With the (temporary?!!)
resolution of the funding issues, the US government turned its attention to
other matters, including what is known as “Trade Promotion Authority”
(TPA). Under TPA, the US Congress
provides authorization to the US President to negotiate trade agreements such
as the Trans Pacific Partnership Agreement (TPPA) currently under negotiation.
Obtaining TPA will be
necessary for the Obama administration to negotiate and conclude the TPP
agreement. This is because negotiation
and implementation powers are not the sole province of the US President for
trade agreements. The US President can
negotiate and conclude an agreement, but without TPA, the US Congress is free
to amend the agreements during the approval and implementation process. This
contrasts with the Westminster parliamentary model which applies in most of the
other TPP negotiating parties, in which the government of the day has both
negotiation and implementation powers.
Thus, without TPA, the other
TPP negotiating parties will be very reluctant to conclude a TPP deal with the
US when they know that the US Congress will be able to amend the agreement and
change its terms. This is why the last
two GATT/WTO agreements and all recent US free trade agreements (FTAs) were all
successfully concluded through the TPA mechanism. The TPA commits the US Congress to an
expedited legislative schedule for the trade agreement, and most importantly,
commits the House and Senate to up-or-down votes without the possibility of
amending the agreements.
The problem for the TPP
talks is that the political sentiment in Washington is mixed on TPA. Certain factions in the Democratic party are
not sympathetic to the need for a TPP agreement, as explained here. The Republicans are traditionally pro-free
trade, but the “Tea Party” faction is loathe to give President Obama any
legislative victories, as evidenced here. TPP negotiating parties reading such articles
would become quite pessimistic about the Obama administration getting TPA
through Congress.
However, the Obama
administration, which had been content not to make trade a priority in the
first term, appears committed to getting the TPP and Transatlantic Trade and
Investment Partnership (the free trade talks with the EU) concluded in the
second term. If this is to happen, the President has to make a personal effort
with Congress, not just on the funding issue, but on TPA as well. Trade has always cut through party lines, and
with frictions based more on the economic interests in each member’s
constituency rather than ideology.
Congress also has to understand
that TPA does not result in the handing over of a blank check to the Obama
administration. Fundamentally, TPA is a
legislative rule, and each house of Congress has the constitutional right to
organize how it operates. If the
President is deemed to have abused his TPA authorization, either house can vote
to withdraw or suspend the TPA authority or process (I
wrote about this in 1989). This happened during the George W. Bush
administration when the then-Democrat controlled House of Representatives
suspended the TPA process for the US-Colombia FTA, delaying its passage for
years until Democrat concerns were addressed.
At the end of the day, TPA
is an expression by the US Congress of its prior consent to trade
negotiations. It provides the US
President with enough credibility to negotiate and conclude trade deals.
Without TPA, the United States will be unable to complete its key economic
diplomatic initiative in Asia (including ASEAN), which will have long-term
detrimental consequences for America.
TPA was born from a bipartisan initiative during the (Republican) Ford
administration and has successfully delivered FTAs that have benefited the
United States and its trading partners. If the United States is to maintain its vital
role in Asia, both the Obama administration and Congressional leaders have
resume bipartisan cooperation to get TPA approved.
