remedy is to elect a Congress that won't do that. But that won't happen because the people who object to fast track, progressive and TEA Party members will never work together to elect any one.

As early as 1890, Congress delegated tariff bargaining authority to the President and authorized him to suspend existing duty-free treatment on particular items by proclamation. The Supreme Court subsequently held that the authorizing statute, § 3 of the Tariff Act of 1890, 26 Stat. 612, did not unconstitutionally delegate either legislative or treaty-making authority to the President.