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Outlook Promising for Trade Legislation in the 114th Congress

Despite the overall volatility on Capitol Hill, the environment for passing major trade legislation in the 114th Congress is extremely positive.  Under our system of shared legislative and executive powers, a high level of cooperation and coordination is necessary to achieve significant progress in producing U.S. trade laws and agreements.  President Obama has committed to negotiate two important trade agreements and has held numerous high-profile meetings on this subject with leaders in Asia and Europe.  With an engaged Democratic president, the new pro-trade Republican Congress could become as active on trade legislation as Congress was during the Clinton administration.

The Senate Finance Committee and House Ways and Means Committee have jurisdiction over trade-related legislation.  Senator Orrin Hatch (R-UT) will be the incoming chairman for the Finance Committee and current Chairman Ron Wyden (D-OR) will be the ranking Democrat.  On the House side, former vice-presidential candidate and current Representative Paul Ryan (R-WI) is expected to be elected chairman of the House Ways and Means Committee, while Representative Sander Levin (D-MI) will remain as the ranking Democrat.

An essential element for a coherent, ambitious U.S. trade policy is congressional authority for the president to negotiate trade agreements with other nations that prevents Congress from amending the negotiated terms of the agreement.  Trade Promotion Authority (TPA), formerly known as “fast track negotiating authority,” assures that Congress can only approve a negotiated trade agreement by an up-or-down vote, with no amendments allowed.  Without TPA, trading partners are often reluctant to make negotiated concessions and give their consent to trade deals that may be unilaterally amended by the U.S. Senate.  TPA technically expired in 2007 and must be reauthorized prior to consideration of any new trade agreements.  Republican congressional leaders are holding out hope that TPA may still be considered in the 2014 lame-duck session of Congress, but since sixty votes are needed for any controversial legislation in the Senate, TPA is more likely to be taken up under the new Senate majority in 2015.

The administration is currently negotiating two trade agreements that could be finalized over the next two years.  The Trans-Pacific Partnership agreement (TPP), an ambitious trade agreement the United States is negotiating with 11 other nations, is expected to be finalized in the near term.  Once completed, it will be a major step in President Obama’s “pivot to Asia,” his goal of building a stronger U.S. economic foundation in the Asia-Pacific region.  Major issues still need to be addressed before the deal can be closed, including in the areas of agriculture and automobiles.

The Transatlantic Trade and Investment Partnership (TTIP), a separate, equally ambitious U.S. trade negotiation with the European Union, began as an attempt to generate economic growth in the United States and EU after the 2008 financial crisis.  The Russia/Ukraine conflicts and recurring EU economic issues continue to impact the pace and trajectory of these negotiations.  Both sides have recently reaffirmed their strong commitment to finalizing a successful TTIP accord.

Until the mid-term elections, laws to reduce or eliminate tariffs and maintain tariff preferences for certain U.S. trading partners have faced highly uncertain prospects for enactment, more than a year after expiring.  If TPA moves in the 114th Congress, it is possible that TPA renewal could be packaged with authority to renew the Generalized System of Preferences (GSP).  New, separate bills are likely to be introduced to enact the Miscellaneous Tariff Bill (MTB), reauthorize the African Growth and Opportunity Act (AGOA), and/or reauthorize the Export-Import Bank.

© 2019 McDermott Will & Emery

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About this Author

Carolyn B. Gleason, McDermott Will & Emery LLP, International Trade Attorney
Partner

Carolyn B. Gleason is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C. office. She heads the Firm's International Trade practice.

202-756-8215
W. Kam Quarles, McDermott Will Emery Law firm, Legislative Affairs
Director of Legislative Affairs

W. Kam Quarles* is the director of legislative affairs in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C., office.  Kam focuses primarily on agriculture, including food safety, sustainability, international trade/supply chain and phytosanitary issues.

202-756-8313