Trade Talks and the US Congress

By | February 13, 2014

There was an excellent article by Barrie McKenna in the Globe on February 9, 2014, pointing out the importance of the Obama administration getting trade negotiating authority from the Congress, called Trade Promotion Authority or “TPA”. That authority expired in 2002 and hasn’t been renewed. A new TPA bill has been introduced in both the Senate and the House of Representatives but is highly contentious and is very much caught up in the toxicity of partisan politics in Washington these days.

I wrote about the TPA and how it impacts on negotiations with the US in an earlier blog ( I noted that without TPA, other countries, Canada included, were negotiating in the Trans-Pacific Partnership exercise on a large amount of faith with the American team. The reason is that no-one yet knows what kinds of conditions Congress will attach to TPA legislation, assuming the bills even get out of the morass of committee deliberations. My prediction is that Congress will set out some very onerous terms for the US administration to bring back a TPP agreement that will be approved.

A bit of history here. Under the US constitution, any treaty signed by the US executive must then obtain Congressional approval for the US to ratify the treaty and be legally bound by its terms. Remember the League of Nations episode, where the Wilson administration signed the treaty in 1919 but the Congress refused to approved it. The result was that the US remained outside the League for the duration of that body’s existence.

One of the serious problems as well was that, to give approval, Congress often required major changes to a signed treaty. This meant that countries, Canada included, that reached a negotiated deal with the US, then had to agree to make more concessions to get the deal through the Congress. In other words, the US got two kicks at the can. This was a particular roadblock to treaty negotiations with the Americans for many years.

To remedy the problem in trade talks, the concept of fast-track was developed in the 1970s. It was an arrangement by which the Congress agreed to give the Executive Branch full authority to negotiate and sign trade agreements with the proviso that the Congress could not insist on changes being made to that agreement later. All Congress could do under fast track was to approve or disapprove the agreement in its entirely. No changes could be insisted on.

Fast track worked well in the Uruguay Round negotiations in the 1990s, leading to the 1994 WTO Agreement. However, the last fast track bill expired in 2007. The Obama administration needs TPA renewed for the Pacific trade talks.

But fast track renewal is hitting stormy weather in Washington. Many in the Senate and the House, notably but not only on the Democrat side, are bent on changing the very concept. Instead of a clean bill, there are efforts to tack on many terms and conditions on Obama’s negotiating authority, meaning that the US team will come to the negotiating table with a long list of a priori demands to meet Congressional conditions. That will cause a lot of TPP countries a lot of angst.

Not only that. There is a move to include a requirement for full Congressional oversight during the Trans-Pacific negotiations. If this gains traction and is included in the final TPA bill, “oversight” will really mean that, once again, countries will be negotiating, not with the US executive branch, but with the Congress. This would be untenable and, in my estimation, could torpedo the talks. So all TPP countries should follow these twists and turns with interest and with some anxiety as the TPA bills tortuously wend their way through the Congressional maze.