January 8, 2020
Presidential Authority to Address Tariff Barriers in Trade
Agreements Under Section 103(a)
The U.S. Constitution grants Congress the power to
Timeline of Changes to Presidential Trade
regulate trade with foreign nations and to lay and collect
Agreement Proclamation Authorities
duties. Since the 1930s, Congress has periodically
authorized the President to negotiate trade agreements and,
1934 Section 350(a) of the Reciprocal Trade Agreements Act
among other actions, proclaim changes to U.S. tariff rates–
of 1934 authorized the President to negotiate bilateral,
known as Trade Promotion Authority (TPA). Currently,
reciprocal trade agreements and proclaim changes to
Section 103(a) of the Bipartisan Congressional Trade
U.S. tariff rates of up to 50% of existing rates without
Priorities and Accountability Act of 2015 (TPA-2015)
further congressional action. Renewed 11 times.
authorizes the President to enter into trade agreements with
1962 Section 201 of the Trade Expansion Act of 1962, like
foreign countries to reduce “duties or other import
the RTAA, authorized the President to enter trade
restrictions” that the President determines are “unduly
agreements and proclaim changes to U.S. tariff rates of
burdening and restricting” the United States’ foreign trade
up to 50% of existing rates. Additionally Section 201
and to proclaim limited changes to U.S. tariff rates without
placed no limits on presidential reductions in tariff
further congressional action. In September 2019, President
rates that were already less than 5%.
Donald Trump announced his intention to enter into a free
1975 Section 101 of the Trade Act of 1974 authorized the
trade agreement (FTA) with Japan regarding tariff barriers
President to proclaim reductions in U.S. tariff rates of
using his limited proclamation authority under Section
up to 60% of existing rates (with no limits on rates
103(a).
already below 5%) and to increase tariffs by up to 20%
History of Authority
of existing rates. While this authority expired in 1979,
Section 124(a) provided limited residual authority for
Section 103(a) of TPA-2015 is the most recent
an additional two years.
congressional delegation of authority to the executive
branch to negotiate trade agreements and proclaim
1988 Section 1102(a) of the Omnibus Trade and
adjustments to customs duties. The first instance was the
Competitiveness Act of 1988 authorized the President
Reciprocal Trade Agreements Act of 1934 (RTAA). Passed
to proclaim reductions in U.S. tariff rates of up to 50%
in the midst of the Great Depression, the RTAA authorized
of existing rates (with no limits on rates already below
the President “to enter into foreign trade agreements with
5%). The 1988 Act limited the President’s ability to
foreign governments” and to proclaim, without further
increase tariffs as part of such an agreement. Several
congressional action, limited modifications to U.S. customs
new technical limitations were also introduced.
duties and import restrictions. Over the next several
2002 Section 2103(a) of the Trade Act of 2002 authorized
decades, presidents negotiated dozens of bilateral trade
the President to proclaim reductions in U.S. tariff rates
agreements addressing tariff barriers and implemented
of up to 50% of existing rates (with no limits on rates
those agreements by proclamation. While the RTAA was
already below 5%). Several new technical limitations
primarily used for bilateral agreements, President Harry
were also introduced.
Truman negotiated and implemented by proclamation the
2015 Section 103(a) of the Bipartisan Congressional Trade
multilateral General Agreement on Tariffs and Trade
Priorities and Accountability Act of 2015 authorizes
(GATT—the precursor to the World Trade Organization)
the President to proclaim reductions in U.S. tariff rates
using RTAA authority.
of up to 50% of existing rates (with no limits on rates
already below 5%). Several new technical limitations
By the late 1960s, nontariff barriers (e.g., regulatory
were also introduced.
barriers or subsidies) had become the focus of multilateral
trade negotiations. Rather than authorize the President to
The result was a bifurcation in trade negotiating authority
proclaim nontariff-related changes to U.S. law, Congress
between agreements affecting tariff barriers and those
enacted the Trade Act of 1974, which added procedures
affecting both tariffs and nontariff barriers. Since 1974,
through which the President could negotiate agreements
TPA has provided authority both to negotiate and to
addressing such barriers and obtain expedited consideration
implement limited agreements addressing tariff barriers
of implementing legislation in Congress if certain criteria
without congressional approval. Section 103(b) of TPA-
were met. Alongside these new procedures, Congress
2015 provides authority to negotiate agreements addressing
continued to authorize the President to negotiate and
tariff and nontariff barriers and sets out the procedures to
implement agreements addressing only tariff barriers
implement those agreements with congressional approval.
without further congressional action.
Most recent U.S. FTAs have covered tariffs and nontariff
barriers and have therefore been negotiated under Section
103(b)’s procedures.
https://crsreports.congress.gov

---

Presidential Authority to Address Tariff Barriers in Trade Agreements Under Section 103(a)
Use of 103(a) and Precursor Authority
U.S.-Japan Trade Agreement (2019)
Since the Trade Act of 1974, Presidents have often used
On September 16, 2019, President Trump notified Congress
their proclamation authority in the context of
of his intention to “enter into a trade agreement regarding
comprehensive agreements to implement changes to tariff
tariff barriers with Japan under Section 103(a).” In late
barriers, while relying on implementing legislation to effect
September, the President signed the agreement, which is
changes to nontariff barriers. For example, during the
expected to enter into force in early 2020. U.S.
GATT Tokyo Round of multilateral trade negotiations
commitments in the agreement include, among other things,
(1973 to 1979), President Jimmy Carter relied upon his
the reduction or elimination of tariffs on 42 agricultural and
proclamation authority to implement preliminary and final
241 industrial products ($7.2 billion of U.S. imports), and,
agreements on tariffs (Proclamation 4707), but
importantly, modifications to the U.S. global tariff-rate
implemented agreements addressing nontariff barriers
quota for imports of Japanese beef.
through the Trade Agreements Act of 1979 (P.L. 96-39).
Some Members of Congress have concerns over the
Presidents have occasionally made use of their authority to
agreement’s scope and the use of 103(a) to implement it,
negotiate and implement limited trade agreements
which differs from prior U.S. FTA practice. Such concerns
addressing only tariff barriers. For example, in 1979,
have focused on whether Section 103(a) authorizes the
President Carter entered into a trade agreement with Canada
President to go beyond cutting tariff rates to modify quotas
to reduce tariff rates on certain live cattle imports. President
and create rules of origin.
Carter used his proclamation authority to implement that
agreement (Proclamation 4808) without further
Trade Agreements Implemented in Part
congressional action.
with Proclamation Authority Since 1974
1978 GATT Tokyo Round Bilateral Agreements, Staged
Recent Uses
Reductions, and Geneva Protocol (U.S.-India, U.S.-
Since the 1970s, Presidents have generally used Section
Mexico, U.S.-Romania, U.S.-Hungary, U.S.-Taiwan, U.S.-
103(a) of TPA-2015 and its precursor authorities to modify
Indonesia, U.S.-Trinidad and Tobago, U.S.-Cartagena
tariff rates, as part of more comprehensive multilateral trade
Agreement Countries, U.S.-Switzerland, U.S.-European
negotiations such as the proposed United States-Mexico-
Communities) (Procl. 4600, 4694, 4707, 4711, 4768)
Canada Agreement (USMCA). Nevertheless, there have
1978 U.S.-Finland (Procl. 4630)
been recent instances of Presidents entering (or notifying
1980 U.S.-Canada (Procl. 4808)
Congress of their intent to enter) into limited bilateral trade
agreements under Section 103(a).
1981 U.S.-Japan (Procl. 4889)
1982 U.S.-Taiwan (Procl. 4980)
Agreement on Duty-Free Treatment of Multi-Chip
Integrated Circuits (2006)
1989 Compact of Free Association with the Marshall Islands
and the Federated States of Micronesia (Procl. 6030)
In 2005, the European Union, Japan, South Korea, the
United States, and Taiwan agreed to reduce the rate of all
1992 Provisional Agreement on Certain Tropical Products
customs duties on multi-chip integrated circuits to zero on a
(Procl. 6515)
most-favored-nation (MFN) basis (i.e., the principle that a
1993 North American Free Trade Agreement (NAFTA)
country should not discriminate among its trading partners).
(Tariff Provisions Only) (Procl. 6641)
President George W. Bush notified Congress of his
1994 Uruguay Round Agreements (Tariff Provisions Only)
intention to enter into the agreement, citing authority under
(Procl. 6763, 6780)
Section 2103(a) of the Trade Act of 2002. On March 31,
1995 Tariff-Rate Quota on Tobacco (Procl. 6821)
2006, President Bush issued Proclamation 7995, which
modified the U.S. Harmonized Tariff Schedule (HTS) to
2006 Agreement on Duty-Free Treatment of Multi-Chip
reflect the terms of the agreement.
Integrated Circuits (Procl. 7995)
2015 Asia-Pacific Economic Cooperation Agreement on
Asia-Pacific Economic Cooperation Agreement on
Environmental Goods (Procl. 9384)
Environmental Goods (2015)
In 2012, leaders of the 21 Asia-Pacific Economic
More Information
Cooperation (APEC) economies agreed to reduce applied
CRS Report R46140, “Stage One” U.S.-Japan Trade
tariff rates to 5% or less by the end of 2015 on 54
Agreements, coordinated by Brock R. Williams.
environmental goods on a MFN basis. On December 23,
2015, President Barack Obama issued Proclamation 9384,
CRS Report RL33743, Trade Promotion Authority (TPA)
which modified the HTS to reflect the terms of the
and the Role of Congress in Trade Policy, by Ian F.
agreement. In the Proclamation, President Obama cited
Fergusson.
Section 103(a) of TPA-2015 and Section 502 of the
Protecting Americans from Tax Hikes Act of 2015 as
Christopher A. Casey, Analyst in International Trade and
authority, the latter of which explicitly authorized the use of
Finance
the proclamation authority provided for in Section 103(a) to
Brandon J. Murrill, Legislative Attorney
implement an agreement by APEC members on
environmental goods.
IF11400


https://crsreports.congress.gov

---

Presidential Authority to Address Tariff Barriers in Trade Agreements Under Section 103(a)


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF11400 · VERSION 1 · NEW

---