TPA is of fundamental importance for the conclusion of bilateral or multilateral trade agreements since it allows for a simple “yea” or nay” vote by the Congress without the possibility of amendment (the long-held and widely accepted school of thought being that foreign trading partners would not enter into negotiations with the United States if they knew that the result of such negotiations could then be amended during the Congressional review process). While TPA is technically a constitutional and legal device for consideration of possible trade agreements, the subject matter has become over the past several years the canvas upon which the greater debate over the impact of trade on this nation’s economy and is place in the global arena is played out. The debate on this go-around is expected to be especially pointed and wide-ranging due to several factors, not the least of which is the Democratic takeover of both houses of Congress this month, the President’s low approval rating, and an underlying economic unease in this country.

Since President Bush initially gained TPA in 2002, his Administration has completed trade agreements with Australia, Bahrain, Chile, Colombia, Morocco, Oman, Panama, Peru, Singapore, and six Central American nations (CAFTA-DR). Most, but not all of these agreements have been implemented (Colombia, Panama, Peru and CAFTA with respect to Costa Rica the exceptions). Negotiations with Korea and Malaysia are ongoing. TPA is also essential for a successful conclusion of the so-called Doha Round of multilateral negotiations under the World Trade Organization.

Several forms of TPA extension have been discussed, including one that contains much stricter labor and environmental requirements, or a TPA that is limited for use only with respect to Doha Round negotiations.

The relevant committees of jurisdiction in the House and Senate are expected to begin hearings on TPA, and trade policy generally, in coming weeks. This association has a significant stake in this battle, since the absence of TPA extension could mean the death knell for the Colombia and Peru agreements and the Doha Round, as well as any other potential bilateral free trade agreements. Moreover, the failure to extend TPA could have a significant injurious impact on the U.S. economy, as it would signal a retreat by this country from the global economic arena at a time when several other emerging powerhouses, most notably China and India, are forming their own economic bonds with trading partners that could deny export opportunities for U.S. companies while increasing prices for U.S. importers and consumers.

We will continue to keep members advised.