Sarah Goldfeder

Get­ting to Yes: Why Fast Track Mat­ters

Policy - - In This Issue - Sarah Goldfeder

Mul­ti­lat­eral trade ne­go­ti­a­tions are like a game of Jenga whereby the usual cau­tion of “Noth­ing is de­cided un­til ev­ery­thing’s de­cided” is com­pounded by what can hap­pen to a deal af­ter it’s ac­tu­ally agreed, with the Trans-Pa­cific Part­ner­ship be­ing the most vivid ex­am­ple. Which is why Trade Pro­mo­tion Au­thor­ity, or “fast track”, as ex­pe­dited con­gres­sional ap­proval is known, is so cru­cial.

As the NAFTA ne­go­ti­a­tions be­gan in Wash­ing­ton DC in mid-Au­gust, mem­bers of Congress and Se­na­tors were back in their home dis­tricts, lis­ten­ing to con­stituents. Many heard mes­sages of con­cern for the eco­nomic un­cer­tainty that has ac­com­pa­nied the rene­go­ti­a­tion of an agree­ment that fa­cil­i­tates sig­nif­i­cant por­tions of the Amer­i­can econ­omy. While Congress may not be the lead on the process of ne­go­ti­at­ing trade deals, it has a sig­nif­i­cant role to play in the ul­ti­mate ap­proval of any agree­ment. With­out Congress on board, there is no deal. With­out the sup­port of their con­stituents, mem­bers

of Congress won’t play. This is par­tic­u­larly true on the eve of a mid-term elec­tion, which can be a game-changer for any ad­min­is­tra­tion.

From the U.S. per­spec­tive, the talks are be­ing con­ducted un­der the Trade Pro­mo­tion Au­thor­ity en­acted by Congress in 2015. In 2014, Pres­i­dent Obama was in the heat of ne­go­ti­a­tions for the Trans-Pa­cific Part­ner­ship (TPP) and look­ing for­ward to the even­tual ne­go­ti­a­tion of the Transat­lantic Trade and In­vest­ment Part­ner­ship (T-TIP) with the Euro­pean Union. That Jan­uary, in his State of the Union ad­dress, he called for Congress to grant him bi­par­ti­san trade pro­mo­tion au­thor­ity (also known as TPA or fast track). He said, “We need to work to­gether on tools like bi­par­ti­san trade pro­mo­tion au­thor­ity to pro­tect our work­ers, pro­tect our en­vi­ron­ment, and open new mar­kets to new goods stamped `Made in the USA.’ China and Europe aren’t stand­ing on the side­lines. Nei­ther should we.”

He was ask­ing for this au­thor­ity to give his ne­go­tia­tors cred­i­bil­ity at the ta­ble in the on­go­ing talks on TPP, where they were feel­ing pres­sure. Even here in Canada, Stephen Harper ex­pended lit­tle po­lit­i­cal cap­i­tal on the agree­ment un­til TPA passed Congress. Iron­i­cally, de­spite Pres­i­dent Trump’s al­most im­me­di­ate re­jec­tion of TPP, it is this TPA that the Trump ad­min­is­tra­tion is re­ly­ing on to get through the rene­go­ti­a­tion of the North Amer­i­can Free Trade Agree­ment (NAFTA). For this rea­son, it is worth re­call­ing the fight for the TPA of 2015.

Dur­ing the first three weeks of June 2015, an epic par­ti­san bat­tle on free trade was waged on Capi­tol Hill. The Democrats were op­posed to grant­ing the Pres­i­dent, a Demo­crat, au­thor­ity to ne­go­ti­ate three spe­cific mul­ti­lat­eral trade agree­ments un­der fast track pro­vi­sions (the TPP, the T-TIP, and the Trade in Ser­vices Agree­ment or TISA). Fast track au­thor­ity is a re­new­able mech­a­nism by which trade deals can be ap­proved or de­nied by Congress on an up-or-down vote, can­not be amended or fil­i­bus­tered.

By 2015, the most vo­cal sup­port­ers of the en­abling leg­is­la­tion, spon­sored by Repub­li­cans Or­rin Hatch in the Se­nate and Paul Ryan in the House, were Se­nate Ma­jor­ity Leader Mitch Mc­Connell and House Speaker John Boehner. In 11th-hour ne­go­ti­a­tions, in which the Obama White House part­nered with the lead­er­ship of the Re­pub­li­can Party, the Bi­par­ti­san Com­pre­hen­sive Trade Pro­mo­tion Au­thor­ity of 2015 passed both houses along largely par­ti­san lines.

Why does this mat­ter? The U.S. ex­ec­u­tive branch must have the abil­ity to ne­go­ti­ate a trade agree­ment with­out the threat of ef­fec­tive re-ne­go­ti­a­tion within its leg­isla­tive branch be­fore the agree­ment can come into force. It is ab­so­lutely nec­es­sary that they have this au­thor­ity in or­der for the U.S. ne­go­ti­at­ing team to have any cred­i­bil­ity with in­ter­na­tional coun­ter­parts who are well aware of the po­ten­tial for con­gres­sional grid­lock with­out fast track.

The prin­ci­ples laid out in the TPA of 2015 were based on decades of leg­is­la­tion al­low­ing for cred­i­ble trade ne­go­ti­a­tion by the USTR. In ad­di­tion, in 2007, the May 10 Bi­par­ti­san Com­pact on Free Trade Agree­ments item­iz­ing cer­tain pri­or­i­ties was struck be­tween Con­gres­sional Democrats and the Bush ad­min­is­tra­tion, lead­ing into a se­ries of bi­lat­eral trade agree­ments. The prin­ci­ples for labour and en­vi­ron­ment out­lined in that memo re­mained in the 2015 leg­is­la­tion and are re­flected in the July 17 doc­u­ment on pri­or­i­ties for the NAFTA ne­go­ti­a­tions. In fact, most of the lan­guage in the July 17th doc­u­ment orig­i­nated in texts de­signed to fa­cil­i­tate the ne­go­ti­a­tion of other agree­ments—trade pri­or­i­ties that have been agreed upon by Congress over time. With­out TPA 2015, any agree­ment ne­go­ti­ated by the USTR team would be sub­ject to full leg­isla­tive over­sight. In the world we live in now, that would mean a line-by-line as­sess­ment of the fi­nal text and likely in­clude sub­stan­tial amend­ments that would speak to the con­stituen­cies of mem­bers of Congress. In other words, it would be a mess.

What does TPA mean for the NAFTA ne­go­ti­a­tions? In a nut­shell: Congress may not be driv­ing the bus, but it owns the bus and can take the keys back at any point in time.

We need to work to­gether on tools like bi­par­ti­san trade pro­mo­tion au­thor­ity to pro­tect our work­ers, pro­tect our en­vi­ron­ment, and open new mar­kets to new goods stamped ‘Made in the USA.’ China and Europe aren’t stand­ing on the side­lines. Nei­ther should we.

TPA 2015 man­dates a spe­cific process for the ne­go­ti­a­tion, ap­proval and im­ple­men­ta­tion of trade agree­ments in the United States. It re­quires that Congress be in­volved from the be­gin­ning, con­sulted through­out, and no­ti­fied of any changes in trade rem­edy laws in ad­vance of the im­ple­men­ta­tion leg­is­la­tion. It also re­quires that Congress re­ceive spe­cific re­ports that de­tail the over­all im­pact of the pro­posed agree­ment on the eco­nomic in­ter­ests of the United States as well as im­pact re­views for the en­vi­ron­ment, em­ploy­ment, labour and an im­ple­men­ta­tion and en­force­ment plan.

Fur­ther com­pli­cat­ing mat­ters, the TPA con­tains pro­vi­sions for Congress to re­tract Trade Pro­mo­tion Au­thor­ity through a pro­ce­dure called the Ex­ten­sion Dis­ap­proval Res­o­lu­tion. This pro­vi­sion may be in play in these NAFTA ne­go­ti­a­tions should the ne­go­ti­a­tions not be con­cluded by July 1, 2018. An­other op­tion, the Pro­ce­dural Dis­ap­proval Res­o­lu­tion, al­lows Congress to re­tract TPA for any spe­cific trade agree­ment. Ad­di­tion­ally, there is yet a fur­ther pro­ce­dure should Congress find that nec­es­sary changes in trade rem­edy

laws are in­con­sis­tent with the ne­go­ti­at­ing ob­jec­tives, in which case, Congress can choose not to ac­cept those and kill the deal. The fourth pro­ce­dure that could come into play is a “Con­sul­ta­tion and Com­pli­ance Res­o­lu­tion” that can be used to deny TPA for any spe­cific piece of im­ple­men­ta­tion leg­is­la­tion. Fi­nally, as if there weren’t enough checks to TPA, each house can al­ways over­ride TPA and con­sider an im­ple­men­ta­tion bill un­der its gen­eral rules.

It is also im­por­tant to note that al­though the pres­i­dent has the au­thor­ity un­der NAFTA to re­move the United States from the agree­ment, the im­ple­men­ta­tion leg­is­la­tion for that agree­ment re­mains in place un­til Congress leg­is­lates some­thing dif­fer­ent. Like­wise, the im­ple­men­ta­tion leg­is­la­tion for NAFTA sub­sumed and in part, nul­li­fied, the prior agree­ment be­tween Canada and the United States. With­out leg­isla­tive ac­tion, which re­quires Congress, noth­ing ef­fec­tively changes.

Which brings us to to­day. Pres­i­dent Trump has con­sis­tently used strong rhetoric against NAFTA (and against all ex­ist­ing trade deals) as a ral­ly­ing cry. That rhetoric may make the ne­go­ti­a­tions more stress­ful for the teams of ne­go­tia­tors, but it has lit­tle ef­fect on the mech­a­nisms of the United States gov­ern­ment. The mech­a­nisms that ad­dress the sys­tem of checks and bal­ances that both frus­trate and pro­tect Amer­i­cans are par­tic­u­larly re­silient. Trade ne­go­ti­a­tions are one of those, and the process is de­signed to be, to the ex­tent pos­si­ble, non­par­ti­san, with the over­ar­ch­ing goal of pro­tect­ing and ad­vanc­ing the na­tional in­ter­est of the United States.

The re­al­ity is that the path not taken—a world with­out NAFTA— would likely in­clude a less wealthy and se­cure North Amer­ica. NAFTA brought Mex­ico into the al­ready sta­ble re­la­tion­ship be­tween Canada and the United States. It helped to sus­tain a con­ti­nent of pros­per­ity and re­silient democ­racy.

And then, there’s pol­i­tics. There are a few ways for a pres­i­dent to alien­ate mem­bers of Congress. One guar­an­teed to work is to act in ways that ex­press a con­vic­tion that Congress works “for” the pres­i­dent. Mem­bers of Congress are the first line of the Amer­i­can democ­racy. They take the con­cerns of their neigh­bours back to Wash­ing­ton. They may ex­press sup­port for a pres­i­dent be­cause their con­stituency sup­ports that Pres­i­dent, but that good­will only goes so far. As this pres­i­dent hu­mil­i­ates, goads, and ha­rasses Re­pub­li­can lead­er­ship via his Twit­ter feed, he runs the risk of los­ing them on leg­isla­tive pri­or­i­ties like trade. Es­pe­cially when trade agree­ments are re­spon­si­ble for the sales of com­modi­ties that put food on the ta­bles of Amer­i­can fam­i­lies. Congress is also be­holden to cor­po­rate in­ter­ests— es­pe­cially cor­po­ra­tions that em­ploy vot­ers in their dis­tricts, but also those that con­trib­ute to fundrais­ing ef­forts in ad­vance of an elec­tion year. While the dis­cus­sion of trade deals that make life bet­ter for Amer­i­can work­ers is good rhetoric, the re­al­ity is that trade deals that fa­cil­i­tate busi­ness are what the cor­po­rate world and its Kstreet lob­by­ists are fighting for. This is not to say that the one set of goals is wholly in­con­sis­tent with the other. But it is im­por­tant to re­mem­ber that trade is not a func­tion of gov­ern­ment, it is a func­tion of busi­ness. Trade deals are not ef­fec­tive at forc­ing the will of a po­lit­i­cal ide­ol­ogy; that is a func­tion of do­mes­tic re­forms. Trade deals are most ef­fec­tive at es­tab­lish­ing mar­kets and re­la­tion­ships be­tween na­tions. Those net­works are the best way of en­sur­ing a rel­a­tively sta­ble global econ­omy where par­tic­i­pants play by a cer­tain set of pre­dictable rules.

The Re­pub­li­can party of the 21st cen­tury has found new strength in the “fly-over” states—states whose economies are driven by agri­cul­ture and man­u­fac­tur­ing. The con­stituen­cies in these states may have con­flict­ing views on spe­cific trade agree­ments (farm­ers liked TPP for ex­am­ple, but skilled work­ers did not), but ac­cess to for­eign mar­kets is im­por­tant to all. As this process un­folds, mem­bers of congress from agri­cul­ture-based states will be look­ing to pre­serve the agree­ment.

The big­ger chal­lenge in the United States is de­ter­min­ing ex­actly how much Amer­i­cans care about NAFTA. The cov­er­age of these ne­go­ti­a­tions in the U.S. is in­fin­i­tes­i­mal com­pared to the daily digest avail­able in Canada. The con­stituen­cies that have more at stake are pay­ing more at­ten­tion, the economies of Texas and New Mex­ico, for ex­am­ple, are largely driven by trade with Mex­ico, and have more front-page cov­er­age of NAFTA in their local pa­pers.

How all this plays in the Amer­i­can re­alpoli­tik is what will be, in the end, the most telling. The re­al­ity is that the path not taken—a world with­out NAFTA—would likely in­clude a less wealthy and se­cure North Amer­ica. NAFTA brought Mex­ico into the al­ready sta­ble re­la­tion­ship be­tween Canada and the United States. It helped to sus­tain a con­ti­nent of pros­per­ity and re­silient democ­racy. There is still work to be done. The Amer­i­can work­force is strug­gling to pay its bills, while Mex­i­can civil so­ci­ety is (ar­guably) still nascent. Both coun­tries look to Canada as an ex­am­ple on many fronts, but mostly as a coun­try that has threaded the nee­dle and found suc­cess by sus­tain­ing a healthy, vi­brant econ­omy based on trade, and sup­ported by a na­tion grounded by its mid­dle-class.

Photo

The West Front of the United States Capi­tol, with the U.S. Se­nate and House of Rep­re­sen­ta­tives. As Sarah Goldfeder writes: “Al­though the pres­i­dent has the au­thor­ity un­der NAFTA to re­move the United States from the agree­ment, the im­ple­men­ta­tion leg­is­la­tion for the agree­ment re­mains in place un­til Congress leg­is­lates some­thing dif­fer­ent.”Wiki­me­dia

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