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.

Brazil Gets Ready to Punish the U.S. for Violating International Law

by Julian Ku

It is always unpleasant to get lectured by foreign governments about “violating international law”, but this is something U.S. government officials should be used to.  Still, it must be galling for the new U.S. administration to be lectured by Brazil’s president over U.S. non-compliance with a WTO ruling on cotton subsidies.

The United States must comply with a World Trade Organization ruling on U.S. cotton subsidies to uphold international law and order, President Luiz Inacio Lula da Silva said on Wednesday.

Brazil detailed on Monday a list of 102 U.S. goods that will be subject to import tariffs within 30 days unless both countries can reach an agreement to settle a long-standing dispute over U.S. cotton aid considered illegal by the WTO.

“Brazil is not interested in confrontation. We’re interested in respect for the decisions of the WTO. Either we respect institutions or the world will fall into disarray,” Lula said during the inauguration of a power plant in near Sao Paulo.

The U.S. is ready to make a deal, except that it has very little to deal with. After all, the U.S. Congress (with full knowledge it was violating the WTO ruling), re-authorized the subsidies at dispute here.  So the best the U.S. Trade Rep can do is promise to try to get Congress to change the law.  If I am Brazil’s President, I wouldn’t take that deal.