Thoughts on Trade Authority

The Founding Fathers determined that the kings of the past gave up the jewels of the realm in trade deals.  They could have written the constitution to give authority over foreign commerce to the executive branch… to the president.  But they didn’t.  Instead they gave the power to regulate foreign commerce to the legislative branch… to the Congress.

Fast Track, Trade Promotion Authority, TPA… are all versions of trade authority given by Congress back to the President.  When I talk about “trade authority”, it means the authority given by the Constitution to Congress and any portions of that authority given to the President. (See this CPA Flyer on the Constitutional Infirmity of Fast Track)

The zombie free traders don’t like the Founding Fathers choice, so they convinced Congress to give virtually all its trade authority away in recent years.  Any authority retained by Congress is illusory… it’s not real… its fake authority.  So… we are back to pre-constitutional scenarios where the king/president gives away the jewels of the realm to get a deal.  We give up large swaths of our industry and supply chains for some vague foreign policy goals, tanking our productivity over the short and long term and ultimately weakening our geopolitical might.

Because a strong economy begets a strong geopolitical stature.  (Oh, and we also get full employment, solid tax revenue, and a high quality of life).

There have been several types of trade authority in U.S. history, but Fast Track is the most complete abdication of Congress.

With “Fast Track”, Congress gives the president these powers.

1.  Choice of countries with which to launch negotiations – the President/USTR chooses who to negotiate with, not Congress.

2.  Contents of the negotiations – The President/USTR chooses the topics of negotiation, the goals, and the objectives… not Congress.  The President then becomes a super-Congress because the trade agreement covers not only tariffs and quotas, but health care, taxation, intellectual property, financial regulation, food safety, Buy America rules, labeling, etc.  The President may include provisions that overrule past laws of Congress.  The President may include provisions that Congress considered and rejected… or refused to consider at all.  Doesn’t matter.  The trade agreement trumps anything Congress, or its committees of jurisdiction, enacted or refused to enact in the past. And international tribunals, in the global governance sense, rule on the issues later.  Indeed the USTR doesn’t even let Congress look at what is being negotiated.

*  Note that while past Fast Track bills included Congressional directives on topics to be covered, and goals to be achieved, the President ignores them.  For example, Congress has told the President to fix the currency manipulation problem via trade negotiations in every trade authority bill since 1974.  The President not only failed to remedy the problem, but refused to do it.  Thus, Congress tricks itself into believing it controls the substance of the agreements, but it does not.

3.  President signs agreement with other countries, before Congress or the relevant committees can vote upon or assess the deal.  The President locks in the text without Congress being able to see it.  Congress never certifies that the President complied with their wishes.

4.  The President takes control of Congress’ procedures.  The House must vote within 60 days and the Senate within 30 days thereafter.  When the President submits the deal to Congress, committees rush to hold truncated hearings to look at thousands of pages of agreement that have been previously kept secret.  The public review and deliberation is very short.  And all other business must be set aside.  The Congress thus loses control of its own rules, which power the Constitution gives to it under Article 1, Section 5.

The solution is for Congress to deliberate and determine what our trade strategy should be, who to negotiate with and what are the goals and objectives of the agreement.  Congress should instruct the President in a bill delegating some of the foreign commerce power.  Congressional staff from any committee with jurisdiction over the topics of the trade agreements should be included in negotiations (which was the case in the past), whether health, tax, intellectual property, finance, etc.  When the President concludes the deal, the relevant committees should certify compliance before any Fast Track procedures are triggered.

This is not a pipe dream.  This is actually the way it was in the past.  The zombie free traders will argue that all trade agreements in the future will fail without trade promotion authority.  But the fact is our trade situation was far healthier when we negotiated deals in a constitutional way that respected checks and balances of both branches.

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