Has Obama's Trade Policy Been

Date: March 25, 2014

Has Obama's Trade Policy Been "Slow-Tracked"?

With the Obama Administration continuing to push forward aggressively on two major free trade deals  – the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP)—the stage seems set for President Obama to cement his historical legacy as an ardent and effective architect of  sweeping free trade initiatives.

 It now appears however that the US Congress could bump the President’s ambitious trade policy agenda into the “slow lane” by failing to approve so-called “Fast Track” trade negotiation authority, otherwise known as Trade Promotion Authority (TPA).

What is “Fast Track” and why is it so important?  Since 1974, Fast Track authority has been the centerpiece of each Administration’s ability to engage in, and successfully conclude, trade agreements. Implementing any free trade agreement in the US requires both houses of the US Congress to pass implementing legislation. Under normal circumstances, the US system of government allows any member of Congress to propose Amendments to any bill under consideration.

As a practical matter, applying these normal legislative procedures to free trade legislation would make it exceedingly difficult – if not impossible – to ever approve a free trade deal. Think about it:  trade negotiators labor for months if not years negotiating the minute details of lengthy agreements which can exceed 1,000 pages in length. When agreement is finally reached with the other country’s negotiators, the US side must submit the agreement to Congress. If each of the 535 members of Congress could propose any change to any part of the agreement, it is likely that the revised agreement ultimately passed by the US Congress would differ substantially from the agreement signed-off on by the other country’s negotiators.

Allowing Congress to consider free trade agreements under normal rules means that, in effect, a foreign country would be facing 535 “Chief” negotiators on the US side, making a successful conclusion exceedingly difficult.

To solve this dilemma, the Trade Act of 1974 contained a provision (which came to be known as Fast Track) which was designed to give Congress a fair chance for input and review on any agreement, but which precluded the possibility of the agreement getting “picked apart”. Under Fast Track, trade agreements are submitted to the US Congress for an “up or down” vote, with no possibility to amend. In other words, individual members may vote to either approve or not approve the agreement, but they may not attempt to modify or change the agreement.   They must vote on it “as is”.

Of course, as part and parcel of this provision, the Administration needs to consult heavily with members of Congress throughout the negotiation process and seek their input and recommendations, if they hope to get these same legislators to eventually vote to approve the agreement. Although far from perfect, fast track provisions have generally been seen as a reasonable attempt to strike a balance between the need for Congress to exercise its authority, and the need for the Administration to be empowered to negotiate agreements with foreign countries that cannot be subsequently altered.

Fast Track authority is provided by the Congress to the Administration for specific, delineated periods of time. Previous Fast Track authority was granted in 2002 and expired in 2007, meaning that the Obama Administration needs Congress to once again approve Fast Track. Implementing legislation on Fast Track was introduced earlier this year, but was immediately met with lackluster support on both sides of the political aisle.  Growing doubts in the US Congress over the actual benefits of free trade for the average American worker have made the passage of Fast Track all the more difficult. Senate Majority Leader Harry Reid has already stated his opposition, and most Capitol Hill insiders view Fast Track – at least in its current form – to be “dead on arrival” in the US Congress.  

So, while US trading partners in Europe and the Asia Pacific continue to work diligently towards the conclusion of major free trade agreements with the US, they would be well-advised to closely monitor sentiment in the US Congress. Unless or until the prospects for Fast Track improve, two of President Obama’s hoped-for signature achievements could end up in the “Slow Lane.”

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