What is TPA?
Trade Promotion Authority (TPA) refers to the process which has been made available by the Congress to the President of United States in order to enable legislation for the purpose of approving and implementing specific trade agreements on an international level under the legislative procedures for a limited time. This authority has been granted to the President for more than three decades which states that he has the authority to vote on the trade agreements without making any amendments. In other words, TPA plays a role in providing a balance by clearly identifying how constitutional authority is exercised by the Congress while trade policy is made, while giving additional leverage of negotiation to the President by assuring the trade partners that Congress with give complete consideration before the agreement is finalized.
TPA has evolved as a product of decades of cooperation, collaboration, compromise and debate between the Congress and the executive branch. The foundation of the authority is built upon the constitutional powers that are granted to both the Congress and the President, while at the same time it ensures the realization that a certain level of cooperative flexibility is also required if credible trade agreements are negotiated in reciprocity by United States. Since the origin of TPA, it has evolved to an extent proving that the partnership between the congress and the executive branch on policymaking for trade can be either strained or strengthened depending on the political as well as economic conditions affecting both the branches.
TPA under Bush Administration
The fast track authority was requested to be renewed by President George W. Bush in 2001. It was then that the legislation was named as the “trade promotion authority,” and this name was changed to remove the negative undertone linked with the term fast-track. Since the incident of 9/11 the global economy had been shaken and by passing the TPA in 2001, President Bush got the authority to make trade deals in a fast manner. He renewed the authority under the Bipartisan Trade Promotion Authority Act of 2002. At that time, America has started playing the role of a global leader. Under the Bush administration, a new version of TPA was approved with the aim of expanding the playing field for the American workers by encouraging free trade and for this purpose, President enacted new trade agreements by partnering with rising number of countries. From merely three, the partnership rose to 16 countries including Chile, Australia, Singapore, the Dominical Republic, Morocco, Bahrain, Peru, Oman, Panama, Columbia and South Korea.
Since the enactment of the TPA in 2002, the pace of negotiations for arranging free trade agreements was accelerated by the Bush Administration. Although the earlier governments had been focusing on building free trade areas with other countries, but the Bush Administration in particular stayed firm on the strategy of ensuring the implementation of a multilateral trade system. But for this purpose, it emphasized more on building both bilateral as well as regional trade ties through the agreements of free trade. It worked to negotiate with all the regions that Clinton Administration had initiated and finalized the FTA negotiation with both Singapore and Chile sooner. Bush Administration pursued the strategy of moving ahead with the trade agenda to form numerous FTAs.
On 10 May, 2007, Bush Administration and the leaders of Congress reached an agreement pertaining to different priorities that ought to be included of the new priorities in the FTAs that were still pending. This included enforcing the five core standards of labor which are a part of the International Labor Organization’s Declaration on Fundamental Principles and Rights of Work. Furthermore, these priorities also included the rights of the foreign investors, availability of affordable pharmaceuticals, and also dedicated to implement seven multilateral environmental agreements for which all the FTA partners are included. Between 2001 and 2007, the overall US exports to the 11 FTA trade partners grew by more than 70 percent as President Bush opened up new markets for the ranchers and farmers of America.
TPA under Obama Administration
Although President Barack Obama along with his administration fully expressed their support for the free trade agreements that remained pending with Colombia, Panama and South Korea, they acknowledged that certain issues remained to be addressed. Some of the concerns include the violent treatment of the union leaders in Colombia, which though has declined over time but still remains unacceptably high. And the major concern regarding Panama refers to the Panamanian tax policy which helps the companies and individuals to easily avoid paying taxes. But the most problematic case is that of the South Korea where some car manufacturers opposed the agreements stating that the regional barriers to auto imports are not being adequately addressed by this agreement.
The Obama Administration has fully assured that it is working for solutions to the agreement issues with both Colombia and Panama. Obama is especially concerned towards the FTAs as the main focus of his administration is to expand the exports of the United States. While the work is being done of these FTAs, President Obama is committed to work on the free trade agreement with the nations surrounding the Pacific known as the Trans-Pacific Strategic Economic Partnership Agreement (Cooper). The TPA exercised under Obama Administration is known as the Bipartisan Comprehensive Trade Priorities and Accountability Act of 2015. This TPA has several differences from TPA 2002 as the new agreement includes updates objectives of negotiation on intellectual property rights, trade, digital trade and even regulatory practices.
President Obama has signed the trade agreements with these three countries making the total number reach 20 of the countries that have a free trade relation with America. Though, initially President Bush signed these deals but could not be completed and hence, with amendments new deals were signed by President Obama.
Trans-Pacific Partnership Free Trade Agreement
Since 2010, the leaders of the Pacific Rim nations including Australia, Mexico, Brunei Darussalam, Chile, Canada, Malaysia, New Zealand, Singapore, Peru, Japan and Vietnam, have been negotiating with the Obama Administration over the Trans-Pacific Partnership Free Trade Agreement. To great despise, it has been identified that the TPP is a rather new version of the North American Free Trade Agreement (NAFTA), which is the earlier free trade agreement that only provided benefit to the largest corporations of the globe. Although, the initial objective of the TPP was to work for the 99% of the population which included the working class (Findlay and Urata). Though, the administration advertises the TPP to the public as an enterprise that would create jobs and raise the wages, none of the sectorial impacts or employment has ever been made public. President Obama is looking forward to the fate of the TPP agreement in order to remain the global leader to write the trade rules for the globe.
TPA is an agreement between two branches where the President is given the authority to negotiate the agreements of trade on behalf of Congress. The agreement is put to vote and if the members of Congress don’t like the contents, then it is taken off by a resolution of disapproval. On the other hand, TPP is the trade negotiation between United States and the other 11 nations. It aims at reducing barriers and tariffs among the 12 countries present in four continents (Cooper). So, this means that TPP would lead to the formation of a larger Free Trade Area present in the Asian Pacific region. The most significant relation between the both is that unless and until a formal grant of TPA is given, the negotiations for TPP cannot be concluded. If TPA is not present, then the president cannot be sure that any trade deal truly reflects the interests and wishes of Congress and neither would the president be able to judge that the foreign negotiators are actually putting in their best offers. This means that if the TPP contents are to be weighed for the benefits and costs, the TPA legislation must be passed by the Congress and the president must have signed this law first (Findlay and Urata).
President Obama’s stance on BCTPA 2014
The trade liberalizations seem to be promising in 2015. It seems that President Obama is going to get more receptivity to the trade initiatives he take as the Republicans have taken control of the Senate by increasing majority. The problem is that Obama has not been able to provide an affirmative case as to how the TPP agreement would benefit the country. I believe that the President Obama’s objective of gaining a TPA bill from Congress has been complicated due to the TPA debate as well as the decline in the popularity of the TPP negotiations. The president emphasized that TPA legislation is his priority in trade policy this year but still what has been seen is that the administration has failed to gain enough congressional backing for TPA. The issue is that some view TPA as an infringement for the president that is merely inherited due to congressional authority. While the others tend to consider TPA as becoming obsolete and useless for the Congress as TPP negotiations are coming near to conclusion.
There is yet another side of this issue which should also be taken into consideration. Although it is true that NAFTA did not provide the real boost to the economic condition of the country, but in all the trade deals made afterwards, the trade negotiators have made sure to include the high standards of labor and environment. Therefore, it signifies that all the trade deals that have been signed by Congress in the 21st Century have helped in reducing the trade deficit which means that ultimately they have played a role in creating jobs in the economy and played a significant role in boosting the U.S. economy (Matthews). The president viewed the liberalization of trade as the need of the economy but considering his stance, he seems to be not able to get actively engaged with Congress. He realizes himself that by supporting free trade, the wages and incomes of the common American man have stagnated (Ikenson).
I believe that the Administration must take into consideration some of the very important aspects if they actually want the authority to play its role effectively. First of all, in the TPP agreement, everything is being done secretively which means that the public is not aware of what is actually taking place. Even the Congress is against this secretive policy and are of the view that if the American people are informed about the details of the agreement then there would be positive impact (Krist). Secondly, a provision is included in all the trade agreements which allow the foreign companies to bring a case to compulsory negotiation against the law or government. Many companies have abused this provision in the past and even the arbitrator’s decision holds no significance. Hence, the TPA should seek ways to rectify this flawed system. Last of all, the issue of not gaining approval by the Congress of any trade agreement which does not refer to the issue of manipulating currency is still not being taken into consideration in any of the agreements that Obama Administration had made (Krist).
Cooper, William H. Free Trade Agreements. [Washington, D.C.]: Congressional Research Service, Library of Congress, 2003. Print.
Findlay, Christopher C, and Shujiro Urata. Free Trade Agreements in the Asia Pacific. Hackensack, N.J.: World Scientific, 2010. Print.
Ikenson, Dan. 'Does President Obama Support His Own Trade Agenda?' Forbes 2015. Web. 8 July 2015.
Krist, Bill. 'Will The President Seek Authority To Negotiate Trade Agreements?' Washington International Trade Association 2014. Web. 8 July 2015.
Matthews, Chris. 'Maybe The Obama Admin Is Right About Free Trade After All'. Fortune 2015. Web. 8 July 2015.