Extending Trade Promotion Authority

July 17, 2017 2:15 PM

Will the expiration next summer of trade promotion authority (TPA) disrupt President Donald Trump’s trade talks with Canada, Mexico, and others? US exporters and investors and US trading partners are anxious because TPA is needed for the expedited consideration of implementing legislation for new US trade agreements such as the renegotiation of the North American Free Trade Agreement (NAFTA) and possibly talks on updating the Korea-US FTA. But no worries: Current law already provides for a three-year extension of TPA and Congress is highly unlikely to block its implementation.

Concerns about the expiration of TPA are understandable. While the Trump administration hopes to negotiate revised trade pacts quickly, it is unlikely that NAFTA implementing legislation could be proffered before TPA expires on July 1, 2018. TPA requires that the administration notify Congress at least 90 days before signing a prospective trade pact (and 180 days if they plan to make changes to unfair trade provisions such as NAFTA Chapter 19), so a deal would have to be reached very quickly after the start of NAFTA talks in mid-August of this year for those notification deadlines to be met before the July 2018 TPA expiry.

The good news is that Congress preauthorized a three-year extension of TPA, provided certain procedures are followed and neither House of Congress vetoes the extension by adopting a disapproval resolution. What needs to be done to extend TPA and when?

First, the president is required to provide a written request to Congress by April 1, 2018 along with a report that describes progress in ongoing trade negotiations and explains why TPA is needed to finish the talks. Second, and at the same time, the president needs to notify the Advisory Committee on Trade Policy and Negotiations (ACTPN), the government’s top-level private sector trade advisory panel, and the United States International Trade Commission (USITC) of the request to extend TPA, so that both can prepare reports to Congress by June 1, 2018. The ACTPN—which comprises leaders from business, labor, think tanks, and other nongovernmental organizations—must provide an assessment on whether the progress in the trade negotiations merits TPA extension. The USITC is required to analyze the economic impact on the United States of any trade deal implemented since the enactment of the 2015 TPA legislation.

With all this information in hand, any member of either House of Congress can introduce by June 30, 2018 a simple disapproval resolution that would be referred to the House Ways and Means and Rules Committees and the Senate Finance Committee. If either the House or the Senate disapproves, TPA provisions will expire on July 1, 2018. Vote on a disapproval resolution must be held before July 1, 2018; otherwise, the president’s request to extend TPA for three years is approved.

What will happen? Simply put, TPA will be extended next year because Congress set relatively easy requirements to do it so they wouldn’t have to revisit this decade the fractious debate and vote on trade negotiating authority that took place in 2015. While any member of Congress can file a disapproval resolution, the odds are stacked against it; the House and Senate committees to which the resolution would be referred are highly unlikely to support it with the current Republican majorities. So TPA will continue to guide US trade policy at least until July 2021.

Add new comment