Latin America Advisor

A Daily Publication of The Dialogue

How Important is US Fast-Track Authority?

US Government
Q: U.S. Senators Max Baucus and Orrin Hatch and Rep. Dave Camp on Jan. 9 introduced a bipartisan Trade Promotion Authority bill. The legislation would give the president the authority to negotiate trade accords that Congress would then be able to approve or reject, but not amend. How important is fast-track authority for pending trade deals such as the Trans-Pacific Partnership? What will happen this year with regard to U.S. trade with Latin American countries? What could derail closer trade ties between the United States and the region? A: Peter Hakim, member of the Advisor board and president emeritus, and Cameron T. Combs, program associate, both at the Inter-American Dialogue: "Trade promotion authority (TPA) means the United States is ready to negotiate seriously. It assures other nations that Congress will not unduly tamper with what the United States agrees to at the negotiating table. TPA will be particularly important for the Trans-Pacific Partnership and E.U.-U.S. talks because so many of the issues at stake go beyond typical trade items and involve highly sensitive economic policies. The Trans-Pacific Partnership is a promising approach, though it has left some Latin American countries worried about stiff competition from Asia. Since the turn of the century, U.S. trade with Latin America has more than doubled; it has nearly tripled with South America, with Peru, Chile, and Colombia increasing the fastest. Trade is flourishing with countries that have free-trade arrangements with the United States, but also with those that do not. Even during this period of considerable volatility, faster expansion is possible. The first places to look are Brazil and Mexico, which already account for two-thirds of U.S. trade with the region (Mexico alone accounts for 55 percent). Mexico's far reaching reforms, particularly the opening of its energy and telecommunications sector, are expected to produce a wide range of new opportunities. Brazil, on the contrary, has become more closed and protectionist in recent years, but its leaders are aware that the country's future depends on re-energizing its economy. A U.S.-Brazil free-trade agreement is not in the cards. Still, the South American giant may decide that serious trade talks with the United States would serve its longer-term interests. But Washington will also have to be ready to make concessions. It may take only one to samba, but two are needed at the trade table." A: Arturo Sarukhan, chairman of global solutions at Podesta Group in Washington and former Mexican ambassador to the United States: "No big things happen in Washington without leadership and without bipartisanship. The success of the United States' on-going trade negotiations--and thus the vitality of U.S. commercial and political ties with a core group of like-minded Latin American nations--will depend mainly on the current partisan landscape in Washington. Trade Promotion Authority, or fast-track, is and has been the keystone of U.S. trade diplomacy. Without this instrument in his toolbox, it is hard to see how U.S. Trade Representative Michael Froman can convince his negotiating counterparts to move forward on controversial issues that remain pending in the Trans-Pacific Partnership (such as currency manipulation or environmental standards), or that the United States will abide by whatever it negotiates with them without Congress then nitpicking the agreement. Mexican Economy Secretary Ildefonso Guajardo suggested as much in a recent press interview. A bill seeking to provide the president with fast-track authority was introduced in early January, and getting TPA passed would be a major victory for the administration. However, the White House will first have to convince Democrats to go along with it. The bill will only pass if it gets substantial Republican support, and the GOP House leadership has already stated that it will not bring the legislation to the floor for a vote unless the Democrats provide at least 50 votes. The situation will require forceful White House leadership if an acceptable bill is to pass. Moreover, the realities of electoral politics suggest that TPA could be pushed back to the post-midterms lame-duck session, delaying the conclusion of the TPP negotiations months beyond the current target date of spring 2014." A: James R. Jones, member of the Advisor board and co-chair of Manatt Jones Global Strategies: "Fast-track authority in Congress has become essential for the successful conclusion of trade agreements. I first noticed this in the late 1970s as a member of the House Ways & Means Subcommittee on Trade. Bob Strauss was the U.S. trade representative and shepharding the global trade package that he was negotiating. In that process, he met regularly with members of the Trade Subcommittee to give progress reports and solicit comments and recommendations. We in turn kept other key members of Congress apprised and provided feedback to Strauss. When the treaty was negotiated, its approval by Congress was assured. Without this fast-track authority prohibiting amendments, it would be much more difficult to conclude trade negotiations. Negotiators from other nations would be reluctant to play their trade cards if they knew the U.S. Congress could amend and trump them. The good news is that despite the highly partisan, vitriolic relationships in Congress and against President Obama, there is a growing sense that expanded trade is very important to continuing and accelerating America's economic recovery. Thus, at this stage, it seems that Trade Promotion Authority will be granted and that the Trans-Pacific Partnership negotiations can move to closure at a more rapid pace. It is vitally important, however, that during this process that the U.S. trade representative emulate the example of Ambassador Strauss and keep important leaders of Congress fully in the loop." A: Ben Beachy, research director of Public Citizen's Global Trade Watch in Washington: "Fast Track was an extraordinary maneuver, used only 16 times since first crafted by President Nixon to push through Congress the most controversial of 'trade' deals. Though the U.S. Constitution grants Congress exclusive authority over trade policy, Fast Track empowered the executive branch to unilaterally negotiate and sign agreements, locking in the contents before Congress got a vote. The executive branch could then write legislation altering U.S. domestic laws to conform to the pacts' terms, with Congress' role limited to an ex-post, expedited vote, with no amendments allowed and debate strictly limited. This abrogation of Congress' democratic role is particularly inappropriate for sweeping deals such as the controversial Trans-Pacific Partnership (TPP), which implicates wide swaths of domestic non-trade laws: immigration visas, food safety protections, patent standards affecting access to medicines, Wall Street re-regulation, and foreign firms' ability to challenge domestic environmental safeguards. Yet, Rep. Camp and Sen. Baucus recently introduced legislation to revive Fast Track, which Congress allowed to expire in 2007, to push through the TPP. Though the bill permits Congress to name non-binding 'negotiating objectives' for the deal, it allows executive branch negotiators to simply ignore the objectives, as done under past Fast Track iterations. The Camp-Baucus bill suffers from paltry congressional support, with most House Democrats publicly opposed, a sizeable bloc of House Republicans rallying against the bill's unconstitutionality, and Senate Majority Leader Harry Reid opposing action on the polemical legislation. But with corporate groups still ardently lobbying for Fast Track's revival, the U.S. public needs to continue asking Congress to not allow a railroading of the democratic process for a deal as threatening as the TPP."

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