Special Interests vs. Trade Promotion Authority
With the United States currently negotiating two mammoth trade agreements, President Obama being granted Trade Promotion Authority (TPA) is far from a done deal. Opposition is nothing new. Industries seeking protection from global competition have long opposed TPA. But this time, they're pulling out all the stops like never before.
TPA, also known as "fast-track" trade authority, facilitates trade negotiations by allowing the president to negotiate trade deals and then submit them for congressional consideration, subject to an up-or-down vote without amendments. Presidents have used TPA to conclude numerous major trade agreements, including 14 regional free-trade deals and several global trade-liberalization agreements under General Agreement on Tariffs and Trade (GATT, the predecessor of the World Trade Organization).
Since it was first introduced more than 40 years ago, TPA has been renewed four times and extended once (in 1993). While early versions of TPA received bipartisan support and passed relatively easily — for instance, in 1974 a bill passed the House 272-140 and the Senate 77-4 — in more recent years fast-track has met bipartisan opposition.
And that's going from bad to worse. The Bipartisan Trade Promotion Authority Act (BTPAA) of 2002 passed mostly along party lines, with the House approving the original version only by one vote, 215-214, and the Senate passing the bill 66-30. Some observers noted that if all the members of the House had been present for the vote, the bill would not have passed.
What happened? Democrats, supported by labor groups and environmentalists seeking protection, argued for more provisions in the TPA legislation to secure their special interests, and were dissatisfied when the final outcome did not include minimal enforceable standards, while Republicans wanted more limited coverage of labor and environmental issues in the legislation.
Including such non-trade provisions defeats the primary purpose of TPA, which is to reduce the pressure from interest groups. These provisions only encourage lobbyists to seek protection for the industries they represent, thereby complicating trade agreements with unnecessary, non-trade language.
Much of the opposition to the 2002 TPA came from industries lobbying against what they called "unfair" foreign competition. Many members of Congress have indulged this rent-seeking by continuing to keep anti-trade protections in place alongside TPA, even though free trade benefits consumers — and therefore the country — as a whole.
The arguments against the current TPA bill are not that much different from those that were deployed against the previous ones. Aside from the old unfounded argument about TPA taking power away from Congress, some conservative critics claim to be worried about job losses for American workers. However, as noted by our Competitive Enterprise Institute colleague Fran Smith, most of these concerns have little to do with the TPA, but are hot-button issues for opponents of trade agreements, who are responsible for including these excessive, trade-unrelated provisions in the TPA in the first place.
The Bipartisan Congressional Trade Priorities and Accountability Act of 2015, the current TPA bill, runs to 113 pages and contains dozens of provisions in the labor and environmental spheres. It could do with far fewer. Yet many labor and environmental groups are still not satisfied and continue to oppose the TPA bill. As the saying goes, give them an inch, and they'll take a mile.
One of free trade's great achievements is to break down the national barriers created by special interests. This is why it is odd to see some supposedly pro-trade Republicans oppose the grant of TPA as "crony capitalism." Freer international trade brings benefits to American consumers by lowering prices and breaking cartels. Special interests should not be allowed to derail the process.
Iain Murray is vice president for strategy for the Competitive Enterprise Institute, where Julija Simionenko is a research associate.