Order Code 97-817 ENR
Updated October 11, 2001
CRS Report for Congress
Received through the CRS Web
Agriculture and Fast Track or Trade
Promotion Authority
Geoffrey S. Becker and Charles E. Hanrahan
Specialist and Senior Specialist in Agricultural Policy
Resources, Science, and Industry Division
Summary
New “fast track” (or, trade promotion) authority (TPA) is at issue in the 107th
Congress. Such authority could enable the Administration to submit negotiated foreign
trade agreements to Congress for consideration under expedited procedures. Efforts to
renew this authority, which expired in 1994, have not succeeded since then. Many
agricultural and food industry interests are among the export-oriented enterprises that
support TPA, arguing that foreign trading partners will not seriously negotiate with an
Administration that lacks it. However, some farm groups argue that fast track ultimately
will lead to new agreements that could have adverse effects on U.S. producers, at least
in some commodity sectors. This report will be updated if events warrant.
What Is Fast Track Authority?
Fast track authority, which the Administration and other supporters are calling
“Presidential Trade Promotion Authority” (TPA), refers to legislation explicitly enabling
the President to negotiate trade agreements with foreign countries and then to submit
implementing legislation to Congress for approval under special, expedited procedures.
First adopted in the Trade Act of 1974, the authority was used to negotiate and implement
several bilateral and multilateral agreements, including agreements in the Tokyo Round of
multilateral trade negotiations, the U.S.-Canada Free Trade Agreement (FTA), the North
American Free Trade Agreement (NAFTA), and the Uruguay Round (UR) accords, which
included establishment of the World Trade Organization (WTO). Fast track is intended
to strengthen the President’s negotiating authority and credibility by reassuring foreign
trading partners that agreements will be considered promptly by Congress and not
subjected to changes that would force a return to the bargaining table.
Fast track procedures included requirements for advance notification of Congress and
consultations with relevant committees, before an agreement could be concluded.
Lawmakers, in effect, used these consultative requirements as informal mark-ups to
address, in advance, the various policy issues that otherwise might be debated during the
votes on the implementing legislation. (For more information, see CRS Issue Brief
IB10084, Fast-Track Authority for Trade Agreements (Trade Promotion Authority):
Congressional Research Service ˜ The Library of Congress

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Background and Developments in the 107th Congress, and Trade Promotion Authority
(Fast-Track Authority for Trade Agreements) in the CRS Trade Electronic Briefing Book
at [http://www.congress.gov/brbk/html/ebtra9.html].)
Importance of Trade for Agriculture
Export markets are critical to U.S. farmers’ prosperity. According to the U.S.
Department of Agriculture (USDA), agricultural export value is equivalent to about 20%
of the value of farm production and 25% of farm income. It is estimated that major crops
planted on one out of every three acres are exported. (For more data, see CRS Report 98-
253, U.S. Agricultural Trade: Trends, Composition, Direction, and Policy.)
Most agricultural interests contend that U.S. efforts to open international markets
must continue in order to sustain farm exports—including the negotiation of new or
enhanced trade agreements that reduce tariff and nontariff import barriers and curtail the
use of trade-distorting domestic and export subsidies. Now underway are negotiations to:
further reform multilateral agricultural trade under the aegis of the WTO; join with Chile
in a FTA; and create a Free Trade Area of the Americas (FTAA) (see page 6).
Most also concede that free trade cannot be a one-way street: the United States also
is expected to open its own borders to the products of other countries. While increased
agricultural imports can bring variety and lower prices to U.S. consumers, they also can
compete directly with U.S.-produced goods and force adjustments on U.S. producers.
Previous Fast Track Trade Legislation and Agriculture
Fast track procedures were used to implement three free trade agreements and two
multilateral trade agreements. Those with significant agricultural provisions include:
NAFTA, which provides for the phased elimination of all tariffs on trade between the
United States, Canada, and Mexico. The agreement incorporates the phased tariff
reductions (by 1998) agreed to in the earlier (1988) U.S.-Canada FTA and all of its
agricultural provisions. As for U.S.-Mexico bilateral trade, most tariffs will be eliminated
by 2004, while tariffs for import-sensitive items, including a number of agricultural
products, will not be completely eliminated until 2009. For the first time in any trade
agreement, NAFTA contains rules on applying animal and plant health and safety measures
(termed sanitary and phytosanitary—SPS—measures) to imports, and spells out procedures
for recognizing the “equivalency” of each country’s food safety standards for poultry and
meat products. The North American Free Trade Agreement Implementation Act (P.L.
103-182, approved December 8, 1993, 19 U.S.C. 3301 note) includes the changes in U.S.
law that affect U.S.-Mexican agricultural trade.
The Uruguay Round/WTO Agreements, which established the WTO and are the
most comprehensive multilateral trade agreements in history. The UR Agreement on
Agriculture (URAA) strengthens rules and disciplines for agricultural trade and requires
WTO members to reduce import protection, export subsidies, and trade-distorting
domestic support. Other UR agreements set new multilateral rules for trade in services,
trade-related investment measures, trade-related intellectual property rights, and
government procurement, and dispute settlement. The Uruguay Round Agreements Act

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(P.L. 103-465, approved December 8, 1994, 19 U.S.C. 3511) has a number of important
agricultural provisions. It authorizes the President to convert U.S. quantitative restrictions
to tariff quotas for dairy products, sugar, sugar-containing products, peanuts, cotton, and
beef; exempts all WTO members from section 22 import quotas; and repeals the Meat
Import Act of 1979, among other things.
Effects of Trade Agreements on U.S. Agriculture
The support of agricultural groups for fast track legislation depends in large part on
their perceptions of how they have been affected by previous agreements. Comparing trade
flows before and after NAFTA’s entry into force, most analyses report that NAFTA has
had a positive overall effect on U.S. agricultural trade. Of course, factors other than trade
liberalization—including population and economic growth, national agricultural policies,
exchange rates, geographic proximity, and weather—also influence trade flows.
Canada and Mexico are, respectively, the second and third largest U.S. agricultural
export markets, together accounting for about one-fourth of the value of our farm exports
worldwide. Total agricultural trade between the United States and its two NAFTA
partners increased from $17.5 billion in 1993, the year just prior to NAFTA’s entry into
force, to an estimated $30 billion in 2001. The United States was exporting slightly more
than it was importing from these two countries combined.
U.S. agricultural exports to Mexico are estimated to have reached more than $7
billion in FY2001, while Mexico’s exports to the United States were estimated at more
than $5 billion. In FY1996, the U.S. trade balance with Canada turned from a surplus to
a negative one. For FY2001, U.S. agricultural exports to Canada were estimated at about
$8 billion, and Canada’s exports to the United States at more than $9 billion.
U.S. commodity exports to Mexico with substantial gains since NAFTA include
coarse grains, wheat, cotton, processed fruits and vegetables, and red meats. Mexico has
made significant gains in tomatoes, peppers, onions, cucumbers, grapes, and melons. U.S.
commodity exports to Canada that have grown include soybeans, corn, poultry meat, dairy
and egg products, fresh vegetables, citrus, cotton, and wine and beer. Canada’s export
gains include cattle, hogs, red meats, dairy products, rapeseed oil, and potatoes.
Some U.S. farmers contend that they have been disadvantaged by NAFTA or that
their concerns are not being addressed by the agreement, often leading to lingering trade
tensions and/or formal actions to obtain limit import relief. Commodities that have been
the focus of such frictions include imports of Canadian wheat, live animals, potatoes, and
stuffed molasses; and of Mexican cattle, tomatoes and other winter vegetables, and
(prospectively) sugar. Often such complaints revolve around the contention that foreign
products are unfairly subsidized or “dumped” here at less than the cost of production.
Moreover, a June 2001 report by Public Citizen’s Global Trade Watch attempts to
document the harm that, it asserts, NAFTA has caused to individual farmers and consumers
while benefitting only large agribusinesses (Down on the Farm: NAFTA’s Seven-Years War
on Farmers and Ranchers in the U.S., Canada, and Mexico).

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Meanwhile, some U.S.-exported agricultural products have come under similar
scrutiny by Mexico and Canada – e.g., complaints by Mexico about U.S. meat products
and high-fructose corn syrup; and by Canada about U.S. corn, among others.
Fast track and free trade advocates also have been promoting the success of the
URAA by citing USDA estimates of its economic benefits for farmers. For example,
USDA has stated that the URAA and other WTO agreements will increase U.S.
agricultural exports by a projected $4.7 billion to $8.7 billion by 2005, and raise farm
income by as much as $2.5 billion by the same year. Others challenge such assertions,
contending that at it is difficult to separate the agreement’s effects from other factors that
influence world trade, and that the numbers are highly speculative and overly optimistic
(particularly in light of the September 11 terrorist attacks and their aftermath).
Other assessments of the impact of the URAA have focused on implementation of
commitments and dispute settlement. The Office of the U.S. Trade Representative (USTR)
reports that most countries, including all major trading partners of the United States,
generally are in compliance with their market access and export subsidy reduction
commitments. A few countries, however, have not met their commitments to open markets
to some U.S. agricultural products.
Much attention has been paid by farmers and agribusinesses to the WTO dispute
settlement process—and its perceived weaknesses. The United States has won most of the
agricultural cases it has brought to the WTO or reached favorable settlements before the
cases were adjudicated by WTO panels. But concerns have arisen about the pace of
implementation of panel decisions in the U.S.’s favor. A prominent example is the
European Union’s (EU’s) continuing reluctance to implement a WTO ruling against its ban
on imports of meat produced with hormones. Despite frequent comments by the USTR
that the dispute settlement is in fact working, some in agriculture have questioned its
credibility—and the value of trade agreements in general. However, other agricultural
interests contend that the economic benefits of free trade agreements outweigh these
problems, and they express support for the URAA and the WTO dispute settlement
procedures as important steps toward improving prospects for U.S. agricultural trade.
New Fast Track (Trade Promotion) Authority
In the 105th Congress, a fast track bill (H.R. 2621) reported by the House Ways and
Means Committee was defeated in the full House on September 25, 1998. An omnibus
Senate trade bill (S. 2400), incorporating a fast track bill (S. 1269) passed earlier by the
Senate Finance Committee, was not put to a floor vote.
Subsequently, no serious attempts were mounted to move a fast track bill in the 106th
Congress. However, near the end of 2000, lawmakers did include, with the USDA
appropriations act for FY2001 (P.L. 106-78), a sense of the Congress that the President
should formally request fast track authority for future U.S. trade negotiations.
In the 107th Congress, President Bush and congressional Republican leaders have
indicated that renewal of TPA is a trade policy priority. Democrats who support trade
reform also have expressed interest in TPA-fast track, although they have warned that
Congress must address longstanding concerns about trade agreements’ impacts on the

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environment and labor, if the measure is to win widespread support. No bipartisan
consensus has yet emerged, making prospects for passage unknown at this time.
Nonetheless, on October 9, 2001, the Ways and Means Committee approved, 26-13,
H.R. 3005, sponsored by Committee Chairman Thomas. H.R. 3005 would authorize the
President to negotiate trade agreements reached by June 30, 2005 (with a 2-year extension
possible). During its deliberations, the committee voted against an alternative measure
(H.R. 3019), sponsored by Representatives Rangel, the committee’s ranking minority
member, and Levin, the ranking minority member of the Trade Subcommittee.
A number of other bills have been offered on new negotiating authority, including S.
599 (Roberts); S. 136 (Gramm); H.R. 1446 (English); H.R. 2149 (Crane); and S. 1104
(Graham). S. 333 (Lugar) and H.R. 627 (Boehner), both broader agricultural measures,
include a title to extend trade negotiating authority. Negotiating objectives and
consultation requirements for agriculture are included in many of the bills, including in the
Ways and Means and the Rangel-Levin measures (see “Agricultural Provisions,” below).
Fast track (trade promotion) authority supporters have pointed out that other nations
already have negotiated, or are negotiating, free trade agreements with important U.S.
trading partners. Unless the United States is engaged, U.S. agricultural and other exporters
will face higher tariff and other trade barriers vis-a-vis countries that have signed such
arrangements, fast track supporters maintain. Many agricultural interests believe that TPA
will encourage the initiation of more comprehensive multilateral trade negotiations, where,
they assert, agricultural trade concessions are more likely to be made by other countries
seeking, as trade-offs, gains in other economic sectors. For example, some 80 producer,
agribusiness, and related organizations signed a June 18, 2001 letter to the President
pledging their active support of TPA.
Opponents, on the other hand, contend that any potential economic and political
advantages of these free trade agreements are outweighed by the prospect of U.S. capital
and jobs being exported to countries where wages, labor standards, and environmental
requirements are weaker—including those in the agricultural sector. Members who
advocated stronger labor and environmental provisions in trade agreements opposed both
the Senate and House committee bills in the 105th Congress, and, joining with those who
opposed any fast-track authority, forged the majority that defeated the House bill. These
concerns have not dissipated. Several agricultural groups do oppose renewal of fast track;
the National Farmers Union and nearly 50 labor, environmental, consumer, and allied
organizations, signed a June 19, 2001, letter to Members of Congress to oppose the Crane
measure (then a leading Republican alternative), for example.
Agricultural Provisions
H.R. 3005 states that the principal agricultural negotiating objective is to obtain
competitive, fairer, and more open market opportunities for U.S. agricultural exports by
(among other things):

! Reducing or eliminating tariffs and other charges by a date certain, and
reducing foreign ones to levels the same as or lower than U.S. levels;

! Reducing or eliminating subsidies that harm U.S. exports or unfairly
distort markets;

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! Allowing for the preservation of (non trade-distorting) programs that
support family farms and rural communities;

! Developing disciplines for domestic farm support so that production in
excess of domestic food security needs is sold at world prices, and
eliminating policies that create price-depressing surpluses;

! Eliminating when possible state trading enterprises (STEs);

! Strengthening dispute settlement mechanisms in order to eliminate
practices (including STE activities; “unjustified” labeling, technical,
sanitary and other technical barriers to trade; and restrictive administration
of tariff rate quotas) that impair U.S. market opportunities;

! Recognizing “the unique characteristics” of perishable or cyclical products
and addressing their trade problems; and ensuring that import relief
mechanisms for such products are as accessible and useful to U.S. growers
as they are to producers in other countries;

! Considering whether other countries have not lived up to existing trade
agreements, and how such agreements have impacted U.S. agriculture;

! Maintaining bona fide food assistance programs, and preserving U.S.
market development and export credit programs.
The bill calls on U.S. negotiators to establish, as the base year for calculating each
country’s “Aggregate Measurement of Support” (i.e., level of most potentially trade-
distorting domestic agricultural subsidies), to be the end of its UR implementation period.
There is also explicit language regarding certain studies and consultations with Congress
over the agricultural negotiations.1

Potential Uses of the New Authority
Even lacking TPA, U.S. officials have been active in various trade negotiations;
officials contend that TPA will expedite the negotiations toward a successful conclusion.
The following negotiations are currently among the most prominent.

WTO. In March 2000, WTO members opened sectoral negotiations aimed at further
liberalizing agricultural trade; these talks are proceeding. Some are looking toward the
next WTO Ministerial Conference, in Qatar in November 2001, for possibly launching a
more comprehensive round of multilateral trade negotiations. (See CRS Report 98-254
ENR, Agriculture in the Next Round of Multilateral Trade Negotiations.)
Free Trade Area of the Americas (FTAA). A high priority for President Bush,
negotiation of an agreement to remove all trade barriers within the Western Hemisphere
would go well beyond NAFTA to cover 34 countries. Some of them want more access to
U.S. beef, sugar, citrus and vegetable markets; U.S. groups in turn want additional
openings for an array of products plus more assurance that these countries will abide by
SPS and other trade rules. At the third Summit of the Americas in April 2001, hemispheric
leaders agreed to conclude negotiations and implement an agreement by 2005.
Other FTAs. Meanwhile, the Administration is negotiating bilateral FTAs with Chile
and Singapore. FTAs with Jordan and Vietnam already have been negotiated, and have
been approved by Congress in 2001. Others could be negotiated, e.g., with Australia.
1 The Trade and Development Act of 2000 (P.L. 106-200) already contains a list of explicit U.S.
objectives and consultation requirements for agriculture in WTO negotiations.

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