After a year of uncertainty on Trade Promotion Authority (TPA) to negotiate and approve trade agreements, the Obama Administration and Congress appear to be moving in the same direction. TPA will be passed first and then individual trade agreements will be addressed.
The Administration made clear late last year that TPA passage was the first step in moving its trade agenda. According to a report by Inside U.S. Trade, White House National Economic Council Director Jeff Zients said, “So we need to get TPA done, and then [on] TPP get across the finish line in these final sets of negotiations.” He also said, “We hope and assume that Trade Promotion Authority will be an early area of focus for the new Congress.”
House Speaker Boehner (OH-R) and Senate Majority Leader McConnell (KY-R) have indicated that trade is an issue on which the Republicans can work with President Obama. The outgoing Senate Majority Leader Harry Reid (NV-D) did not take up TPA because a vote last year could have put some Senate Democrats in a politically difficult position. New Senate Finance Chairman Hatch (UT-R) said trade overall will top the agenda in early 2015.
All Presidents should have TPA. How it is structured and the goals pursued may change depending on conditions in the world, but the Congress should always provide the President the authority to negotiate trade agreements on behalf of the American people. The time to negotiate is when someone else is ready, so the President has to always be prepared. Passing agreements under TPA without amendments avoids upsetting complex negotiated tradeoffs. Congress still retains the right to reject a truly bad agreement.
The TPA legislation should be bipartisan. Some members of both parties will oppose TPA for broad constitutional reasons or narrow parochial ones. The House Republicans now number 28 above the 218 majority, but are likely to have 60-70 votes against TPA. That means about 50 House Democrats must vote in favor of the TPA legislation. Trade Adjustment Assistance for workers has traditionally been a Democratic issue and will likely be part of any final bill. The Senate has 54 Republicans and they will need help from Democrats to shut off debate. The need for Democratic support should not be seen as a negative, but seen as an opportunity to have a truly bipartisan trade policy.
The trade policy debate should not be linked to other policy issues where sharp political disagreements will likely slowdown the legislative process. The case for Democratic support for TPA was recently made in a Wall Street Journal opinion article by Thomas ‘Mack’ McLarty, White House Chief of Staff under President Clinton. He stressed that trade-related jobs are better paying jobs and trade policy is about the “country’s ability to engage with the world and to lead.”
The biggest challenge for this version of TPA is how the Administration can reach out to individual members of the House and Senate who have concerns about the negotiations on the Trans-Pacific Partnership (TPP) trade agreement and the Transatlantic Trade and Investment Partnership (TTIP) trade agreement with the European Union. In previous versions of TPA, the President and Congress agreed on the negotiating objectives before talks between the U.S. Trade Representative’s (USTR) Office and officials from other countries. The USTR knew the issues that were sensitive for individual members of Congress and efforts were made to keep all sides informed as talks progressed.
This time, the President and the USTR forged ahead without that understanding. The USTR has attempted to keep members of the House and Senate informed, but the dynamics lack the sense of shared mission. That is particularly true of the TPP agreement which is nearing completion. The TPA bill will likely contain some very specific instruction to get the President and the Congress on the same page. Thick skins will be required by participants as these differences are worked out. All sides appear to be serious enough about a compromise that one will be achieved.
The role of TPA in convincing the other negotiating countries that the U.S. is serious about an agreement has been raised many times. Some countries have visions of Congress amending an agreement that goes through the House and Senate without TPA. If the President and the Congress cannot reach an agreement after they have said they want TPA, it would be a negative outcome. The TPA process has probably come too far to stall out now and maintain momentum in other countries for the TPP agreement.
The legislative process cannot start without a bill. With the start of a new Congress, all of the bills introduced the last two years have died. The process is further slowed down by the Senate shifting party control and the House Ways and Means Committee having a new Chairman. Despite those complications, there is plenty of institutional knowledge and senior leaders who want to move on trade, particularly with the White House prepared to engage on the issue. Aides have been working behind the scene to draft consensus language to introduce early in the year. Some have suggested the best time would before the President’s State of the Union speech on January 20.
A bipartisan TPA bill with a high likelihood of being passed will probably attract other trade legislation that has accumulated in recent months or will expire in 2015. These could include the Generalized System of Preferences, which reduces tariffs for developing countries and expired in July 2013, a Miscellaneous Tariff Bill, changes in customs procedures, and reauthorization of the African Growth and Opportunity Act, which has to be renewed by September. All of these would likely add support to the underlying TPA bill.
If TPA is to be completed before the TPP talks are completed, the time clock is already ticking. In preparation for a visit to Washington by Mexico’s President Nieto, the Obama Administration indicated the U.S. is seeking to conclude the TPP talk ‘early’ this year. If TPA is to show the Japanese and the other ten countries of the TPP that the U.S. government has worked out an internal compromise on trade policy, time is short.
Ross Korves is a Trade and Economic Policy Analyst with Truth About Trade &Technology (www.truthabouttrade.org). Follow us: @TruthAboutTrade and @World_Farmers on Twitter |Truth About Trade & Technology on Facebook.