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News Release

Fast-Track Trade Authority Should Be Permanent But Should Explicitly Endorse New Negotiations

September 8, 1997

Contact:    I. M. Destler    (202) 328-9000

Washington, DC—Congress should promptly approve President Clinton's upcoming request for new “fast-track” trade negotiating authority. Based on a comprehensive review of experience under fast track, beginning with the establishment of the procedure in the Trade Act of 1974, a new study by the Institute for International Economics concludes that "fast-track procedures have served the nation well. They have made it possible for the executive branch to negotiate credibly on complex nontariff trade measures that require congressional action to implement. They need renewal now so that the Clinton administration can continue to do so."

But I. M. Destler, author of Renewing Fast-Track Legislation, also concludes that the law should be modified in substantial ways from its prior format:

  • It should provide permanent authority to use the procedure for market-expanding trade negotiations, without any time limit; and
  • Congress should explicitly authorize future trade negotiations in advance, starting with some in the upcoming fast-track bill itself.

In addition, there should be a constructive compromise on the contentious question of whether and how to address trade-related labor and environmental issues. Negotiations on these issues should be authorized, but Congress should call for particularly close consultation on them and the accompanying reports should recognize the need for such consultation and bipartisan political support for any agreements that are subsequently reached.

Destler is the author of the award-winning American Trade Politics, the most widely used book on that topic. In today's world, he argues that the United States is both heavily dependent on the world economy and exceptionally well positioned to take advantage of it. Exports have tripled as a share of US production over the past generation. Export growth has accounted for one-third of overall GDP growth for a decade. Export jobs pay 10-15% better than the average wage and productivity in export firms is commensurately higher. The 1990s have revealed the US economy as the most entrepreneurial and flexible of the major industrial nations and hence particularly capable of exploiting the opening of markets around the world.

Fast-track authority, by which Congress authorizes negotiations of trade agreements and promises a prompt up-or-down vote on the results without amendment, has been the indispensable means by which presidents from Gerald Ford through Bill Clinton have pursued international trade agreements with foreign nations. Fast track provides credibility for US negotiators by guaranteeing that legislators will not rewrite agreements once reached. It helps Congress resolve its own internal problems by weakening the impact of special interests while retaining ultimate policy control. Fast track makes it possible for the president, US trade representative (USTR), and Congress to work together to promote US prosperity through enhanced participation in the global economy.

But the president has lacked this authority since the conclusion of the Uruguay Round in 1994. During this period, US trade policy has lost momentum while other countries have concluded new agreements that exclude, and often discriminate against, the United States. The administration now needs fast track to move ahead on:

  • its pledges to work out a Free Trade Area of the Americas (FTAA) by 2000 or 2005, starting with a long-promised free-trade agreement with Chile;
  • its pledges to achieve free trade with East Asia, the world's most rapidly growing region, through the Asia Pacific Economic Cooperation (APEC) forum by 2010 or 2020; and
  • scheduled negotiations within the World Trade Organization (WTO) to reduce barriers in agriculture, services, and other key sectors beginning in 1999.

Congress should enable the president to pursue these negotiating opportunities aggressively. However, recent experience with fast track has underscored three problems:

  • Under the current formula, it has been possible for the executive branch to launch a major negotiation neither anticipated nor authorized by Congress as a whole; the North American Free Trade Agreement (NAFTA) in fact began in this manner and its contentious approval was complicated by this history.
  • During the Clinton administration, deep divisions have developed within the trade policy community over the substantive scope of future trade negotiations—above all the coverage of trade-related labor and environmental issues.
  • Implementing legislation for past agreements concluded under fast track has included many matters that were not necessary for adherence to these agreements, leading to congressional charges of process abuse by the administration.

The legislation enacted by Congress should address these problems directly. To confirm trade liberalization as long-term US policy, Destler argues that Congress should abandon the concept of a general termination date for fast-track authority. Instead, fast-track procedures should be ongoing and available for any agreement whose negotiation Congress has approved.

This long-term general commitment would be made operational by advance congressional approval of specific new negotiations. Democratic process and congressional influence would be protected through a requirement for up-or-down votes at their takeoffs. Future fast-track law should thus become two-tiered.

On labor and environmental issues, there is need for a constructive compromise. Expanding trade and globalization clearly affect US workers and the environment, sometimes adversely. The nation and the world need to confront these connections if workers are to win a more equitable share of the gains from trade, and if trade is to reinforce rather than undermine steps toward a better global environment. Hence it is desirable to explore internationally the extent to which some labor and environmental issues that are clearly trade-related can be handled within the trade negotiating process.

Trade-related labor and environmental issues cannot be among the top US negotiating priorities, however, as proposed in the administration in 1994. But neither should these topics be ruled out of trade agreements as proposed in several Republican alternatives. Due to complexity of the issues and the lack of consensus at home and abroad, the reality is that the short-term yield from addressing these issues is likely to be sparse and mainly symbolic. The circumstances, therefore, demand a compromise, and there should be no specific prohibitions of changes in domestic labor or environmental law, or of the use of trade sanctions to enforce agreements on these issues, as a result of fast-track negotiations. Negotiations on these issues should be authorized but Congress should call for particularly close consultation on them. And the accompanying reports should recognize the need for such consultation and bipartisan political support for any agreements reached.

Destler argues that better education and training programs are far more likely to help workers respond to the challenges of globalization than even the most ambitious achievements with respect to international labor standards. The president should therefore complement the enormous emphasis he has put on expanding higher education with a broad new effort to give workers the wherewithal to engage in the marketplace even when forced to change jobs. Apprenticeship and retraining assistance should be available to all in need, specifically including those disadvantaged or displaced by trade and globalization.

To protect fast-track legislation from being abused by the inclusion of provisions well beyond those required to implement trade agreements, the study suggests:

  • replacement of the phrase "necessary and appropriate," concerning what provisions can be included in implementing legislation, with significantly more restrictive terminology, like "necessary or clearly contributing to" implementation of the agreement;
  • a requirement that the president submit, with the implementing bill, a statement listing all provisions not strictly "necessary" together with an argument (for each) as to why it is appropriate for action via fast-track rather than ordinary legislation; and
  • permitting amendments to the bill, though still within its strict time limits, on the money provisions required under congressional rules to offset the budgetary impact of any losses of tariff revenue.