Congress Proposes to Take Over Negotiations of U.S. Trade Agreements

by Julian Ku

I am not a huge fan of restrictive and protectionist trade policy, but I can’t offer any serious legal quarrel with the recently proposed Trade Reform, Accountability, Development and Employment Act by the growing anti-trade bloc in the U.S. Congress.  As Lori Wallach from Public Citizen notes, the Act offers a radically new approach to U.S. trade policy.  The Act explicitly conditions expedited consideration of trade agreements by Congress to agreements which have addressed labor, environmental, national security, and other considerations.  As a policy matter, this goes beyond tying the President’s hands in trade negotiations: It is taking over trade negotiations by essentially mandating the key content of almost any U.S. trade agreement, and gives the President very little flexibility.

From a U.S. constitutional law perspective, the Act is a remarkable attempt to micromanage U.S. trade agreements, by mandating certain provisions before getting expedited consideration before Congress.  But since it only applies with respect to expedited congressional consideration, I don’t see any separation of powers problem here.  Moreover, the Act even contains a requirement that any trade agreement requiring a U.S. state to comply with procurement or investment rules will not be enacted unless that state’s individual consent is obtained.  This appears to give individual states either a veto or a right to “opt out” of the trade agreement.

As a policy matter, I think this means there will be no new trade agreements for the foreseeable future. As a legal matter, we may be seeing a re-assertion of congressional control over certain aspects of U.S. trade policy,and perhaps foreign policy as well.

One Response

  1. Julian,

    Prior to 1934 it was routine for Congress to do the tariff negotiations, and this led, among other things, to the protectionism of Smoot-Hawley.  Franklin Roosevelt’s Secretary of State Cordell Hull changed that by establishing the practice of transferring tariff negotiating authority from Congress to the Executive branch with the Reciprocal Trade Agreements Act of 1934.

    This approach allowed tariffs rates to be set through a more sophisticated calculus of nets gains and losses divorced from special interest lobbying. Tariff rates were now bargained between the Executive branch and foreign countries through bilateral negotiations, so that any losses conceded could be offset with gains secured.

    Policies of expanding export markets and promoting consumer interests were advanced in addition to the traditional goal of protecting domestic producers. The result was dramatic reductions in tariffs from a high of an average 60 percent duty rate in 1932.

    I doubt the proposal you discuss would threaten tariff increases, which are bound in WTO schedules, but it might lead to a decrease in the use of U.S. free trade agreements.  As with the 1920s, Congress’ focus will be on centralized concerns of American producers rather than the disaggregated concerns of consumer welfare.

    Roger Alford

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