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Executive Memorandum #549

August 26, 1998

Fast Track Negotiating Authority:  The Facts

On September 24, the House of Representatives will vote on a bill to renew President Bill Clinton's fast-track authority to negotiate trade agreements with other countries. Since 1974, Presidents have used fast-track authority to negotiate trade agreements that reduced foreign taxes on American exports and provided American consumers with a broad selection of goods and services at competitive prices. President Clinton, however, has been without fast track since 1994.

Protectionists claim that the American people do not support renewal of fast track. In fact, a recent survey of U.S. public opinion on international trade found that 59 percent of Americans support free trade agreements with other countries and only 26 percent disapprove. Moreover, 83 percent know little about fast-track authority, but 41 percent to 48 percent oppose its renewal.

These opinion surveys suggest that much of the popular reluctance to support the renewal of fast-track authority may be due to a lack of familiarity with the issue. Most Americans support free trade agreements with other countries because they know that trade liberalization benefits them directly. But before deciding whether to support or oppose fast track, they want to know what it is and how it will be used.

  • Fast-track authority is not a trade agreement
    Fast track is an important and effective procedural tool that allows the President to negotiate and implement agreements with other countries to lower foreign trade barriers, open markets, and rebalance trade relationships on more reciprocal terms.

  • Fast track does not dilute the power of Congress to regulate trade
    Under fast-track authority, trade agreements are submitted to Congress for an up or down vote under rules barring committee or floor amendments. Fast track does not give the President a blank check to negotiate trade agreements, nor does it undermine the constitutional prerogatives of Congress, which defines the objectives and limits of the President's negotiating authority in the legislation granting fast track. During any trade talks, the Administration must consult frequently with the House Ways and Means Committee, the Senate Finance Committee, and special advisers designated by Congress. Only Congress has the final say on any trade agreement negotiated by the President.

  • Fast track is not new
    Congress created fast-track authority in 1974 to allow U.S. Presidents to negotiate agreements reducing foreign tariff and non-tariff barriers (NTBs) on American exports of merchandise goods and services. NTBs are government measures other than tariffs--such as import quotas, product standards, sanitary and phytosanitary rules, and subsidies--that impede or distort the flow of international commerce. In 1999, a new round of agriculture liberalization talks will start at the World Trade Organization (WTO). Without fast-track authority, the United States will not be an active participant in discussions that could affect the American farmer for decades.

  • Fast track is a bipartisan achievement
    The Trade Act of 1974, which created fast track, was approved in the House of Representatives by a vote of 323 to 36. Fast track was renewed in 1979 by a margin of 395 to 7; in 1988, by 376 to 45 votes; and in 1993, by 295 to 126 votes. The extension in 1993 was for the purpose of completing the Uruguay Round trade negotiations under the General Agreement on Tariffs and Trade (GATT) and moving the North American Free Trade Agreement (NAFTA) and WTO implementing legislation through Congress. This residual fast-track authority expired after Congress approved the Uruguay Round Agreements in November 1994.

  • Fast track produces successful trade agreements
    Since 1974, U.S. Presidents from both political parties have used fast-track authority to negotiate and implement (1) the Tokyo Round of the GATT in 1979, (2) the U.S.-Israel Free Trade Agreement in 1985, (3) the U.S.-Canada Free Trade Agreement in 1988, (4) the NAFTA in 1993, and (5) the Uruguay Round Agreements in 1994 that replaced the GATT with the WTO.

  • Fast track enhances America's international leadership
    Fast track gives the President the ability to exercise international leadership in trade. If the President cannot wield fast-track authority, no country will initiate serious trade negotiations with the United States. Fast track guarantees that trade accords negotiated in good faith with the President will not be changed later by Congress.

  • Fast track makes the American economy stronger
    The free trade agreements achieved under fast-track authority have produced tangible benefits for the American economy. Now in its eighth consecutive year of economic expansion, the United States is the world's largest exporter and importer of merchandise goods and services, and the largest manufacturer of sophisticated semiconductors, automobiles, and software. The United States reports the highest productivity and competitiveness of any economy in the world, creates more jobs each year than any other industrialized economy, and accounts for 25 percent of all global foreign investment each year. In 1997, two-way U.S. trade with the world--defined by the Clinton Administration as trade in goods and services plus earnings on U.S. foreign investment abroad--totaled $2.3 trillion, or 30 percent of gross domestic product (GDP), compared with only 13 percent of GDP in 1970.

CONCLUSION

The lack of fast-track negotiating authority is the single most important factor limiting the capacity of the United States to access foreign markets, expand exports and investments overseas, and sustain the dynamic performance of the economy at home. Increasingly, major trade agreements have been negotiated without U.S. participation, particularly in Latin America and Asia, creating exclusive commercial alliances that hurt U.S. interests. Renewal of the President's fast-track negotiating authority would tell other countries that the United States stands united in pursuit of free trade agreements that advance American economic interests and values.

John Sweeney is Policy Analyst for Latin America and Trade Issues in The Kathryn and Shelby Cullom Davis International Studies Center at The Heritage Foundation.

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