July 16, 2002

July 16, 2002 | News Releases on Energy and Environment

Analysts Endorse "Clean" Trade Promotion Authority

WASHINGTON, July 16, 2002-For months, President Bush has been asking Congress to give him Trade Promotion Authority (TPA, formerly known as "fast track") to allow him to forge trade deals that would be subject only to up-or-down approval from lawmakers. No amendments that could torpedo the agreement would be permitted.

Now, with both houses having passed trade legislation, lawmakers must hammer out a final version to send the president-one that, a new Heritage Foundation paper says, will likely give Congress the authority not only to approve trade deals but amend them as well.

"This would completely undermine the reason for granting TPA in the first place," say Heritage analysts Sara Fitzgerald, Nina Owcharenko and Aaron Schavey. "It leaves our potential trade partners essentially in the position they're in now-wanting to trade with us, but concerned that the deals they negotiate with the president will be virtually rewritten by Congress."

This fear, they say, is a large part of the reason the United States is party to just three of the 150 trade agreements in force around the world-the North American Free Trade Agreement (NAFTA) and bilateral pacts with Jordan and Israel.

An amendment to the Senate bill by Sens. Larry Craig, R-Idaho, and Mark Dayton, D-Minn., would let Congress amend any part of an agreement that involves trade-imbalance remedy measures, such as anti-dumping laws. The House bill contains a provision to allow Congress to amend agreements if members agree the president has not consulted with them sufficiently.

These measures, along with special-industry protections such as steel tariffs and farm subsidies, undermine the interests of American families-which benefit economically from free trade-and generate bitterness on the part of potential trade partners, the Heritage analysts say. Some protections, such as those lavished on the farm industry, hurt the least-developed countries the most, as agriculture often fuels their economic growth.

Free trade means big bucks for American consumers, Fitzgerald, Owcharenko and Schavey note. The two major trade agreements of the 1990s-NAFTA and the Uruguay Round, which produced the World Trade Organization-add up to $2,000 per year to the pocketbooks of the average family of four, they say.

Conversely, an anti-free-trade subsidy program that protects U.S. sugar growers from global competition leaves Americans paying three times the world price for sugar and sugar-based products, they say. And farm subsidy programs, which cost developed nations $1 billion per day, serve only to drive up costs for consumers and drive down prices for farmers.

"Each dollar spent on such subsidies is another dollar spent against free trade and the prospect of a better life for the world's poor," the analysts say. "Farming comes with unavoidable risks. Yet American farmers demand a free market when they make a profit, but they want any losses to be socialized. Welfare-to-work has ended welfare 'as we know it' for most Americans. It's time it ended for the American farmer as well."

As part of Trade Adjustment Assistance-which compensates workers who lose their jobs because of free-trade measures-both bills include provisions for health care coverage for displaced workers. The two versions should be reconciled into one that supports free markets, maximizes patient choice and allows states to design affordable private purchasing options, the analysts say.

"Congress has done quite a bit lately to tarnish America's free-trade credentials in the eyes of the world," they say. "A clean version of TPA would help restore our reputation."

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