News and Analysis • Volume 12 • Number 3 • May 2008
The Colombia Free Trade Agreement, the Twenty-year Itch and the Doha Round
While some see an ill omen for the Doha Round in the tug of war between the US Congress and administration on the Colombia free trade agreement, this confrontation is just the latest outbreak in a twenty-year itch that both sides know how to scratch.
In April, President Bush did something unprecedented, sending to Capitol Hill the implementing legislation for the Colombia free trade agreement (FTA) without first working out its terms with the trade committees in Congress. The House of Representatives then responded by doing something equally unprecedented, enacting a resolution that suspended trade promotion authority (TPA) for the bill. The stand-off between the two branches raised doubts over the future of not only one FTA, but also the Doha Round. The US negotiating mandate had already been called into question by the fact that the most recent TPA grant had expired in mid-2007, and it was not certain whether or when Congress would make a new grant for the round. This latest action casts doubt on the permanence of any new grant that Congress might make.
This impasse fits into a larger pattern of inter-branch conflict. The US Constitution ensures that trade policy is a matter of delicate inter-branch relations, as it specifies that the regulation of trade is a congressional prerogative, but also creates a presumption that the executive takes the lead in foreign policy. Ever since Congress gave up trade policy-making by legislative fiat and agreed to delegate authority to the president, the two branches have had to work out the precise boundaries of their powers in this field. They have generally been successful, but have also had a series of confrontations.
The TPA (a.k.a. ‘fast track’) and its predecessor authorities are intended to get around the ability of legislative opponents to prevent an agreement from coming to a vote, or to amend the agreement. From 1934 through 1967, that was done through grants of authority that allowed presidents to negotiate and then proclaim tariff agreements. Things got more complicated with the advent of non-tariff agreements. There Congress insists on having a role in the process of translating an agreement’s commitments into changes in legislation, and also voting the final package up or down. That’s why the fast track replaced the earlier and simpler tariff authority.
TPA rules provide two special protections: an agreement’s implementing legislation will not be amended once it has been formally introduced, and the bill will be voted upon within ninety legislative days. Both of the special protections are based on legal fictions. While it is literally true that Congress has never amended any implementing bills for TPA-protected agreements, legislators have found many other ways to influence, interpret, or even modify the results of negotiations. One such opportunity comes before the formal introduction of the bill, when the executive and the congressional trade committees work out its precise terms.
The Colombian FTA is the only agreement that never underwent that process, and it is no coincidence that this is the only agreement to expose the other legal fiction. Congress has always retained the prerogative to undo a fast-track grant at any time and thus undo the ninety-day promise, but did not exercise that authority until now.
This confrontation is just the latest outbreak in a twenty-year itch. The two branches constantly wrangle over trade, and while they usually find ways to accommodate one another they sometimes reach the breaking point. That happened when Congress refused to adopt the Havana Charter of the International Trade Organisation (1948-1950) or non-tariff agreements reached in the Kennedy Round (1967), and when it almost prevented negotiation of the Canada FTA (1986) because the president refused to bargain over a new trade bill. Each of these cases arose out of concerns that the executive was not consulting fully with its partner. We were just about due for another outbreak of that twenty-year itch. The Bush administration had enjoyed the luxury of a compliant Congress for six years, but now must deal with an assertive Democratic leadership. Part of the problem is specific to the Colombia agreement, having more to do with competing priorities in foreign policy and labour rights than with trade per se. The confrontation over TPA, however, points to a larger problem. The all-important element in US trade politics is inter-branch comity. It is difficult to define comity precisely, but we know it when we don’t see it, and we definitely don’t see it now.
The bad news for the multilateral system is that this outbreak coincides with the end-game of the Doha Round. The good news is that each of the past episodes led to some accommodation: The ‘temporary’ GATT stepped in for the ITO, the failed Kennedy Round agreements inspired the first grant of fast-track authority, and a compromise was reached that allowed both the Canada FTA and a new trade bill to be negotiated and enacted. This is an itch that the two branches know how to scratch.
The question is how long it will take to re-establish comity between the branches, and thus facilitate the approval of whatever comes out of Geneva. The best opportunity will come with the election of a new president. No matter who gets the Democratic nomination, and no matter which party wins, we know that the next president will come directly from the Senate. Let’s hope that the president-elect makes the restoration of inter-branch comity on trade policy a top priority for 2009.
Craig VanGrasstek is a Washington-based trade consultant and an adjunct professor in the Kennedy School of Government (Harvard University) and the School of Foreign Service (Georgetown University).