[CTC] Lawmakers, analysts eye new Fast Track as an opportunity for change

[Arthur Stamoulis]

Lawmakers, analysts eye new TPA as an opportunity for change
By Isabelle Icso, Inside US Trade 
3/11/2021
The looming expiration of so-called “fast-track” trade authority is prompting lawmakers and other stakeholders to assess ways the process might be improved as they wait to see whether the Biden administration requests the renewal of the authority.
The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 allows Congress to consider implementing bills for trade agreements under expedited procedures, including a guaranteed up-or-down vote with no amendments, if some minimal conditions are met. The bill, which is authorized through June 30, includes expansive consultation requirements for the administration to follow as it works with congressional committees of jurisdiction as well as advisory panels on trade negotiations.
As stakeholders weigh how the consideration of a new Trade Promotion Authority might play out -- and what a new fast-track law might look like -- a key question remains unanswered: Will the Biden administration, which to date has not put new trade deals at the top of its priority list, push for it to be renewed?
The administration has yet to say what it plans to do, but some lawmakers see the expiration of TPA as an opportunity to restore congressional oversight. Rep. Bill Pascrell (D-NJ), a member of the House Ways & Means Committee and the former ranking member of its trade panel, said it was “high time” to reform TPA and rein in the executive branch’s trade powers.
“On trade matters, Donald Trump repeatedly ignored Congress. Article 1, Section 8 of the Constitution puts Congress in the driver’s seat for trade,” he said in a statement to Inside U.S. Trade. That constitutional provision gives Congress the authority to regulate Commerce with foreign countries.
“But our Trade Promotion Authority is based on an outdated model that puts Congress in the passenger’s seat until the Executive Branch needs our votes,” Pascrell added. “It hurts workers, it hurts the environment and makes trade negotiations less transparent. We are focused on this pandemic and helping workers recover. But it is high time to change that imbalance.”
Pascrell and other Democrats led several efforts <https://insidetrade.com/node/164203> to compel the Trump administration to improve transparency between the executive and legislative branches. The lawmakers claimed the Trump White House skirted its TPA obligations by neglecting to consult key advisory groups as North American Free Trade Agreement renegotiation talks and other negotiations neared completion.
The administration in 2019 used a loophole in TPA to avoid submitting a market-access trade deal with Japan to Congress. A phase-one deal with China, signed in January 2020, also was not negotiated under TPA. Other Trump-era negotiations with India and Brazil similarly were not submitted for congressional approval. Such “mini-deals” often came under fire on Capitol Hill, with many lawmakers -- including Rep. Terri Sewell (D-AL) -- calling them “politically expedient <https://insidetrade.com/node/169066>.” The limited agreements were defended by Trump administration officials as ways to ensure concessions in areas they said wouldn’t have been possible via bigger pacts.
Senate Finance Committee ranking member Mike Crapo (R-ID), noting that Biden administration officials have not yet indicated “whether they want TPA renewed, or which potential trade agreements they might pursue,” said the GOP was willing to talk.
“We look forward to a constructive debate if the Administration decides to seek renewal,” Crapo said in an emailed statement to Inside U.S. Trade.
While Katherine Tai, Biden’s pick for U.S. Trade Representative, has said little about TPA, she told senators during her confirmation hearing and subsequent responses of her plans to consult with Congress on trade negotiations. She pledged to work with lawmakers to “identify ways to improve the flow of information in the development of trade policy,” in one answer <https://insidetrade.com/sites/insidetrade.com/files/documents/2021/feb/wto2021_0102a.pdf> to to questions for the record following her Feb. 25 hearing.
‘Action-forcing’ events
Since 1979, Congress has passed six measures extending TPA for limited time periods. In two of those instances, TPA lapsed for eight years before being reauthorized. The authority has been re-established four times: In 1979, 1988, 2002 and 2015.
Kelly Ann Shaw, a former Trump White House adviser, said this week that TPA consideration is usually tied to an “action-forcing” event, which might not arise in the near future. Shaw, now a partner at Hogan Lovells, was also a trade counsel for the House Ways & Means Committee and an assistant general counsel at USTR.
Biden has said he does not intend to complete any new trade deals until significant investments are made in U.S. workers and infrastructure. Tai, meanwhile, has pledged to make enforcement of the U.S.-Mexico-Canada Agreement and Chinese trade practices top priorities. She has also said she will review trade deals with the United Kingdom and Kenya. Whether those negotiations will resume -- and whether either deal might be an “action-forcing” event -- remains uncertain.
“TPA renewal has most often gone hand-in-glove with the need for that negotiating authority, meaning there has been some negotiation we have wanted to launch or that we wanted to conclude which requires that authority to be on the books,” Shaw said during a March 9 webinar hosted by Georgetown Law. “And, in this case, if there isn’t a comprehensive deal being considered by Congress, it removes the action-forcing event.”
“I don’t think there is going to be an action-forcing event at least between now and July but it certainly is something for Congress to consider at some point in the future,” she continued.
Todd Tucker, a member of President Biden’s Office of the U.S. Trade Representative transition team, said he would be surprised if the administration requested a new TPA soon because pursuing comprehensive trade deals is not a top priority.
“I don’t expect that there is going to be a mega-deal approach,” Tucker said during the same webinar. “When you can get to an agreement with Congress, there’s always a way to pass a deal, especially if they are more sectoral in nature. So, I would be surprised if they want to open that Pandora’s Box.”
Tucker pointed to potential negotiating objectives he could see Biden supporting. “I think you would want to -- in a perfect world -- align the negotiating objectives with the supply chain resilience and other priorities in [Biden’s Build Back Better agenda], but whether you would be able to get the necessary votes in Congress for such a change in those negotiating objectives I think is another question,” Tucker continued. “So, I would be surprised if it’s a path that they go down.”
“I imagine with such a closely divided Senate they are going to be very careful about where they spend their political capital,” he added.
William Reinsch, Scholl Chair of International Business at the Center for Strategic and International Studies, said he too thinks the administration is in a “let’s-put-it-off-until-later mode.”
“I don’t see signs that it is going to move very fast or get done before current TPA expires,” he told Inside U.S. Trade. “A lot of us have told the administration they need to do it -- that they will wish they had later on when they discover they need the authority, but it looks like they’re going to make the same mistake Obama made: Wait so long to [get TPA] that there’s no time left to finish anything once they get the authority.”
After TPA expired in 2002, it was not re-established until Obama’s second term, in 2015. The Obama administration faced pressure to get TPA in its first term but decided to focus on other priorities like healthcare and economic recovery following the recession. Obama pursued massive trade deals like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. TPP negotiations concluded in October 2015, but the deal was never submitted to Congress. TTIP talks stalled in September 2016.
Biden’s reasoning, Reinsch continued, “is also the same as Obama’s -- focus on higher-priority items and wanting to save political capital for them. Not wrong, but it has consequences.”
“They are going to say ‘We are too busy on COVID, we are too busy on reconciliation, we are too busy on infrastructure. We’ve got all these priorities and this is going to have to wait.’ And then they are going to regret it,” he added.
“So, unless everyone opts for a straight extension, which I think is very unlikely, I don’t see them getting to it until the fall at the earliest and more likely next year. I hope I’m wrong about that, but that’s the way it looks right now,” Reinsch said.
Stakeholders at work
Reinsch said CSIS recently established a working group of trade experts and stakeholders to discuss TPA reform issues. Noting that the conversations are ongoing and no conclusions have been reached, Reinsch shared some findings on process, substance and legislative mechanics.
“As far as what [TPA reform] might look like, there are two baskets -- germane changes to TPA and the mostly unrelated specific stuff that always gets tossed aboard the train before it leaves the station,” he said. “In the first category, our group’s work focused on process and substance.”
On process, he continued, “the big question was which agreements must be submitted to Congress for approval, a reaction to the [Trump administration] approach of negotiating agreements that did not require congressional action.”
“The group’s answer was, essentially, ‘More than now, but not necessarily all,’ and it developed a detailed definition of what would be covered,” he said. “Related to that was the question of the president’s authority to withdraw from agreements without congressional approval, also a reaction to Trump’s threats to pull out of NAFTA.”
In addition to NAFTA, Trump also threatened to withdraw from the U.S.-Korea Free Trade Agreement and the World Trade Organization’s Government Procurement Agreement.
“There we made clear that if an agreement received congressional approval, we could only withdraw from it with congressional consent. As I recall, we also played around with the consultation process to try to make it more effective,” he said.
On substance, Reinsch called the list of negotiating objectives “the fundamental germane issue.”
“That usually starts out with a short list that gets much longer as members of Congress seek to add specific items that are important to their constituents,” he said. “We continued that trend by shortening the existing list.”
“A lot of the substantive work, besides cutting the list down, was simply updating the 2015 list with more recent language on new issues like digital trade, taken from the U.S.-Japan phase-one agreement or USMCA. A likely new one that we did not address was the question of redefining ‘subsidy’ in ways that would shelter green tech subsidies from [World Trade Organization] rules,” he continued. “As you might imagine, there will likely be heated debates on some issues -- labor and environment, [investor-state dispute settlement], currency manipulation, and other old favorites.”
Fellow travelers?
As for other issues that could be included in a broader trade package that includes TPA, Reinsch pointed to the Trade Adjustment Assistance program as a possible “fellow traveler.” TAA also is set to expire on July 1. The House Ways & Means trade subcommittee held a hearing <https://insidetrade.com/node/170802> on the program’s reauthorization earlier this month. Rep. Earl Blumenauer (D-OR), the panel’s chairman, said he believed the hearing allowed the subcommittee to “build a record that will enable us I think to move forward fairly quickly in terms of reauthorization.”
But Tucker, during Tuesday’s webinar, questioned whether TAA would be renewed. “I think it may be reauthorized but I think you’re likely to see the administration lean on more trade neutral assistance programs and regional development strategies,” he contended.
Reinsch said lawmakers also might want to try to limit presidential powers in a new trade package, including the authorities granted to the executive branch under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974, among others. Several bills aimed at reining in the executive branch’s tariff authorities were introduced during the Trump years.
Whether such efforts might succeed is unclear, Rensch added. “The irony of a TPA bill is that it’s not subject to trade procedures; it’s an ordinary bill and it’s a trade bill,” he said. “When a trade bill comes up, there’s all this extra stuff that people want to attach ... that makes it complicated and time-consuming.”
“You’re talking about significant floor time and significant committee time,” Reinsch said.
Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20210312/d17ffcf7/attachment.html>