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Policy Committee Feature Issue of the Week: Trade

Policy • January 9, 2014

The United States has Free Trade Agreements (FTAs) in place with 20 countries.[1]  International Trade has been estimated to support more than 38 million American jobs and account for more than 30 percent of total U.S. GDP.[2]    The United States’ use of Trade Promotion Authority (TPA) has been important in securing these agreements, expediting the implementation process, and enhancing the credibility of U.S. negotiators.  Currently, the United States is engaged in major negotiations with 11 Asia-Pacific countries (“Trans Pacific Partnership”), with the European Union, and with 22 other countries for a trade in services agreement (“TISA”).  Combined, U.S. negotiations with the Asia-Pacific and the EU would open markets with nearly 1 billion consumers, covering nearly two-thirds of global GDP, and 65% of global trade.  TISA covers about 50% of global GDP, as well, and over 70% of global services trade.

What is TPA?

This week, Chairman Camp introduced the Bipartisan Congressional Trade Priorities Act of 2014. Senators Baucus and Hatch introduced identical legislation in the Senate.

Granted to every President since FDR, TPA includes three main components: (1) congressional negotiating objectives directing the Administration in negotiations; (2) robust consultations and access to information requirements for the Administration to engage Congress; and (3) rules that ensure Congress has the final say in approving trade agreements through procedures providing for an up-or-down vote on the final implementing bill without amendment.

TPA requires that Congress take an active and meaningful role in the negotiation and approval of trade agreements.  TPA allows Congress to establish extensive negotiating objectives and consultation procedures for the Administration to follow.  It mandates Congressional consultations prior to, during, and after negotiations. Moreover, Congress retains the right to consider final agreements with an up-or-down vote.  Free trade agreements subject to TPA can only enter into force after Congressional approval.  Although the Constitution assigns Congress the authority to regulate foreign trade, TPA is fundamentally important in providing U.S. negotiators the credibility needed to close negotiations and to ensure trading partners make their best offers.  TPA expired for new agreements on July 1, 2007.  TPA legislation introduced by Chairman Camp this week would extend TPA through 2018, with the possibility of further extension through 2021.

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