Trade Negotiations During the 110th Congress

Publication Date: April 2008

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

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Abstract:

The Bush Administration has made bilateral and regional free-trade agreements (FTAs) more important elements of U.S. trade policy, a strategy known as "competitive liberalization." This strategy, it argues, will push forward trade liberalization simultaneously on bilateral, regional, and multilateral fronts. It is meant to spur trade negotiations by liberalizing trade with countries willing to join FTAs, and to pressure other countries to negotiate multilaterally. Critics contend, however, that the accent on regional and bilateral negotiations undermines the multilateral forum and increases the risk of trade diversion away from competitive countries not in the trade bloc.

Legislation to implement the Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) and FTAs with Bahrain and Oman were approved by the 109th Congress. Negotiations were concluded in 2006 with Peru, Colombia, and Panama and implementing legislation may see Congressional action in 2007. Negotiations are also actively underway with South Korea and Malaysia. Several other trade initiatives are under discussion, including a U.S.-Middle East FTA and an FTA with countries in Association of South East Asian Nations (ASEAN) bloc.

The broadest trade initiative being negotiated is the Doha Round of multilateral trade negotiations in the World Trade Organization (WTO). In November 2001, trade ministers from WTO member countries agreed to launch a new round of trade talks covering market access, trade remedies, and developing-country issues. After fruitless meetings to attempt to resolve differences between the major parties in July 2006, the negotiations were "suspended" indefinitely. An ongoing regional initiative is the Free Trade Area of the Americas (FTAA). In April 1998, 34 Western Hemisphere nations formally initiated negotiations on tariffs and nontariff trade barriers in the hemisphere, but the talks have now stalled.

The completion of existing negotiations has become a priority due to the looming expiration of U.S. trade promotion authority (TPA). Potential agreements resulting from current trade negotiations may be considered by Congress under TPA legislation enacted in 2002. That legislation covers agreements signed before June 1, 2007. However, the President must give a 90-day notification to Congress of his intent to sign an FTA, thus making the de facto deadline April 2, 2007, for reaching an agreement under TPA. Under the legislation, if the President meets notification requirements and other conditions, Congress will consider a bill to implement a trade agreement under an expedited procedure (no amendment, deadlines for votes). The notification requirements include minimum 90-day notices before starting negotiations and before signing a trade agreement. The upcoming expiration of TPA, and uncertainty over its possible extension or reauthorization, may provide a catalyst to complete certain agreements, and perhaps to scuttle others.