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The
TPP and the US Congress – without Fast Track Authority We are pleased to share with you this note by Third World Network on the mechanism in the US government system known as Fast Track Authority and its bearing on the Trans-Pacific Partnership Agreement (TPPA). While Congress has the power to adopt trade agreements negotiated by the president-led executive branch of government, Fast Track Authority enables the latter to present it for approval without altering it. But, as the Note below illustrates, while US trade negotiators typically downplay the prospect of a congressional disapproval of an executive Fast Track Authority, procedural requirements, past record as well as current political realities considerably render such a prospect increasingly likely for the Barack Obama administration. This Note also illustrates what, in the event of such a disapproval, the normal congressional process and rules of consideration would entail for the TPPA. With best wishes, Third
World Network To
subscribe to other TWN information lists go to: www.twnnews.net The TPP and the US Congress – without Fast Track Authority Note by Third World Network The United States Constitution provides Congress with exclusive “power to lay and collect taxes, duties, imposts and excises” and “to regulate commerce with foreign nations”. While the executive branch is empowered to negotiate with foreign nations on behalf of the US, a trade agreement with the US can only go into effect if approved by the Congress. Over the history of the US, Congress (comprising the House of Representatives and the Senate) has used different processes to approve agreements. Fast Track Fast Track was one such procedure. Under Fast Track, Congress authorised the President to sign a trade agreement and write implementing legislation that both formally approved the agreement and brought US law into conformity with its terms. It also guaranteed that Congress would complete its consideration of a trade agreement within 90 days of a signed agreement and implementing legislation being presented to Congress. The House of Representatives was required to vote within 60 days, with an additional 30 days thereafter for the Senate. Under Fast Track, Congress also agreed in advance to waive its normal voting rules. Thus, no amendments to the implementing legislation or changes to a signed agreement were permitted and debate was limited to a maximum of 20 hours. Even in the Senate where various supermajority voting rules usually apply, only a simple majority was required. When Fast Track is in effect, the US congressional approval process is still not very fast. While the ultimate voting process is expedited, it typically requires a year for an agreement to be prepared for submission to Congress, which is when the Fast Track 90-day final passage clock is started. This is because Fast Track requires that the US International Trade Commission conducts a comprehensive study of a pact’s prospective effects on the US economy. This study and additional reports must be sent to Congress before implementing legislation may be submitted. Further, a comprehensive assessment of administrative changes a pact may require must be prepared and submitted with the implementing legislation. Congress Forced Renegotiation of Past FTAs US trade negotiators typically downplay the role of Congress and ignore congressional demands because they assume that an agreement will enjoy Fast Track treatment and that, in the end, they can railroad a final deal through Congress. Sometimes US negotiators miscalculate. For instance, they ignored congressional demands related to automobile and auto parts terms when negotiating the US-Korea Free Trade Agreement (FTA). Three years after that agreement had been signed in 2007 by the Bush administration, it became obvious that even with Fast Track in place, the FTA would not be supported by a majority in the House of Representatives – and both chambers of Congress must approve all trade agreements. Thus, under the Obama administration, US negotiators demanded additional concessions from Korea. Korea ultimately provided them and the FTA finally was passed by both chambers in 2011. Similarly, the US-Peru FTA was signed in 2007 when the Republicans controlled the House of Representatives. In 2009 the Bush administration realised that the deal it had signed could not pass now that the House was controlled by Democrats. US negotiators demanded that Peru accept stronger labour and environmental provisions and also withdrew some of the extreme US demands on medicine patents that had been included in the original pact. Only then did the FTA pass. Even when Fast Track is not in effect or likely, US negotiators downplay Congress’ role because they are concerned that other countries’ negotiators would not make sensitive concessions if they knew that commitments the US negotiators make are subject to Congress’ discretion. Processing the TPP through Congress without Fast Track If Congress refused to provide Fast Track authority for an agreement, then the normal congressional process and rules of consideration would apply to a vote to approve the deal. To start with, that would mean that congressional committees, not the White House, would write the implementing legislation. This would be the first opportunity for Congress to alter a signed agreement. The House Ways & Means and Senate Finance Committees,which have primary jurisdiction over trade, would start the process. Then the implementing legislation that they develop would be referred to each of at least ten other non-trade congressional committees that have jurisdiction over non-tariff aspects of the agreement. The text of legislation must be approved by a committee and then passed to the next committee. Through this committee process, the House and the Senate would each write a version of implementing legislation. Then, if each chamber approved its legislation, a committee of Senators and Representatives would be appointed to negotiate the differences. The resulting “Conference Report” – one common text – would then have to pass both the House and the Senate, but it would not have to go back through the committee process again. Possible Scenarios for TPP without Fast Track With respect to the writing of implementing legislation, Congress could force additional negotiations if the executive branch failed to include key terms that were demanded by a large bloc of members of Congress or included provisions a large bloc opposed. This could occur in various ways: • Because there would be no requirement that any votes occur within a pre-set timeline, either the committees or the full House or Senate could simply refuse to move implementing legislation until additional negotiations obtained the demanded changes. The chairs of the committees have the authority to decide whether and when to bring up any piece of legislation for committee review and amendment. They also determine if and when a vote by the committee to approve legislation and “report it out” of committee occurs. Votes on amendments and to report a bill out of committee require simple majority votes of the committee. However, a committee chair who is upset with the inclusion or absence of specific provisions could simply decide not to schedule any committee action until his or her concerns are remedied. Even if all of the House or Senate committees report out an implementing bill, the decision of whether and when to schedule a floor vote – consideration by the full House or Senate – is under the authority of each chamber’s leadership. That means the Speaker of the House and the Senate Majority Leader must explicitly agree to schedule votes in the relevant chamber. How such floor votes would be conducted is described below, as the House and Senate have different rules. For issues on which there is bipartisan agreement, such as requiring all Japanese agricultural tariffs to go to zero, or including strong currency and state owned enterprise disciplines, the congressional leadership would simply withhold any action on final consideration of implementing legislation until changes to the agreement were negotiated to the satisfaction of Congress. • For issues where there are powerful parochial interests, such as avoiding new US market access concessions for sugar or dairy, chairs of relevant committees could withhold committee action. Alternatively, given the chambers’ differentiated voting rules, leading up to a final passage vote, a large bloc of House members or even small blocs of Senators could simply withhold their votes or push for amendments even if the congressional leadership did not support their demands. (This is what occurred with respect to the House and the US-Korea FTA.) As explained below, the Senate’s rules allow considerable discretion for any one Senator to offer amendments. That means an implementing bill could be amended on the floor to condition the TPP going into effect on US negotiators obtaining changes to the actual agreement text through additional negotiations. This might involve removing US concessions or obtaining additional concessions from specific countries or changes to broad rules. Differences between House and Senate processes without Fast Track With respect to floor voting procedures, the chambers have different rules. The House of Representatives has a Rules Committee that sets terms of consideration for major votes. The committee could decide to forbid amendments and limit debate, or allow some amendments and set the hours of debate or allow open amendments. For a major trade pact, the committee would likely only allow amendments for which there was broad support, if it allowed any amendments. Passing an amendment on the House floor requires a simple majority vote. The Senate is an altogether different body. A Washington aphorism is: “the Senate is where legislation goes to die.” The Senate operates by unanimous consent. If one Senator objects to legislation being brought up for debate, then a three-fifths vote (60 votes if all 100 Senate seats are occupied) is required to overcome that Senator’s objection and initiate debate. Each Senator also has the right to file a “hold” on legislation, which is a declaration made in advance that he or she will oppose unanimous consent. If a bill passes the first 60-vote hurdle, then debate can continue indefinitely. To end debate and proceed to a vote, unanimous consent must be requested again. If any one Senator objects, then a “cloture” petition must be filed. Another three-fifths vote must succeed to cut off debate and move to voting on the legislation. If the cloture vote fails, then usually legislation is deemed dead, and the Senate simply moves on to other business rather than allowing a “filibuster” which could waste days of precious floor time. A filibuster involves Senators who oppose legislation occupying the floor with speeches and reading of random texts. (A recent example of a filibuster was Kentucky Tea Party Republican Senator and Fast Track opponent Rand Paul who filled the time with, among other things, reading Dr. Seuss books to his children at home). If a cloture vote succeeds, then amendments are allowed during consideration of legislation on the Senate floor. Typically, hundreds of amendments are filed on legislation that passes the first two supermajority vote requirements, with scores of them actually debated and voted on. To pass an amendment in the Senate requires only a simple majority vote. Another three-fifths vote is required to cut off amendments and move to a final passage vote, which requires a simple majority. When legislation passes the Senate, it is because 60 votes in favour have been secured. That usually means ensuring that various small groups and sometimes individual Senators whose votes are needed have obtained the changes they are demanding. If Fast Track is not in effect the 60-vote rules means that even small groups of Senators demanding various changes to a trade agreement would have enormous leverage to force renegotiations. An additional way the US can extract concessions even after Congressional ratification Even if the legislation passes both chambers of Congress and the legislation is signed by the President, the implementing legislation for all recent US FTAs has required that the President withholds formal written notification that the US has completed its legal requirements to implement an FTA until the President certifies that a trade partner country has altered its domestic laws and policies to satisfy US expectations of that country’s FTA compliance. That is to say that, even when Congress has approved a trade agreement, the United States will only allow it to go into effect if it is satisfied with the other country or countries’ implementation. The relevant provision, for example, from the US implementing legislation for the US-Panama FTA requires: “At such time as the President determines that Panama has taken measures necessary to comply with those provisions of the Agreement that are to take effect on the date on which the Agreement enters into force, the President is authorized to exchange notes with the Government of Panama providing for the entry into force, on or after January 1, 2012, of the Agreement with respect to the United States.” To implement this policy, US officials transmit a list of changes that the US government requires be made to a trade partner’s domestic laws and policies before the United States will allow a pact to go into force. US government officials then monitor compliance and pressure the trade partner country’s government to alter its laws and policies until the US view of needed changes is satisfied. A 2008 Inside U.S. Trade article revealed that in some instances US officials actually travel to the trade partner country and directly participate in making changes to domestic law required by the United States. Not surprisingly, this process often causes considerable political and policy problems for US trade pact partners. Both governments and private sector interests may have quite different views from those of the US government or private sector about what a pact’s obligations mean and what, if any, changes to domestic laws and policies such terms require. As a result, this mechanism provides US commercial interests and the US government with additional leverage to try to force other countries to adopt the US interpretation of what are often deliberately vague, opaque and contested trade pact terms and rules, and then to make their domestic laws and policies conform to the US interpretation. Some critics have argued that this process results in the United States obtaining additional concessions after a trade pact has been negotiated, signed, and ratified. Unquestionably, the US unilateral certification process often results in long delays in agreements going into effect, even after Congress has approved a deal. Perhaps most relevant to the TPP context was the US country-by-country certifications of compliance for members of the Central America Free Trade Agreement (CAFTA), which occurred at different times for different countries, depending on their willingness to cede to US demands. However, the lengthy process before CAFTA went into effect is not unique. For instance, the US-Panama FTA was signed in June 2007. Panama’s legislature voted in July 2007. But the FTA only went into effect on 5 November 2012, a year after the US Congress approved the FTA and the implementing legislation became US law in October 2011. That was five years after passage by Panama’s legislature. The United States withheld notification because Panama had not changed all of its patent, copyright, financial, telecommunications, procurement, customs, trade remedies and other laws and policies that the United States had listed as necessary to receive certification of compliance. The US-Peru FTA was signed on 12 April 2006. The Peruvian Congress ratified it in June 2006 and a Protocol of Amendment in June 2007. The US Congress approved it and implementing legislation was signed into US law in December 2007. However, the FTA only entered into force in February 2009 after the United States certified that Peru had altered various intellectual property, labour, environmental and other laws to meet US specifications.
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