Federal Bill Extends President’s Authority to Negotiate Free Trade Agreements

The California Chamber of Commerce is supporting legislation introduced in Congress this week to renew the authority of the President and/or U.S. Trade Representative to negotiate trade agreements.

The Bipartisan Congressional Trade Priorities Act of 2014​ (TPA-2014) was introduced January 9 by U.S. House Ways and Means Committee Chairman Dave Camp (R-Michigan), U.S. Senate Finance Committee Chairman Max Baucus (D-Montana) and Ranking Member Orrin Hatch (R-Utah).

Passage of trade promotion authority will help Congress and the President to work together to forge new and beneficial trade agreements for the United States.

Trade is an important engine for U.S. economic growth and jobs. With more than 30% of U.S. gross domestic product (GDP) tied to international trade and investment, 95% of the world’s population abroad, and more than one in five U.S. jobs supported by trade, U.S. engagement in the international marketplace is more important to the nation’s economy than ever.

Trade Promotion Authority

Trade promotion authority (formerly called fast track trade negotiating authority) is the process by which Congress gives authority to the President and/or U.S. Trade Representative to enter into trade negotiations in order to lower U.S. export barriers.

Traditionally, it follows the conclusion of negotiations for a trade agreement; enabling legislation is submitted to Congress for approval. Every president since Franklin Delano Roosevelt has been granted the authority to negotiate market-opening trade agreements in consultation with Congress.

Once legislation is submitted, under trade promotion authority, both houses of Congress will vote “yes” or “no” on the agreement with no amendments, and do so within 90 session days (not to be confused with a treaty, which is “ratified” by the U.S. Senate). During negotiations, however, there is a process for sufficient consultation with Congress.

President George W. Bush signed the landmark Trade Act, H.R. 3009, on August 6, 2002. The act helped put U.S. businesses, workers and consumers back in the game of international trade by granting the president trade promotion authority. Trade promotion authority was extended for two years in August 2005, clearing the way for free trade negotiations to get underway with other countries. Trade promotion authority expired in June 2007 and must be extended by Congress once again.

U.S. Completed Agreements

Since the Trade Act of 2002 granted the President trade promotion authority, the United States has completed free trade agreements (FTA) with Australia, Bahrain, Chile, Colombia, the Dominican Republic/Central America, Morocco, Oman, Panama, Peru, Singapore and South Korea.

Financially, this translates into the removal of billions of dollars in tariffs for U.S. exports.

Other Free Trade Agreements

Several hundred FTAs are in force worldwide, with the United States party to just a handful.

For example, both Canada and Mexico have FTAs with Chile. Mexico has more than 45 FTAs with countries and blocs, including Japan, Israel and the European Union.

Chile has more than 50 FTAs with countries worldwide.

Future Agreements

The United States’ major trading partners are participating in numerous agreements, and trade promotion authority is a prerequisite to meaningful U.S. participation.

Without trade promotion authority, the United States will be compelled to sit on the sidelines while other countries negotiate numerous preferential trade agreements that put U.S. companies at a competitive disadvantage. Trade promotion authority not only opens markets and broadens opportunities for U.S. goods and firms; it will make the United States the leader in global trade.

By approving trade promotion authority, Congress can help strategically address the range of U.S. trade negotiations being pursued: the Trans-Pacific Partnership (TPP) between the United States and Asia-Pacific region; the Transatlantic Trade and Investment Partnership (TTIP) between the United States and European Union; the Trade in Services Agreement (TISA) to liberalize trade in services globally; negotiations on a trade facilitation agreement; and negotiations on an updated Information Technology Agreement (ITA) to eliminate tariffs on covered products—as well as future trade negotiations.

The United States had become the world’s leading exporter due to increased market access achieved through trade agreements. Trade promotion authority is vital for the President of the United States to negotiate new multilateral, bilateral and sectoral agreements that will continue to tear down barriers to trade and investment, expand markets for U.S. farmers and businesses and create higher-skilled, higher-paying jobs for U.S. workers.

CalChamber Position

The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.

The CalChamber, therefore, supports the extension of trade promotion authority so that the President of the United States may negotiate new multilateral, sectoral and regional trade agreements, ensuring that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.

Staff Contact: Susanne Stirling

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