Trade Promotion Authority (TPA): Issues, Options, and Prospects for Renewal

Publication Date: July 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

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Abstract:

On July 1, 2007, Trade Promotion Authority (TPA -- formerly fast track) is set to expire. TPA is the authority Congress grants to the President to enter into certain trade agreements, and to have their implementing bills considered under expedited legislative procedures, provided he observes certain statutory obligations in negotiating them. TPA allows Congress to exercise its constitutional authority over trade, while giving the President added negotiating leverage by effectively assuring U.S. trade partners that final agreements are given swift and unamended consideration. President Bush formally requested TPA renewal on January 31, 2007.

TPA reflects years of debate, cooperation, and compromise between Congress and the Executive Branch. Congress has express constitutional authority to impose duties and regulate foreign commerce, while the President has the sole authority to negotiate international agreements and exerts broad power over U.S. foreign policy. TPA arose from a pragmatic need to accommodate these authorities in the conduct of U.S. trade policy, as well as address concerns that constituent pressures can often lead to poor trade policy decisions. The "Smoot-Hawley" Tariff Act of 1930, for example, raised tariffs significantly, diminishing trade and prolonging the Great Depression. In response, Congress in 1934 delegated to the President authority to implement "pre-approved" reductions in tariff rates. TPA evolved in 1974 from this precedent to allow the President to enter into non-tariff barrier (NTB) agreements, provided he observes congressional negotiating requirements set out in the statute.

The core provisions of the fast track legislative procedures have remained unchanged since first enacted, although Congress has expanded trade negotiation objectives, oversight, and presidential notification requirements. While early versions of fast track/TPA received broad bipartisan support, renewal efforts became increasingly controversial as fears grew over the perceived negative effects of trade, and as the trade debate became more partisan in nature, culminating in a largely party-line vote on the 2002 renewal. The current renewal debate is centered on the broad effects of trade on the United States, with an emphasis on at least four specific issues: stronger labor and environment provisions; stricter enforcement of trade agreements; enhanced adjustment and assistance programs; and revisions to the congressional consultation process.

Congress faces a difficult challenge given the number of trade negotiations, including the WTO Doha Round and bilateral agreements with South Korea, Malaysia, and Panama, among others, that are close to being concluded before TPA expires. Congress can choose among various options: no action; temporary extension; revision and renewal; permanent authority; or some hybrid solution. How this issue plays out depends on a host of variables, including the status of uncompleted negotiations, the economic effects of pursuing trade liberalization as perceived by various stakeholders, the political will to compromise between the Bush Administration and Congress, and the willingness and ability of the 110th Congress, with its new Members and majority, to craft a bipartisan solution. This report will be updated as events warrant.