[CTC] Finance leaders: IPEF requires congressional approval

[Arthur Stamoulis]

https://www.finance.senate.gov/chairmans-news/wyden-crapo-and-bipartisan-senate-finance-committee-members-raise-concerns-about-process-to-approve-and-implement-indo-pacific-trade-pact-and-other-trade-agreements

DECEMBER 01,2022
Wyden, Crapo and Bipartisan Senate Finance Committee Members Raise Concerns about Process to Approve and Implement Indo-Pacific Trade Pact and Other Trade Agreements

Congress, Not the Executive Branch, Possesses Constitutional Authority To Approve Trade Agreements Under Article I, Section 8

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., Ranking Member Mike Crapo, R-Idaho, and 19 bipartisan members raised Constitutional concerns about the process to approve and implement the proposed Indo-Pacific Economic Framework for Prosperity (IPEF), as well as the need for the administration to increase consultation and transparency. 

In a letter to President Biden, the members noted that they support efforts to strengthen ties with allies in the Indo-Pacific and address issues like strengthening supply chains, growing American jobs and expanding digital trade. However, they reminded the administration that Congress holds ultimate responsibility for approving trade pacts, regardless of whether they include tariff reduction or market access provisions.

“There is no question that comprehensive free trade agreements that include reciprocal tariff reductions and dispute resolution mechanisms must be approved and implemented by Congress,”the members wrote. “However, there appears to be a misunderstanding as to whether an agreement like IPEF, which aims to regulate foreign commerce and reshape international trade flows, requires similar approval. It does.”

While neither the administration nor Congress has announced a process to approve and implement IPEF, Finance Committee leaders urged the president to engage in robust consultation with Congress, transparency of negotiations and collaboration with Congress on how the agreement should be approved and implemented.   

The letter is cosigned by U.S. Senators Debbie Stabenow, D-Mich., Chuck Grassley, R-Iowa, Maria Cantwell, D-Wash., John Cornyn, R-Texas, Bob Menendez, D-N.J., John Thune, R-S.D., Tom Carper, D-Del., Richard Burr, R-N.C., Ben Cardin, D-Md., Rob Portman, R-Ohio, Sherrod Brown, D-Ohio, Pat Toomey, R-Pa., Catherine Cortez Masto, D-Nev., Tim Scott, R-S.C., Bill Cassidy, R-La., Steve Daines, R-Mont., Todd Young, R-Ind., Ben Sasse, R-Neb., and John Barrasso, R-Wyo.

Read the full letter here <https://www.finance.senate.gov/download/letter-to-potus-on-ipef-authority-final-12122>.

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Finance leaders, most members: IPEF requires congressional approval

Inside US Trade, December 1, 2022 at 3:31 PM

The Indo-Pacific Economic Framework for Prosperity requires congressional approval, the leaders and most members of the Senate Finance Committee told President Biden on Thursday.

Chair Ron Wyden (D-OR) and ranking member Mike Crapo (R-ID) joined with 19 panel members from both parties in sending Biden a Dec. 1 letter <https://insidetrade.com/sites/insidetrade.com/files/documents/2022/dec/wto2022_0864a.pdf> asserting congressional authority over trade agreements – even those that, like IPEF, are not comprehensive deals focused on market access.

“There is no question that comprehensive free trade agreements that include reciprocal tariff reductions and dispute resolution mechanisms must be approved and implemented by Congress,” the letter states. “However, there appears to be a misunderstanding as to whether an agreement like IPEF, which aims to regulate foreign commerce and reshape international trade flows, requires similar approval.”

“It does,” the senators contend.

The signatories – 13 Republicans and eight Democrats – say they support the administration’s efforts to “strengthen our bonds with our allies in the Indo-Pacific and look forward to better understanding your plans to tackle 21st century issues like digital trade and the strengthening of supply chains; your objectives in the clean and fair economy pillars; and the ways in which these efforts might support U.S. workers and U.S. jobs.”

However, they add, the Constitution “establishes a careful balance of authority between the Executive and Legislative branches. In no place is this balance more apparent than international trade. The Constitution provides Congress with sole authority ‘to lay and collect … duties’ and ‘to regulate commerce with foreign nations,” while the President is vested with the ‘power, by and with the advice and consent of the Senate, to make treaties.’”

The senators note that executive agreements that administrations say do not require congressional approval have become more common in recent years – and, as Finance has “discussed” with prior administrations, its leadership and many members believe “the use of sole executive agreements to reshape trade relations confuses the implementation of an agreement – which may not require congressional action because no domestic laws need to be altered – and the ability to enter into a binding agreement with other sovereign nations without congressional approval.”

They list three ways in which the U.S. can join an international agreement: The invocation of the Constitution’s Treaty Clause; a congressional-executive agreement that must be approved by a majority of both houses of Congress; and an executive agreement “covering matters reserved by Article II of the Constitution to the President.”

A “significant binding trade agreement” doesn’t qualify as a sole executive agreement, the letter continues.

Recognizing that “neither the Administration nor Congress has taken a definitive position on the process for approving and implementing the proposed IPEF,” the senators ask that Biden ensure three requests are heeded.

The first is a familiar refrain: The administration must engage in “robust” consultations with Congress. Many lawmakers across many administrations have made similar pleas, and members of both parties have called for more <https://insidetrade.com/node/173976> from Biden’s Office of the U.S. Trade Representative on IPEF and other agreements.

“Given that IPEF will address novel issues not included in previous trade agreements and be led in part by agencies not involved in trade negotiations, consultation must exceed even that required by the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA 2015) to build bipartisan support for any final agreement,” the letter states. USTR leads the IPEF trade pillar; the Commerce Department steers the other three.

The second request is for more transparency with stakeholders and the public on IPEF and other initiatives. One of the signatories of the letter, Sen. Bob Menendez (D-NJ), has placed a hold <https://insidetrade.com/node/175554> on the administration’s nominee for USTR chief agricultural negotiator as a means of forcing the administration to engage in talks on transparency, particularly his long-standing push to establish a USTR inspector general.

USTR has repeatedly insisted it has engaged in robust consultations with Congress and taken steps to ensure transparency on IPEF and other initiatives.

In a statement to Inside U.S. Trade, USTR said “The Biden Administration takes its commitment to transparency seriously and respects the role Congress plays in the development and implementation of U.S. trade policy. Even before the IPEF was launched in May 2022, this administration held briefings with Members of Congress and relevant committee staff to provide updates and solicit feedback. We will continue to hold briefings and share information as negotiations continue.”

The final request in the letter is that Biden “ensure that your Administration works with Congress to arrive at a common understanding of the appropriate submission, approval, and implementation mechanisms for such a broad-based and important agreement regulating international commerce.”

IPEF countries will gather for their first in-person negotiating session in Brisbane, Australia, on Dec. 10. All 14 members of IPEF joined three of the four pillars; India opted out of the trade pillar.

An administration official said Wyden, the Finance chair, is sending staff members to Brisbane who will be briefed on the negotiations as they progress. -- Dan Dupont (ddupont at iwpnews.com <mailto:ddupont at iwpnews.com>)



Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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