Trade Promotion Authority (TPA)

Trade Promotion Authority (TPA)

January 13, 2014
Trade Promotion Authority (TPA)
Overview
Congress has sought to achieve four major goals in TPA:
What is TPA? Trade Promotion Authority (TPA),
(1) define trade policy priorities and to have them reflected
previously “fast track,” is the time-limited authority that
in trade agreement negotiating objectives; (2) ensure that
Congress uses to set trade negotiating objectives, establish
the executive branch adheres to these objectives by
consultation requirements, and to have implementing bills
requiring notification and consultation with Congress; (3)
for certain reciprocal trade agreements considered under
define the terms, conditions, and procedures under which
expedited procedures, provided certain statutory
the President may enter into trade agreements and under
requirements are followed (see Figure 1).
which implementing bills may be approved; and (4)
reaffirm Congress’s constitutional authority over trade by
What is the current status? TPA expired as of July 1,
placing limitations on the use of TPA.
2007. On July 30, 2013, President Obama requested that
Congress reauthorize TPA. On January 9, 2014, legislation
Supporting Views—Supporters argue that TPA is
to reauthorize TPA—the “Bipartisan Congressional Trade
necessary to ensure that U.S. negotiated trade agreements
Priorities Act of 2014—was introduced in the House (H.R.
are not amended by Congress, which could undermine the
3830) and the Senate (S.1900). Current negotiations on the
credibility of U.S. trade negotiators and potentially unravel
proposed Trans-Pacific Partnership (TPP), the Transatlantic
a final agreement. They also argue that TPA should be
Trade and Investment Partnership (TTIP), the Trade in
renewed now because of the four major trade negotiations
Services (TISA), and the World Trade Organization (WTO)
currently underway with the United States and to address
Doha Round agreements may require TPA to pass
new issues not reflected in the 2002 authority.
implementing legislation.
Opposing Views—Opponents argue that with TPA,
Why TPA? The President has the authority to negotiate
Congress is relinquishing its constitutional authority over
international agreements, including free trade agreements
trade by delegating it to the President. They also argue that
(FTAs), but the Constitution gives the U.S. Congress sole
because trade agreements have become increasingly
authority over the regulation of foreign commerce. For 150
comprehensive and may affect economic activities beyond
years, Congress exercised this authority over foreign trade
what is typically considered trade, the implementing
by setting tariff rates directly. This policy changed with the
legislation should be subject to normal legislative
Reciprocal Trade Agreements Act of 1934, in which
procedures, including full debate and amendments.
Congress delegated authority to the President to enter into
reciprocal trade agreements that reduced tariffs within pre-
Key Elements of TPA
approved levels, and so did not require further
congressional action.
Trade Agreements Authority—First enacted in the Trade
Act of 1974, TPA historically has provided authority to the
Congress has the Power to “...regulate commerce
President to enter into reciprocal trade agreements that
reduce tariff and nontariff barriers, provided an
with foreign nations...” and to “...lay and collect
“implementing bill” is introduced in which Congress
taxes, duties, imposts, and excises...” approves the agreement and authorizes changes in existing
law and/or new statutory authority “necessary or
Article I, Section 8, U.S. Constitution
appropriate” to implement it. The trade agreement enters
into force by presidential proclamation, subject to the
In the 1960s, nontariff barriers became part of trade
implementing bill being enacted into law.
negotiations and Congress altered this delegated authority
Expedited Procedures—The implementing bill is subject
to require an implementing bill to authorize changes in U.S.
law required to meet these new obligations. Pre-approval
to: (1) mandatory introduction; (2) automatic discharge
was no longer an option, and given an implementing bill
from the relevant committees; (3) limited floor debate; and,
faced potential amendment that could alter a long-
(4) an “up or down” vote, passing by simple majority.
negotiated agreement, Congress adopted fast track authority
in the Trade Act of 1974 to ensure that the implementing
Negotiating Objectives—Defined by Congress in TPA, the
bill would be given expedited legislative consideration.
executive branch is expected to honor and adhere to trade
negotiating objectives, if it expects to have the
implementing bill considered under expedited rules.
The fast track authority was reauthorized four times. It was
renamed Trade Promotion Authority in the Trade Act of
2002, the most recent authorization.
www.crs.gov | 7-5700

Trade Promotion Authority (TPA)
Notification and Consultation—TPA authority and the
Scope of Negotiating Objectives—Over a decade has
expedited procedures are extended to the President subject
passed since TPA was last renewed, so there is considerable
to certain notification requirements and consultations with
interest in Congress but also differing views on updating
Congress on the status of negotiations.
negotiating objectives for “21st century” trade agreements.
Key issues may include intellectual property rights, state-
Limitations to the TPA—Congress has adopted TPA on
owned enterprises, supply-chain trade flows, currency, and
pragmatic grounds to prevent trade implementing bills from
labor and environmental commitments, among other issues.
being delayed or obstructed by congressional procedures.
To assure retention of its constitutional authority, Congress
Consultation and Notification—While, some Members of
has included: time limits on use of the TPA; the option for
Congress have been satisfied with the Administration
Congress to disapprove extension of TPA should either
current consultation practices, others have expressed
House of Congress decide not to extend TPA; and the
dissatisfaction and may wish to consider revising certain
option for Congress to withhold expedited consideration of
past procedures.
an implementing bill should Congress determine that there
was inadequate consultation and reporting to Congress.
Technical Considerations—Given years of experience in
Each House also retains the right to exercise its
the use of TPA, some concerns have arisen over: (1) the
constitutional rulemaking authority to change TPA rules.
interpretation of “necessary or appropriate” language; (2)
the possible use of time limitation in the introduction of
Hearings and “Mock Markups”—In the past, Congress
trade agreement implementing legislation; and (3) the
has reviewed trade agreements prior to an implementing bill
treatment of text changes in trade agreements after
being introduced. The House Ways and Means and Senate
negotiations have closed.
Finance Committees typically hold hearings on the
proposed trade agreement. They also can hold “informal”
For a more detailed look at TPA, see CRS Report RL33743,
markups on a draft implementing bill, followed by a “mock
Trade Promotion Authority (TPA) and the Role of Congress
conference.” Although not defined in the TPA legislation,
in Trade Policy, by William H. Cooper.
these steps provide for public review of the proposed
agreement and allow the President to hear feedback and
William H. Cooper, wcooper@crs.loc.gov, 7-7749
concerns from Congress which are, nonetheless, nonbinding
IF00002
on the Administration.
Possible Issues for Congress
The Need and Timing of TPA—TPA legislation is widely,
but not universally, viewed as necessary for passage of
major reciprocal trade agreements. Currently, the Obama
Administration is proceeding as if such authority is in place,
including consulting with Congress on current negotiations.
It is not clear, however, that this will necessarily lead to an
easy consensus between the two parties and branches of
government on new TPA.
Figure 1. Congressional Requirements and Time Line Under TPA

Source: CRS.

www.crs.gov | 7-5700