WASHINGTON – To continue leveling the playing field and expanding trade opportunities for American farmers, workers, businesses and consumers, the Administration today requested an extension of Trade Promotion Authority (TPA). TPA, enacted as part of the Trade Act of 2002, provides a framework for Executive – Congressional cooperation in trade negotiations, including a streamlined mechanism for Congressional consideration of trade agreements.
The Administration’s report accompanying the extension request details the progress achieved to date under TPA and prospects for completing current negotiations.
"We must continue to pursue bilateral and regional agreements to open new markets, and we must complete negotiations in the World Trade Organization to reduce global barriers to trade. We will continue to enforce vigorously the trade laws so that American businesses and workers are competing on a level playing field," wrote President Bush in his transmittal letter. "Free and fair trade creates jobs, raises living standards, and lowers prices for families here at home. Trade agreements also deepen our partnerships with countries that want to trade in freedom. I look forward to the continued close cooperation with the Congress in pursuing these objectives."
TPA currently applies to trade agreements signed before July 1, 2005. The Administration’s request will extend that deadline to July 1, 2007 unless either House disapproves by July 1, 2005.
Passage of TPA legislation in August 2002 was a major achievement of President Bush’s first term. Earlier efforts to renew "fast track" legislation after it lapsed in 1994 were unsuccessful, and America fell behind as the European Union, Mexico, and many other nations negotiated dozens of trade agreements that set new rules and opened growing markets for their exports, putting the United States at a competitive disadvantage. To restore America’s leadership in negotiating agreements and enforcing agreements it concludes, the Bush Administration worked closely with the Congress to forge a new consensus on TPA.
Taken together, the countries with which the Administration has completed or is negotiating free trade agreements constitute America’s third largest export market, drawing $78 billion in U.S. exports in 2004 and comprising the world’s sixth largest economy. Continued cooperation between Congress and the President through TPA will be critical in bringing current bilateral, regional and global negotiations to successful conclusions.
Background on TPA:
TPA provides for close collaboration between the President and Congress in opening foreign markets for U.S. goods and services. First, it gives the Executive branch specific Congressional guidance on objectives to seek in trade negotiations. TPA also sets detailed notice and consultation requirements for the Administration to follow to ensure it has the benefit of advice from the Congress, private sector, and the public before and during negotiations. TPA establishes a special Congressional Oversight Group through which Members of Congress provide timely advice to the Administration on trade negotiations and receive regular briefings from the United States Trade Representative on proposed U.S. negotiating positions. In addition, the Administration’s trade negotiators brief and seek advice from Congressional committees before each negotiating round. This process ensures close coordination and regular exchange of information between the two branches.
Second, if the Administration follows TPA notice and consultation procedures, TPA provides for Congress to vote "yea" or "nay" on resulting trade agreements and implementing legislation as a whole within a set period.
Background on Administration use of TPA to level the playing field and open markets:
In close consultation with Congress, the President has used TPA to initiate a new trade strategy: simultaneously pursuing mutually reinforcing trade initiatives globally, regionally and bilaterally. This strategy has created strong incentives for trading partners to move forward, while also establishing models for state-of-the-art rules. Since August 2002, the Congress has, under TPA, approved groundbreaking FTAs with Chile, Singapore, Australia and Morocco, with strong bipartisan support in both chambers. And, in close consultation with the Congress, the President has concluded two additional FTAs – one with five Central American countries and the Dominican Republic (CAFTA-DR) and another with the Persian Gulf country of Bahrain.
These trade agreements:
Level the Playing Field, Expand Opportunities: Under the U.S.-Australia FTA, more than 99 percent of U.S. manufactured goods exports to Australia became duty-free immediately. The agreement will provide an estimated $2 billion per year increase in U.S. exports to Australia once the agreement is fully implemented. The U.S.-Chile and U.S.-Singapore FTAs are also delivering promising results. In 2004, U.S. exports to Chile grew by nearly one billion dollars compared to 2003, up nearly 34 percent. This is nearly double the rate of growth in U.S. exports to other countries in Latin America. U.S. exports to Singapore – the United States’ 11th largest export market – rose by more than 18 percent, with exports of U.S.-built information technology equipment alone growing by $1.7 billion.
Expand U.S. prosperity: Today, the United States is the world’s greatest trading nation, exporting $1.15 trillion in goods and services in 2004. In the last two decades, U.S. trade (exports plus imports of goods and services) increased significantly, growing from 18 percent of GDP in 1984 to 25 percent of GDP in 2004. At the same time, the U.S. economy grew by 86 percent, and the real per capita income of Americans rose by 50 percent. U.S. jobs supported by goods exports are estimated to pay wages 13 percent to 18 percent above the U.S. national average, and U.S. exports of goods and services support an estimated 12 million American jobs. In the agricultural sector today, one in three acres planted in the United States produces crops for export. Open markets also help increase productivity, raise real wages, and lower prices for the goods that American businesses and families purchase. Prices for consumer goods and services and industrial inputs tend to drop as trade barriers fall. These inputs in turn help make domestic producers more efficient and internationally competitive, which in turn drives export and job growth. Consumers find more choices, at lower prices.
Set fair rules: The high-quality trade agreements concluded and implemented under the TPA Act include strong dispute settlement procedures and establish an infrastructure for enforcing those agreements.
Promote Economic Freedom and Reform: U.S. FTAs provide the means to trigger and then lock-in broader economic reforms abroad. FTAs require effective environmental and labor law enforcement, government transparency, and anti-corruption efforts and promote market-based reforms and the rule of law.
U.S. global economic leadership: Under TPA, the Administration is leading the way in the ongoing Doha Development Agenda trade negotiations under the WTO that promise substantial economic gains for the United States and for the world. A successful conclusion of these negotiations could mean an annual benefit of $2,500 for the average American family of four. Up to 500 million people could be lifted out of poverty with the removal of all measurable tariff and non-tariff barriers (World Bank and the Center for Global Development).
In consultation with Congress, the Administration has launched and is seeking to conclude free trade negotiations with partners in Latin America (Panama and the Andean nations of Colombia, Ecuador, and Peru, with Bolivia participating as an observer), Asia (Thailand), Africa (the five nations of the Southern African Customs Union: Botswana, Lesotho, Namibia, South Africa, and Swaziland), and the Middle East (Oman and the United Arab Emirates). In addition, the Administration is working to conclude the Free Trade Area of the Americas (FTAA), encompassing all the democracies of the Western Hemisphere. The Administration considers that the progress that has been made in each of these negotiations in achieving TPA objectives justifies continuing – and completing – the negotiations.