Trade Promotion Authority (Fast-Track Authority for Trade Agreements): Background and Developments in the 107th Congress

Trade Promotion Authority (Fast-Track Authority for Trade Agreements): Background and Developments in the 107th Congress

Order Code IB10084
Issue Brief for Congress
Received through the CRS Web
Trade Promotion Authority (Fast-Track Authority
for Trade Agreements): Background and
Developments in the 107th Congress
Updated January 14, 2003
Lenore Sek
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Early Presidential Authority to Cut Tariffs
Nontariff Barriers and Fast-Track Authority
Stalemate on Fast-Track Renewal
Developments During the 107th Congress
House Approval of H.R. 3005, Bipartisan Trade Authority Act of 2001
Senate Approval of Trade Bill H.R. 3009, Trade Act of 2002
House Vote (H.Res. 450) Following Senate Approval of H.R. 3009
The Conference Report, Final Floor Votes, and Enactment
Early Action on Trade Agreements
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
CHRONOLOGY
CRS Products
Other Reading

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Trade Promotion Authority (Fast-Track Authority for Trade
Agreements): Background and Developments in the 107th Congress
SUMMARY
One of the major trade issues in the 107th
Following Senate passage of H.R. 3009,
Congress was whether or not Congress would
House Ways and Means Committee Chairman
approve trade promotion authority (formerly
Thomas sought a rule (H.Res. 450) that, he
called fast-track authority) for the President to
argued, would strengthen the position of the
negotiate trade agreements with expedited
House in the conference. The rule included
procedures for implementing legislation.
broad trade language to match the scope of the
Under this authority, Congress agrees to
Senate-approved bill. Many Democrats op-
consider legislation to implement the trade
posed the rule as by-passing the legislative
agreements (usually nontariff trade agree-
process. On June 26, 2002, the House ap-
ments) under a procedure with mandatory
proved the rule with another one-vote margin:
deadlines, no amendment, and limited debate.
216-215.
The President is required to consult with
congressional committees during negotiation
After some delays, a conference report
and notify Congress at major stages.
(H.Rept. 107-624) was filed on July 26, 2002.
The House approved the conference report by
The President was granted this authority
a 215-212 vote on July 27. The Senate ap-
almost continuously from 1974 to 1994. After
proved the conference report on August 1,
that, the authority lapsed.
2002. The President signed the bill into law
(P.L. 107-210) on August 6, 2002.
On December 6, 2001, the House passed
trade promotion authority (TPA) bill H.R.
The TPA provisions in P.L. 107-210
3005 by a vote of 215-214. An important
cover tariff and nontariff agreements entered
issue was the designation of labor and the
into before June 1, 2005 (possible 2-year
environment as negotiating objectives.
extension). For expedited procedures to apply
to legislation to implement a trade agreement,
On May 23, 2002, the Senate wrapped
the agreement would have to “make progress”
TPA into a comprehensive trade bill, H.R.
toward meeting the outlined negotiating objec-
3009, “the Trade Act of 2002.” The bill
tives and satisfy other specified conditions.
included TPA (in title XXI), reauthorization
Any changes to trade remedy laws would be
of Andean trade preferences, extension of the
subject to greater congressional scrutiny. The
Generalized System of Preferences, and trade
President would have to consult with congres-
adjustment assistance (TAA). Two controver-
sional bodies, including the newly established
sial differences with the House were: (1) the
Congressional Oversight Group. Congress
so-called Dayton-Craig amendment, which
could withdraw expedited procedures if con-
would allow the removal from an implement-
sultation requirements were not met.
ing bill any provisions to amend U.S. trade
remedy laws, and (2) the level of tax credits

for displaced workers to cover their health
care.
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MOST RECENT DEVELOPMENTS
On August 6, 2002, H.R. 3009 was enacted into law (P.L. 107-210). The House had
approved the conference report for H.R. 3009 (H.Rept. 107-624) by a vote of 215-212 on
July 27, 2002. The Senate had approved the conference report by a vote of 64-34 on August
1, 2002.
On June 19, 2002, the House Rules Committee reported out a rule (H.Res. 450)
recommended by Ways and Means Committee Chairman Thomas for consideration of the
Senate-passed TPA bill (H.R. 3009). The House approved H.Res. 450 on June 26 by a vote
of 216-215.
On May 23, 2002, the Senate passed comprehensive trade bill H.R. 3009 by a 66-30
vote. Title XXI of H.R. 3009 includes TPA provisions similar, but not identical, to the
House-approved TPA provisions.
On December 6, 2001, the House approved TPA bill H.R. 3005 along party lines by a
vote of 215-214.
BACKGROUND AND ANALYSIS
The Constitution gives Congress the primary power over trade policy: Article 1
empowers Congress “to regulate commerce with foreign nations” and “to lay and collect
taxes, duties, imposts, and excises.” By virtue of his constitutional power to conduct foreign
affairs, the President has the authority to negotiate and enter into agreements with foreign
countries, including those dealing with trade and tariff policy, but has no constitutional
authority to impose tariffs, unless Congress delegates that authority.
Early Presidential Authority to Cut Tariffs
For 145 years, Congress exercised its power in trade policy through frequent enactment
of tariff acts, setting in detail duty rates for individual imports. The high tariffs and
economic disaster of the early 1930s, however, led to a major change in the congressional
and executive roles in tariff-setting. Under the Reciprocal Trade Agreements Act of 1934,
Congress authorized the President to negotiate reciprocal reductions of tariffs, within a
limited range and time period, and to implement them by proclamation without the need for
implementing legislation.
This delegation of tariff-cutting authority to the President was intended to encourage
lower tariff levels. Since Congress was elected by local interests that often benefitted from
protection against imports, there were incentives for keeping tariffs at high levels. On the
other hand, because the President was accountable to a broader constituency than Members
of Congress, the President could negotiate reciprocal reductions in tariffs (within the limits
allowed) without the political liability faced by Members.
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For the next several decades, Congress extended the President’s tariff-cutting authority
a number of times. Under this authority, the President negotiated reductions in tariff levels
multilaterally in five rounds under the General Agreement on Tariffs and Trade and
afterward proclaimed the lower tariffs under the authority Congress had delegated.
Nontariff Barriers and Fast-Track Authority
The sixth round of multilateral trade negotiations, called the Kennedy Round (1964-67),
involved negotiations on nontariff as well as tariff barriers. Congress had extended
presidential tariff-cutting authority for the Kennedy Round under the Trade Expansion Act
of 1962. That authority did not include negotiation of nontariff barriers. Nonetheless, the
Administration negotiated agreements that involved two nontariff barriers: (1) the American
Selling Price (ASP), which was a relatively high U.S. import valuation based on domestic
producers’ prices that primarily protected the U.S. chemical industry; and (2) a code, or set
of rules, on antidumping. Although the 1962 Act authorized (as did the 1934 Act) the
President to negotiate a reduction of “any existing duty or other import restriction,” the view
in Congress at the time was that by entering into the antidumping agreement, the President
had overstepped his delegated power. Congress subsequently did not enact legislation to
implement the two agreements and even approved opposing measures.
The decision by Congress not to approve the nontariff commitments made by the
President showed that there was a dilemma regarding negotiations on nontariff barriers.
Nontariff barriers were becoming increasingly important in restricting trade, since tariffs had
been reduced in prior rounds. Trading partners wanted assurance that U.S. negotiators could
reach a deal with likelihood of approval back home. U.S. negotiators were concerned they
would have no credibility in future trade talks without some “go-ahead” by Congress to
negotiate on nontariff trade barriers.
In the early 1970s, in anticipation of a seventh round of multilateral negotiations that
was sure to include nontariff barriers, President Nixon submitted legislation for a new type
of negotiating authority. The proposed legislation would have granted to him proclamation
authority for nontariff barriers much like the previously granted authority for tariffs. He
proposed that he be able to reach a nontariff agreement, submit it to Congress, and unless
Congress legislatively disapproved the agreement, the President would put the changes into
effect by proclamation. There would be no need for implementing legislation. The Nixon
proposal was passed by the House but stopped in the Senate.
Senate Members and staff reached a different, substantially new arrangement with the
Administration. Under this arrangement, enacted in the Trade Act of 1974 (P.L. 93-618),
Congress agreed to consider and vote on legislation to implement a trade agreement
negotiated by the President without amendment and with limited debate, as long as the
President met the conditions set out in the Act. The President would have to consult with
appropriate congressional committees before and during the negotiation and to notify
Congress at least 90 days before entering into the agreement. The President also would have
to submit implementing legislation, a statement of administrative actions to be taken to
implement the agreement, and reasons why the agreement serves the interests of U.S.
commerce. The arrangement in the 1974 Act – an assured vote by Congress without
amendment on a bill to implement a trade agreement, on the condition that the President
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consulted with Congress and took other required actions – became commonly known as
“fast-track authority.” At the time, there was little if any controversy about the procedural
restrictions that Congress imposed on itself. It was viewed that Congress had achieved an
enlarged role in trade negotiations through consultation and notification requirements.
The negotiating authority in the 1974 Act enabled the Administration to negotiate the
Tokyo Round of multilateral trade negotiations (1974-79). After the Round was completed,
when it was time to construct the implementing legislation, Senate staff argued that Congress
should have an active part in that process. The result was that Congress took a draft bill
through a “mock” legislative process, with committee consideration, amendments, and
conference committee. The President then submitted legislation based on that final draft bill.
Although not formally outlined in any document, the executive and legislative branches thus
agreed on a process that allowed congressional involvement in crafting legislation that would
eventually be formally considered under expedited procedures.
The 1974 Act granted fast-track authority to the President for agreements reached over
the next 5 years. The Trade Agreements Act of 1979 (P.L. 96-39) extended the authority
another eight years. After a brief lapse, the Omnibus Trade and Competitiveness Act of 1988
(P.L. 100-418) renewed the President’s fast-track authority for agreements reached through
May 1993 (the latter two years of that renewal were granted because the President requested
the additional two years and Congress did not disapprove). The 1988 Act was subsequently
amended (P.L. 103-49) to extend fast-track authority for Uruguay Round multilateral
agreements reached before April 16, 1994. After that, the President’s trade negotiating
authority expired.
Fast-track authority had been instrumental in the negotiation and implementation of five
major trade agreements. Two of those five agreements were multilateral agreements reached
during the Tokyo Round and the Uruguay Round negotiations in the GATT. The other three
agreements were free trade agreements: the U.S.-Israel Free Trade Agreement, which was
negotiated with special authority in the Trade and Tariff Act of 1984 (P.L. 98-573); the U.S.-
Canada Free Trade Agreement; and the North American Free Trade Agreement. No
agreement has been disapproved under fast-track procedures.
Stalemate on Fast-Track Renewal
During the 104th Congress (1995-1996), President Clinton proposed an extension of
fast-track authority. The President’s intent was to use the fast-track authority to extend the
North American Free Trade Agreement to Chile. Democrats supported the President’s
proposal. A Republican-supported alternative, H.R. 2371, was approved by the House Ways
and Means Committee. The bill did not reach floor vote. A major reason why legislation
did not move forward was disagreement over inclusion of labor and environmental issues.
A major push to enact fast-track legislation occurred during the 105th Congress (1997-
1998). In the first half of 1997, President Clinton did little on a fast-track bill because of
attention to the budget and other priorities. In spite of warnings from both Democrats and
Republicans, he waited until after Labor Day (September 16, 1997) to submit a proposal to
Congress. The proposal was met with criticism. Neither Democrats nor Republicans
supported how labor and the environment were treated in the proposal.
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Two weeks later, on October 1, 1997, the Senate Finance Committee approved a bill,
S. 1269, by voice vote. The bill did not include labor and the environment as principal
objectives. It did include them in a separate section under “policy objectives,” but the
Finance Committee stated in its bill report that those provisions were intended to encourage
the President to develop initiatives outside of the context of trade agreements subject to fast-
track approval. The bill stipulated that fast-track procedures would apply to only certain
kinds of provisions in an implementing bill, further limiting how labor and the environment
could be addressed. In early November, the Senate approved a motion to proceed to floor
consideration of S. 1269, but stopped to wait for the House to act.
Meanwhile in the House, on October 8, 1997, the Committee on Ways and Means had
approved H.R. 2621, which was similar to the bill in the Senate. The committee vote was
24-14, with only 4 of the 16 Democrats on the Committee voting for the bill. House Speaker
Gingrich set the floor vote for November 7, then delayed it to November 9. President
Clinton lobbied hard for Democratic votes, but was unsuccessful. House Speaker Gingrich
and President Clinton agreed to hold off on the floor vote.
The following year, on July 1, 1998, the Senate Finance Committee voted 18-2 to
approve S. 2400, a comprehensive trade bill that included essentially the same fast-track
provisions that the Committee had approved the year before, together with other trade
programs such as trade preferences for sub-Saharan Africa and the Caribbean and renewal
of the Generalized System of Preferences. S. 2400 did not reach the Senate floor.
On July 23, 1998, House Speaker Gingrich announced that a vote would be scheduled
on fast-track bill H.R. 2621 that September. President Clinton and some Democratic
Members opposed a vote that close to the November elections. They wanted the vote
postponed until the next year. Some Republicans claimed that the Democrats did not want
to vote for trade authority against their labor supporters. Democrats claimed that the
Republicans scheduled the vote to get agriculture and business support and to hurt the
Democrats. On September 25, 1998, the House voted down fast-track bill H.R. 2621 by a
vote of 180-243. The vote was along strongly partisan lines.
During the 106th Congress (1999-2000), there was little done on fast-track renewal. In
1999, the Senate Finance Committee considered the idea of another omnibus trade bill with
fast track provisions, but decided to split up the proposals and didn’t act on fast-track. With
the presidential election in 2000, there was virtually no activity on fast-track that year.
Developments During the 107th Congress
The Bush Administration pursued fast-track renewal from the start. During his first
State of the Union address on February 27, 2001, President Bush asked Congress to “...give
me the strong hand of presidential trade promotion authority, and to do so quickly.” The
Administration introduced the new phrase “trade promotion authority” or TPA, to replace
“fast-track authority,” and the two terms are now widely used interchangeably. The President
called TPA his top trade priority. He said that he wanted TPA for a new round of
multilateral trade talks in the World Trade Organization, a Free Trade Area of the Americas
agreement, and other regional and bilateral negotiations, including free trade agreements with
Chile and Singapore.
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House Approval of H.R. 3005, Bipartisan Trade Authority Act of
2001
A major issue during the first session of the 107th Congress was how labor and the
environment should be treated in trade agreements. Some Members supported fast-track
reauthorization, but only with strong labor and environmental provisions that could be
enforced with sanctions. Other Members supported labor and environmental provisions, but
wanted the President to have discretion to choose from a “toolbox” of remedies to enforce
those provisions. Yet other Members favored excluding labor and the environment
completely and limiting the authority for fast-track implementation to provisions that related
strictly to removal of trade barriers. There was a clear partisan split of these views, with
Democrats generally favoring labor and the environment as enforceable objectives, and
Republicans generally favoring them in less important roles.
The Administration and the New Democrats offered early proposals. On May 10, 2001,
in his legislative agenda for international trade, President Bush included labor rights and
environmental protection as objectives, but “...in a manner consistent with U.S. sovereignty
and trade expansion.” He also included related actions among the toolbox of actions that
could be taken together with trade negotiations. On May 24, 2001, the House and Senate
New Democrats “applauded” the President’s inclusion of labor and the environment, but
argued that the President’s plan was “...silent on the critical issue of appropriate mechanisms
for enforcing trade agreements.” They said that labor and the environment should have
parity with the other negotiating objectives.
Partisan differences continued. On June 13, 2001, Representative Crane, Chairman of
the Trade Subcommittee of the House Ways and Means Committee, introduced H.R. 2149,
with 61 original cosponsors, all of whom were Republican (except one original Democratic
cosponsor, who later withdrew). Labor and the environment were not specifically included
in any of the provisions of H.R. 2149. House Democratic Leader Gephardt said that the bill
“looks like another ‘my way or the highway’ solution to a problem.” A few months later,
after the September 11th attack, the Administration promoted TPA as part of a national
security package. Some Democrats strongly objected, saying that the Administration was
unfairly suggesting that it was unpatriotic to oppose TPA.
On October 3, 2001, Representative Thomas, Chairman of the House Ways and Means
Committee, introduced H.R. 3005, a bill to extend trade negotiating authority. Chairman
Thomas has worked with a small number of Democrats on the bill through the summer. The
Democrats included Representative Dooley, a leader of the New Democrats, and
Representatives Jefferson and Tanner, both on the Ways and Means Committee. The three
Democrats, Representative Crane, and Representative Dreier, Chairman of the House Rules
Committee, were the original cosponsors. Although the bill was entitled the “Bipartisan
Trade Promotion Authority Act of 2001,” many Democrats charged that Chairman Thomas
was not trying to build a bipartisan consensus, but was trying only to secure enough
Democrats to win passage in the House.
The day after Chairman Thomas introduced his bill, Democratic leaders submitted their
own bill. On October 4, Representative Rangel, Ranking Member of the Ways and Means
Committee, and Representative Levin, Ranking Member of the Ways and Means
Subcommittee on Trade, released H.R. 3019. They said that there were key differences
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between H.R. 3019 and H.R. 3005 in the areas of labor standards, environmental issues,
enforcement, and the role of Congress.
Ways and Means Committee Chairman Thomas scheduled markup of H.R. 3005 for
October 5, 2001. The markup of a TPA bill was postponed because of complaints by
Democratic Committee members that more time was needed to debate key proposals. The
Committee still met on October 5 to markup other trade bills: H.R. 3009 to extend Andean
trade preferences, H.R. 3010 to reauthorize the Generalized System fo Preferences, and H.R.
3008 to reauthorize trade adjustment assistance (TAA). The Committee met on October 9
for markup of TPA legislation, and on that day, it defeated H.R. 3019 by a 12-26 vote and
approved H.R. 3005 by a 26-13 vote. Both votes were largely along party lines.
The legislation stalled after the Committee vote. House floor votes were repeatedly
postponed. President Bush and House Speaker Hastert conferred with House Ways and
Means Committee Ranking Member Rangel, but no compromise resulted. Ways and Means
Committee Chairman Thomas and Ranking Member Rangel had angry exchanges. The
World Trade Organization ministerial conference took place in Doha, Qatar in early
November without the President having TPA, which he had wanted for that meeting.
On December 6, 2001, the House approved H.R. 3005 by a vote of 215-214 along party
lines (194 out of 221 Republicans voted for the bill, compared to 21 out of 211 Democrats).
The version of H.R. 3005 considered and approved in the House had been amended in some
significant ways under Rules Committee Resolution H.Res. 306. (Of note was a last-minute
deal on the House floor between Republican leadership and representatives from textile
states. That deal was outlined in a letter from House Republican leaders to Representative
DeMint. It stated that no trade bills would be brought to the House floor until the House
approved provisions that U.S. knit and woven fabrics must undergo all dyeing, finishing, and
printing procedures in the United States in order to qualify for Caribbean or Andean trade
preferences.)
Senate Approval of Trade Bill H.R. 3009, Trade Act of 2002
On December 12, the Senate Finance Committee approved its version of H.R. 3005 on
an 18-3 vote “subject to further amendment.” The Committee met again on December 18,
rejected three amendments, and ordered the bill to be reported with an amendment in the
nature of a substitute. The version of H.R. 3005 approved by the Senate Finance Committee
was similar to the House-passed version in most major respects, but it did have some
differences regarding negotiated changes to trade remedy law, investor-government disputes,
and dispute panel action.
The controversy over labor and the environment that was so heated in the House seemed
to diminish as the TPA bill moved to the Senate. Two other issues, however, became
increasingly important: trade adjustment assistance to help workers hurt by trade and trade
remedy laws (e.g., antidumping and countervailing duty laws).
Democrats in the Senate wanted substantial TAA benefits to be part of any TPA
legislation considered on the Senate floor. Finance Committee Chairman Baucus and Senate
Majority Leader Daschle co-sponsored S. 1209, a TAA bill that included among its
provisions a 75% subsidy of health care premiums for dislocated workers for up to a year
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under the Consolidated Omnibus Budget Reconciliation Act or COBRA (which allows
workers to continue their coverage through the plans where they worked), benefits for
secondary workers (i.e., those supplying parts to an injured firm), and assistance to farmers
and fishermen. The Finance Committee approved S. 1209 on December 4, 2001. About a
week later, at the start of the Finance Committee mark-up of TPA bill H.R. 3005, Chairman
Baucus said that if fast track was to be taken up on the floor, he would use “every legislative
option at my disposal to ensure that TAA and fast track are joined.” Early in January 2002,
Majority Leader Daschle repeated that TPA renewal would be linked to TAA benefits for
workers.
Republicans in the Senate did not necessarily oppose a TAA-TPA package, but they
expressed concern about the cost of the increased benefits in S. 1209. They supported a tax
credit for workers to privately buy their own health care policies (or if not that, then a lower
subsidy for health care premiums or a combination of tax credit and subsidy), no benefits for
secondary workers, and other changes from provisions in S. 1209. They also opposed a
Democratic proposal to use Customs user fees to pay for increased TAA benefits.
In addition to TAA, another major issue in the Senate debate on TPA was protection of
U.S. trade remedy laws. Some Members of the Senate, especially those from steel-producing
states, wanted provisions in a TPA bill that assured U.S. trade remedies would remain
unchanged under trade agreements. They were furious that the U.S. Trade Representative
had agreed to include trade remedy reform on the negotiating agenda for the new WTO
round. That agenda was set in Doha, Qatar in November 2001. In March 2002, President
Bush imposed tariffs of up to 30% on most steel imports, undoubtedly aware that he was
using trade remedies to help domestic steel producers shortly before a vote on TPA was
expected in the Senate.
TPA legislation was delayed in the Senate for the early part of 2002 because of other
legislative priorities and by partisan differences over TAA provisions that might accompany
TPA. Finally, at the end of April 2002, the Senate leadership pushed trade legislation
forward. On May 1, 2002, the Senate invoked cloture and agreed by a 77-21 vote to proceed
to consideration of the vehicle for a trade package, H.R. 3009. The House had passed H.R.
3009 on November 16, 2001, as a bill to reauthorize the Andean Trade Preference Act
(ATPA), and the Senate Finance Committee had approved H.R. 3009, also as an Andean
trade preferences bill, on December 14, 2001. The Senate was going to amend H.R. 3009
to add other trade measures.
On the same day that the Senate voted to proceed to consideration of H.R. 3009, Senate
Majority Leader Daschle introduced a manager’s amendment (S.Amdt. 3386) that had
several components. It included Democrat-supported TAA provisions for workers that
offered a 73% refundable tax credit for workers’ health care and controversial health care
benefits for retired steelworkers (“legacy costs”). It also included the TPA and ATPA
language reported out of the Senate Finance Committee. Republican Senators opposed the
Daschle amendment and called its TAA provisions “partisan.” As debate on H.R. 3009
stalled, Senate Majority Leader Daschle said he would pull the bill if Democrats and
Republicans couldn’t reach an agreement on TAA.
On May 9, 2002, Senators Baucus and Grassley, the Chairman and Ranking Member
respectively of the Senate Finance Committee, announced they had reached a major
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agreement on TAA provisions the trade bill. The next day they introduced S.Amdt.3401 as
a substitute to H.R. 3009. The Baucus-Grassley amendment included a 70% tax credit for
workers’ health insurance, benefits for secondary workers, and a pilot program for wage
insurance for workers over 50, but no legacy-cost benefits for steelworkers. The Baucus-
Grassley amendment also included TPA, ATPA, and a 5-year reauthorization of the
Generalized System of Preferences (GSP) program.
A number of amendments to the Baucus/Grassley amendment were proposed, and many
were approved. The most controversial was S.Amdt. 3408, which was sponsored by
Senators Dayton and Craig. This amendment stated that trade authorities (fast-track)
procedures would not apply to any provision in an implementing trade bill that weakened
U.S. trade remedy law. A motion to table the Dayton-Craig amendment was defeated 38-61,
and the amendment passed on a voice vote. Supporters of the amendment claimed that the
amendment was necessary to ensure that U.S. safeguards, antidumping and countervailing
duty laws were not undermined during trade negotiations. The Bush Administration strongly
opposed the Craig-Dayton amendment., claiming that the amendment would tie the hands
of U.S. negotiators by restricting their ability to negotiate.
On May 23, 2002, the Senate approved the Baucus-Grassley substitute amendment
(which included the Dayton-Craig provision above) by voice vote and approved H.R. 3009
as amended by the Baucus-Grassley substitute by a 66-30 vote. TPA provisions were Title
XXI of the approved H.R. 3009.
House Vote (H.Res. 450) Following Senate Approval of H.R. 3009
Following Senate passage of H.R. 3009, House Ways and Means Committee Chairman
Thomas sought a rule that, he argued, would strengthen the position of the House in the
conference. In a departure from usual practice, he recommended a rule (H.Res. 450) to go
to conference that essentially included language for a new, comprehensive trade bill. He
pushed for a rule that included the House-approved TPA bill, new TAA language
(significantly different from previously passed H.R. 3008), House-approved reauthorization
of Andean trade preferences, extension of the Generalized System of Preferences (passed in
House committee but not on the floor), and other provisions.
Almost all House Democrats and some House Republicans opposed the Thomas rule.
Some opponents said that, because the Thomas rule included new language that the House
had not previously approved, the rule bypassed the legislative process. Further, according
to some reports, House Democrats opposed the broader language that was in the Thomas
rule, because they wanted the higher TAA benefits and stronger trade remedy protections in
the Senate version.
After some delay, which Democrats said reflected lack of support but Republican
leaders said was used to explain the rule, the House Rules Committee reported out H.Res.
450 (H.Rept. 107-518) on June 19, 2002. As reported, H.Res. 450 stated that upon its
adoption, the House “shall be considered to have insisted” on the provisions in the rule as
an amendment to the Senate amendment of H.R. 3009. In other words, the language of the
Thomas rule would become the working document for House conferees.
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Several days later, the House voted on H.Res. 450. Press reports suggested that the
delay was needed to secure support for the measure. On June 26, 2002, the House approved
H.Res. 450 by a one-vote margin: 216-215. House conferees were appointed the same day.
The Conference Report, Final Floor Votes, and Enactment
In early July, conference action was delayed by a disagreement between Senate leaders
over the number of Senate conferees on the conference committee. Senate Majority Leader
Daschle wanted 5 conferees, while Senate Minority Leader Lott wanted at least 7 conferees
and preferably more. According to press reports, the reason the Republican leadership
wanted a larger number of conferees was to allow Senator Gramm, who opposed higher TAA
benefits, to serve on the conference committee. Finally on July 12, 2002, the Senate
Republican leadership consented, and 5 conferees were named.
Conference action was further delayed by a disagreement between House Ways and
Means Committee Chairman Thomas and Senate Finance Committee Baucus over who will
chair the conference. The chair usually alternates between the House and the Senate. On
July 18, 2002, an agreement was reached that Chairman Thomas would be chairman of the
trade conference committee.
Conferees held their first meeting on Tuesday, July 23, during the week before August
recess. They reached an agreement on the trade package late in the evening of Thursday, July
25. On the controversial issue of tax credits for displaced workers to help pay for health care
insurance, conferees split the difference (60% House versus 70% Senate) and agreed on a
65% level. On another difficult issue, the Dayton-Craig provisions in the Senate version,
conferees dropped the provision but agreed to additional reports and oversight if negotiations
might result in possible changes to U.S. trade remedy laws.
Just before midnight on Friday, July 26, the conference report for H.R. 3009 (H.Rept.
107-624) was filed. Just after midnight on Saturday, July 27, the Rules Committee reported
and the House passed a waiver (H.Res. 507) allowing same-day consideration for the
conference report to accompany H.R. 3009. Around 3:30 A.M. on July 27, the House
approved the conference report by a 215-212 vote. The House recessed that day.
The Senate had scheduled recess a week later. On August 1, the Senate approved the
conference report for H.R. 3009 by a 64-34 vote. Although some Senators objected on
constitutional grounds or because of specific provisions such as those affecting textiles and
apparel, the measure received solid and bipartisan support in the Senate relative to the House.
The President signed the measure on August 6, 2002. The legislation became P.L. 107-
210.
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Selected Major Provisions P.L. 107-210, The Trade Act of 2002
Trade Adjustment Assistance
! Provides a 65% tax credit for health insurance for workers who lose their
jobs because of trade or because their firms relocated production;
! Consolidates trade adjustment assistance and the adjustment assistance
program under NAFTA;
! Would expand eligibility for workers hurt by a shift in production to
another country (benefits previously available for shifts to NAFTA
countries only, H.R. 3009 would provide benefits for shifts to certain
other countries);
! Extends benefits to workers previously ineligible: secondary workers,
downstream workers in the case of NAFTA countries, and farmers and
ranchers (but not fishermen or taconite workers);
! Adds 52 weeks of possible TAA benefits;
! Establishes a 5-year demonstration project to pay up to half of the wage
difference for older workers who move into new jobs or industries;
! Raises the ceiling for training from $110 million to $220 million;
! Raises the job search and relocation allowance for workers; and
! Speeds the process for workers to petition for eligibility.
Trade Promotion Authority
! Sets objectives for trade negotiations, including labor and the
environment;
! Provides that, for certain trade agreements entered into before June 1,
2005 (possible 2-year extension), if the President negotiates the
agreements under the conditions specified, Congress will consider
legislation to implement the agreements under expedited procedures (no
amendment, limited debate);
! Includes provisions on trade remedy laws: (1) makes enforcement of such
laws a “principal negotiating objective,” and (2) requires a report on
possible changes to these laws 6 months before an agreement is signed,
and provides for a congressional resolution expressing opposition;
! Establishes a new Congressional Oversight Group; and
! Requires notification and consultation by the President at different stages
of negotiation, and withdraws expedited procedures for an implementing
bill for lack of notice or consultation.
Andean Trade Preferences
! Reauthorizes Andean trade preferences through December 31, 2006, with
duty-free benefits applied retroactively; and
! Expands duty-free treatment to many articles previously excluded:
specific groups of apparel articles, footwear, tuna shipped in airtight
containers, petroleum products, watches, and selected leather goods.
Generalized System of Preferences
! Reauthorizes the Generalized System of Preferences through December
31, 2006, with duty-free benefits applied retroactively, and expands the
list of internationally recognized workers’ rights.
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Early Action on Trade Agreements
On August 1, 2002, U.S. Trade Representative (USTR) Zoellick issued a statement
upon Senate approval of the conference report for H.R. 3009. In the statement, he said that
the United States had fallen behind other countries that had been aggressively negotiating
trade agreements. He said, however, that passage of the trade legislation would offer “...a
boost to the U.S. and global market.” He pointed to immediate results in opening U.S.
markets to developing countries in Latin America, Africa, and the Caribbean. He also said
that TPA would be used to complete free trade agreements with Chile and Singapore, initiate
new negotiations for free-trade agreements with Central America and Morocco, and consider
free-trade agreements with other countries such as Australia and in southern Africa. With
TPA, he said, the United States will “...push to complete negotiations regarding the Free
Trade Area of the Americas on the same aggressive time frame as the global talks.” He also
stated that the legislation gave the United States “...the credibility and the ability to advance
our agenda in the new global trade negotiations....”
In the months remaining in 2002, the Office of the USTR moved ahead quickly on many
of these proposals. A U.S.-Chile free-trade agreement (FTA) was concluded on December
11, 2002. A month earlier, on November 19, the USTR had announced that an FTA with
Singapore had been reached “in substance, although the issue of capital controls was still
unresolved. As required under P.L. 107-210, the President notified Congress of the intent
to initiate trade negotiations with Central America (formal notice given on October 1),
Morocco (October 1), South African Customs Union (November 4), and Australia
(November 13). Under the Act, such notice is required at least 90 days before initiating the
negotiations.
Under provisions of the Trade Act of 2002, the executive branch and Congress began
work on a new consultative relationship on trade negotiations. The Congressional Oversight
Group met for the first time on September 19, 2002. At that meeting, Finance Committee
Chairman Baucus called for the Administration to provide negotiating documents, allow
congressional observers at the negotiations, and ensure that Members can “provide input”
before negotiating positions are fixed. In the following days, he complained that the
Administration was meeting none of these and repeatedly offered plans for consultation.
Under the 2002 Trade Act, the USTR was required to submit guidelines for the exchange of
information between the USTR and the Congressional Oversight Group within 120 days of
enactment. The USTR submitted these guidelines on December 4, 2002. With several trade
negotiations underway in 2003, the effect of these guidelines and the other provisions of the
2002 Trade Act will be seen quickly.
LEGISLATION
P.L. 107-210, H.R. 3009
To extend the Andean Trade Preference Act, to grant additional trade benefits under that
Act, and for other purposes. Introduced October 3, 2001. Reported, amended, by the
Committee on Ways and Means (H.Rept. 107-290) November 14, 2001. Passed/agreed to
in House by voice vote November 16, 2001. Reported by Senate Finance Committee
Chairman Baucus with an amendment in the nature of a substitute (S.Rept. 107-126)
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December 14, 2001. Passed Senate with an amendment by 66 - 30 vote May 23, 2002.
House agreed to Senate amendment with amendment pursuant to H.Res. 450 by 216-215
vote June 26, 2002. House conferees appointed Jule 26, 2002. Senate conferees appointed
July 12, 2002. Conference report (H.Rept. 107-624) filed July 26, 2002. Conference report
brought up for consideration in the House under the provisions of H.Res. 509, and House
agrees to conference report by a vote of 215-212 July 27, 2002. Senate agreed to conference
report August 1, 2002. Signed into law August 6, 2002.
H.Res. 306 (Reynolds)
Providing for consideration of the bill (H.R. 3005) to extend trade authorities
procedures with respect to reciprocal trade agreements. Reported as an original measure by
the House Rules Committee (H.Rept. 107-323) and approved by the House by a 224 - 202
vote on December 6, 2001.
H.Res. 450 (Reynolds)
Relating to consideration of the Senate amendment to the bill (H.R. 3009) to extend the
Andean Trade Preference Act, to grant additional trade benefits under that Act, and for other
purposes. Reported by the House Rules Committee as an original measure (H.Rept.
107-518) June 19, 2002. Passed in House by 216 - 215 vote June 26, 2002.
H.R. 1446 (English)
Standard Trade Negotiating Authority Act of 2001. A bill to provide permanent trade
negotiating authority. Introduced April 4, 2001; referred to Committees on Ways and
Means; and Rules.
H.R. 2149 (Crane, et. al.)
Trade Promotion Authority Act of 2001. A bill to extend trade authorities procedures
with respect to reciprocal trade agreements. Introduced June 13, 2001; referred to the
Committee on Ways and Means and the Committee on Rules.
H.R. 3005 (Thomas, et. al.)
Bipartisan Trade Promotion Authority Act of 2001. A bill to extend trade authorities
procedures with respect to reciprocal trade agreements. Introduced October 3, 2001.
Reported (amended) by the Committee on Ways and Means (H.Rept. 107-249, Part 1)
October 16, 2001. On December 6, 2001, Rules Committee Resolution H.Res. 306 reported
to House (H.Rept. 107-323). H.Res. 306 provided that the amendment recommended by the
Committee on Ways and Means now printed in the bill, modified by the amendment printed
in H.Rept. 107-323, be considered as adopted. Passed House by recorded vote: 215 - 214
on December 6, 2001. Reported by the Finance Committee with an amendment in the nature
of a substitute favorably (S.Rept. 107-139) February 28, 2002.
H.R. 3019 (Rangel, et. al.)
Comprehensive Trade Negotiating Authority Act of 2001. A bill to provide fast-track
trade negotiating authority to the President. Introduced October 4, 2001; referred to the
Committee on Ways and Means and Committee on Rules.
S. 136 (Gramm)
Fast Track Trade Negotiating Authority Act. A bill to amend the Omnibus Trade and
Competitiveness Act of 1988 to extend trade negotiating and trade agreement implementing
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authority through the end of 2004. Introduced January 22, 2001; referred to the Finance
Committee.
S. 599 (Roberts, et al.)
Permanent Trade Promotion Authority and Market Access Act of 2001. A bill to amend
the Omnibus Trade and Competitiveness Act of 1988 to establish permanent trade
negotiating and trade agreement implementing authority. Introduced March 22, 2001;
referred to Finance Committee.
S. 1104 (Graham/Murkowski, et al.)
Trade Promotion Act of 2001. A bill to establish objectives for negotiating, and
procedures for implementing, certain trade agreements. Introduced June 26, 2001; referred
to Finance Committee.
S. 2062 (Durbin)
Comprehensive Trade Negotiating Authority Act of 2002. A bill to provide fast-track
trade negotiating authority to the President. Introduced March 21, 2002; referred to Finance
Committee.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. Committee of Conference. Trade Act of 2002. Conference report to
accompany H.R. 3009, July 26, 2002. H.Rept. 107-624. 107th Congress, 2nd session.
U.S. Govt. Print. Off., 2002. 266 p.
U.S. Congress. House. Committee on Rules. Report to accompany H.Res. 450, June 19,
2002. H.Rept. 107-518. 107th Congress, 2nd session. U.S. Govt. Print. Off., 2002. 74
p.
U.S. Congress. House. Committee on Ways and Means. Bipartisan Trade Promotion
Authority Act of 2001. Report together with additional and dissenting views to
accompany H.R. 3005, October 16, 2001. H.Rept. 107-249, Part 1. 107th Congress, 1st
session. U.S. Govt. Print. Off., 2001. 83 p.
U.S. Congress. Senate. Committee on Finance. Bipartisan Trade Promotion Authority Act
of 2002. Report together with additional views to accompany H.R. 3005, February 28,
2002. S.Rept. 107-139. 107th Congress, 2d session. U.S. Govt. Print. Off., 2002. 69 p.
——. Andean Trade Preference Expansion Act. Report to accompany H.R. 3009, December
14, 2001. S.Rept. 107-126. 107th Congress, 2d session. U.S. Govt. Print. Off., 2002.
56 p.
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CHRONOLOGY
1934 – In the Reciprocal Trade Agreements Act of 1934, Congress begins a policy of
delegating authority to the President to negotiate tariff agreements within limits and to
implement the new tariff levels by proclamation.
01/03/75 – The Trade Act of 1974 is enacted. Under the Act, Congress continues to delegate
to the President the authority to negotiate tariff agreements and implement them by
proclamation. Congress also delegates to the President the authority to negotiate
nontariff trade agreements subject to consultation and notification requirements. For
nontariff agreements reached by specified deadlines, Congress agrees to consider such
agreements under an expedited (“fast track”) procedure.
04/16/94 – After almost continual reauthorization since 1975, the President’s trade
negotiating authority expires.
09/25/98 – The House disapproves H.R. 2621 by a largely partisan vote of 180-243. The
Administration opposed the vote.
05/10/01 – President Bush outlines his 2001 legislative agenda for international trade. He
places trade promotion authority (TPA) at the top of the agenda.
12/06/01 – The House passes H.R. 3005 by a 215-214 vote along party lines.
05/23/02 – The Senate approves TPA under title XXI of H.R. 3009 by a 66-30 vote.
06/26/02 – The House approves by a vote of 216-215 a rule (H.Res. 450) offering alternative
language for H.R. 3009 that includes the House-approved TPA bill, reauthorization of
Andean preferences and the Generalized System of Preferences, TAA, and other
provisions.
07/27/02 – The House approves the conference report for H.R. 3009 (H.Rept. 107-624) by
a 215-212 vote.
08/01/02 – The Senate approved the conference report for H.R. 3009 by a 64-34 vote.
08/06/02 – The President signs the measure. The legislation becomes P.L. 107-210.
CRS Products
CRS Report 97-817, Agriculture and Fast Track (Trade Promotion) Legislation, by
Geoffrey S. Becker and Charles E. Hanrahan.
CRS Report RS21004, Trade Promotion Authority and Fast-Track Negotiating Authority for
Trade Agreements: Chronology of Major Votes, by Carolyn C. Smith.
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CRS Report RS21078, Trade Adjustment Assistance for Workers: Legislation in the 107th
Congress, by Paul J. Graney.
CRS Report RS21078, Trade Promotion Authority: Environment-Related provisions of P.L.
107-210, by Mary Tiemann.
CRS Report RL31445, Trade Promotion (Fast-Track) Authority: A Comparison of Bills
Approved by the House and by the Senate with Notes on the Conference Report (H.R.
3009), by Lenore Sek and William H. Cooper.
CRS Report 97-896, Why Certain Trade Agreements Are Approved as
Congressional-Executive Agreements Rather Than as Treaties, by Jeanne J. Grimmett.
Other Reading
Schatz, Joseph J. and Jill Barshay. Bush Wins Key Victory Before Recess: Fast-Track
Trade Negotiating Authority. CQ Weekly. August 3, 2002. p. 2127-2130.
—— Deal Puts Fast Track on Track. CQ Weekly. July 27, 2002. pgs. 2021-2025.
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