[CTC] Senior members of Congress are asserting their constitutional authority over trade

[Arthur Stamoulis]

A few clips on the Taiwan Implementation Act below…


— Senior members of Congress are asserting their constitutional authority over trade negotiations with Taiwan, rebuking a White House statement that indicated the Biden administration could ignore provisions of the bill.

...

DRIVING THE DAY
KNIVES SHARPEN: Senior lawmakers are insisting the Constitution grants Congress primary jurisdiction over negotiations with Taiwan, escalating a dispute that places the Biden administration’s approach to regulating policy on trade under fresh scrutiny.

Senate Finance Committee Chair Ron Wyden <https://go.politicoemail.com/?qs=dbb3e89775d450f58bb5d50a1d0ae19e09ee5b06d70d1e782a5c544507b46018cd676661196065c515b4a4197ef301e22a6c9b5dce553fd5> (D-Ore.) said in a statement Tuesday that the Constitution provides Congress with the “sole authority” to lay and collect duties and “to regulate commerce with foreign nations.”

Sen. Mike Crapo <https://go.politicoemail.com/?qs=dbb3e89775d450f5419e624d6bdee9c440f7fd4d36743eebad5783dc8549974371b12efc6269b8c61db9d0a591cac3c34244af02486540cf> (R-Idaho), ranking member on the Finance Committee added “the Constitution vests Congress — not the president — with authority over trade policy.” He also said that “Congress will ensure the Administration fully complies with the Act,”per our Doug Palmer <https://go.politicoemail.com/?qs=dbb3e89775d450f5fabc5e349ddf13bb3fbd1109f517043b5de8c3cf95b7114d5883ad6504a30b5fa7438b64142949d5d4b7ec10e099fa92>.

Quick reminder: President Joe Biden signed the U.S.-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act into law on Monday, but said in a statement that provisions that "impermissibly infringe" on his authority would be treated as "non-binding."

The rundown: The trade bill could be considered as much about enhancing economic engagement with Taiwan, as it is about solidifying a standard over how Congress and the White House assign trade policy more broadly.

In addition to enacting an initial trade agreement with Taiwan, the bill sets out certain requirements for any subsequent agreements, including that they be submitted to Congress for approval.

Feeling the pressure: USTR expressed willingness to agree to adhere to demands on Tuesday and said the office “remains committed to maintaining close consultations and cooperating with Congress across its negotiations and anticipates being able to follow the provisions set out in the Bill.”

Go it alone: Congress has traditionally approved free-trade agreements negotiated by the executive branch as a result of its constitutional authority. But rather than expanding market access, the Biden administration has focused on resolving a more narrow set of disputes with nations abroad, which the White House doesn’t believe requires approval.

That approach has extended to the most defining parts of the administration’s trade agenda, including IPEF, and recent engagement with the U.K. and Kenya, among other governments.

Rep. Richard Neal <https://go.politicoemail.com/?qs=dbb3e89775d450f5aea6f612a2b0bde76dafb073000c1616ee6c779a11fa5eece1329172c11db7b832ada5287a121e5f856adf5b8376d407> of Massachusetts, the Democratic ranking member of the Ways and Means Committee, and Wyden previously slammed the Biden administration in a March letter <https://go.politicoemail.com/?qs=825d63bae5c45a1934b1b92fc3978363113c4f5799807ae5ff72f8f15db214e12ae1a5d3cf8f78ff7fe9359a5a318558f933238f19c45b7f> about an agreement reached with Japan over critical minerals that did not require congressional approval.

NEXT IPEF ROUND COMES INTO FRAME: The fifth round of negotiations for the Biden administration’s signature IPEF will take place Sept. 10-16 in Thailand, and will build on the draft IPEF texts for the four pillars covering trade, supply chains, clean economy and a fair economy, according to the National News Bureau <https://go.politicoemail.com/?qs=825d63bae5c45a195ec9d48a2408e8801ff4bfe46feb0fc7da74531d8207d1a573c6c7c29de7ca36533af0473061385fade935f1e135bd2d>, which is facilitated by the office of the Prime Minister Public Relations Department.

Next month’s meeting, hosted by Bangkok, will “focus on advancing new technological cooperation, particularly in relation to clean energy, which includes areas such as electric vehicles (EVs), sustainable aviation fuel, circular economy and the carbon market.”

Quick context: IPEF, launched in May of 2022, is aimed at countering China’s efforts to expand its own economic influence in the region. It’s part of the broader White House approach to trade policy which prioritizes joint cooperation over issues like environmental and labor rights, rather than eliminating barriers to free trade.

Case and point: “The Thai delegation has reaffirmed its commitment to adhere to relevant international standards on anti-corruption and taxation, while considering the diverse domestic laws, regulations and capacities of the IPEF partners,” the government-run publication said in the update.

What to watch: Southeast Asian nations including the Philippines, Malaysia and Indonesia are among the countries that have urged U.S. trade officials to broker a critical minerals pact as part of the ongoing negotiations.

That could enable electric vehicle batteries made with critical minerals processed within their countries to qualify for tax credits under the Inflation Reduction Act.

The request by Southeast Asian nations would add to the list of thorny negotiations, as U.S. trade officials hustle to hammer out disputes ahead of the Asia-Pacific Economic Cooperation summit meeting in November, which is viewed as an informal deadline.

Keep in mind: Beijing is escalating its strategic partnership with countries in the region, and previously submitted an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a move that has divided and deepened rancor among member nations, per Reuters <https://go.politicoemail.com/?qs=825d63bae5c45a199ccb8e474ae349027c31612da42b777fe3e5e45137ef06c398e045eb9126e02deff502eb2a52d9c043055620d16c2e33>. 

 
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SMITH: TAIWAN BILL REQUIREMENTS ‘NOT A SUGGESTION’: House Ways and Means Chair Jason Smith <https://go.politicoemail.com/?qs=69841c7d121a506eefeda7b3cd80e4c7c38ab5d411046d2e09c64e7618730167ce44e834757ef45aa62993ea4280927df351b0c06d8a74eb> (R-Mo.) added his voice Wednesday to other senior lawmakers pressing the White House to abide by transparency and consultation requirements <https://go.politicoemail.com/?qs=69841c7d121a506e99e01e341b2976ec7db7dc907d2baeda654abb6ab69fe320975dff06bd0c86610e376ae9de475a5382afa09287f62660> of a new Taiwan trade bill, despite Biden’s warning that he could ignore some of them if they interfere with his constitutional authority to negotiate on behalf of the United States.

“What President Biden signed is not a suggestion — it’s the law,” Smith said in a statement. <https://go.politicoemail.com/?qs=69841c7d121a506e953046cad0673d16232bd08c83d4c355e1b0df5b561d376e8fa43fe5239437f1d504fa7d700d129d393cc51b2122e447> “Congress will hold the President and his Administration accountable for following its requirements to the letter.”

The legislation Biden signed Monday underscores the important principle that the Executive Branch “can only enter into binding trade agreements with approval from Congress,” Smith said. “This applies both to ongoing negotiations with Taiwan and trade initiatives being negotiated with other partners, all of which must show concrete benefits to American workers, small businesses, and farmers to earn the support of Congress."

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Biden signs bill formalizing Taiwan trade deal
By Margaret Spiegelman, Inside US Trade | August 7, 2023
 
President Biden on Monday signed a bill codifying a deal struck in June by the United States and Taiwan and setting out new procedures for the administration to follow in further negotiations with Taipei – while stating his administration will treat “as non-binding” any such procedures that might infringe on its authority.

The United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act says the president “may provide” that the deal, signed on June 1 <https://insidetrade.com/node/177029>, enters into force “not earlier than 30 days after the date on which the President submits to Congress a certification” that Taiwan has met the terms of the agreement. The pact called on Taipei to make certain regulatory changes.

In a statement following the bill’s signing <https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/07/statement-from-president-joe-biden-on-h-r-4004-the-united-states-taiwan-initiative-on-21st-century-trade-first-agreement-implementation-act/>, the president said it “includes requirements for the negotiation of certain further trade agreements with Taiwan that raise constitutional concerns,” citing section 7 of the bill.

In particular, section 7 directs the Office of the U.S. Trade Representative to give the Senate Finance and House Ways & Means committees any future negotiating texts exchanged under the U.S.-Taiwan Initiative on 21st Century Trade. It also “would preclude the USTR from transmitting United States-proposed texts to Taiwan while the Congress is reviewing them,” among other measures, as described in the statement.

Biden added that “In cases where the requirements of section 7 of the Act would impermissibly infringe upon my constitutional authority to negotiate with a foreign partner, my Administration will treat them as non-binding.”

The bill was approved in the Senate by unanimous consent last month and passed by voice vote in the House in June. It was presented to the president <https://insidetrade.com/week-trade> on July 27 and was set to take effect this week even without Biden's approval, unless he vetoed it.

House Ways & Means ranking member Richard Neal (D-MA) lauded the announcement, saying in a statement <https://democrats-waysandmeans.house.gov/media-center/press-releases/neal-applauds-president-biden-signing-taiwan-trade-legislation> that the legislation “underscores the exclusive Constitutional authority of Congress – and particularly the Ways and Means Committee – as the gatekeeper of our trade priorities.”

The administration has repeatedly asserted that the deal with Taiwan, like other trade talks the administration has pursued, does not require congressional approval. Lawmakers from both parties have objected to that stance and pitched the Taiwan bill as an effort to reclaim some congressional authority on trade.

Neal also linked the bill to efforts to counter China – though without naming Beijing.

“The legislation also deepens the economic ties between Taiwan and the United States, and as the aggression towards democracy from Taiwan’s authoritarian neighbor grows, it is critical that America’s trade policy reflects our determination to preserve democracy and peace at home and abroad,” he said. “By signing this critical bipartisan bill into law, President Biden has done just that.”

 

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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