As was widely expected, the Bush Administration yesterday formally requested a two-year extension of “trade promotion authority” (TPA). TPA is a legislative mechanism that allows the President to negotiate trade agreements with foreign countries, and have those agreements reviewed by Congress under streamlined procedures that allow Congress to cast a simple “yea” or “nay” vote on the proposed agreement without amendments.
After a ten-year long hiatus, TPA was renewed in the Trade Act of 2002. TPA currently applies to trade agreements signed before July 1, 2005. The Administration’s request will extend that deadline to July 1, 2007, unless either house of Congress passes a disapproval resolution by July 1. Despite the recent focus on the country’s expanding trade deficit and its impact on employment and monetary policy, it is widely expected that the Republican-controlled Congress will permit the extension of TPA without much debate or discussion.
TPA has already been used by the Bush Administration to gain Congressional approval of the free trade agreements (FTAs) with Chile, Singapore, Australia and Morocco. FTAs with five Central American nations and the Dominican Republic (the so-called CAFTA-DR) and with Bahrain are to be reviewed this year by Congress under TPA procedures. Several other possible FTAs are currently in negotiations, including proposed agreements with Thailand, with Panama, with the Andean nations of Colombia, Ecuador and Peru, with the five nations of the Southern African Customs Union (Botswana, Lesotho, Namibia, South Africa and Swaziland), and with two Middle East nations (Oman and the United Arab Emirates). Negotiations are also continuing on a multilateral Free Trade Area of the Americas (FTAA) and under the World Trade Organization (the Doha Round).
In a press release announcing its extension request, the Office of the United States Trade Representative states that “the Administration considers that the progress that has been made in each of these negotiations in achieving TPA objectives justifies continuing – and completing – the negotiations.”
The expiration of TPA would constitute a major, and perhaps insurmountable, stumbling block for trade agreement negotiations, and could well freeze for an extended period further steps towards trade liberalization and tariff reductions. Despite the fact that the TPA policy objectives spelled out in the Trade Act of 2002 are heavily weighted in favor of U.S. exporting interests, there is little doubt that U.S. importers would be significantly harmed if TPA was allowed to expire. For this reason, AFI stands strongly in favor of TPA, and will be making appropriate representations to Congress to promote this essential mechanism.
A full review of these matters will be set forth in a Counsel’s Report to be issued shortly, and at the Annual Convention in mid-April.
