Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Trade Promotion Authority Not a “Blank Check” for President Obama

Posted May 14, 2015


Trade Promotion Authority (TPA) legislation previously approved by the Senate Finance Committee was the key focus of debate in Congress today with most Democrats and possibly as many as 60 “Tea Party” Republicans opposed the bill that would “fast-track” the passage of trade agreements.

Bill S. 995, formally known as the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 would give the Obama administration, and potentially the next president also, increased power to negotiate and commit the United States to international trade deals such as the controversial Trans-Pacific Partnership (TPP), which is currently being negotiated with 11 other countries.

Contrary to what some of the bill’s more deeply unenlightened critics would have people believe, TPA is not merely a “blank check” that would enable President Obama to give away the farm and then foist a lousy outsourcing deal on the American people’s supine representatives. In fact, the 117-page legislation establishes an array of negotiating and reporting guidelines to be followed in addition to setting out numerous general and specific trade objectives that must be met with respect to jobs, wages, manufacturing, agriculture, and the environment.

The key sections of the bill are those circumscribing the nature of the trade promotion authority and the implementation of trade agreements. The “fast-track” power granted by Section 3 of the bill would allow the president to bring a trade agreement to Congress for an up-or-down vote that it could not amend. The TPA lays out more than a dozen overall objectives for trade negotiations including: increasing access and decreasing trade barriers for the U.S., promoting worker and children’s rights and ensuring equal access for small business. More specific objectives are identified regarding almost twenty different economic sectors that would be affected by the trade negotiations, from agriculture and textiles to intellectual property and digital technology.

Dealing with one of the most controversial aspects of the TPP (and the Transatlantic Trade and Investment Partnership), the bill outlines a number of specific objectives attempting to significantly improve the Investor-state dispute settlement (ISDS) process including: enhancing opportunities for public input; ensuring the fullest measure of transparency possible; promptly disclosing to the public all proceedings, submissions, findings, and decisions; ensuring all hearings are open to the public; and establishing a means for accepting amicus curiae submissions from businesses, unions, and non-governmental organizations.

The bill also establishes a number of requirements for the Office of the U.S. Trade Representative (USTR), including guidelines for how it should work with Congress and its various advisory commissions, as well as how information should be divulged to the U.S. public. Pursuant to those requirements, USTR must publicly list the objectives of any potential agreement at least 30 days before starting negotiations. And to help address frequently voiced concerns about perceived opacity in the negotiation process, the bill establishes a new position of “Chief Transparency Officer” to liaise and consult with Congress “on transparency policy, coordinate transparency in trade negotiations, engage and assist the public, and advise the United States Trade Representative on transparency policy.”

More than a dozen reports are called for by the TPA, from various advisory committees and commissions as well as assessments of the economic, environmental and labor impact of any deal, in addition to the costs and effects of trade penalties and current enforcement mechanisms.

Finally, the implementation and enforcement provisions of the bill set out the timeline for the president and Congress when reviewing a trade deal. Section 6 states that the president must give 90-day notice before entering into a trade deal. Then at least 60 days before signing, the administration must publish the text of the proposed agreement online and also requires the president to post a final copy of the agreement 30 days before entering into it.

An unprecedented addition to the bill, never before included in any previous trade promotion legislation, is the provision in Section 6 of a “procedural disapproval resolution” that allows Congress to revoke the authorities granted in the event the president doesn’t consult as required with Congress about ongoing trade negotiations, isn’t in compliance with the mandatory reporting requirements set out in the bill, or otherwise fails “to make progress in achieving the purposes, policies, priorities, and objectives” as established in Section 3 of the TPA.