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June 29, 2015

What is Fast Track Trade Authority?  It’s when the Congress gives to the President the authority to negotiate international trade agreements.  When negotiated, these come back to the Congress which is only given an up/down vote on them.  Unlike treaties, that require an affirmative vote of 2/3rds in the Senate, Fast Track agreements become law unless both houses “veto” them by a majority vote within 90 days.  These bills cannot be amended, filibustered, and cannot die in committee.  Failure of Congress to act means they become law! 

So what's the fuss? Aren’t we all in favor of free trade?  Well maybe! The business community likes trade agreements because they see sales opportunities.  Goods could be purchased overseas where the labor costs are less, then imported/sold in the U.S., potentially undercutting goods made domestically.   But a favorable trade agreement could also open doors for U.S. exports overseas and that’s a good thing.  Consider also our part of the Gulf Coast has five seaports that stand to benefit from an increase in U.S. exports.

So what’s the problem?  The opponents are concerned about the impact of free trade agreements on U.S. jobs.  We already have record numbers of people who have left the job market because they are unable to find work.  Others are underemployed.   Opponents also point to a lack of transparency.  Some Congressmen/Senators have complained they have been stymied from getting easy access to the Trans-Pacific Partnership (TPP) agreement and that key staff have been barred from examining the document.

There’s a concern about enforcement of such agreements.  The only “sweetener” the Senate Majority Leader is offering is to empower the Commerce Department to take retaliatory action (through antidumping/countervailing duty [CVD] laws) against foreign countries that violate the trade rules.  But this falls way short of what the Democrats want.

Both antidumping and CVD cases require investigations/analysis; and injury to U.S. companies must be proven.  All this takes time and the damage to domestic companies may be done before the remedy can be applied.

Earlier this month the House moved the bill forward (218-208). But the measure rests on a diminishing resource in Washington: TRUST!  The original bill included Trade Adjustment Assistance (TAA) which would help workers who are adversely impacted by trade deals.  But a coalition of House Democrats and Conservative Republicans refused to pass the bill.  So the House leadership (with White House support) split the legislation into two bills, passing the one without TAA and promising to move TAA separately.  This past week the Senate cleared the way for approval of TPA.

But there is another issue.  Who will be doing the negotiating?  This President has a record of being completely ineffective in negotiations.  It’s also possible he or a future president could exceed the negotiating authority.

Here is what we would have preferred to see:

• Fast Track Authority that allows the Congress to amend provisions they find objectionable;
• A requirement that Congress take affirmative action before trade agreements are ratified;
• That the secrecy surrounding trade agreements (like TPA) be removed and that transparency be mandated; and
• That such agreements sunset every ten years unless they are extended by the Congress.

Bill, Mark, and John