Congress and NAFTA 2.0
(Editor’s note: This piece originally appeared in Legislative Procedure on October 10, 2018.)
The United States, Mexico, and Canada recently agreed to modify the North American Free Trade Agreement (NAFTA), which was first implemented in 1994. The new pact, the United States-Mexico-Canada Agreement (USMCA; NAFTA 2.0), makes a number of changes to NAFTA’s provisions dealing with country-of-origin rules for automobiles, agriculture, labor and environmental standards, intellectual property, and digital trade. NAFTA 2.0 must now be signed by President Trump, Mexican President Enrique Peña Nieto, and Canadian Prime Minister Justin Trudeau. In the United States, Congress must approve NAFTA-2.0-related legislation after Trump signs the agreement because its implementation will require changes to existing law.
Congress will consider that implementing legislation according to trade-specific rules that expedite its consideration in the House of Representatives and the Senate. Otherwise known as Trade Promotion Authority (TPA), these rules were most recently reauthorized in 2015 as part of the Defending Public Safety Employees’ Retirement Act (Public Law 114-26). That measure served as the legislative vehicle for the Bipartisan Congressional Trade Priorities and Accountability Act (Title I of Public Law 114-26), which reauthorized TPA’s special fast-track procedures pursuant to which the Senate (and House) considers new trade agreements (or changes to existing agreements) submitted to Congress by the president between July 1, 2018, and July 1, 2021. Amendments to implementing legislation are prohibited, and debate time is limited. Consequently, Senate minorities can’t obstruct the implementing legislation.
Brief History of TPA’s Fast-Track Procedures
Congress first established TPA’s fast-track procedures in 1974 as part of the Trade Reform Act (Public Law 93-618; see Chapter 5 – Congressional Procedures With Respect to Presidential Actions, sec. 151-sec. 154). They were included to ensure that the House and Senate would consider trade agreements negotiated by the president. TPA’s amendment prohibitions and debate limitations were designed to facilitate congressional approval of legislation to implement trade agreements negotiated by the president.
Congress first used the expedited procedures to pass the Trade Agreements Act of 1979 (Public Law 96-39). Since then, Congress has used the fast-track procedures to approve implementing legislation 15 times. While TPA was first used to expedite consideration of legislation concerning non-tariff barriers, Congress expanded its scope to address reductions in, or the elimination of, tariffs in the Omnibus Tariff and Trade Act of 1984 (Public Law 98-573). Congress extended (or reauthorized) TPA in 1979, 1988, 1993, 2002, and 2015.
Brief Overview of Fast-Track Procedures
Members of Congress intentionally designed TPA’s fast-track procedures to make it easier to approve legislation implementing trade agreements negotiated by the president (e.g., NAFTA 2.0). The relevant TPA fast-track provisions are listed below. (Emphasis is placed on the Senate given the ability of a minority of its members to filibuster legislation in most circumstances.)
- The president must notify Congress of any changes to existing law required by a trade agreement 60 days before signing it;
- Implementing legislation is automatically introduced in the House and Senate;
- Upon its introduction, the implementing legislation is referred to the relevant committees of jurisdiction (usually the House Ways and Means Committee and the Senate Finance Committee);
- Committee consideration is perfunctory (i.e., committee members have a limited amount of time to review the implementing legislation and can’t amend it/recommend amendments to the full House or Senate);
- Committees are automatically discharged from further consideration of the implementing legislation if they have not reported it within 45 session days (when either chamber meets in legislative or executive session);
- After the committee reports it (or the committee is discharged), the implementing legislation (or automatically discharged) is placed on each chamber’s relevant calendar and is eligible for floor consideration;
- In the Senate, any member may move to start a debate on the implementing legislation by making a particular non-debatable motion to proceed to its consideration (i.e., senators can’t filibuster the motion to begin debate);
- A simple majority of the senators voting must approve the motion to proceed to start a discussion on the implementing legislation;
- Debate time on the implementing legislation is limited to 20 hours (i.e., senators can’t filibuster the bill);
- Amendments and dilatory motions are prohibited;
- A simple majority of the senators voting must approve the implementing legislation for it to pass;
- If the House acts first, Senate approval sends the implementing legislation to the president to be signed into law (amendment prohibitions in committee, as well as in the full House and Senate, ensure that each chamber is acting on identical versions of the legislation);
The fast-track procedures outlined above are modified slightly if the implementing legislation makes changes to existing tariffs. (Art. I, section 7, clause 1 of the Constitution stipulates, “All Bills for raising Revenue shall originate in the House of Representatives.”) In that case, the House acts first on the implementing legislation. After House approval, the legislation is then sent to the Senate and referred to the Finance Committee. However, instead of 45 session days, the committee has only 15 session days to report the measure. If it fails to report the implementing legislation in that time, Finance is automatically discharged from its further consideration. (Note: The fast-track procedures are otherwise identical in both cases.)
As acknowledged, members of Congress intentionally limited their ability to consider legislation implementing trade agreements negotiated by the president when they designed TPA’s fast-track procedures. Members did so because they believed expedited consideration was required to enact legislation reducing tariff and nontariff barriers to trade successfully. However, it is important to remember that TPA’s fast-track procedures can be used to expedite the consideration of legislation opposed by proponents of free trade in the Senate. In such instances, TPA’s restrictions on senators’ ability to debate and amend the implementing legislation limits their leverage to promote free trade. However, those senators concerned about NAFTA 2.0 are not entirely without leverage. For example, they can condition their votes on final passage on enacting separate TPA reforms to make it harder to use its fast-track procedures to restrict trade in the future.
A number of in-depth examinations of TPA and its fast-track procedures are publicly available. A great place to start is this Congressional Research Service report.