The need for another Trade Agreement? Re-examining the Trade Promotion Authority considering current US-Asia relations

Shipping containers in the Port of Freeport.

As calls for trade deals with the Pacific intensify, it is worth reevaluating whether Congress should push for another Trade Promotion Authority.

BY: Julianna Eboli Andréu, Staff Editor

In a time of great geopolitical rivalry, calls have been made for the US to enhance alliances with the Indo-Pacific region, particularly Taiwan, to foster economic prosperity and regional stability. As Taiwan is a major US trading partner, a trade agreement between both countries would solidify these ties. Although the US has pursued “productive meetings” with Taipei over trade, it has been slow to develop a trade deal with Taiwan, as well as with the Asia-Pacific region generally. While the Biden Administration issued the Indo-Pacific Economic Framework to deepen economic engagement in the Pacific, Taiwan was excluded from the framework. And while the administration launched the U.S. Taiwan Initiative on 21st Century Trade to compensate for such exclusion, neither trade plan provides a framework for market access, which can limit their success in the region. Yet, one of the largest limits on these efforts is that such negotiations will not necessarily lead to trade agreements, which must be passed by Congress. Historically, however, Congress and the Executive have collaborated to expedite the negotiations process and ensure that such a deal will be codified by the legislature. 

Therefore, as the US navigates its economic and political policy in the Pacific, it is crucial to revisit the Trade Promotion Authority (TPA), the power that allowed the Executive to “fast-track” trade deals through Congress.  Although it had been consistently used since enacted in 1974, the Biden Administration let the TPA expire in June 2021 extinguishing the White House’s trade tool to swiftly get trade deals approved. Despite not knowing the exact reasons why the Biden White House did not attempt to get the TPA renewed, it is still useful to understand this delegated power’s use and whether it can be used as a strong tool to strategically build strong relationships in the East.

History of the Trade Promotion Authority

Trade plays a key role in shaping the geopolitical climate. As Economist Thomas Schelling stated, “Broadly defined to include investment, shipping, tourism and the management of enterprises, trade is what most of international relations are about. For that reason, trade policy is national security policy.” In U.S. history, trade has been used as a tool for strengthening international partnerships and alliances. Yet, under the powers enumerated in the U.S. Constitution it is important to understand who has the authority to dictate trade policy. 

Article I, Section 8 of the U.S. Constitution, also known as the Commerce Clause, delegates the power to Congress to “regulate Commerce with foreign Nations.” Article II, however, grants the President the “Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur”. These articles clearly indicate that the legislature and executive both have a role in implementing trade policy abroad. But how much of a role each branch exercises power over foreign commerce is left unclear.

There is a pragmatic need, however, for the US to have a unified strong voice in bargaining trade dealings. As evident from the Kennedy Round, post-WWII trade policy expanded from focusing on tariff barriers to non-tariff barriers, such as quota, embargoes, sanctions, to trade. Repealing these barriers,  however, would require changing U.S. law, a power that belongs to Congress under Article I.  It was Congress’ realization that 1) the Executive must assert a necessary confidence in bargaining trade agreements, and 2) its concern over presidential encroachment on its legislative power, led them to develop The Trade Promotion Authority.

Codified as the Trade Act of 1974, Congress passed procedural legislation that would expedite trade treaties. Congress sought to (1) define the trade policy priorities, (2) ensure the Executive meets those priorities by requiring consultation with Congress, (3) state the terms, conditions, and procedures under which the President may seek trade agreements and get them approved, and (4) reaffirm its’ authority over trade by imposing limitations. In return, Congress would consider implementing bills without amendments in a timely manner.

Overall, Congress intended the TPA to be a narrow, procedural measure that did not grant the president powers beyond those already granted by the Constitution. It is a highly conditional delegation to the Executive, which allowed there to be congressional oversight. If the president went against one of the guidelines, there were withdrawal mechanisms in place to end the agreement.

Controversy

The Trade Promotion Authority has allowed the Executive to negotiate many free trade agreements that were consequently approved by Congress. Under the TPA, Congress has passed NAFTA as well as trade agreements with Chile, Singapore, Chile, Australia, Morocco, Bahrain, the Dominican Republic, Oman, and Peru. 

Despite TPA’s purpose to be a tool of cooperation between Congress and the Executive, experts are uncertain as to the actual balance between the executive and legislature as well as its effectiveness in implementing trade agreements. In terms of the power balance, some opponents claim that the TPA gave the Executive carte blanche power to pursue trade agreements under the presumption that Congress ceded its ability to control the substance of the deals. Others, however, argue that the TPA framework became a primarily congressional prerogative, where the Executive lost its role to be the primary agenda-setting authority in trade negotiations. For instance, after the TPA had been renewed in 2002, Congress in 2007 demanded that new provisions on intellectual property, labor, and the environment be added to free trade agreements already negotiated. These new guidelines undermine the Executive’s ability to have full control over negotiating trade deals with other countries – it undermines the White House’s bargaining power at the negotiating table. 

Additionally, this structure can undermine its effectiveness in passing trade agreements speedily. One of the main problems of the TPA is a grant of authority for trade agreements that have not yet been negotiated. Providing “one-size fits all” guidelines which are required in future trade agreements which potentially involve very diverse issues and has led to contentious Congressional debates over TPA itself. For example, contentions over intellectual property, environmental and labor standards prevented Congress from approving President Clinton’s fast-track legislation in 1997. 

With a deeply polarized Congress, there has been a rise in executive agreements,  agreements made with foreign countries without Congressional ratification. Although executive agreements lack the substance of a treaty, they are considered to be valid international pacts unless declared otherwise by a reviewing court. The issue with the proliferation of these agreements is that it overrides the TPA’s purpose, and ultimately the Constitutional power-sharing role, to cooperate with Congress on foreign policy. Additionally, they raise constitutional concerns over whether Congress is acquiescing to a non-delegation doctrine. Also, it undermines the transparency and accountability the legislative body provides as such agreements are more likely to surpass Congressional oversight. 

Future Considerations

 In 2022, the US is facing great-power competition and needs to assert a strong position in coordinating trade policies with other countries. Cooperation between both Congress and the White House is needed now more than ever. Despite the limitations associated with the delegated authority, the Executive and Congress should reconsider putting the TPA back on the legislative table. 

However, such TPA must be held to new standards where the Executive retains a strong negotiating power and Congress maintains its democratic and transparent law-making role in ratifying a treaty. It should also serve as a tool to get trade deals efficiently passed instead of opening highly-contested debates that undermine the purpose of quickly enacting trade agreements. Possible solutions include having the Executive consult with Congress at the start of negotiations and making Congress provide exclusions rather than guidelines that must be included. If the TPA is to be effective, the statute must be one that allows for trade deals that can be tailored to address the specific issue at hand. Most importantly, it should be a tool to successfully pursue foreign policy while reflecting the checks and balances instilled within the American government. 

Julianna Eboli Andréu is a second-year student at Columbia Law School and a Staff member of the Columbia Journal of Transnational Law.  She graduated with a Master of Science from The London School of Economics in 2019. Prior to that endeavor, she received a Bachelor of Arts degree from New York University in 2018. She has worked at an international affairs think tank, clinical research institutes, and interned at the U.S. Court of International Trade.