fb - voice of agriculture
July 2006

U.S. Trade Hinges on Trade Promotion Authority

Bob Stallman
American Farm Bureau
By Bob Stallman
President, American Farm Bureau

The talk in trade circles is the state of World Trade Organization negotiations. But driving these and other trade talks is the looming expiration of presidential trade negotiating authority.

The world is currently looking at the United States and our nation’s ability to finalize trade deals in the future, whether it is the WTO or free trade agreements. And all are contingent on Trade Promotion Authority. 

A Deal Breaker

Congress considers trade agreements under the procedures included in the Trade Act of 2002, which includes Trade Promotion Authority. Under TPA, if the president meets trade negotiating objectives and satisfies the consultation and notification requirements of Congress, it would then consider the legislation to implement a trade agreement with limited debate, no amendments and a vote.

In layman’s terms, TPA means Congress can only vote up or down on trade agreements.

Farm Bureau supports TPA because it’s necessary if we want other countries to engage in serious negotiations with the U.S. Understandably, other nations don’t want to waste time and resources negotiating treaties only to have them amended by Congress and then renegotiated.  

Typically when a seller and a buyer negotiate they come to final terms. If then a third party steps in adding amendments and clauses to what was a done deal, it makes the previous terms meaningless. In essence, without TPA the same scenario could fit our trade agreements. No country would or should want to negotiate with the U.S. without TPA protection.

Meeting the Deadline

The current TPA expires on July 1, 2007. Before that date, Congress can act to extend TPA or pass a new trade bill that includes TPA authority. The July 2007 deadline has a direct impact on the time frame for not only WTO talks, but also all free trade agreement negotiations. Congress has a 90-day period to consider a trade agreement after submission by the president, so all agreements must be sent to Congress by April 1, 2007.

So where does that leave us with our current trade negotiations? There are many negotiations that are still outstanding, from the WTO to various free trade agreements, such as Panama, Malaysia, Thailand and Korea – and this is just to name a few. Unless our government and these other countries complete negotiations by the TPA deadline, U.S. agriculture may not be able to see the potential trade gains of these agreements.

Congress generally has a difficult time mustering the will and the votes to pass trade agreements. Trade Promotion Authority makes it possible to reach anagreement.