At the U.S. Chamber of Commerce yesterday the President spoke about trade:

<

blockquote>[W]e finalized a trade agreement with South Korea that will support at least 70,000 American jobs – a deal that has unprecedented support from business and labor; Democrats and Republicans. That’s the kind of deal I’ll be looking for as we pursue trade agreements with Panama and Columbia and work to bring Russia into the international trading system.

This sounds like a free trade agenda, or at least a pro-trade agenda, which would be good from a President whose party often leans heavily toward protectionism.  The problem is that the U.S. already has trade agreements with Panama and Colombia.  The President is in reality saying that he is undoing those deals.  He also appears to be saying that “unprecedented support from … labor [and] Democrats …” is a precondition to further progress on free trade.

When President Obama took office, he found three signed Free Trade Agreements (FTAs) on his desk awaiting Congressional approval:  the [South] Korea FTA, the Colombia FTA, and the Panama FTA.

Congress must approve any trade agreement negotiated by the President (more accurately, by his U.S. Trade Representative) with another country.  Under normal legislative procedures, the implementing legislation for a trade agreement would be subject to amendments in Congress.  Since any trade agreement will make compromises that sacrifice certain geographically or economically  limited interests for a broader national benefit, it would be vulnerable to being amended in Congress after it has been negotiated.  Foreign negotiators know this.  They don’t want to negotiate with the USTR and then have their deal reopened by Congress.

The clever solution to this collective action problem is called trade promotion authority (TPA), formerly known as fast track authority.  Congress passes and the President signs a law that gives the President and his USTR authority to negotiate and sign trade deals for a certain number of years.  In this legislation, the Congress limits itself to a simple yes-or-no vote on the whole treaty.  Through this law they surrender their later rights to amend the treaty when it comes before them.  In legislative parlance, we say that the treaty gets a straight up-or-down vote in both the House and Senate.

This binary choice strengthens a U.S. President and his trade negotiator.  While they still must convince the foreign power that they can get Congress to support the agreement being negotiated, they don’t have to worry that Congress will amend the […]