Fast Track Trade Negotiating Authority:
Advancing a Positive Agenda on Trade

In December 2001, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Minority Member Charles Grassley (R-IA) introduced the Bipartisan Trade Promotion Authority Act of 2001, an expanded and enhanced version of the House-passed legislation (H.R. 3005). Fast track, also known as Trade Promotion Authority or TPA, lays out Congresss trade priorities and allows the President to negotiate trade agreements that cannot be amended by Congress, but must instead be voted on a strict up-or-down basis.

The Finance Committee passed the Baucus-Grassley legislation by a vote of 18-3. The Chairman has indicated that any trade legislation must be comprehensive; it is his intention that fast track and trade adjustment assistance be considered as a single package early this year.

Fast Track Is An Important Component Of Advancing A Positive Trade Agenda. Under fast track authority, Congress agrees to consider legislation to implement trade agreements without amendment. This process guarantees that the trade agreements voted on by Congress are the same agreements reached by negotiators, putting pressure on our trading partners to put the best deal on the table. Importantly, fast track negotiating objectives also spell out Congresss priorities, and in so doing, demonstrate that U.S. negotiators have the full support of Congress in seeking a positive negotiating agenda.

The Last Five Presidents Have All Had This Authority. Although Congress has denied some recent requests, it has granted fast track authority to Presidents Ford, Carter, Reagan, Bush, and Clinton. Under agreements negotiated with fast track, trade has more than doubled and new markets have been opened to American farmers and businesses.

Under The Senate Fast Track Legislation, The President Must Continue To Consult With Congress Before And During Trade Negotiations. The Constitution grants Congress the power to regulate trade; fast track advances Congresss role by establishing strict guidelines for Congressional consultations and oversight. Among other provisions, this legislation creates a Congressional Oversight Group that would help to establish the U.S. negotiating agenda and directly advise U.S. negotiators. It calls for additional Congressional staff to ensure that Congress can play an active role in trade -- including both trade negotiations and dispute settlement. And it contains a reverse fast track procedure under which Congress can revoke the Presidents grant of fast track if U.S. negotiators fail to adequately consult with Congress or ignore negotiating objectives.

The Baucus-Grassley Fast Track Legislation Contains A Number Of Important Negotiating Objectives That Have Already Been Agreed To In The House And Have The Broad Support Of The American People. Among these objectives are:

• Reducing barriers to trade in sectors such as goods, services, foreign investment, and e-commerce.
• Improving anticorruption measures, foreign regulatory practices, and transparency.
• Reducing barriers to U.S. agricultural trade. This includes reducing tariffs and foreign subsidies; eliminating unjustified sanitary and phyto-sanitary restrictions; and reducing or eliminating practices that adversely affect trade in perishable or cyclical products.
• Improving adherence to international labor standards. This includes promoting respect for workers rights and the rights of children; ensuring that countries do not weaken or reduce labor laws to increase trade; ensuring that countries adequately enforce the domestic labor standards; strengthening the capacity of our trading partners to promote respect for core labor standards; and reviewing the impact of trade agreements on U.S. employment. Importantly, this legislation fully reflects the standard set by the U.S.-Jordan Free Trade Agreement.
• Promoting sustainable development, environmental technologies, and multilateral environmental agreements. This includes working to make sure that trade and environmental policies are mutually supportive; ensuring that countries do not weaken or reduce their environmental laws as an encouragement to trade; promoting sustainable development, including programs to strengthen the capacity of our trading partners to protect the environment; promoting consideration of multilateral environmental agreements; and seeking market access for U.S. environmental technologies.
• Protection of U.S. trade remedy laws. This legislation requires the President to preserve the ability of the United States to rigorously enforce its trade laws.

The Baucus-Grassley Fast Track Legislation Also Contains Important Enhancements Not Included In The House Bill. These enhancements address the increasingly complex trade agenda faced by the United States and include provisions to ensure that issues such as labor and environmental rights and enhancing U.S. trade laws play as important a role in future negotiations as opening new markets.

As this legislation is considered on the Senate floor further improvements may be made. But this legislation -- even without the addition of an expanded Trade Adjustment Assistance program -- is already the most progressive fast track legislation with a chance of passing Congress. The Baucus-Grassley legislation goes further in promoting international labor rights, promoting sustainable development, and protecting U.S. trade laws than any previous bill passed by either House of Congress:

• Address the underlying causes of unfair trade. The U.S. will seek to address and remedy market distortions, such as overcapacity, that lead to dumping and subsidization.
• Improve dispute settlement. The U.S. will seek improved adherence by WTO panels to the standards of review contained in the WTO agreements. The legislation raises particular concerns regarding recent decisions affecting U.S. trade laws.
• Require certification by Congress that any changes to U.S. trade laws are consistent with the negotiating objective of not weakening U.S. trade laws. The President must notify the Finance and Ways & Means Committees of any proposed changes to U.S. trade laws. Following a report by these Committees, the President must separately explain how proposed changes are consistent with the negotiating objectives established in the fast track legislation.
• Conduct a labor rights reviews of U.S. trading partners. The President must submit to Congress a labor rights report on any the country with which the U.S. is negotiating. This report will include an explanation of trading partners existing labor standards and whether those standards are adequately enforced.

• Improve procedures for settling investor-state disputes. The legislation includes the following objectives: (1) ensure that U.S. investors in the U.S. are not accorded lesser rights than foreign investors in the U.S.; (2) seek to establish standards for fair and equitable treatment consistent with U.S. legal principles and practice; (3) seek mechanisms to deter and eliminate frivolous claims; (4) seek to enhance opportunities for public input into the formulation of government positions in investor-state dispute settlement; and (5) provide for appellate review of these disputes (and, unlike the House bill, the Senate Legislation would not constrain the scope of review).
• Seek to settle the Foreign Sales Corporation case. The U.S. will seek a revision of WTO rules with respect to the treatment of border adjustments for internal taxes to redress the disadvantage to countries relying primarily on direct taxes for revenue rather than indirect taxes.

Trade Adjustment Assistance:
Ensuring All Americans Benefit from Trade

In July 2001, Senators Bingaman, Baucus, and Daschle introduced legislation to re-authorize and expand the Trade Adjustment Assistance program (S. 1209). The bill has 46 co-sponsors, including 42 Democrats, 3 Republicans, and 1 Independent. The Finance Committee passed the legislation, by voice vote, in December 2001. It is the intention of the Chairman that TAA and fast track be considered as a single package early in the session.

Trade Adjustment Assistance Is Critical For Thousands Of American Workers. Congress established Trade Adjustment Assistance in 1962 to assist workers whose job loss is associated with an increase in imports. Workers are eligible for up to 52 weeks of income support, provided they are enrolled in re-training. The program also provides job search and relocation assistance. Despite low unemployment through the second half of the 1990s, the number of workers eligible for TAA has increased. In 2000, approximately 35,000 workers received TAA benefits.

The Finance Committee Legislation Would Expand Eligibility And Improve The Existing Program. The existing TAA eligibility requirements have not kept up with the changing times. TAA covers too few workers -- and fails to address major problems that workers and communities face.

• Broaden Eligibility. The legislation would provide benefits to secondary workers, including suppliers and downstream producers. For example, iron ore workers who faced layoffs because of increased steel imports would be covered. TAA eligibility would also be expanded to include workers affected by shifts in production (in addition to those affected by increased imports).
• Expand Benefits. The legislation would increase income maintenance from 52 to 78 weeks; substantially increase funds available for training; ensure that workers who take a part-time job dont lose training benefits; and increase assistance for job relocation.
• Provide Assistance With Health Care Coverage. The expanded program would link TAA recipients to child care and health care benefits under existing programs, and provide assistance to recipients in making COBRA payments.
• TAA For Farmers, Ranchers, And Fishermen. The legislation would recognize the special circumstances faced by family farmers, ranchers and independent fisherman, and would seek to provide assistance and technical support before they lose their businesses.
• Allow Certification For Affected Industries. In addition to current practice, the President, the Senate Finance Committee, and the House Ways and Means Committee would be able, by resolution, to initiate a TAA certification process for an affected industry.
• Provide Wage Insurance For Older Workers. Realizing the difficulty for older workers to change careers, this legislation facilitates on-the-job training and faster re-employment by providing wage insurance for up to 2 years for part of the gap between old and new earnings.
• Help Communities Adjust. This legislation recognizes that communities, particularly small communities, can be devastated by job losses. As a part of TAA reform, this legislation would establish an inter-agency group to coordinate Federal assistance to workers and trade-impacted communities, help communities develop strategic plans following job losses, and provide technical assistance, loans, and grants.