Trade Promotion Authority (TPA): Frequently
Asked Questions
William H. Cooper
Specialist in International Trade and Finance
Ian F. Fergusson
Specialist in International Trade and Finance
Richard S. Beth
Specialist on Congress and the Legislative Process
April 21, 2014
Congressional Research Service
7-5700
www.crs.gov
R43491
Trade Promotion Authority (TPA): Frequently Asked Questions
Summary
Trade Promotion Authority (TPA), formerly called fast track, is the authority Congress has
granted to the President for limited periods of time to negotiate reciprocal trade agreements. The
authority lays out U.S. trade negotiating objectives, procedures for congressional-executive
notification and consultation, and expedited legislative procedures under which bills
implementing trade agreements negotiated by the executive branch are to be considered. The
most recent authority was enacted in December 2002 and expired as of July 1, 2007. Legislation
to reauthorize TPA has been introduced in the 113th Congress. The United States is engaged in
several sets of trade agreement negotiations. The issue of TPA reauthorization has raised a
number of questions regarding TPA itself and the pending legislation. This report addresses a
number of those questions that are frequently asked, including:
• What is trade promotion authority?
• Is TPA necessary?
• What are trade negotiating objectives and how are they reflected in TPA statutes?
• What requirements does Congress impose on the President under TPA?
• Does TPA affect congressional authority on trade policy?
For more information on TPA, see CRS Report RL33743, Trade Promotion Authority (TPA) and
the Role of Congress in Trade Policy, by William H. Cooper.
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Trade Promotion Authority (TPA): Frequently Asked Questions
Contents
Background on Trade Promotion Authority (TPA) .......................................................................... 1
What is Trade Promotion Authority? ......................................................................................... 1
Why has the issue of TPA renewal been raised now? ................................................................ 1
Has legislation been introduced to renew TPA? ........................................................................ 1
What is Congress’s responsibility for trade under the Constitution? ........................................ 2
What authority does Congress grant to the President by enacting TPA legislation? ................. 2
Is TPA necessary? ...................................................................................................................... 2
What requirements have been placed on the President under TPA? .......................................... 3
Is there a deadline for when the President must submit a draft implementing bill to
Congress? ............................................................................................................................... 3
Along with the draft implementing bill, what other documents must the President
submit to Congress for approval? ........................................................................................... 3
When was TPA/fast track first used? ......................................................................................... 4
How many times has TPA/fast track been used? ....................................................................... 4
How has the lack of TPA affected current trade agreement negotiations? ................................ 4
Do other countries have a TPA-type legislative mechanism? ................................................... 4
Will TPA legislation be considered like other bills or be subject to expedited
procedures? ............................................................................................................................. 5
Trade Negotiating Objectives .......................................................................................................... 5
What are negotiating objectives? ............................................................................................... 5
Goods, Services, and Agriculture .............................................................................................. 5
What are some of the negotiating objectives for market access for goods? ........................ 5
Have U.S. negotiating objectives evolved on services trade? ............................................. 6
How do the negotiating objectives for agriculture differ from those laid out in the
2002 TPA Act? ................................................................................................................. 6
Foreign Investment .................................................................................................................... 7
How does TPA seek to protect U.S. investor rights with our trading partners? .................. 7
To what extent does TPA address investor-state dispute settlement? .................................. 7
How have these provisions evolved over time? .................................................................. 7
Will foreign investors be afforded “greater rights” than U.S. investors under U.S.
trade agreements? ............................................................................................................. 8
Trade Remedies ......................................................................................................................... 8
How does TPA address trade remedies? .............................................................................. 8
Currency Issues ......................................................................................................................... 8
Have currency practices ever been addressed in a TPA authorization? ............................... 8
How would currency issues be addressed under pending TPA renewal legislation? .......... 9
Intellectual Property Rights (IPR) ............................................................................................. 9
What are the key negotiating objectives concerning IPR? .................................................. 9
Does the proposed BCTPA contain new IPR negotiating objectives? ................................ 9
What is the May 10th Agreement? .................................................................................... 10
Have the May 10th Agreement provisions been incorporated into the proposed
BCTPA? ......................................................................................................................... 10
Labor and Environment ........................................................................................................... 11
What are the negotiating objectives on labor under the 2002 TPA and how do they
compare with the objectives on labor proposed under the proposed BCTPA? .............. 11
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Trade Promotion Authority (TPA): Frequently Asked Questions
What are the environmental negotiating objectives under the proposed BCTPA,
and how do they compare with the objectives on environment under the 2002
authority? ....................................................................................................................... 12
Would the labor and environmental provisions negotiated be subject to the same
dispute settlement provisions as other parts of the agreement? ..................................... 12
Regulatory Practices ................................................................................................................ 12
How does the proposed BCTPA seek to address regulatory practices?............................. 12
Does the proposed BCTPA address drug pricing and reimbursement issues? .................. 13
Dispute Settlement (DS) .................................................................................................... 13
What are the principal negotiating objectives on DS in FTAs? ........................................ 13
How does TPA address DS at the WTO? .......................................................................... 13
New Issues Addressed in the proposed BCTPA ...................................................................... 13
What new negotiating objectives are contained in the proposed BCTPA? ....................... 13
Congressional Consultation and Advisory Requirements .............................................................. 14
How do the provisions on consultations in proposed TPA renewal legislation compare
with previous statutes? ......................................................................................................... 15
Who would be Members of the House and Senate Advisory Groups? .................................... 15
Who are Designated Congressional Advisors? ........................................................................ 15
Which Members of Congress have access to draft trade agreements and related trade
negotiating documents? ........................................................................................................ 16
What are the requirements to consult with the private sector and the public on trade
policy? .................................................................................................................................. 16
Do specific import sensitive industries have special negotiation and consultation
requirements? ....................................................................................................................... 17
Notification and Reporting Requirements ..................................................................................... 17
What have been the congressional notification requirements and would they change
under the pending legislation? .............................................................................................. 17
What is the role of the U.S. International Trade Commission? ............................................... 18
Expedited Procedures and the Congressional Role ....................................................................... 18
What have been the expedited legislative procedures? Would they be changed under
the proposed BCTPA? .......................................................................................................... 18
What is the purpose of the expedited procedures for considering implementing bills? .......... 19
Why do the expedited procedures for implementing bills prohibit amendments? .................. 19
What can/should be included in a trade agreement implementing bill that receives
expedited legislative consideration? ..................................................................................... 19
How would the proposed BCTPA treat agreements reached under the sets of
negotiations already launched?............................................................................................. 20
May Congress withdraw TPA procedures? .............................................................................. 20
What is a “mock markup”? ...................................................................................................... 20
Can Congress disapprove the President’s launching trade negotiations with a trading
partner? ................................................................................................................................. 21
May Congress override the TPA procedures? .......................................................................... 21
Does TPA constrain Congress’s exercise of its constitutional authority on trade
policy? .................................................................................................................................. 22
National Sovereignty and Trade Agreements ................................................................................ 22
Can a trade agreement force the United States to change its laws? ......................................... 22
What happens if a U.S. law violates a U.S. trade agreement? ................................................. 23
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Contacts
Author Contact Information........................................................................................................... 23
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Background on Trade Promotion Authority (TPA)
What is Trade Promotion Authority?
Trade promotion authority (TPA), formerly called “fast track,” is the authority Congress has
granted to the President for limited periods to enter into reciprocal trade agreements to reduce or
eliminate barriers to trade and have their implementing legislation considered under expedited
legislative procedures. The authority lays out U.S. trade negotiating objectives, procedures for
congressional-executive notification and consultation, and the expedited legislative procedures
under which a bill to implement a trade agreement (an “implementing bill”) is to be considered.
More generally, TPA defines how Congress has chosen to exercise its constitutional authority
over a particular aspect of trade policy, while affording the President added leverage to negotiate
trade agreements by giving trading partners assurance that final agreements can receive
consideration by Congress in a timely manner and without amendments.1
Why has the issue of TPA renewal been raised now?
The most recent TPA authorization was enacted on August 6, 2002, as the Bipartisan Trade
Promotion Authority Act (part of P.L. 107-210), and applied to trade agreements entered into
(signed) before July 1, 2007. Therefore, Congress would have to renew TPA in order for it to
apply to future trade agreements and those currently under negotiation. On July 30, 2013,
President Obama, in a speech, requested Congress reauthorize TPA. He and other Administration
officials have reiterated the request since that time. Some Members of Congress and members of
the business community, among others, have also called for TPA reauthorization, while critics of
trade agreements and trade liberalization have raised concerns about TPA.
Has legislation been introduced to renew TPA?
On January 9, 2014, bicameral legislation (H.R. 3830/S. 1900)—the Bipartisan Congressional
Trade Priorities Act of 2014 (BCTPA)—was introduced by the chairman of the House Ways and
Means Committee and the then-chairman and the ranking Member of the Senate Finance
Committee. The new chairman of the Senate Finance Committee has indicated that he would
consider changes in the draft legislation, notably in measures to ensure accountability to Congress
and to the public.2 Like previous TPA authorizations, the BCPTA would grant the authority for a
limited time, and would permit a single extension if the President requests it and Congress does
not disapprove.3 The proposed BCTPA would apply to trade agreements entered into (signed)
before July 1, 2018, or before July 1, 2021, if the President requests the extension, subject to a
1 For more detailed background and analysis of TPA, see CRS Report RL33743, Trade Promotion Authority (TPA) and
the Role of Congress in Trade Policy, by William H. Cooper, and CRS Report IF00002, Trade Promotion Authority
(TPA) (In Focus), by William H. Cooper.
2 “Wyden Says Substance Will Drive Timeline of New TPA Proposal, International Trade Reporter, April 17, 2014.
3 The last previous authorization, the Bipartisan Trade Promotion Authority Act of 2002, also granted the authority for
three years with an option for a two-year extension. The Bipartisan Trade Promotion Authority Act of 2002 is Title
XXI of the Trade Act of 2002 (P.L. 107-210), enacted on August 6, 2002.
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congressional resolution of disapproval.4 Amendments to this legislation or additional legislation
to reauthorize TPA or address certain aspects of TPA may be introduced.
What is Congress’s responsibility for trade under the Constitution?
The U.S. Constitution assigns express authority over the regulation of foreign trade to Congress.
Article I, Section 8, gives Congress the power to “regulate Commerce with foreign Nations…”
and to “…lay and collect Taxes, Duties, Imposts, and Excises.…” In contrast, the Constitution
assigns no specific responsibility for trade to the President. Under Article II, however, the
President has exclusive authority to negotiate treaties and international agreements and exercises
broad authority over the conduct of the nation’s foreign affairs.
What authority does Congress grant to the President by enacting
TPA legislation?
In a sense, TPA grants no new authority to the President. The President possesses inherent
authority to negotiate with other countries to arrive at trade agreements. Any such agreement,
however, could only be implemented through legislation enacted by Congress, if it requires
changes in U.S. law. (In some cases, as well, Congress has enacted legislation authorizing the
President in advance to implement certain kinds of agreements on his own authority. An example
is the historical reciprocal tariff agreement authority described under the next question.) TPA
legislation provides expedited legislative procedures (also known as “fast track” procedures) to
facilitate congressional action on legislation to implement trade agreements of the kinds specified
in the TPA statute. TPA legislation also provides trade negotiating objectives and notification and
consultation requirements described later.
Is TPA necessary?
The President has the authority to negotiate international agreements, including free trade
agreements (FTAs), but the Constitution gives the U.S. Congress sole authority over the
regulation of foreign commerce. For 150 years, Congress exercised this authority over foreign
trade by setting tariff rates directly. This policy changed with the Reciprocal Trade Agreements
Act of 1934, in which Congress delegated temporary authority to the President to enter into and
implement by proclamation reciprocal trade agreements that reduced tariffs within pre-approved
levels without further congressional action. This authority was renewed a number of times until
1974.
In the 1960s, as international trade expanded, nontariff barriers, such as antidumping measures,
safety and certification requirements, and government procurement practices, became subjects of
trade negotiations and agreements. Congress altered this delegated authority to require an
implementing bill to authorize changes in U.S. law required to meet these new obligations. Pre-
approval was no longer an option. Because an implementing bill faced potential amendment by
Members of Congress that could alter a long-negotiated agreement, Congress adopted fast track
authority in the Trade Act of 1974 to ensure that the implementing bill would not be subject to
4 For detail on the disapproval process, see later discussion of the “extension disapproval resolution” under “How may
Congress withdraw TPA procedures?”
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amendment and would be given expedited legislative consideration. The authority would also
establish negotiating objectives and ensure executive branch notification of and consultation with
Congress and the private sector. Fast track was renamed Trade Promotion Authority in the
Bipartisan Trade Promotion Authority Act of 2002.
Many observers point out that U.S. trade partners might be reluctant to negotiate with the United
States, especially on politically sensitive issues, unless they are confident that the U.S. executive
branch and Congress speaks with one voice, that a trade agreement negotiated by the executive
branch would receive timely legislative consideration, that it would not unravel by congressional
amendments, and that the United States would implement the terms of the agreement reached.
Others, however, have argued that because trade negotiations and agreements have become more
complex and more comprehensive, bills to implement the agreements should be subject to
amendment like other legislation. In practice, even though TPA is designed to ensure that
Congress will act on implementing bills without amending them, it also affords Congress several
procedural means to maintain its constitutional authority. (For details, see section on “Expedited
Procedures and the Congressional Role”.)
What requirements have been placed on the President under TPA?
In general, under TPA Congress has required the President to notify Congress and consult with
Congress and with private sector stakeholders before, during and upon completion of trade
agreement negotiations. Congress also has required the President strive to adhere to general and
specific principal trade negotiating objectives in any trade agreement negotiated under TPA. After
signing the agreement, the President submits a draft implementing bill along with the trade
agreement, and a statement of administrative action. (See detailed discussion of requirements
below in the following sections: “Trade Negotiating Objectives”, “Congressional Consultation
and Advisory Requirements”, and “Notification and Reporting Requirements”.)
Is there a deadline for when the President must submit a draft
implementing bill to Congress?
No. After signing a trade agreement, the President may submit the implementing bill to Congress
at his discretion.
Along with the draft implementing bill, what other documents
must the President submit to Congress for approval?
Along with a draft implementing bill, the President submits a Statement of Administrative Action
(SAA) to Congress for approval. An SAA contains an authoritative expression of Administration
views regarding the interpretation and application of the trade agreement for purposes of U.S.
international obligations and domestic law. It describes significant administrative actions to be
taken to implement the trade agreement. In addition, it contains an explanation of how the
implementing bill and administrative action will change or affect U.S. law and contains a
statement and proposed administrative action that are necessary or appropriate to implement the
trade agreement.
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Furthermore, the President sends Congress supporting information to include an explanation of
how the implementing bill and proposed administrative action will change existing U.S. law and a
statement of that the trade agreement makes progress in achieving the “purposes, policies,
priorities, and objectives under the TPA.
When was TPA/fast track first used?
Trade promotion authority was first enacted on January 1, 1975, under the Trade Act of 1974. It
was used to enact the Tokyo Round Agreements Act of 1979, which implemented the 1974-1979
multilateral trade liberalization agreements reached under the Tokyo Round negotiations under
the General Agreement on Tariffs and Trade (GATT), the predecessor to the World Trade
Organization (WTO). Since that time it was renewed four times –1979, 1984, 1988, and 2002. In
1993, Congress provided for a short-term extension to accommodate the completion of the GATT
Uruguay Round negotiations.
How many times has TPA/fast track been used?
Since 1979, the authority has been used for 14 bilateral/regional free trade agreements (FTAs) and
one additional set of multilateral trade liberalization agreements under the GATT (now the World
Trade Organization (WTO))—the Uruguay Round Agreements Act of 1994. One FTA—the U.S.-
Jordan FTA—was negotiated and approved by Congress without TPA.5 That FTA was largely
considered non-controversial and applies to only a small portion of U.S. total trade.
How has the lack of TPA affected current trade agreement
negotiations?
The United States is currently engaged in three sets of trade negotiations that have been a factor
in the drive for TPA reauthorization: the Trans-Pacific Partnership (TPP) agreement with 11 other
countries; the Transatlantic Trade and Investment Partnership (TTIP) agreement with the 28-
member European Union; and the Trade in Services Agreement (TISA) with 22 other trading
partners, including the European Union (EU). Future agreements may be reached under the WTO.
The Obama Administration has fulfilled the notification and consultation requirements under the
most recent TPA for each of these sets of negotiations in anticipation that it would be renewed.
Some trade partners have suggested that the lack of TPA has slowed progress in the negotiations
on the TPP; however, it is unclear whether the lack of TPA will preclude a final agreement or that
the most sensitive issues are being left until the final stages of the negotiations.
Do other countries have a TPA-type legislative mechanism?
In some countries, the executive may possess authority to conclude trade agreements without
legislative approval. In others, especially in parliamentary systems, the head of government is
typically able to secure approval of any requisite legislation without amendment under regular
5 In the House, many of these agreements were actually considered not under TPA procedures themselves, but under
special rules from the Committee on Rules. This is explained below under “May Congress override the expedited
procedures?”
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legislative procedures. In addition, some countries prohibit amendments to trade agreement
legislation and others treat trade agreements as treaties.
Will TPA legislation be considered like other bills or be subject to
expedited procedures?
Legislation to authorize TPA is considered under standard legislative procedures. Therefore,
regular rules on debate, amendments, and votes would apply.
Trade Negotiating Objectives
What are negotiating objectives?
Congress exercises its trade policy role, in part, by defining trade negotiating objectives in TPA
legislation. The negotiating objectives are definitive statements of U.S. trade policy that Congress
expects the Administration to honor, if the implementing legislation is to be considered under
expedited rules. Since the original fast track authorization in the Trade Act of 1974, Congress has
revised and expanded the negotiating objectives in succeeding TPA/fast track authorization
statutes to reflect changing priorities and the evolving international trade environment. Since the
last grant of TPA in 2002, new issues associated with state-owned enterprises, digital trade in
goods and services, and localization policies have come to the forefront of U.S. trade policy and
have been included in the proposed BCTPA as principal negotiating objectives.
Under the 2002 Bipartisan Trade Promotion Authority Act, the most recent authorization,
Congress established trade negotiating objectives in three categories: (1) overall objectives; (2)
principal objectives; and (3) other priorities. These begin with broad goals that encapsulate the
“overall” direction trade negotiations are expected to take, such as fostering U.S. and global
economic growth and obtaining more favorable market access for U.S. products and services.
Principal objectives are more specific and are considered the most politically critical set of
objectives. The proposed BCTPA uses a similar structure.
Goods, Services, and Agriculture
What are some of the negotiating objectives for market access for goods?
The market access negotiating objectives under TPA seek to reduce or to eliminate tariff and non-
tariff barriers and practices that decrease market access for U.S. products. One new provision in
the proposed BCTPA would consider the “utilization of global chains” in the goal of trade
liberalization. It also calls for the use of sectoral tariff and non-tariff barrier elimination
agreements to achieve greater market access. Agriculture (see below) and textiles and apparel are
considered in separate negotiating objectives. For textiles and apparel, U.S. negotiators are to
seek competitive export opportunities “substantially equivalent to the opportunities afforded
foreign exports in the United States markets and to achieve fairer and more open conditions of
trade” in the sector. Both the general market access provisions and the textiles provisions are the
same as those in the 2002 Act.
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Have U.S. negotiating objectives evolved on services trade?
Services have become an increasingly important element of the U.S. economy, and the sector
plays a prominent role in U.S. trade policy.6 The rising importance of services has been reflected
in their treatment under TPA/fast track statutes as a negotiating objective beginning with the 1984
Trade Act.
Services trade liberalization are expressed in the 2002 Trade Act as a principal negotiating
objective. It requires that U.S. negotiators strive to reduce or eliminate barriers to trade in
services, including regulations that deny nondiscriminatory treatment to U.S. services and inhibit
the right of establishment (through foreign investment) to U.S. service providers. The content of
the negotiating objective on services had not changed appreciably over the years. (Because
foreign direct investment is an important mode of delivery of services, negotiating objectives on
foreign investment (see below) pertain to services as well.)
The proposed BCTPA expands the principal negotiating objectives on services in the 2002 TPA
by highlighting the role of services in global value chains and calling for the pursuit of liberalized
trade in services through all means, including plurilateral trade agreements (presumably referring
to the proposed Trade in Services Agreement (TISA)).
How do the negotiating objectives for agriculture differ from those laid out in
the 2002 TPA Act?
The proposed BCTPA adds three new agriculture negotiating objectives to the 18 previously
listed in the 2002 Act. One lays out in greater detail what U.S. negotiators should achieve in
negotiating robust trade rules on sanitary and phytosanitary (SPS) measures (i.e., those dealing
with a country’s food safety and animal and plant health laws and regulations). This increased
emphasis aims to address the concerns expressed by U.S. agricultural exporters that other
countries use SPS measures as disguised non-tariff barriers, which undercut the market access
openings that the United States negotiates in trade agreements. The second calls for trade
negotiators to ensure transparency in how tariff-rate quotas (TRQs)7 are administered that may
impede market access opportunities. The third seeks to eliminate and prevent the improper use of
a country’s system to protect or recognize geographical indications (GI). These are trademark-like
terms used to protect the quality and reputation of distinctive agricultural products, wines and
spirits produced in a particular region of a country. This new objective is intended to counter in
large part the European Union’s efforts to include GI protection in its bilateral trade agreements
for the names of its products that U.S. and other country exporters argue are generic in nature or
commonly used across borders, such as parma ham or parmesan cheese.
6 For more information, please see: CRS Report R43291, U.S. Foreign Trade in Services: Trends and U.S. Policy
Challenges, by William H. Cooper.
7 A TRQ is a trade policy tool used to protect a domestically-produced commodity or product from competitive
imports. It combines two policy instruments that nations historically have used to restrict such imports: quotas and
tariffs. In a TRQ, the quota component works together with a specified tariff level to provide the desired degree of
import protection. Imports entering during a specific time period under the quota portion of a TRQ are usually subject
to a lower, or sometimes a zero, tariff rate. Imports above the quota’s quantitative threshold face a much higher (usually
prohibitive) tariff.
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Foreign Investment
How does TPA seek to protect U.S. investor rights with our trading partners?
The United States is the largest source and destination of foreign direct investment in the world.
Both the 2002 Act and the proposed BCTPA include principal negotiating objectives on foreign
investment and the objectives in each are the same.8 The overall negotiating objectives on foreign
investment are designed “to reduce or eliminate artificial or trade distorting barriers to foreign
investment, while ensuring that foreign investors in the United States are not accorded greater
substantive rights with respect to investment protections than domestic investors in the United
States, and to secure for investors important rights comparable to those that would be available
under the United States legal principles and practices....” Like the 2002 TPA, the proposed
BCTPA would seek to accomplish these goals by including provisions establishing protections for
U.S. foreign investment, such as non-discriminatory treatment, free transfer of investment related
capital flows, reducing or eliminating local performance requirements, and established standards
for compensation for expropriation consistent with U.S. legal principles and practices. These
provisions are also part of the bilateral investments treaties (BIT) that the United States negotiates
with other countries. The proposed BCTPA would also seek to improve investor-state dispute
resolution mechanisms.
To what extent does TPA address investor-state dispute settlement?
Investor-state dispute settlement (ISDS) allows for private foreign investors to seek international
arbitration against host governments to settle claims over alleged violations of foreign investment
provisions in FTAs. The 2002 TPA authority and the proposed BCTPA do not specifically
mention an ISDS mechanism. They do state that trade agreements should provide meaningful
procedures for resolving investment disputes; seek to improve mechanisms used to resolve
disputes between an investor and a government through mechanisms to eliminate frivolous claims
and to deter the filing of frivolous claims; provide procedures to ensure the efficient selection of
arbitrators and the expeditious disposition of claims; provide procedures to enhance opportunities
for public input into the formulation of government positions; and seek to provide for an appellate
body or similar mechanism to provide coherence to interpretations of investment provisions in
trade agreements.
How have these provisions evolved over time?
Two negotiating objectives relating to foreign investment were initially listed under the Omnibus
Trade and Competitiveness Act of 1988 fast-track authority. The 2002 authority and the proposed
BCTPA list eight. In addition to TPA, U.S. investment negotiating objectives are shaped by the
U.S. Model BIT, the template used to negotiate U.S. BITs and FTA investment chapters. The
Model BIT has been revised periodically in an effort to balance investor protections and other
policy interests. The 2004 Model BIT, for instance, narrowed the definitions of covered
investment and minimum standard of treatment, and connected the definition of direct and
indirect expropriation to “property rights or property interests,” reflecting the U.S. Constitution’s
8 For more information, please see CRS Report R43052, U.S. International Investment Agreements: Issues for
Congress, by Shayerah Ilias Akhtar and Martin A. Weiss.
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Takings Clause and with possible implications for expropriation protection depending on foreign
countries’ definitions of property. It also clarified that only in rare cases do non-discriminatory
regulatory actions by governments to protect legitimate public welfare objectives result in indirect
expropriation. In response to global economic changes, the 2012 Model BIT, among other things,
clarified that its obligations apply to state-owned enterprises, as well as to the types of financial
services that may fall under a prudential exception (such as to address balance of payments
problems). Other examples of revisions to the Model BIT over time include more detailed
provisions on ISDS, stronger aspirational language on environmental and labor standards, and
enhanced transparency obligations.
Will foreign investors be afforded “greater rights” than U.S. investors under
U.S. trade agreements?
The 2002 TPA authority and the proposed BCTPA state that no trade agreement is to lead to the
granting of foreign investors in the United States greater rights than are granted to U.S. investors
in the United States. Some have argued, however, that the use of ISDS itself does imply greater
procedural rights.
Trade Remedies
How does TPA address trade remedies?
Trade remedy statutes, such as antidumping and countervailing duty laws, provide U.S. firms
with the means to redress the unfair trade practices of foreign actors, whether firms or
governments.9 Safeguard provisions, which allow for temporary restraints on import surges not
considered to be unfairly traded, are also included as trade remedies. The principal objective
concerning trade remedies in TPA/fast track has been to “preserve the ability of the United States
to rigorously enforce its trade laws” and to avoid concluding “agreements that weaken the
effectiveness of domestic and international disciplines on unfair trade.” Trade remedies have
usually been addressed in the context of multilateral WTO negotiations. This objective reflects
the perception by some Members of Congress that other WTO members have sought to weaken
U.S. trade remedy laws. The proposed BCTPA also maintains notification provisions that require
the President to notify Congress 180 days before signing a trade agreement on provisions
affecting trade remedy laws.
Currency Issues
Have currency practices ever been addressed in a TPA authorization?
The extent to which some countries may use the value of their currency to gain competitive
market advantage is a source of concern for certain industries and Members of Congress. In the
2002 TPA authorization statute, the President was to seek to establish consultative mechanisms
with trading partners to examine the trade consequences of significant and unanticipated currency
movements and to scrutinize whether a foreign government has manipulated its currency to
9 For more information, please see CRS Report RL32371, Trade Remedies: A Primer, by Vivian C. Jones.
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promote a competitive advantage in international trade. This provision was contained in the
“promotion of certain priorities section.”
How would currency issues be addressed under pending TPA renewal
legislation?
The proposed BCTPA would elevate the topic of currency manipulation to a principal U.S.
negotiating objective. The proposed authority states that U.S. trade agreement partners “avoid
manipulating exchange rates in order to prevent effective balance of payments adjustment or to
gain unfair competitive advantage.” It does not specifically define currency manipulation to
include or exclude central bank intervention in the domestic economy. (It does not differentiate
among the ways for a government to affect the value of its currency such as currency market
intervention, or central bank activities such as an increase in the money supply to stimulate the
domestic economy.) The language calls for multiple remedies, “as appropriate,” including
“cooperative mechanisms, enforceable rules, reporting, monitoring, transparency, or other
means.”
Intellectual Property Rights (IPR)
What are the key negotiating objectives concerning IPR?
The United States has long supported the strengthening of intellectual property rights through
trade agreements, and Congress has placed IPR protection as a principal negotiating objective
since the 1988 grant of fast-track authority.10 The overall objectives on IPR under the 2002 TPA
authority were: the promotion of adequate and effective protection of IPR; market access for U.S.
persons relying on IPR; and respect for the WTO Trade-related Aspects of Intellectual Property
Rights (TRIPS) Declaration on Public Health. These objectives are largely reflected in the five
objectives proposed in the proposed BCTPA. The promotion of adequate and effective protection
of IPR through the negotiation of trade agreements that reflect a standard of protection similar to
that found in U.S. law is a key provision, as are provisions for strong protection of new
technologies, standards of protection that keep pace with technological developments, non-
discrimination in the treatment of IPR, and strong enforcement of IPR. The proposed BCTPA
would also seek to ensure that agreements negotiated foster innovation and access to medicine.
Does the proposed BCTPA contain new IPR negotiating objectives?
A new objective in the proposed BCTPA would seek to negotiate the prevention and elimination
of government involvement in violations of IPR such as cybertheft or piracy. The enhanced
protection of trade secrets and proprietary information collected by governments in the
furtherance of regulations are contained in the negotiating objective on regulatory coherence.
10 For additional information, please see CRS Report RL34292, Intellectual Property Rights and International Trade,
by Shayerah Ilias Akhtar and Ian F. Fergusson.
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What is the May 10th Agreement?
The May 10, 2007Agreement was a bipartisan statement of agreed principles between the
President and the House leadership on labor, environment, IPR, foreign investment, and
government procurement to be applied to the four FTAs Congress would consider at that time:
Colombia, Panama, Peru, and South Korea. The extent to which these provisions would be
included in TPA negotiating objectives and future FTAs has been a source of debate among policy
makers. (See May 10th box below for more details.)
Have the May 10th Agreement provisions been incorporated into the proposed
BCTPA?
The proposed BCTPA incorporates the labor and environmental principles of the May 10th
provision, including requirements that a negotiating party's labor and environmental statutes
adhere to internationally recognized core labor standards and to obligations under common
multilateral environmental agreements. While the May 10th patent language on pharmaceuticals
is not specifically included in the proposed BCTPA language, it does seek to “ensure that trade
agreements foster innovation and access to medicine.” 11 The same investment language,
“ensuring that foreign investors in the United States are not granted greater substantive rights
with respect to investment protections than U.S. investors in the United States” is included.
11 The language does not specifically refer to the patent protection provisions found in the May 10th Agreement
provisions, which were designed to achieve greater access to medicine in developing country FTA partners. The
included language seemingly could be used to justify including or excluding those provisions in future FTAs.
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“The May 10th Agreement”
On May 10, 2007, a bipartisan group of congressional leaders and the Bush Administration released a statement on
agreed principles in five policy areas: worker rights, environment protection, IPR, government procurement, and
foreign investment. The principles were to be reflected in provisions in four U.S. FTAs—with Colombia, Panama,
Peru, and South Korea, then being considered for ratification. Regarding worker rights, the May 10th Agreement (the
Agreement) required the United States and FTA partners to commit to enforcing the five international labor
principles enshrined in International Labour Organization’s (ILO’s) 1998 Declaration on Fundamental Principles and
Rights At Work and that the commitment be enforceable under the FTA. These rights are the freedom of association,
the effective recognition of the right to collective bargaining, the elimination of all forms of compulsory or forced
labor, the effective abolition of child labor, including the worst forms of child labor, and the elimination of
discrimination in respect of employment and occupation.
The Agreement also required FTAs to adhere to seven major multilateral environmental agreements: The seven
agreements are the Convention on International Trade in Endangered Species; the Montreal Protocol on Ozone
Depleting Substances; the Convention on Marine Pol ution; the Inter-American Tropical Tuna Convention; the
Ramsar Convention on the Wetlands; the International Convention for the Regulation of Whaling; and the
Convention on Conservation of Antarctic Marine Living Resources.
Furthermore, the parties are not to waive or otherwise derogate from their labor or environmental protection laws
in a manner that would affect trade or investment with the FTA partner(s). In addition, the labor and environment
provisions must be enforceable, if consultation and other avenues fail, through the same dispute settlement
procedures that apply to the other provisions in the FTA.
The Agreement also required the FTAs to include provisions related to patents and approval of pharmaceuticals for
marketing exclusivity with different requirements for developed and developing countries. Specifically, the Agreement
requires provisions dealing with the effective period of data exclusivity—the restrictions on the use of test data
produced for market approval by generic drug producers; patent extensions; linkage of marketing approval of generic
drugs to determination of possible patent infringement; and reaffirmation of adherence to Doha Declaration on
compulsory licensing of drugs to respond to public health crises.
Regarding foreign investment, the Agreement required each of the FTAs to state that none of its provisions would
accord foreign investors greater substantive rights in terms of foreign investment protection than are accorded U.S.
investors in the United States.
Labor and Environment
What are the negotiating objectives on labor under the 2002 TPA and how do
they compare with the objectives on labor proposed under the proposed
BCTPA?
Both the 2002 Authority and the proposed BCTPA include several negotiating objectives on labor
issues and worker rights.12 While similar, they also differ in some fundamental ways. For
example, the 2002 authority states that trade agreements are to ensure that a trading partner does
not fail effectively to enforce its own labor statutes. The proposed BCTPA would require that the
United States ensure that a trading partner not only enforce its own labor statutes but that those
statutes include internationally recognized core labor standards as defined in the bill to mean the
12 For more information, please see CRS In Focus IF00018, CRS Report IF00018, Worker Rights Provisions in Free
Trade Agreements (FTAs) (In Focus), by Mary Jane Bolle and Ian F. Fergusson.
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“core labor standards only as stated in the International Labor Organization’s (ILO) Declaration
on Fundamental Principles and Rights to Work and its Follow-Up (1998).”13
In addition, the 2002 authority allowed some discretion on the part of a trading partner
government in enforcing its laws and that the government would be considered fulfilling its
obligations if it exercised discretion, either through action or inaction, reasonably. The proposed
BCTPA, on the other hand, states that while the government retains discretion in implementing its
labor statutes, the exercise of that discretion is not a reason not to comply with its obligations
under the trade agreement. The labor—and environmental—provisions also contain language to
strengthen the capacity of trading partners to adhere to labor and environmental standards, as well
as a provision to reduce or eliminate policies that unduly threaten sustainable development.
What are the environmental negotiating objectives under the proposed
BCTPA, and how do they compare with the objectives on environment under
the 2002 authority?
Like the labor objective, the proposed BCTPA would provide that a party not only enforce its own
environmental standards as in the 2002 Act, but that those laws conform to seven internationally
recognized multilateral environmental agreements (MEAs). The environmental objective contains
similar, but seemingly more flexible language, allowing a reasonable exercise of discretion in
enforcement based on resources.
Would the labor and environmental provisions negotiated be subject to the
same dispute settlement provisions as other parts of the agreement?
The proposed BCTPA would commit negotiators “to ensure that enforceable labor and
environmental standards are subject to the same dispute settlement and remedies as other
enforceable provisions under the agreement.” Under the most recent U.S. trade agreements, this
could mean the withdrawal of trade concessions until the dispute is resolved. By contrast, the
2002 TPA provided separate remedies under dispute settlement, including the use of monetary
penalties and technical assistance.
Regulatory Practices
How does the proposed BCTPA seek to address regulatory practices?
The regulatory practices objectives seek to reduce or eliminate the use of governmental
regulations (non-tariff barriers)—such as discriminatory certification requirements or non-
transparent health and safety standards—from impeding market access for U.S. goods, services,
or investment. Like the 2002 TPA, it seeks commitments in trade agreement that proposed
regulations are based on scientific principles, cost-benefit risk assessment, or other objective,
non-discriminatory standard. It seeks more transparency and participation by affected parties in
13 The ILO declaration lists these core labor principles as: the freedom of association and the effective recognition of
the right to collective bargaining; the elimination of all forms of forced or compulsory labor; the effective abolition of
child labor and the prohibition on the worst forms of child labor; and the elimination of discrimination in respect of
employment and occupation.
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the development of regulations, consultative mechanisms to increase regulatory coherence,
regulatory compatibility through harmonization or mutual recognition, and convergence in the
standards-development process. A new provision in the proposed BCTPA would limit
governmental collection of undisclosed proprietary data—“except to satisfy a legitimate and
justifiable regulatory interest”—and to protect that data against public disclosure.
Does the proposed BCTPA address drug pricing and reimbursement issues?
Yes, the regulatory practices negotiating objective also contains language applicable to a foreign
country’s drug pricing system. BCPTA seeks to eliminate government price controls and
reference prices “which deny full market access for United States products.” The proposed
BCTPA also seeks to ensure that regulatory regimes adhere to principles of transparency,
procedural fairness, and non-discrimination.
Dispute Settlement (DS)
What are the principal negotiating objectives on DS in FTAs?
The principal negotiating objectives on DS address the provision of DS mechanisms in FTAs
negotiated by the United States and the application of DS at the WTO. TPAs, past and present,
seek to establish DS mechanisms to resolve disputes, first through consultation, then by the
withdrawal of benefits that seek to encourage compliance with the agreement. The BCPTA also
seeks provisions in FTAs that apply the principal negotiating objectives in TPA equally through
equivalent access, procedures, and remedies. This obligation would, in practice, allow for full
dispute settlement of labor and environmental disputes under the agreement.
How does TPA address DS at the WTO?
The proposed BCTPA, like its predecessors, would also seek that the WTO DS panels and the
Appellate Body “apply the WTO Agreement as written, without adding to, or diminishing rights
and obligations under the agreement,” and to use a standard of review applicable to the Uruguay
Round Agreement in question, “including greater deference, where appropriate, to the fact finding
and technical expertise of national investigating authorities.” These provisions address the
perception by some Members of Congress that the WTO dispute settlement bodies have
interpreted WTO agreements in ways not foreseen or reflected in the agreement.
New Issues Addressed in the proposed BCTPA
What new negotiating objectives are contained in the proposed BCTPA?
Digital Trade in Goods and Services and Cross-Border Data Flows
The Internet not only has become a facilitator of international trade in goods and services given
its borderless nature, but also is a source itself of trade in digital-originated services such as
search engines or data storage. At the same time, however, digital trade and cross-border data
flows have increasingly become the target of trade restricting measures, especially in emerging
markets. The digital trade provisions update and expand upon the e-commerce provisions from
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the 2002 TPA that call for trade in digital goods and services to be treated no less favorably than
like-physical goods or services in terms of applicability of trade agreements, the classification of
a good or service, or regulation. Aside from ensuring that governments refrain from enacting
measures impeding digital trade in goods and services, the proposed BCTPA would extend that
commitment to cross-border data flows, data processing, and data storage. It also would provide
enhanced protection of trade secrets and proprietary information collected by governments in the
furtherance of regulations. The promotion of strong IPR for technologies to facilitate digital trade
is included in the IPR objectives. It also seeks to extend the existing WTO moratorium on duties
on electronic commerce transactions.
State-Owned Enterprises (SOE)
U.S. firms often face competition from state-owned or state-controlled firms. Under the proposed
BCTPA, the United States would seek to ensure that SOEs are not favored with discriminatory
purchases or subsidies and that competition is based on commercial considerations in order that
U.S. firms may compete on a “level playing field.” While current TPP negotiations include
countries such as Malaysia, Singapore, and Vietnam with a significant SOE presence, such
language may also pertain to future negotiations covered under the proposed BCTPA, which
could include other countries with large SOE sectors such as China or India.
Localization
The proposed BCTPA would add a principal negotiating objective on “localization,” the practice
by which firms are required to locate facilities, intellectual property, services, or assets in a
country as a condition of doing business. While localization can be motivated by privacy and
security interests, there are concerns that such measures can be trade distorting and may be used
for protectionist purposes. U.S. negotiators are directed to prevent and eliminate such practices,
as well as the practice of indigenous innovation, where a country seeks to develop local
technology by the enforced use of domestic standards. Localization provisions concerning the
free flow of data are included in the digital trade objective above. Localization barriers are also
addressed in the foreign investment chapter with provisions to restrict or eliminate performance
requirements or forced technology transfers in the establishment or operation of U.S. investments
abroad.
Congressional Consultation and Advisory
Requirements
The consultative, notification, and reporting requirements of TPA/fast-track are designed to
achieve greater transparency in trade negotiations and to maintain the role of Congress in shaping
trade policy. Congress has required the executive branch to consult with Congress prior to,
during, and upon the completion of trade negotiations and the signing of a trade agreement.
TPA/fast track statutes have required the USTR to meet and consult with the House Ways and
Means Committee, the Senate Finance Committee, and other committees that would have
jurisdiction over laws possibly affected by trade negotiations.
In addition, the Bipartisan Trade Promotion Authority Act of 2002 established the Congressional
Oversight Group (COG). The COG consists of the chair and ranking Members of the House Ways
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and Means Committee and the Senate Finance Committee, and three Members from each of the
two committees, no more than two of whom can be from the same political party. The COG also
consists of the chair and ranking Member, or their designees, of House and Senate Committees
that would have jurisdiction over laws that are possibly affected by the trade agreements. Under
the Bipartisan Trade Promotion Act of 2002, the United States Trade Representative (USTR), as
the chief trade negotiator for the President, is required to meet with members of the COG before
and during negotiations if requested by a majority of its members. The COG is still a statutorily
establish entity although reportedly has met infrequently.
How do the provisions on consultations in proposed TPA renewal
legislation compare with previous statutes?
The proposed BCTPA includes consultation requirements similar to those under the 2002 Act and
previous trade negotiating authorities. However, instead of the COG, the proposed BCTPA would
provide for the establishment of separate Congressional Advisory Groups on Negotiations
(CAGs) for each house—a House Advisory Group on Negotiations (HAG), chaired by the
chairman of the Ways and Means Committee, and a Senate Advisory Group on Negotiations
(SAG), chaired by the chairman of the Finance Committee. The USTR would be required to meet
with either group upon the request of the majority of that group prior to launching negotiations or
at any time during the negotiations.
The proposed BCTPA would also require the USTR to develop guidelines on how to enhance
consultation with Congress, including timely briefings on the negotiating objectives, the status of
the negotiations, and any changes in laws that might be required to implement the trade
agreement. The USTR would be required to develop the guidelines in consultation with the
chairmen and ranking Members of the Senate Finance Committee and the House Ways and
Means Committee, and to produce the guidelines no later than 120 days after the proposed
BCTPA enters into force. In addition, the proposed BCTPA would require the USTR to consult on
trade negotiations with any Member of Congress who requests to do so.
Who would be Members of the House and Senate Advisory
Groups?
Under the proposed BCTPA, the HAG would consist of the chairman and ranking Member of the
House Ways and Means Committee plus three additional Members of the Committee, no more
than two of whom could be of the same party. The HAG would also include the chairman and
ranking Member or their designees, of any Committee with jurisdiction over laws affected by the
proposed trade agreement. The SAG would consist of the chairman and ranking Member of the
Senate Finance Committee plus three additional Members of the Committee, no more than two of
whom could be Members of the same party. It would also include the chairman and ranking
Member, or their designees, of any committee with jurisdiction over laws that would be affected
by the proposed trade agreement.
Who are Designated Congressional Advisors?
Designated Congressional Advisors (DCAs) are Members of Congress who are accredited as
official advisers to U.S. delegations to trade negotiations. Under Section 161 the Trade Act of
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1974, as amended, the Speaker of the House selects five Members from the Ways and Means
Committee (no more than three of whom are to be of the same political party), and the President
Pro Tempore of the Senate selects five Members from the Senate Finance Committee (no more
than three of whom can be of the same political party), as DCAs.14 In addition, the Speaker and
the Senate President Pro Tempore may each designate as DCAs Members of committees that
would have jurisdiction over matters that are the subject of trade policy considerations or trade
negotiations. Members of the COG are also DCAs.
Under the proposed BCTPA, in addition to the above, any Member of the House can be
designated by the Speaker as a DCA upon consultation with the chairman and ranking Member of
the House Ways and Means Committee and the chairman and ranking Member of the committee
from which the Member would be selected. Similarly, any Member of the Senate can be
designated a DCA upon consultation with the President Pro Tempore and the chairman and
ranking Member of the committee from which the Senator would be selected. In addition,
Members of the HAG and SAG would be accredited as official trade advisers to U.S. trade
negotiation delegations by the USTR.
Which Members of Congress have access to draft trade agreements
and related trade negotiating documents?
Currently all Members of Congress have security clearances, and any Member may examine draft
trade agreements and related trade negotiating documents, although this is not specifically spelled
out under the most recent trade negotiating authority. The USTR classifies draft texts of trade
agreements and related documents under Executive Order 13526.
The proposed BCTPA would expressly require that the USTR, upon the request of any Member
of Congress, provide that Member access to pertinent documents relating to trade negotiations,
including classified materials.
What are the requirements to consult with the private sector and
the public on trade policy?
In order to ensure that private and public stakeholders have a voice in the formation of U.S. trade
policy, Congress established a three-tier advisory committee system under Section 135 of the
Trade Act of 1974, as amended. These committees advise the President on negotiations,
agreements and other matters of trade policy. At the top of the system is the 30-member Advisory
Committee for Trade Policy and Negotiations (ACTPN) consisting of presidentially-appointed
representatives from local and state governments and representatives from the broad range of
U.S. industries and labor. At the second tier are five policy advisory committees—Trade and
Environment Policy, Intergovernmental Policy, Labor Policy, Agriculture Policy, and Africa. The
third tier consists of 17 sector-specific committees—one on agriculture and 16 on industry—
14 The appointment power of the President pro tempore of the Senate is subject to the conditions of 2 U.S.C. 199, which
requires involvement of the majority and minority leaders if a statute specifies that the appointment is to be made on
the basis of the appointee’s affiliation with a political party, or if not, upon the joint recommendation of the Senate
majority and minority leaders.
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which provide technical advice.15 In addition to consultations with the advisory committees, the
USTR solicits the views of stakeholders through Federal Register notices and hearings.
The TPA/fast-track authorities under the Trade Act of 1974 and, thereafter, have required the
President to submit reports from the various advisory committees on their views regarding the
potential impact of an agreement negotiated under the TPA before the agreement is submitted for
congressional approval. For example, the 2002 Trade Act requires the President to submit to
Congress the reports on a trade agreement of the advisory committees no later than 30 calendar
days after notifying Congress of his intent to enter into the trade agreement. Those reports would
also be required under the proposed BCTPA.
The proposed BCTPA would expand the existing statutory requirements for consultation with the
public. For example, the legislation would require the USTR to develop guidelines for enhanced
consultation with the public and to provide these guidelines no later than 120 calendar days after
the legislation went into effect. The legislation would also require the USTR to develop
guidelines on consultations with the private sector advisory committees no later than 120 days
after the legislation would go into effect. Furthermore, the legislation would require the President
to make public the U.S. International Trade Commission (USITC) assessment of the potential
impact of the trade agreement, which is not the case under the previous authority. The President
would also be required to make public other mandated reports on the impact of future trade
agreements on the environment, employment, and labor rights in the United States. (See question,
“What is the role of the U.S. International Trade Commission?” below.)
Do specific import sensitive industries have special negotiation
and consultation requirements?
Under the 2002 Trade Act and the proposed BCTPA, import sensitive products in the agriculture
(i.e., products subject to a tariff rate quota [TRQ]), fishing and textile sectors have special
assessment and consultation requirements before initiating negotiations.
Notification and Reporting Requirements
Another tool Congress has employed under TPA to ensure transparency of the negotiating
process, is to require the President to notify Congress prior to launching trade negotiations and
prior to entering into (signing) a trade agreement.
What have been the congressional notification requirements and
would they change under the pending legislation?
The Bipartisan Trade Promotion Authority Act of 2002 required the President to notify Congress
90 calendar days prior to initiating negotiations on a reciprocal trade agreement with a foreign
country. The President was also required to notify Congress 90 calendar days prior to entering
into (signing) a trade agreement and to notify Congress 60 days prior to entering into the
15 On February 18, USTR Froman announced the formation of a Public Interest Advisory Committee (PIAC) that will
advise the Administration on issues of public health, consumer protection and transparency in trade negotiations.
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agreement of any expected changes in U.S. law that would be required in order to be in
compliance with the trade agreement. In addition, 180 calendar days prior to entering into a trade
agreement, the President had to notify the House Ways and Means Committee and the Senate
Finance Committee of any changes in U.S. trade remedy laws (antidumping, countervailing duty,
and escape clause statutes) that would be required by the trade agreement. The 2002 Act also
stipulated special notification and reporting requirements for agriculture, fishing industry, and
textiles and apparel. The proposed BCTPA would maintain these requirements.
What is the role of the U.S. International Trade Commission?
Under the 2002 Authority, the President had to submit to the USITC 90 calendar days prior to
entering into an agreement, the details of the proposed agreement. The USITC was required to
produce an assessment of the potential economic impact of the agreement no later than 90
calendar days after the agreement was entered into. The BCTPA would have the same
requirement but extend the deadline for the USITC to produce the report by 15 calendar-days to
105 days and to make the reports public.
Expedited Procedures and the Congressional Role
What have been the expedited legislative procedures? Would they
be changed under the proposed BCTPA?
The expedited procedures are prescribed in Section 151 of the Trade Act of 1974. (See the text
box). Those procedures would be the same in the proposed BCTPA.
Expedited Legislative Procedures for Trade Agreement Implementing Bills
Under Section 151 of the Trade Act of 1974 (19 U.S.C. 2191), the implementing bill submitted by the President is
automatically introduced in both chambers and referred to the appropriate committees of jurisdiction (normally
Ways and Means in the House and Finance in the Senate, perhaps among others). In each chamber, the committees
have 45 session days to report the bill back to the floor, and they may not amend it or recommend amendments. If
either committee does not report after 45 session days, it is discharged from considering the implementing bill, which
makes the bill available for floor action (days on which the respective chamber does not meet are not counted
toward the 45-day period.)
In each chamber, once the committee reports or is discharged, the implementing bill may be called up for
consideration by a non-debatable motion, offered from the floor by any Member. In the House, this provision means
that no special rule from the Committee on Rules is necessary in order to bring the bill to the floor; in the Senate, it
means that Senators need not defer to the majority leader to call up the bill, and no supermajority is needed to limit
debate on a motion to consider the legislation.
Once the measure is on each floor, debate is limited to 20 hours, no amendments may be considered, and various
potentially dilatory motions are prohibited. The limit on debate means that no super-majority vote will be needed in
the Senate to overcome a filibuster. Each chamber can pass the implementing bill by a simple majority vote. If either
chamber passes its bill, it sends the bill to the other; the other chamber then considers its own implementing bill
under the expedited procedure, but takes its final vote on the bill received from the first. Because neither chamber
could amend the implementing bill, the two bills must remain identical; as a result, if the chamber acting second passes
the bill received from the other, this action clears the bill for the President’s signature.
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Most trade agreements affect tariffs, in which case the implementing bill wil be a revenue bill, which, under the
Constitution, must be enacted as a House bill. In this case the House must act first, and send its bill to the Senate,
where it is referred to committee. The Senate Committee is automatically discharged if it does not report the House
bill within 15 session days beyond the 45 session days allowed for considering its own bill. After the Committee
reports the House bill or is discharged, the Senate then may consider it under the expedited procedure.
What is the purpose of the expedited procedures for considering
implementing bills?
The expedited procedure of the TPA includes three core elements: a mechanism to ensure timely
floor consideration, limits on debate, and a prohibition on amendment. The guarantee of floor
consideration is intended to ensure that Congress will have an opportunity to consider and vote on
the implementing bill whether or not the committees of jurisdiction or the leadership favor the
legislation. Especially in the Senate, the limitation on debate helps ensure that opponents cannot
prevent a final vote on an implementation bill by filibustering. The prohibition on amendments is
intended to ensure that Congress will vote on the implementing bill in the form in which it is
presented to Congress. In these ways, the expedited procedures help assure U.S. negotiating
partners that the United States will act on the question of implementing the terms of the
agreement reached, rather than their being compelled to renegotiate it or not reaching final
agreement.
Why do the expedited procedures for implementing bills prohibit
amendments?
As just noted, if Congress were to amend an implementing bill, the legislation ultimately enacted
might fail to implement the terms of the agreement that had actually been agreed. In addition,
however, if either house were to amend the implementing bill, it would probably become
necessary to resolve the differences between the House and Senate versions of the bill through a
conference committee (or through amendments between the houses). Since there is no way to
force the two houses to reach an agreement on a single version, this prospect would make it
impossible to ensure that Congress could complete action on the implementing bill expeditiously
or, indeed, at all.
What can/should be included in a trade agreement implementing
bill that receives expedited legislative consideration?
Because trade agreement implementing bills would receive expedited congressional consideration
under TPA, Congress has imposed restrictions on what should be included in these bills. The
2002 TPA authority stated that the implementing bill should consist only of provisions that
approve the trade agreement and a statement of administrative action and provisions “necessary
or appropriate” to implement the agreement. What constitutes “necessary and appropriate” has
been the subject of debate with some Members arguing that the terms should not be interpreted
too loosely, while others may argue for a broader interpretation. The proposed BCTPA would
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include the same basic language except it would require that the provisions be “strictly [italics
added] necessary and appropriate.”
How would the proposed BCTPA treat agreements reached under
the sets of negotiations already launched?
For the TPP, the TTIP, and the TISA negotiations (see question, “How has the lack of TPA
affected current trade agreement negotiations?” above), the proposed BCTPA would waive the
requirement of notification 90-calendar days prior to launching the negotiations for these
negotiations, provided that the President notifies Congress of the negotiating objectives of the
agreement and whether he is seeking a new agreement or changes in an existing agreement. (The
Obama Administration has already been adhering to similar notification and consultation
requirements of the expired 2002 authority.)
May Congress withdraw TPA procedures?
Under both the 2002 TPA authority and the proposed BCPTA, Congress may withdraw expedited
legislative consideration from a particular implementing bill if it determines that the President has
not adequately notified or consulted Congress on that agreement as provided by the Act, or that
the agreement “fails to make progress in achieving the purposes, policies, priorities, and
objectives” of the Act. If both houses, within 60 days of each other, adopt a “procedural
disapproval resolution” (PDR) on the same implementing bill, neither can use the expedited
procedure to consider that implementing bill.16
As already noted, the proposed BCTPA would enable Congress to deny TPA altogether for the
period from July 1, 2018, through June 30, 2021). At any time through June 30, 2018, the
President may request that TPA be extended through this period, but the extension is denied if,
before that date, either house adopts an “extension disapproval resolution” (EDR). Earlier TPA
statutes contained similar provisions for an extension and EDR.
The pending BCPTA legislation effectively places the withdrawal of TPA by either of these
means in the control of the Committee on Ways and Means and the Committee on Finance,
similar to previous grants of TPA. Although any Member of the respective house may introduce a
PDR or an EDR, such a resolution may be considered on the floor in each chamber only if the
respective revenue committee reports it. If reported, however, the measure is considered under an
expedited procedure of its own, which makes privileged a motion for consideration, limits debate,
and prohibits amendment at any stage of the process.17
What is a “mock markup”?
Although not embedded in statute, a “mock markup” has been an informal, traditional method for
the House Ways and Means Committee and Senate Finance Committee to provide advice on the
contents of the implementing bill before the President formally sends the draft bill to both houses,
16 If a PDR becomes effective, the two houses could still consider the implementing bill under their general rules; see
“May Congress override the expedited procedures?” later.
17 Section 152(d) and (e) of the Trade Act of 1974, 19 U.S.C. 2192(d) and (e).
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thus beginning the expedited consideration of the bill. Under the statute, the President notifies
Congress of his intention to enter into (sign) a trade agreement 90 calendar days prior to doing
so.18 This notification typically enables the committees to conduct hearings on a draft
implementing bill sent by the White House, followed by the advisory “markup.” If the House and
Senate Committees have significant differences, they could hold a “mock conference.”
This process is purely advisory, and it is at presidential discretion whether to accept the advice.
The process is called a “mock markup” because the bill under consideration is only a draft. The
action of the committees operates only as a signal of their preferences to the executive. Often,
nevertheless, the implementing bill that the President later submits to Congress tracks the results
of the mock markup. If the revenue committees are dissatisfied with the implementing bill as
submitted, they retain the options of denying expedited consideration through the use of a PDR,
as just described, or of bringing the bill to the floor under the general rules rather than the
statutory expedited procedures, as described next.
Can Congress disapprove the President’s launching trade
negotiations with a trading partner?
Congress does not have the constitutional authority to prevent the President from entering into
negotiations with a foreign government. However, under the Trade and Tariff Act of 1984 and the
Omnibus Trade and Competitiveness Act of 1988, an implementing trade agreement’s bill could
have been denied expedited consideration if within a 60-day period after the President has
notified the House Ways and Means Committee and the Senate Finance Committee of his
intention to begin negotiations, either committee voted to disapprove the negotiation. This
provision was not included in the most recent authority nor is it in the proposed BCTPA.
May Congress override the TPA procedures?
As the TPA statutes acknowledge, the expedited procedures for which they provide operate as
procedural rules of each house, and therefore each house retains full authority, under the
Constitution, to change or override them at any point. Under this authority, either house could
choose not to consider an implementing bill under the expedited procedure, but instead under its
general rules, under which amendment might be permitted.19
In practice, the House usually does not consider implementing bills under the statutory expedited
procedure, but pursuant to special rules, reported from the Committee on Rules. These special
rules normally retain the statutory prohibition against amendment (thereby duplicating the
conditions under which the House usually considers revenue bills). However, the House could
adopt a special rule permitting amendments to an implementation bill, and it has also adopted a
resolution prohibiting consideration of an implementing bill for a specified trade agreement.
The Senate normally considers implementing bills under the expedited procedure, because
supporters thereby avoid the possible need to obtain a super-majority vote in order to limit debate.
18 See “Notification and Reporting Requirements,” later.
19 As noted earlier, under “Why does the expedited procedure prohibit amendments,” if either house adopted
amendments, a conference committee might be necessary to reach agreement on a version to send to the President.
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By unanimous consent, nevertheless, the Senate could agree to override any or all of the TPA
procedures, including those to permit amendments to an implementing bill.
Does TPA constrain Congress’s exercise of its constitutional
authority on trade policy?
Even though the TPA procedures are designed to ensure that Congress will act on implementing
bills, and will do so without amending them, TPA legislation affords Congress several procedural
means to maintain arguably tight reins on the executive branch’s exercise of the delegated trade
authority. In the provisions of successive TPA statutes, Congress has developed several
mechanisms for preserving its authority in relation to the content of implementing bills even
when they are eligible for consideration under the expedited procedure. In practice, these
mechanisms enable the House Committee on Ways and Means and the Senate Committee on
Finance (the “revenue committees”) to operate as agents of Congress as a whole in protecting
congressional prerogatives.
TPA statutes include extensive, specific negotiating objectives to be pursued in covered trade
agreements (see “Trade Negotiating Objectives”, above).
TPA statutes include extensive requirements for Congress to be notified of any trade agreement
negotiations and consulted during their course. These requirements enable the revenue
committees to monitor the negotiations actively and work to ensure that any trade agreements
reached will be acceptable (see “Congressional Consultation and Advisory Requirements”, and
“Notification and Reporting Requirements”, above).
The procedural mechanisms discussed in the preceding paragraphs, including the extension
disapproval resolution, the procedural disapproval resolution, and the mock markup enable
Congress, and the two revenue committees in particular, to exercise a degree of control over the
content and consideration of covered trade agreements that is comparable, in many respects, to
that which these panels generally exercise over other legislation within their jurisdiction.
In addition to these TPA-specific procedures, finally, each house retains the ability to consider
implementing bills under its general rules rather than under the expedited procedure.
National Sovereignty and Trade Agreements
Can a trade agreement force the United States to change its laws?
Neither the 2002 TPA authority nor previous TPA/fast track authorities contained provisions
addressing the issue of national sovereignty. The proposed BCTPA states that no provision of any
trade agreement entered into under the TPA that is inconsistent with any law of the United States,
of any State, or any locality of the United States shall have any effect. Nor shall any provision of
a trade agreement prevent the government of the United States, of any State, or any U.S. locality
from amending its laws. This provision from the proposed BCTPA essentially provides that, for
domestic purposes, any trade agreement adopted under the TPA authority is not self-executing.
Therefore, any potential agreement adopted through the TPA procedures will not displace any
federal, state, or local law without further action being taken by the appropriate legislature.
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Trade Promotion Authority (TPA): Frequently Asked Questions
What happens if a U.S. law violates a U.S. trade agreement?
In general, if the United States does adopt an agreement with foreign countries, it would be bound
by international law under the agreement. If a federal, state, or local law is found to be in
violation of the free trade agreement, then the United States could be subject to removal of some
benefits under the agreement, such as an increase in tariffs on its products, through a potential
dispute resolution with a challenging country. The federal, state, or local government potentially
would have to amend its laws that are inconsistent with the trade agreement in order for the
United States to avoid removal of benefits under the international agreement.
Author Contact Information
William H. Cooper
Richard S. Beth
Specialist in International Trade and Finance
Specialist on Congress and the Legislative Process
wcooper@crs.loc.gov, 7-7749
rbeth@crs.loc.gov, 7-8667
Ian F. Fergusson
Specialist in International Trade and Finance
ifergusson@crs.loc.gov, 7-4997
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