Trade Promotion Authority (TPA) in Trans-Pacific Partnership (TPP) - Trade Policy and Trade Politics

1. Trade Promotion Authority (TPA) in
Trans-Pacific Partnership (TPP):
Trade Policy andTrade Politics
I32031 Hang Nguyen

2. Agenda
1. Introduction
2. Literature Review
2.1:Trans-Pacific Partnership (TPP)
2.2:Trade PromotionAuthority (TPA)
3. Role ofTPA in FreeTrade Agreements
4. TPA as Bipartisan Trade Policy
5. Discussion
6. Conclusions

3. 1. Introduction
 U.S. goals withTPP:
 establish a platform for the dissemination of high quality rules
on trade and investment
 avoid marginalization from a process of Asian regional
integration led by China
 tap into the economic dynamism ofAsia as part of a larger effort
to find off-budget sources of growth through an export
promotion strategy.
 TheTPP has not been under the auspices of formal trade
promotion authority (TPA).

4. 2. Literature review
 Trade PromotionAuthority (TPA—previously known as fast track) is the
ability Congress extends to the president to negotiate and conclude FTAs
with Congressional input.
 the ReciprocalTradeAgreements Act of 1934 authorized the President to
negotiate trade deals that would reduce tariffs within levels pre-approved
by Congress.
 was renewed 11 times until 1962.
 No FTA from 1994-2001. In 2001, President GeorgeW. Bush requested a
renewal of fast track authority, although the name was changed to trade
promotion authority. Congress grantedTPA with theTrade Act of 2002.
 Congress has not granted aTPA since the expiration of the last authority
on July 1, 2007.

5. 3. Role ofTPA in FTAs
 In the past 12 years, the United States has signed more than
10 free trade agreements under theTPA.
 Republican Senator Orin Hatch: “History tells us very clearly
that withoutTPA, your trade agenda will almost certainly
fail.”
 1789-1933: the president submitted 27 tariff reduction
treaties to the Senate for ratification, and only five of those
were approved.

6. 3. Role ofTPA in FTAs
 IfTPA is to be useful in facilitating theTPP negotiations, it
must subtract rather than add negotiating objectives.
 2002: laid out extensive and detailed negotiating objectives,
included investment protection, intellectual property laws,
administrative law, labor law, and environmental protection.
 achieving these negotiating goals will not liberalize trade
 While theTPA is not a necessary step towardsTPP
ratification, it eases the passage of trade agreements
through Congress and strengthens the country’s negotiating
hand as trading partners will only take theWhite House
seriously if it has congressional support.

7. 4.TPA as BipartisanTrade Policy
 The last time there was a Democrat in theWhite House and
Republicans in charge of Congress, controversy over labor
and environment issues prevented Congress from approving
fast-track legislation for President Clinton in 1998 despite
support from Republican leadership.
 In 1998 the House voted 243–180 against granting fast-track
authority to President Clinton.One third of the Republican
majority joined the bulk of the Democratic members to defeat
the bill.
 Democrats: anti-trade sentiment has become quite powerful
 Republicans: strongly committed to reciprocal liberalization
through trade agreements

8. 4.TPA as BipartisanTrade Policy
The Democrats:
 November 2013, 151 Democrats in Congress wrote a letter to
President Obama opposing theTPA
 does not provide high enough standards for environmental
protection
 contain strong enough rules on currency manipulation
 1988-2002: Democratic support forTPA in the House
dropped from 95 to 12 percent, and from 93 to 40 percent in
the Senate.

9. 4.TPA as BipartisanTrade Policy
The Republicans:
 while they were strong supporters of theTPP, they were
surprised that the President had set the ambitious goal of
concluding theTPP negotiations before November 2014,
without mentioning how he would first enact theTPA.
 criticized President Obama for doing too little to rally
Democratic support for theTPA.

10. 4.TPA as BipartisanTrade Policy
The President:
 Without the support of the most powerful Democrats in the
Senate and the House
 ‘lame-duck’ session
 President Obama sees the trade policy debate and ongoing
international negotiations as a tool for managing political
constituencies, not as part of a genuine agenda to liberalize
trade.

11. 5. Discussion
 The House and Senate and the President usually work out the
legislative language forTPA before any negotiations begin
with other countries.
 Trade agreements were not a high priority item for President
Obama in his first years in office.
 The world expect the U.S. to operate like the rest of the
world and vote on an agreement without amendments. How
the U.S. arrives at that conclusion is not their concern.
 The U.S. pursuit of theTPP and the possible outcome of the
negotiations raise other questions regarding its possible
impact on the status and shape of current and future U.S.
trade policy.

12. 6. Conclusions
 If the United States wants to maintain its position in global
trade, a timely conclusion of theTPP is a necessity.
 Some hope that Congress mightTPA in the lame duck
session; unfortunately, most lame duck sessions do not turn
out to be exceptionally fruitful as these sessions often focus
on last-minute nominations and appropriations bills.
 TPA will require bipartisan cooperation, not confrontation.
 BipartisanTPA bill would send a strong domestic and
international signal about the United States’ commitment to
global trade.