Legislation to Renew Fast-Track Consideration for Trade Agreements Introduced

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A much awaited trade promotion authority ("TPA") bill was introduced in the House and Senate on January 9 by Ways and Means Committee Chairman Dave Camp (R-MI) and Finance Committee Chairman Max Baucus (D-MT). The legislation (H.R. 3830/S. 1900) would provide for fast-track congressional consideration of trade agreements negotiated by the Administration, including the ongoing Trans-Pacific Partnership (TPP) negotiations with countries such as Australia, Thailand, Malaysia, Singapore, Philippines, and Japan and the nascent Transatlantic Trade and Investment Partnership (TTIP) negotiations between the United States and EU countries. Although introduced with great fanfare, the legislation faces an uphill battle and passage will not occur anytime soon.

Fast-track authority provides for a change in the normal congressional voting procedures, aimed at streamlining the approval process for trade agreements. Specifically, the procedure allows an up or down vote without amendment on legislation implementing a trade agreement. Such procedures provide assurances to negotiating partners that once an agreement is concluded, Congress will not be able to make changes that would force renegotiation of aspects of the agreement. In addition to these procedural provisions, the legislation also provides direction to U.S. negotiators regarding the congressional objectives for each of the key negotiating areas including intellectual property, the services industries, regulatory harmonization, labor and environment, foreign investment and mechanisms for dispute settlement including rules for international arbitration. It also calls upon negotiators to address issues such as currency manipulation and anti-corruption. To address concerns that members of Congress often have no transparency to or role in ongoing negotiations, the legislation creates a Congressional Advisory Group that is made up of Designated Congressional Advisers who would be briefed on the ongoing negotiations. Finally, the legislation requires negotiators to uphold and enforce U.S. trade remedy laws against any attempts to weaken them through trade negotiations. The legislation has been referred to the Finance Committee in the Senate and the Ways & Means, Rules, and Budget Committees in the House.

The legislation faces significant challenges. Due to his nomination as Ambassador to China, the Senate author of the legislation, Senator Max Baucus, will soon be replaced as Finance Committee Chairman by Senator Ron Wyden (D-OR). At the very least, Wyden will want to put his own imprimatur on the bill, which will delay Senate consideration. In the House, Ways and Means Committee Ranking Member Sander Levin (D-MI) is leading a large group of influential Democratic Members who are unhappy with the path that the TPP negotiations are taking, starting with the addition of Japan to the negotiations. In the Senate, Majority Leader Harry Reid (D-NV) has not committed to bringing the bill to the floor, noting that there is a lot of controversy surrounding TPA. Beyond that, there will no doubt be general opposition from numerous Democrats concerned about labor and environmental issues. To counter that opposition, leading business organizations, including the U.S. Chamber of Commerce, are promoting TPA and the underlying agreements that would be furthered under the procedures contained in the bill.

Another unresolved issue is whether the TPA bill will eventually be combined with other trade-related legislation, like the extension of Trade Adjustment Assistance and the renewal of the Generalized System of Preferences (GSP), both of which the Administration has said are also priorities. The inclusion of such legislation may complicate passage on the one hand, but may also offer some incentives to Democrats to vote affirmatively on the other.

Look for TPA to have a somewhat tortured legislative path with passage unlikely to occur until late Spring or early Summer.

-Thomas J. Spulak, Bonnie B. Byers

Topics:  EU, International Arbitration, TPA Agreement, Trade Policy, TTIP

Published In: General Business Updates, Elections & Politics Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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