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Trade or Treaty? Why Does the House Approve Free Trade Agreements?

By Mark Strand and Dan Risko

According to the Constitution, the President has the power to negotiate treaties with foreign nations, and the Senate must approve with a two-thirds vote. So how did the process our Founding Fathers created evolve into the bicameral procedure that exists today?

To understand why free trade agreements need approval from both chambers of Congress, it is important to recognize the jurisdiction of the branches of government involved in these negotiations:

Article I, Section 8 of the Constitution grants Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

In Article II, the President is authorized to negotiate with foreign nations “by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur.”

Traditionally, Congress has delegated authority to the President to negotiate tariff barriers with foreign nations. Unlike treaties, trade agreements affect U.S. law regarding foreign commerce, which Congress regulates, thus requiring legislation to implement. Also, Article I states that bills concerning the generation of revenue must be introduced in the House of Representatives. Because free trade agreements deal with our nation’s revenue stream, the House has a Constitutional obligation to participate.

The process of entering into trade agreements with other nations, including those with non-tariff barriers, is a somewhat backwards process. The president enters into a general agreement and signs a deal BEFORE Congress approves legislation. Thus, the process for Congress’ approval is equally important as the trade negotiations with foreign leaders.

The legislative process for free trade agreements was established in Section 151 of the Trade Act of 1974.  This section provided the President with the necessary negotiating tools for dealing with tariff and non-tariff barriers. The law requires the president to consult Congress 90 days before signing the agreement. Upon signing, the president has 60 days to provide Congress with a list of changes to existing U.S. statutes in order to comply with the agreement. To assure the executive and his foreign counterparts that the agreement would remain generally unscathed, legislators are unable to amend the deal once legislation has been introduced.

Remember, once signed, these free trade agreements are U.S. Law. To provide the president and party leaders with a sense of Congress before even introducing legislation, the legislature can hold “mock markups” while in committee. The House Ways and Means Committee and the Senate Finance Committee are the primary committees of jurisdiction, but other relevant committees may also markup the bill. The name “mock mark up” might lead you to think they are inconsequential to the agreement, but these meetings are quite important. This ensures that there is clarity between the President and Congress on the parts of the agreement that members may disagree with, which may require the renegotiation of terms with foreign leaders but does not normally require a new agreement to be signed. When speaking to the media in July, Senator Mike Enzi (R-WY) said that the Senate Finance Committee’s mock markup session “is our only opportunity to say something on the bill.”

After the bill is formally introduced (remember “mock markups” are only for the draft bills), committees have 45 days to consider the bill before it is automatically placed on a calendar. Once the bill leaves committee, the motion to move the bill to the floor is non-debatable and highly privileged; in the House, that means the bill can proceed without going through the Rules Committee. Time for debate limited to 20 hours and split between the majority and minority. These time restraints place pressure on Congress to act on the agreement and thus ensure a quick vote.

While under consideration in the House, the recent trade agreements with Colombia, Panama and South Korea could have been collectively considered for up to 60 hours of debate. In order to expedite the process, the Rules Committee issued H. Res. 425, allowing for all three free trade agreements to be considered under the same 20 hours of debate.

The expedited consideration of free trade agreements, known as Trade Promotion Authority (TPA), was formerly known as “fast track” legislative process because a bill avoids many of the timely legislative constraints, such as the filibuster or amending the bill to change the terms of the agreement. The president was able to utilize the “fast track” authority in Congress until it expired 1994. It was then reapproved under the Trade Promotion Authority Act of 2002, but once again expired in 2007. Because the agreements with Colombia, Panama and South Korea were all signed during the Bush Administration before the 2007 expiration, they were eligible for Congressional approval through the fast track process.

When a foreign agreement also affects domestic policy, it is crucial that Congress and the president find common ground. In 2008, the agreement with Colombia that was negotiated by President George W. Bush was met with resistance because Congressional leaders did not feel they had been properly consulted (required by law) before submitting the deal.  This battle caused further delays in action, leaving work unfinished before the start of President Obama’s administration, and the bill was finally passed in October along with the Panama and South Korea agreements.

With the passage of the Colombia, South Korea and Panama, the U.S. is now engaged in 14 free trade agreements with 20 different countries. The legislative process of these agreements provides a unique opportunity for Congress to set the parameters of negotiation for the executive while also allowing him to take the lead. Trade agreements are a crucial part of our international political economy, but also shows how our national institutions have evolved as our country has changed. In the tug-of-war of our nation’s political climate, free trade agreements require a balanced contribution from the executive and legislative branches of government.

Works Consulted:

Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy by J. F. Hornbeck and William H. Cooper for Congressional Research Service. 7 April 2011. United States. Cong. Rept. Rl33743.

Why Certain Trade Agreements are Approved as Congressional-Executive Agreements Rather than as Treaties by Jeanne J. Grimmett for Congressional Research Service. 19 January 2011. United States. Cong. Rept. 97-896. Print.

Mark Strand is the President of the Congressional Institute and Dan Risko is a staff assistant. The Sausage Factory blog is a Congressional Institute project dedicated to explaining parliamentary procedure, Congressional politics, and other issues pertaining to the legislative branch.

 

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