Pass Trade Promotion Authority
Policy Factsheet Background Trade Promotion Authority (TPA or “Fast Track Negotiating Authority”) provides the President and United States Trade Representative (USTR) with clear direction as to the priorities Congress requires for our country’s trade agreements. Once TPA is passed, all negotiated trade agreements that meet those criteria are given an expedited vote, without amendment by Congress, ensuring efficient passage of beneficial agreements. Although every President since Franklin D. Roosevelt has had authority to negotiate trade agreements, TPA has been expired since 2007, putting at risk the successful negotiation and passage of economically beneficial trade liberalization efforts such as the Trans-Pacific Partnership (TPP) or Transatlantic Trade and Investment Partnership (TTIP). Congress must act in 2014 to restore TPA or risk delaying these momentous free trade agreements that will significantly boost U.S. exports and create thousands of American jobs.
Trade Promotion Authority
Policy Factsheet Why it matters to
WASHINGTON
Trade is the backbone of the Washington state economy; Washington state exports per capita more than twice as much as the average state. In fact, 40%of jobs in our state are tied to trade. As a result, free trade agreements benefit Washington state even more than most states. Free trade agreements open doors for Washington state companies in new markets and remove costly trade barriers, which in turn helps our companies sell more goods and services abroad. Lower import barriers also help hundreds of Washington retail or manufacturing companies that rely on global supply chains to provide high quality, low-cost goods to consumers. Without TPA, it’s very likely that trade agreements which would benefit local employers will stall in Congress.
Current U.S. Free Trade Agreement Partners Australia Bahrain Canada Chile Colmbia Costa Rica Dominican Republic El Salvador Guatemala
TPA will enable Congress to set negotiating objectives for our country’s trade agreement negotiations and to vote up or down on a trade agreement with no amendments
Jordan Korea Mexico Morocco Nicaragua Oman Panama Peru Singapore
TPA/”FAST TRACK” TIMELINE 1974 – Congress created “Fast Track Authority” as part of the Trade Act of 1974 1979 – Congress extended Fast Track Authority for eight more years 1988 – Congress renewed fast track and extended it until 1993 1994 – Fast track was extended to accommodate the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade (GATT) Fast track expired April 16, 1994 2002 – Congress renewed fast track as part of the Trade Act of 2002.
POLICY FAQs Why doesn’t the President have TPA now? Congress created TPA as part of the Trade Act of 1974. Though it was originally set to expire in 1980, Congress renewed it until 1994 and restored it from 2002 to 2007. Under TPA, the United States has negotiated free trade agreements with twenty countries. TPA expired on July 1, 2007, and Congress has not renewed it. Why does the President need TPA now? The U.S. is currently negotiating three important trade agreements—the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) with the EU, and the WTO Trade in Services Agreement (TISA). TPA will allow these agreements to pass expeditiously without stalling in Congress. Why is TPA important? TPA provides our trade negotiators with clear direction as to the priorities that Congress and the President should achieve in our country’s trade agreements. Without TPA, passing free trade agreements becomes a slow and tedious process, during which Congress and USTR often need to reopen discussions on trade agreements that have already been finalized. TPA allows Congress to put free trade agreements that meet the pre-approved criteria on a “fast track” for approval and to vote on them without amendment. This not only considerably speeds up the process, but also allows the U.S. to enter into more trade agreements that grow our country’s economic opportunities in the global marketplace.
Examples of current trade agreement negotiations Trans-Pacific Partnership (TPP)
The Trans-Pacific Partnership (TPP) is an Asia-Pacific regional trade agreement currently being negotiated among the United States and eleven other partners: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Canada, Mexico and Japan. A successful TPP would open doors for Washington state’s increased economic engagement in Asia, a region that is already a destination for 69% of Washington goods exports and a significant portion of our services exports.1 In addition, many Washington retail, apparel and manufacturing companies leverage the Asia-Pacific region as a key part of their global supply chain.
Transatlantic Trade and Investment Partnership (TTIP)
The United States and EU are currently negotiating a Transatlantic Trade and Investment Partnership (TTIP) that would drive economic growth in both the U.S. and EU by eliminating tariffs, liberalizing services trade, and increasing regulatory compatibility. In particular, since regulatory barriers frequently impede trade between the U.S. and EU, harmonizing regulations has potential to significantly increase trade and create jobs on both sides of the Atlantic. Given that the EU is one of Washington’s largest trade partners (accounting for more than 11% of our goods exports in 2013),2 this agreement is of particular importance to our state. EU member countries such as Ireland, Germany and France are top destinations for Washington services exports, and Washington also benefits from European foreign direct investment (FDI), with French, German, Dutch and British firms employing 39,800 Washington residents.3
WTO Trade in Services Agreement (TISA)
A TISA would eliminate current services trade barriers such as restrictions on foreign investment or nationality requirements and would increase transparency, allowing U.S. businesses to more easily provide services across international borders. The U.S. is the largest exporter of services in the world. The services sector has grown faster than other major sectors for decades and accounts for 68% of U.S. GDP.1 In fact, the U.S. boasts an annual services trade surplus of over $160 billion.4 Washington state in particular stands to gain significantly if services trade is liberalized. Our state is the fifth largest exporter of services in the U.S. and exported $24 billion in services in 2012.5 The computer software and IT services sector led the way, exporting $13 billion.3 Other leading services exports include professional services like legal, finance and accounting, as well as international tourism, foreign student education and architecture services.
1 United States Trade Representative, “Benefits from the Trans-Pacific Partnership Free Trade Agreement-Washington” 2010 | 2 WISER Trade Database, 2014|3 An International Competitiveness Strategy for Washington State, Washington Council on International Trade and Trade Development Alliance of Greater Seattle | 4 U.S. Department of Commerce, Economics and Statistics Administration, 2011 | 5 US Chamber of Commerce, traderoots.com
Washington Council on International Trade www.wcit.org @WashingtonTrade 1301 Fifth Avenue, Suite 1500 Seattle, WA 98101