The conventional wisdom in Washington these days is that
presidential trade-negotiating authority, which passed the House
of Representatives by a single vote in 2001, will never get
renewed after it expires in June 2007. That bleak assessment
notwithstanding, some business lobbyists have privately begun to
discuss just what it would take to pass such legislation.
This speculation has begun 15 months before the president's
authority expires because the current Doha Round of multilateral
trade negotiations is stalled. Unless an unexpected breakthrough
in the talks occurs in the next four months, the Bush
administration may face the unpalatable choice of walking away
from the talks or seeking extended negotiating authority. With
GOP prospects uncertain in the U.S. fall elections, a
congressional vote on renewal that comes sooner rather than
later may stand the best chance of succeeding.
So don't be surprised if negotiating authority comes up for
a vote as early as December, in a lame-duck session of Congress,
where, to grease its passage, it may be paired with tough new
bipartisan trade legislation emerging in the Senate or with
legislative extension of the U.S. farm program, which has
support in the House.
Presidential trade-negotiating authority -- also known as
"fast-track" or "trade-promotion authority" -- commits Congress
to a simple up-or-down vote on trade deals negotiated by the
president, forgoing Congress's constitutional right to amend
legislation. First granted to the president in 1974, fast-track
proved pivotal to congressional approval of the North American
Free Trade Agreement with Canada and Mexico, and creation of the
World Trade Organization in the 1990s.
With the Doha Round ongoing and U.S. free-trade
negotiations recently launched with South Korea and Malaysia, a
pessimistic U.S. Trade Representative Rob Portman said this to
an agribusiness group in Washington in late March: "Would we
like to see immediate renewal? Of course. But I think we have to
realistically look at what's happened in the past. The track
record is not good. The last time, it took us eight years."
Conventional wisdom also has it that the looming expiration
of presidential trade authority is actually helping Portman
secure a deal in the Doha Round, now in its fifth year of talks.
One business lobbyist in Washington said, "I don't see how you
renew fast-track without sending a signal to the Europeans and
the Indians that 'it is OK, you don't need to make any further
concessions in the Doha Round, we will simply extend the
negotiations.' "
And business interests have long worried that renewing
fast-track would be tough now because liberal Democrats in
Congress would try to block renewal unless it included stringent
new labor rights and environmental standards that might hobble
commerce and be rejected by U.S. trading partners.
But this conventional wisdom is now being openly
challenged. "I don't accept that this is the worst time to seek
renewal," said Stephen E. Biegun, vice president of
international government affairs for Ford Motor in Washington.
"In fact, I don't think there is any better time to do it,"
because it would trigger a long-needed national debate on trade.
Others agree, although more circumspectly. "I believe that
if certain preconditions could be met, you could do limited
extension," said Calman Cohen, president of the Emergency
Committee for American Trade, which represents major U.S.
multinational corporations.
The prerequisites for a short extension are fairly
straightforward. If by early 2007, progress in the Doha
negotiations promised substantial new market access abroad for
American farmers, manufacturers, and service providers, and if a
limited extension permitted the successful wrap-up of the talks,
then Cohen believes a bipartisan congressional majority could be
built to extend fast-track.
But the Doha talks remain stalemated. And if no meaningful
progress is apparent by the end of July, which negotiators in
Geneva see as a drop-dead date for technical reasons, a short
extension could be pointless. So the Bush administration may
soon face some tough choices.
It could walk away from the talks, but at a cost. The
European Union stands ready to end all agricultural export
subsidies, something Washington has long sought. That European
concession would be lost if the talks broke down.
The administration could decide it will continue talking
even if negotiating authority expires, on the assumption that it
can persuade a future Congress to provide fast-track if the
talks finally produce significant commercial benefits for the
United States. But the White House has long contended that other
countries won't bargain seriously if the president lacks the
negotiating authority.
So, the administration may have little choice but to
attempt to renew its trade-negotiating authority.
The first hurdle would be timing. Fast-track authority does
not expire until June 30, 2007. So the effort could be postponed
until next spring. But, said a former Clinton administration
trade official, "I don't see how the argument [in favor of
renewal] gets any better next year."
Moreover, the administration will face an undesirable
prospect in 2007 if the fall congressional elections go badly
for the Republicans: Either the GOP will not control the House
or it will have a much smaller majority there. Some interest
groups are already threatening to ask Democratic congressional
candidates to sign a pledge that they would vote against
fast-track renewal if they get elected. So, the cost of buying
votes for renewal next year -- perhaps accepting new limits on
negotiating authority or new protection for some special
interests -- could go up, not down.
Faced with that prospect, extending fast-track this year
may soon look increasingly attractive, possibly in a December
lame-duck session of Congress if that proves necessary to
consider must-pass legislation. After the November elections, it
may be easier for the White House to build a majority for a
controversial piece of trade legislation by calling on outgoing
members of Congress -- both Democrats and Republicans -- who
never have to face the electorate again. The administration may
also want to rely one last time on the arm-twisting skills of
retiring House Ways and Means Chairman Bill Thomas, R-Calif.
Whatever the timing, few observers foresee a blanket
renewal of the president's authority. "If it were limited to
just the Doha Round, it might be viewed as less outrageous than
extending the authority to launch new negotiations," said I.M.
Destler, a professor at the School of Public Policy at the
University of Maryland and the author of the 1997 book Renewing
Fast-Track Legislation. Destler is quick to note that he doesn't
endorse early renewal.
The administration faces the real prospect that it could
lose a vote on negotiating authority. To bolster chances of
passage, the extension may need to be bundled with other
legislation.
"I would put a package together that included something on
enforcement of trade laws, something on China, and throw in
fast-track," said the former Clinton trade official, noting that
Sen. Charles Grassley, R-Iowa, and Sen. Max Baucus, D-Mont.,
have crafted a bipartisan trade bill that could serve as that
vehicle.
Another alternative would be to attach fast-track to a
proposal by Rep. Mac Thornberry, R-Texas, to extend the farm
bill, which expires in 2007. The American Farm Bureau and other
agricultural groups support continuing the current farm program
until the Doha Round is completed, to ensure that cuts in U.S.
farm subsidies are offset by greater access abroad for American
commodities.
"In terms of picking up votes," predicted Larry Combest,
the former chairman of the House Agriculture Committee and now a
farm lobbyist, "there is no question that you would get votes
for extension of the farm bill by linking it to fast-track, and
vice versa."
A final factor for the administration to consider is how
long a fast-track extension to request. A yearlong extension
might set the administration up to have to make tough
negotiating concessions in the middle of the 2008 presidential
campaign, an unpalatable prospect. An extension through the end
of 2009 would pass the buck to the next president.
Fast-track renewal wouldn't be easy, no matter when it came
up. It would have to compete with more-compelling administration
legislative priorities, for one. The outcome of the fall
elections, the president's troubles in the polls, and the likely
continued rise in the U.S. trade deficit could embolden
Democrats to deny the president an extension.
But the deadlock in the Doha Round and the growing K Street
speculation about the renewal of presidential negotiating
authority underscore the reality that, despite the difficulty in
extending fast-track, the Bush administration may have little
option but to try. And that effort may come sooner than
expected.
Fast-Track Facts
Fast-Track: Once the president formally submits a bill to
Congress implementing a trade agreement, both chambers must vote
on the bill within 90 days. No amendments are permitted.
Fast-track has been in effect off and on for more than
three decades and has been invoked six times -- but not for
all trade agreements reached during that period. Here are
the six:
1979 Tokyo Round GATT Agreements
1985 U.S.-Israel Free Trade Agreement
1988 U.S.-Canada Free Trade Agreement
1993 North American Free Trade Agreement
1994 Uruguay Round WTO Agreements
2002 Doha Round WTO Agreements
Key votes in the House on fast-track and other trade
agreements have generally become more closely divided over
time. The Senate is usually more pro-trade.
Key House votes:
1974 Trade Act, conference report, 323-36
1979 Trade Agreements Act, 395-7
1987 Omnibus Trade and Competitiveness Act, 290-137
1988 OTCA conference report, 312-107
1988 U.S.-Canada Free Trade Act, 366-40
1991 Fast-track extension, 231-192
1993 NAFTA, 234-200
1994 Uruguay Round WTO Act, 288-146
1998 Fast-track renewal act fails, 180-243
2001 Trade Promotion Authority Act, 215-214
2002 TPA conference report, 215-212
Sources: I.M. Destler; Brookings InstitutionNational Journal
