Order Code RL31844
Report for Congress
Received through the CRS Web
Trade Promotion Authority (Fast-Track Authority
for Trade Agreements): Background and
Developments in the 107th Congress
April 2, 2003
(name redacted)
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜
The Library of Congress
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 Congress (2001-2002) was whether
Congress would approve trade promotion authority (TPA; formerly called fast-track
authority) for trade agreements. Under these provisions, Congress agrees to consider
legislation to implement a trade agreement under special legislative procedures that
limit debate and allow no amendment. The President is required to consult with
congressional committees during negotiation and notify Congress at major stages.
This report gives background on the origin of TPA/fast-track legislation, trade
agreements negotiated under such legislation in the past, the lapse of legislation in
1994, and attempts at renewal in the late 1990s. The report also follows TPA/fast-
track authority legislation as it developed during the 107th Congress.
There were four major stages in the development of TPA legislation during the
107th Congress. First, after extensive debate on labor and the environment as trade
negotiating objectives, the House passed a TPA bill (H.R. 3005) by a single vote
(215-214) on December 6, 2001. Second, the Senate wrapped TPA into a
comprehensive trade bill (H.R. 3009), with debate concentrated on health care
subsidies under the trade adjustment assistance title of the bill, and approved the
trade bill by a 66-30 vote on May 23, 2002. Third, the House considered a rule
(H.Res. 450) that included broad trade language to match the scope of the Senate-
approved bill. There was partisan disagreement on using the rule as a means to
approve broad trade programs, and the House approved the rule on June 26, 2002,
by another one-vote margin (216-215). Fourth, after some delays, conferees filed a
report on trade bill H.R. 3009 on July 26, 2002. The House and Senate approved the
conference report by votes of 215-212 and 64-34 respectively just before the summer
recess. The President signed the bill into law (P.L. 107-210) on August 6, 2002.
The TPA provisions in P.L. 107-210 cover tariff and nontariff agreements
entered into before June 1, 2005 (possible 2-year extension). For expedited
procedures to apply to legislation to implement a trade agreement, the agreement
must “make progress” toward meeting the outlined negotiating objectives and satisfy
other specified conditions. Any changes to trade remedy laws are subject to greater
congressional scrutiny. The President must consult with congressional bodies,
including the newly established Congressional Oversight Group. Congress can
withdraw expedited procedures, if consultation requirements are not met. This report
will not be updated.
Contents
Early Presidential Authority to Cut Tariffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Nontariff Barriers and Fast-Track Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Stalemate on Fast-Track Renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Developments During the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
House Approval of H.R. 3005, Bipartisan Trade Authority Act of 2001 . . . 5
Senate Approval of Trade Bill H.R. 3009, Trade Act of 2002 . . . . . . . . . . . 7
House Vote (H.Res. 450) Following Senate Approval of H.R. 3009 . . . . . . 9
The Conference Report, Final Floor Votes, and Enactment . . . . . . . . . . . . . 9
Enactment to Year-End 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Trade Promotion Authority (Fast-Track
Authority for Trade Agreements):
Background and Developments in the
107th Congress
At the start of the 108th Congress, the United States was involved in an
unprecedented number of trade negotiations. It was meeting with over 140 countries
on a multilateral trade agreement under the World Trade Organization. It also was
negotiating with 33 other countries in the western hemisphere to create a Free Trade
Area of the Americas and was near conclusion to free-trade agreements with Chile
and with Singapore. Furthermore, the Administration had given notice that it
intended to begin free-trade negotiations with the Central American Common
Market, the Southern African Customs Union, Morocco, and Australia.
These agreements, if concluded, are expected to be considered by the Congress
under provisions of major trade legislation enacted during the 107th Congress. That
legislation, the Bipartisan Trade Promotion Authority Act of 2002 (P.L. 107-210),
provides that if the Administration consults with Congress and meets other specified
conditions, Congress will vote on legislation to implement the trade agreements
under limited debate and without amendment. This arrangement between the
executive and legislative branches is commonly called trade promotion authority
(TPA) and was formerly known as fast-track authority.
This report provides background on the origin of TPA/fast-track legislation,
trade agreements negotiated under such legislation in the past, the lapse of legislation
in 1994, and attempts at renewal in the late 1990s. The report follows TPA/fast-track
authority legislation as it developed during the 107th Congress, and includes action
on trade agreements in the first months after enactment.
Early Presidential Authority to Cut Tariffs
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.” The President, by virtue of his
constitutional power to conduct foreign affairs, has authority to negotiate and enter
into agreements with foreign countries, including those dealing with trade and tariff
policy. The President, however, has no constitutional authority to impose a new
tariff reached in a trade agreement, unless Congress delegates that authority.
For 145 years, Congress exercised its power in trade policy through frequent
enactment of tariff acts, setting duty rates in detail for individual imports. The high
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tariffs and economic depression 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, the President could negotiate reciprocal reductions in tariffs (within the
limits allowed) without the local political liability faced by Members.
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,
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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
died in the Senate.
Senate Members and staff reached a different, substantially new arrangement
with the Administration. Under this arrangement, which was endorsed by the House
and 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 served 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 consulted with Congress and took other required actions – became
commonly known as “fast-track authority.” At the time, there was little controversy
about the procedural restrictions that Congress imposed on itself. It was viewed that
Congress had already 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 following 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 bilateral and regional
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.-
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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 met with criticism. Neither
Democrats nor Republicans supported how labor and the environment were treated
in the proposal.
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 paused to wait for the House to act.
Meanwhile in the House, on October 8, 1997, the Committee on Ways and
Means 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.
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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.
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. These provisions generally related to labor
rights and environmental protection. 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 some Members 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
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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’s title 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 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 of 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
(H.Rept. 107-249, Part 1). 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
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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 (S.Rept. 107-139). 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 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
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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 to
accompany TPA. Finally, at the end of April 2002, 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 agreement on TAA provisions. 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
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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.
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 over the number
of Senate conferees on the conference committee. Senate Majority Leader Daschle
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reportedly wanted 5 conferees, while Senate Minority Leader Lott reportedly wanted
at least 7 conferees and preferably more.1 According to some press reports, the
argument for a larger number of Senate conferees was to allow Senator Gramm, who
opposed higher TAA benefits, to serve on the conference committee.2 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.3 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
the House was scheduled to leave for 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 for H.R. 3009. Around 3:30 A.M. on July 27,
the House approved the conference report by a 215-212 vote and then recessed.
The Senate had scheduled its summer recess to begin 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 (P.L. 107-210) on August 6, 2002.4
1 See Norton, Stephen. Squabbles Over Conference Size Keeps Trade Bill Stalled In Senate.
Congress Daily. National Journal. July 9, 2002; and Brevetti, Rossella. Senate Leaders
Continue to Disagree About Size of Conference on TPA Bill.
Daily Report for Executives.
Bureau of National Affairs, Inc. July 10, 2002.
2 See Schatz, Joseph J. Trade Negotiating Authority.
CQ Daily Monitor. Congressional
Quarterly. July 15, 2002; and Brevetti, Rossella. Stalemate Ends on Appointment of Senate
Conferees on Trade Package.
Daily Report for Executives. Bureau of National Affairs, Inc..
July 15, 2002.
3 See Brevetti, Rossella. Trade Promotion Bill Hits Another Snag As Lawmakers Dispute
Conference Chair.
Daily Report for Executives. Bureau of National Affairs, Inc. July 16,
2002; and Norton, Stephen. Thomas, Baucus Play ‘Who’s on First?’
Congress Daily.
National Journal. July 18, 2002.
4 Further information is available in: CRS Report 97-817,
Agriculture and Fast Track
(Trade Promotion) Legislation, by (name redacted) and (name redacted); CRS
(continued...)
CRS-11
Enactment to Year-End 2002
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....”5
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), Southern 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 days following, 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.
4 (...continued)
Report RS21078,
Trade Adjustment Assistance for Workers: Legislation in the 107th
Congress, by (name redacted); and CRS Report RS21078,
Trade Promotion Authority:
Environment-Related provisions of P.L. 107-210, by (name redacted).
5 Office of the United States Trade Representative. Statement of Robert B. Zoellick, U.S.
Trade Representative, upon Senate Approval of Trade Promotion Authority. August 1,
2002. Available at [http://www.ustr.gov/releases/2002/08/index.shtml].
CRS-12
Selected Major Provisions of 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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