NCPA - National Center for Policy Analysis

Why Trade Promotion Authority Is Wrong for the Trans-Pacific Partnership

January 2, 2014

The Obama administration has asked Congress to reinstate trade promotion authority in hopes that it will enable passage of the Trans-Pacific Partnership (TPP), a trade agreement being negotiated by 12 countries in the Asia-Pacific region. Advocates of free trade generally support trade promotion authority, because it eases the passage of trade agreements through Congress by guaranteeing an up-or-down vote with no amendments. While trade promotion authority can be useful, the current political climate in Washington reduces its benefits, and the late stage of the TPP negotiations raises the risk that trade promotion authority will do more harm than good, says K. William Watson, a trade policy analyst at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies.

  • Free trade agreements are an important tool to improve U.S. trade policy, and "fast track" trade promotion authority has been helpful in securing the completion and passage of those agreements.
  • But, contrary to the assertion of many trade advocates, trade promotion authority is not a necessary prerequisite to passing trade agreements.

While the benefits that stem from granting fast track are currently weak, the costs are still very real.

  • In exchange for promising expedited procedures, Congress sets negotiating objectives in the trade promotion authority statute that the president is expected to adopt if he wants an agreement to receive fast track treatment.
  • If the TPP negotiations are as far along as the administration claims, adding new negotiating objectives will delay or possibly even prevent completion of the agreement.

If trade promotion authority is to be useful in facilitating the TPP negotiations, it must subtract rather than add negotiating objectives. The TPP, as envisioned by U.S. negotiators, will push forward a lot of unpopular, new U.S. demands as a condition for access to the U.S. market. None of these "ambitious" goals helps American consumers or furthers the goal of trade liberalization. They do, however, attract substantial political opposition at home and abroad.

Unless trade promotion authority is used to make the TPP a better agreement, there is little point in pursuing it now.

Source: K. William Watson, "Stay off the Fast Track: Why Trade Promotion Authority Is Wrong for the Trans-Pacific Partnership," Cato Institute, December 19, 2013.


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