S. 995 – Trade Promotion Authority
Noteworthy
Floor Situation: On Tuesday May 12, the Senate will vote to invoke cloture on the motion to proceed to H.R. 1314, which will serve as the vehicle for the trade debate, particularly the Trade Promotion Authority bill.
Background/Executive Summary: Trade Promotion Authority is the legislative framework Congress created for executive-legislative interaction on international trade agreements. It outlines the legislature’s views on what the negotiating objectives should be in trade agreements, and it requires the executive to consult with Congress throughout the process of negotiating a trade agreement. In exchange, it promises that a signed agreement will be considered for approval and implementation by Congress under expedited procedures without amendment. In the past, this framework was sometimes referred to as “fast-track” authority.
The president can negotiate trade agreements on his own authority, but those agreements usually require implementing legislation, as Congress has the constitutional power to “regulate commerce with foreign nations.” The TPA structure is an exercise of that constitutional power.
TPA expired in July 2007. This bill would reauthorize it until July 2018, with the possibility of its authority being extended to July 2021 upon presidential request. It significantly strengthens and updates the notification and consultation requirements, along with the negotiating objectives.
Considerations on the Bill
Increasing trade is vital to helping American workers. As the U.S. Trade Representative has explained: “Every $1 billion in exports of U.S. goods and services supports more than 5,000 U.S. jobs. In 2012, exports of U.S. goods and services supported an estimated 9.8 million American jobs, including 25 percent of all manufacturing jobs.” Secretary of State Kerry has said to our allies that trade “could have a profound impact on jumpstarting the economies for all of us. It’s worth millions of jobs.”
Notable Bill Provisions
Section 2 – Trade Negotiating Objectives
This section outlines overall trade negotiating objectives and principal trade negotiating objectives. The first part of the section establishes overall objectives, such as obtaining more market access or ensuring trade and environmental policies are mutually supportive. The latter is directed at outlining objectives in more specific areas, such as trade in goods, trade in services, trade in agriculture, foreign investment, intellectual property, labor and the environment, and currency practices. Some of these principal objectives are new, such as ones related to digital trade, human rights, or state-owned enterprises. As the Finance Committee points out, this section updates the negotiating objectives for the 21st century.
Section 3 – Trade Agreements Authority
This section authorizes the president to enter into a trade agreement addressing both tariff and non-tariff barriers. It further provides that an agreement may only be entered into if it meets the negotiating objectives previously outlined, as well as the notification and consultation mechanisms in sections four and five.
It then provides that an implementing bill qualifying for procedural protections is one that approves a trade agreement itself, approves the statement of administrative action implementing the trade agreement, and only makes changes in law strictly necessary to implement the agreement. These procedural protections are currently codified at 19 U.S.C. § 2191.
The section then provides that these procedural protections apply to implementing bills submitted before July 1, 2018. The deadline can be extended to July 1, 2021, if the president requests an extension by April 1, 2018, and neither house of Congress adopts a resolution disapproving the extension before July 1, 2018. Such a disapproval resolution must be reported out of the relevant committee of jurisdiction.
Section 4 – Congressional Oversight, Consultations, and Access to Information
This section provides the requirements for the executive’s interactions with the legislature in the course of negotiating a trade agreement. It describes the consultations the U.S. Trade Representative must have with Congress throughout the process, including with congressional advisory groups on negotiations, designated congressional advisers on trade policy, and individual members.
Section 5 – Notice and Consultations
This section provides that the president must provide congress at least 90 days’ notice prior to initiating negotiations for a trade agreement. It goes on to require the president consult with Congress in this process, and provides the mechanisms for doing so. It requires additional consultation and reporting if negotiations concern agriculture, textiles, apparel, or other import sensitive products.
Section 5(d) requires the president to submit to Congress reports of any completed agreement concerning the agreement’s environmental elements, its impact on U.S. employment, and the labor rights of the partner country.
Section 6 – Implementation of Trade Agreements
This section provides the process by which a trade agreement is to take effect and become implemented. It provides that an agreement is eligible for expedited procedures only if the president takes the following steps:
- 90 days prior to signing the agreement: notifies Congress of his intent to enter into an agreement.
- 60 days prior to signing the agreement: makes the text of the agreement public.
- Within 60 days of signing: submits to Congress a description of changes to law necessary to be in compliance with the agreement.
- After signature: submits to Congress the final text of the agreement; a draft of an implementing bill; and a statement of administrative action proposed to implement the agreement.
The agreement can then only take effect if the implementing bill is enacted into law.
Section 6(b) provides two processes to remove the procedural protections afforded to a bill implementing a trade agreement when Congress finds that the president failed to meet the negotiating objectives or to comply with the notification or consultation procedures of this act. First, it provides expedited procedures for the consideration of a “procedural disapproval resolution” by both houses removing such protections. Both houses must approve such a resolution within 60 days of each other to have this effect. The expedited procedures for consideration of this measure come by reference in the bill to 19 U.S.C. §2192(d) and (e). This procedural disapproval resolution must be reported out of the respective committees of jurisdiction in each chamber in order to be considered by the full body.
Second, the act establishes a “consultation and compliance resolution” under which each house, acting individually, may remove the procedural protections given to an implementing bill. In the Senate, such a resolution removing the procedural protections must be reported out of the Finance Committee. Cloture requirements on the motion to proceed to that resolution would still stand. Procedures are separately provided for House consideration of such a resolution. If such procedural protections are removed, then they are only removed in the respective house that passed such a resolution.
If the procedural protections for an implementing bill are removed, the bill could still be considered; it would just be subject to the standard legislative process of timing, amendments, committee processes, etc.
The bill provides that expedited procedures cannot be used to consider a trade agreement that includes any country listed as a Tier 3 country in the State Department’s annual Trafficking in Persons report.
Section 7 – Treatment of Trade Agreements Where Negotiations Have Already Begun
Negotiations are currently in progress for a variety of trade agreements, such as the Trans-Pacific Partnership or with the European Union. This section provides the notification and consultation requirements for these ongoing negations and any resulting agreement.
Section 8 – Sovereignty
This section provides that no provision of a trade agreement that is inconsistent with domestic law “shall have effect.” It further provides that trade agreements cannot prevent the United States or any state from amending or modifying their laws. It finally provides that reports issued by trade agreement dispute settlement panels “shall have no binding effect” on the United States.
Administration Position
In every State of the Union address President Obama has delivered, he has either requested Trade Promotion Authority or spoken of the job-creating benefits of increased international trade.
Cost
CBO has estimated the costs of this bill are negligible, and consist of spending subject to future appropriation. There is no effect on direct spending.
Amendments
The amendment situation is unclear at this time.
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