Order Code 97-817 ENR
Updated May 10, 2002
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), legislation to implement
trade agreements 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, or 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

CRS-2
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. (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 a new round of
WTO multilateral negotiations to further reform trade, including agriculture; and
negotiations to create several new bilateral or regional FTAs (see page 6).
Most acknowledge 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 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. 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
(P.L. 103-465, approved December 8, 1994, 19 U.S.C. 3511) has a number of important
agricultural provisions.

CRS-3
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 reached $7.4 billion in FY2001, while Mexico’s
exports to the United States were $5.3 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 $8 billion, and Canada’s exports to the United States were $9.5 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 import relief. Commodities that have been the
focus of such frictions include imports of Canadian wheat, live animals, potatoes, and
stuffed molasses (a sugar-containing product); 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
).

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,

CRS-4
contending that it is difficult to separate the agreement’s effects from other factors that
influence world trade, and that the numbers are speculative and overly optimistic.
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.1 However, other agricultural interests
contend that the economic benefits of free trade agreements outweigh such problems.
New Fast Track (Trade Promotion) Authority
Previous “fast track” authority expired in 1994, and efforts since then to renew it
were not successful. However, early in the 107th Congress, President Bush and
congressional Republican leaders indicated that renewal of TPA would be a trade priority.
Democrats who support trade reform also have expressed interest in TPA-fast track,
although they warned that Congress must address longstanding concerns about trade
agreements’ impacts on the environment and labor, among other issues, if a measure is to
win widespread, bipartisan support.
Nonetheless, on December 6, 2001, the House narrowly passed, largely along party
lines, a TPA bill (H.R. 3005) that had been approved October 9, 2001, by its Ways and
Means Committee. H.R. 3005, sponsored by Committee Chairman Thomas, would
authorize the President to negotiate trade agreements reached by June 30, 2005 (with a
2-year extension possible). The Senate Finance Committee cleared its version of H.R.
3005 on December 18, 2001. Senate floor debate and votes on a comprehensive trade
package that includes TPA were expected to occur the week of May 13, 2002.
Agricultural Provisions
TPA enjoys support throughout much, but not all, of the agricultural community. For
example, some 80 farm, agribusiness, and related organizations signed a June 18, 2001
letter to the President pledging their active support for TPA. On the other hand, a few
others, including the National Farmers Union, joined nearly 50 labor, environmental,
consumer, and allied organizations on a June 19, 2001, letter to Members of Congress to
oppose what was at the time the leading Republican alternative, because, they argued, it
would not address labor, environmental, and related concerns.
1 For background, see CRS Report RS20142, The European Union’s Ban on Hormone-Treated
Meat
, December 19, 2000.

CRS-5
Key House Members with agricultural constituencies – including the chairman of the
House Agriculture Committee – had threatened to withhold support for TPA unless the
Administration promised to support increases in U.S. farm subsidies. The Administration
had criticized the House-passed omnibus farm bill (H.R. 2646) for its cost ($73.5 billion
in new spending over 10 years) and potential for undermining U.S. efforts to expand
agricultural trade. However, the committee chairman, and the ranking Democrat,
ultimately pledged their support for TPA after receiving assurances that the Administration
would agree to the new farm spending. (The farm bill cleared Congress in early May, and
the President said he will sign it.)
In part to shore up support for TPA among agricultural groups and to address their
specific trade concerns, proponents have included in the new TPA legislation extensive
language regarding negotiating objectives and consultation requirements for agriculture.
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;

! 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;

! Eliminating practices that adversely affect trade in 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.2
2 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.

CRS-6
To garner more support from agricultural members, the bill’s House sponsors added
language, to the committee-passed version, expanding the consultation requirements that
U.S. officials must follow before undertaking tariff reduction negotiations on agricultural
products considered “import-sensitive” (defined in the House version as those subject to
the minimum 2.5% annual reduction required under the URAA). The U.S. Trade
Representative (USTR) would have to identify such products – likely more than 200
specific items ranging from cheese and many other dairy products to various fresh fruits
and vegetables, sugar and other sweeteners, beef and lamb, oilseeds, wine, tobaccos,
cotton, wool, and chocolate – and consult with Congress on how domestic producers
would be affected by tariff cuts, among other requirements. The Senate version contains
somewhat different language but with the same intent.
Some analysts note that while H.R. 3005 and the Senate bill give the President the
authority he sought to proceed with negotiations, provisions in those bills (along with the
new farm bill subsidies) will make it difficult for the President to achieve stated
negotiating objectives for agriculture. In particular, analysts say both bills’ requirement
to consult in advance with Congress before negotiating cuts in tariffs on import-sensitive
products, make negotiating tariff reductions more difficult and prevent negotiations of
trade-offs between sectors. Similarly, the Senate committee bill, by making preservation
of U.S. export credit programs a principal negotiating objective, may render negotiations
on export subsidy reduction or elimination more difficult. The Administration, has
countered that while the fast track bills pose additional hurdles for lowering tariffs on
import-sensitive products, in the long-run they provide a “better basis” for negotiations.

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. At the WTO Fourth Ministerial Conference in Doha, Qatar, November 9-14,
2001, trade ministers agreed on a declaration to begin a new round of multilateral trade
negotiations, including on agriculture. The Doha declaration gives new impetus to
sectoral negotiations on agriculture, which had been underway since early 2000, by
effectively incorporating them into a comprehensive trade round and by setting an agreed
negotiating mandate for agriculture. The deadline for concluding the negotiations in the
new round, including those on agriculture, is January 1, 2005. (See CRS Report RS21085,
Agriculture in WTO Negotiations.)
Free Trade Area of the Americas (FTAA). 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, President Bush and other 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
and New Zealand.
crsphpgw