Sunday, November 27, 2022

Key Tool to Speed Approval of Trade Pacts Expired July 1

Congressional authorization for the President and/or U.S. Trade Representative to enter into trade negotiations to lower U.S. export barriers expired on July 1.

The trade promotion authority (TPA) process (formerly called fast track trade negotiating authority pursuant to the Trade Act of 1974) must be renewed by Congress to enable the United States to continue aggressively pursuing new trade deals.

TPA legislation establishing strong rules for trade negotiations and congressional approval of trade pacts, and delivering trade agreements that boost U.S. exports and create U.S. jobs, needs to be considered by Congress. To date, the Biden administration has shown no interest in requesting trade promotion authority.

Traditionally, trade promotion authority follows the conclusion of negotiations for a trade agreement; enabling legislation is submitted to Congress for approval. Every president since Franklin D. Roosevelt has been granted the authority to negotiate market-opening trade agreements in consultation with Congress.

Once legislation is submitted, under trade promotion authority, both houses of Congress will vote “yes” or “no” on the agreement with no amendments, and do so within 90 session days (not to be confused with a treaty, which is “ratified” by the U.S. Senate). During negotiations, however, there is a process for sufficient consultation with Congress.

The landmark Trade Act, H.R. 3009, signed by President George W. Bush on August 6, 2002, included the renaming of fast track trade negotiating authority to trade promotion authority. The act helped put U.S. businesses, workers and consumers back in the game of international trade by granting the President trade promotion authority.

At the request of President Donald J. Trump, 2015 trade promotion authority was renewed in July 2018 for three years.

Impact: U.S. Completed Agreements

Since the Trade Act of 2002 granted the President trade promotion authority, the United States has completed free trade agreements with Australia, Bahrain, Chile, Colombia, the Dominican Republic/Central America, Israel, Jordan, Mexico/Canada, Morocco, Oman, Panama, Peru, Singapore, and South Korea.

Financially, these free trade agreements translate into the removal of billions of dollars in tariffs and nontariff barriers for U.S. exports.

Future Free Trade Agreements

Major U.S. trading partners are participating in numerous agreements, and trade promotion authority is a prerequisite to meaningful U.S. participation.

Without trade promotion authority, the United States will be compelled to sit on the sidelines while other countries negotiate numerous preferential trade agreements that put U.S. companies at a competitive disadvantage. Trade promotion authority not only opens markets and broadens opportunities for U.S. goods and firms; it will make the United States the leader in global trade.

By approving trade promotion authority, Congress can help strategically address the range of U.S. trade negotiations being pursued: conclusion to a U.S.-United Kingdom free trade agreement; a possible U.S.-European Union free trade agreement; conclusion to a U.S.-Kenya free trade agreement; and even a possible re-admission to the Trans Pacific Partnership (TPP)—now Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)—as well as other future trade negotiations.

The United States is among the world’s leading exporters due to increased market access achieved through trade agreements. Trade promotion authority is vital for the President of the United States to negotiate new multilateral, bilateral and sectoral agreements that will continue to tear down barriers to trade and investment, expand markets for U.S. farmers and businesses, and create higher-skilled, higher-paying jobs for U.S. workers.

When trade promotion authority expired in 2007, Congress waited eight years to renewed it. According to Politico, any effort to craft a new bill before the 2022 elections, as unlikely as that currently seems, would have to be led by U.S. Senate Finance Chair Ron Wyden (D-Ore.) and U.S. House Ways and Means Chair Richard Neal (D-Mass.). Wyden voted for the 2015 trade promotion authority bill, while Neal opposed it.

A Wyden spokesperson told Politico: “Senator Wyden is looking forward to working with the new administration and our colleagues on developing an effective TPA package that reflects 21st century trade.”

CalChamber Position

The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.

The CalChamber, therefore, supports the extension of trade promotion authority so that the President of the United States may negotiate new multilateral, sectoral and regional trade agreements, ensuring that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.

See the timeline for the TPA process in the CalChamber 2021 issues article.

Staff Contact: Susanne T. Stirling

Susanne T. Stirling
Susanne T. Stirling
Susanne T. Stirling, vice president, international affairs, has headed CalChamber international activities for more than four decades. She is an appointee of the U.S. Secretary of Commerce to the National Export Council, and serves on the U.S. Chamber of Commerce International Policy Committee, the California International Relations Foundation, and the Chile-California Council. Originally from Denmark, she studied at the University of Copenhagen and holds a B.A. in international relations from the University of the Pacific, where she served as a regent from 2012 to 2021. She earned an M.A. from the School of International Relations at the University of Southern California.

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