Trade Promotion Authority (TPA)/Fast-Track Renewal: Labor Issues

Publication Date: February 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

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Abstract:

Trade promotion authority (TPA), formerly known as "fast-track" authority, is scheduled to expire July 1, 2007. With it will expire the authority: (a) that Congress grants the President to enter into certain trade agreements, and (b) for Congress to consider the agreements' implementing legislation under expedited procedures. Currently, the Administration is negotiating a number of trade agreements that may not be completed before the current TPA is set to expire. If these activities are to continue, TPA/fast-track renewal may be a central issue in the 110th Congress. Within the debate, a major issue is expected to be whether to include as a principal negotiating objective in trade agreements, "enforceable core labor standards."

Two TPA/fast-track authorities have incorporated labor provisions. The first, the Omnibus Trade and Competitiveness Act of 1988 (OTCA), which expired in 1994, included the broad, general objective: "to promote worker rights." The North American Free Trade Agreement, with its labor side agreement, was negotiated under OTCA. The second and current TPA/fast-track authority with labor provisions, the Trade Act of 2002, includes protections for labor, modified by protections for country governments, businesses and investors. Seven free trade agreements (FTAs) -- with Chile, Singapore, Australia, Morocco, Bahrain, Oman, and the Dominican Republic and Central America -- were negotiated under this authority. All have only one enforceable labor requirement: that each country not fail to enforce its own labor laws in a manner affecting trade between the parties. (In contrast to this, the U.S.-Jordan FTA, negotiated in 2000 and approved in 2001 without TPA/fast track authority, includes enforceable labor provisions.)

Major options for labor provisions in renewed TPA focus on whether principal negotiating objectives should include "enforceable core labor standards." Supporters argue that including these could help: (1) slow the offshoring of certain U.S. jobs; (2) protect foreign workers against exploitative corporate behavior; (3) support the ability of workers to share in the gains from international trade; and (4) fend off an international "race to the bottom" based on labor costs. Opponents argue that: (1) core labor standards should be promoted by the International Labor Organization, not by trade agreements; (2) as countries develop, they adopt higher labor standards on their own; (3) stronger worker protections could discourage international investment; and (4) labor standards are disguised protectionism. History shows that with or without FTAs, trade will likely continue to grow.

This report examines issues relating to TPA/fast-track labor provisions in the larger context of global labor issues. It: (1) identifies the players and their positions; (2) tracks the enforceable labor provisions in TPA/fast-track laws and the FTAs negotiated under them; (3) presents some legislative options for new TPA/fast-track labor provisions; and (4) sets out arguments for and against enforceable core labor standards. Finally, it looks at possible outcomes and implications of the various legislative options. This report will be updated as events warrant.