97-957: Fast-Track Trade Negotiating Authority:
A Comparison of 105th Congress Legislative Proposals

Jeanne J. Grimmett
Legislative Attorney
American Law Division

Updated September 15, 1998

CONTENTS

Summary
Introduction
Endnotes

Summary

This report provides a side-by-side comparison of H.R. 2621 and S. 2400, as reported, 105^th Congress bills that would provide the President with trade negotiating authority and accord certain resulting agreements and implementing bills expedited -- or "fast-track" -- legislative consideration. In September 1997 the President requested that a new fast-track statute be enacted, given that authorities in the Omnibus Trade and Competitiveness Act of 1988 (OTCA) had expired. OTCA provisions were last used to approve and implement the GATT Uruguay Round agreements. H.R. 2621 was reported by the House Ways and Means Committee October 23, 1997 (H.Rept. 105-341, Part I). A planned House vote was postponed November 10, with no further floor action taken. The Senate Finance Committee reported a fast-track bill (S. 1269) October 8, 1997 (S.Rept. 105-102). It was debated in November and returned to the Senate calendar February 26, 1998. On July 31, the Committee reported S. 2400, the Trade and Tariff Act of 1998, an original bill containing fast-track provisions that are essentially the same as those found in S. 1269 (S.Rept. 105-280). Floor action has been anticipated in both Houses.

The House and Senate bills contain the same basic elements contained in the OTCA: a list of general and specific negotiating objectives; a temporary (but extendable) grant of authority to the President to enter into tariff and nontariff agreements and to implement tariff agreements by proclamation; a requirement that nontariff barrier agreements be approved and implemented by statute; a provision that any such statute will be accorded expedited legislative treatment provided the President abide by certain statutory notification and consultation requirements; procedural provisions for extending the general availability of fast-track procedures to a given date, as well as for prohibiting their use for specific trade agreements; incorporation of the fast-track procedures set forth in § 151 of the Trade Act of 1974; and a provision that the procedural provisions of the bill are an exercise of Congress' constitutional rulemaking authority and are subject to change by rule.

Differences from the OTCA include the addition of labor and environmental aims as either principal U.S. negotiating objectives or new "international economic policy objectives," limitations on what may be included in legislation for which fast-track procedures are available, and additional requirements placed on the President to notify and consult with Congress during the trade agreements process. Among the ways in which the bills differ are: a greater number of negotiating objectives in the Senate bill; additional attention to agriculture in the House bill; different emphases in each as to labor and environmental issues; committee pre-negotiation disapproval in the Senate bill; broader notification and consultation requirements in the Senate bill with respect to tariff agreements; and some differences in how provisions that may be contained in implementing legislation are characterized. Each bill would extend current trade adjustment assistance (TAA) programs for workers and firms and the NAFTA worker adjustment assistance program for two years (i.e., until 2000), with the House bill mandating a GAO study on TAA programs.

Introduction

This report provides a side-by-side comparison of H.R. 2621 and S. 2400, as reported, 105^th Congress bills that would provide the President with trade negotiating authority and accord certain resulting agreements and implementing bills expedited -- or "fast-track"-- legislative consideration. The President requested in September 1997 that a new fast-track statute be enacted (and submitted his own bill on the matter), given the expiration of authorities in the Omnibus Trade and Competitiveness Act of 1988 (OTCA), P.L. 101-418, Title I. The OTCA provisions were last used to approve and implement the GATT Uruguay Round agreements in the Uruguay Agreements Act of 1994, P.L. 103-465.

The House Ways and Means Committee reported H.R. 2621, the Reciprocal Trade Agreements Authorities Act of 1997, with amendments, October 23, 1997 (H.Rept. 105-341, Part I). The bill was placed on the Union Calendar November 4, but a planned House vote was postponed November 10.⁽¹⁾ There has been no further floor action on the bill to date. A Senate fast-track bill, S. 1269, was reported by the Senate Finance Committee October 8, 1997 (S.Rept. 105-102). The bill was the subject of several days of floor debate in November 1997 and was returned to the Senate calendar February 26, 1998.⁽²⁾ In June, the Speaker of the House stated that fast-track trade legislation would be on the House agenda later in the year.⁽³⁾ On July 31, the Senate Finance Committee reported S. 2400, the Trade and Tariff Act of 1998, an original bill containing fast-track provisions essentially the same as those found in S. 1269 (S.Rept. 105-280). S. 2400's fast-track provisions are contained in Title II of the bill, which has the short title, "Reciprocal Trade Agreements Act of 1998." Floor action on fast-track legislation has been anticipated in both Houses.

The House and Senate bills contain the same basic elements contained in the OTCA: a list of general and specific negotiating objectives; a temporary (but extendable) grant of authority to the President to enter into tariff and nontariff agreements and to implement tariff agreements by proclamation; a requirement that nontariff barrier agreements be approved and implemented by statute; a provision that any such statute will be accorded expedited legislative treatment provided the President abide by certain statutory notification and consultation requirements; procedural provisions for extending the general availability of fast-track procedures to a given date, as well as for prohibiting their use for specific trade agreements; incorporation by reference of the fast-track procedures contained in section 151 of the Trade Act of 1974; and a provision that the procedural provisions of the bill are an exercise of Congress' constitutional rulemaking authority and are subject to change by rule.

Within this basic structure, however, the bills differ from the OTCA in a variety of ways, many of these restricting the availability of fast-track procedures. Among these:

• they incorporate certain labor and environmental aims as principal negotiating objectives, as separate "international economic policy objectives" that complement the trade agreements process, or as both
• they limit the use of fast-track procedures to agreements meeting principal negotiating objectives and prevent the use of these procedures to modify U.S. law where international economic policy objective are implicated
• they further define (and limit) the elements of implementing legislation that may be considered under fast-track procedures, refining the Trade Act's language allowing provisions in an implementing bill that are "necessary or appropriate" to implement an agreement
• they require the President, between the time he notifies Congress of his intent to enter into an agreement and his submission of an implementing bill, to submit to Congress an assessment of which changes in U.S. law will be required as a result of the agreement
• they prescribe additional Executive Branch consultations during the pre-negotiating and negotiating phases of the trade agreements process.

The bills also differ from each other in a number of respects, including negotiating objectives, pre-negotiation committee disapproval, their formulation of provisions that may be included in implementing legislation, and other points. For example:

• though the bills share negotiating objectives in a number of areas (e.g., trade barriers, trade in services, foreign investment, intellectual property, agriculture, and the use of foreign governmental regulations in certain trade-distorting ways), the Senate bill contains most of the principal negotiating objectives set forth in the OTCA (though updating some of them), while the House bill contains fewer (though also updated) objectives
• the House bill contains guidance for negotiators regarding domestic policy aims (e.g., health and safety) applicable to all principal negotiating objectives, while the Senate bill contains similar language applicable only to negotiations on services and investment and refers to these aims as being "legitimate" (the latter limited approach was taken by the OTCA)
• the House pays additional attention to agriculture in requiring special pre-negotiation consultations on the matter, placing concern over import-sensitive items within negotiating objectives, and creating a Special Agricultural Negotiator within the Office of the United States Trade Representative (USTR)
• while each bill would seek, as a principal negotiating objective, to prevent foreign governments from lowering regulatory standards to gain competitive advantage, the breadth of foreign measures to be addressed in negotiations differs: the House bill refers to the waiving of or derogation from existing environmental, health, safety, or labor measures, while the Senate bill refers to the use of foreign government regulations and other government measures generally for this end and includes within this broad category the specific actions and regulatory areas mentioned the House bill (each bill specifically refers to child labor, however)(note also that House bill titles this section "Labor, Environment and Other Matters," while the Senate bill labels its similar section, "Regulatory Competition")
• each of the sections containing these regulatory objectives contains different provisos, the House bill focusing on its meaning for foreign law, the Senate bill on its meaning for U.S. law
• the bills differ in emphasis as to their "international economic policy objectives," with the Senate bill treating them as supportive of the trade agreements process and the House bill providing that the President should ensure that U.S. trade agreements "complement and reinforce" these other policy goals
• with respect to U.S. worldwide advancement of labor standards as an "international economic policy objective," the Senate bill is more specific than the House bill as to the U.S. mandate in the International Labor Organization (ILO), a forum in which this global action may take place: the Senate bill provides that the U.S. objective is to seek the establishment of an ILO mechanism for the systematic examination and reporting on the promotion and enforcement by ILO members with respect to specifically named worker rights, while the House bill provides for working within the ILO to encourage the observance and enforcement of core labor standards (each specifically refers, however to a prohibition on exploitative child labor)
• only the Senate bill provides for two-committee disapproval of the use of fast-track procedures for a specific nontariff barrier agreement, a procedure that was available in the OTCA for free trade area negotiations authorized in the Act
• the Senate bill contains additional provisions for notification of and consultation with Congress with respect to tariff agreements
• while each bill requires that trade agreements addressing both tariff and nontariff barriers must reduce, eliminate, or prohibit duties, trade barriers, or other distortions, the bills differ in the negotiating objectives that must be met in any such agreements: the House bill provides that the agreements may make progress toward any of the negotiating objectives set forth in the bill, while the Senate bill limits these agreements to those making progress toward meeting principal negotiating objectives.⁽⁴⁾
• the bills differ somewhat in characterizing what may be included in an implementing bill subject to fast-track procedures: the Senate bill requires that the bill must approve a trade agreement that achieves one of the principal negotiating objectives of the bill, while the House bill requires that the agreement simply be one that is entered into under its authority for such agreements; while each refers to implementing provisions as being "necessary," the House bill relates this requirement to provision that are "directly related" to principal trade negotiating objectives; while the House bill allows provisions that define and clarify, or provisions that are related to, the operation or effect of the provisions of the trade agreement, the Senate bill allows provisions that are "otherwise related to the enforcement, and adjustment to the effects of such agreement and are directly related to trade"; the House bill additionally allows provisions for adjustment assistance to workers and firms adversely affected by trade in general (each allows for provisions necessitated by budget law).

S. 2400 essentially restates the fast-track provisions of S. 1269, with the following modifications: (1) it revises a provision regarding workers' rights by naming a specific Declaration of the International Labor Organization (ILO) that should be effectively implemented within the ILO (§ 2002(c)(1)(C)(ii)); (2) it requires that the International Trade Commission submit an assessment of the economic impact of any resulting trade agreements no later than 90 days after they have been entered into (§ 2004(e)); and (3) it adds agreements resulting from negotiations to achieve a free trade area of the Americas to the list of trade agreements exempted from the pre-negotiation notice and consultation requirements of the bill (§ 2006(a)(4)).

As this report is based on the text of the reported bills, it should be added that legislative history may provide further interpretation and clarification of the bills' provisions. The side-by-side comparison of the H.R. 2621 and Title II of S. 2400 begins on the following page.

Endnotes

1. ^(back)"House puts off trade vote after Clinton seeks delay to corral votes," AP, November 10, 1997, available in LEXIS, NEWS Library, CURNWS File.

2. ^(back)144 Cong. Rec. D130 (daily ed. February 26, 1998).

3. ^(back)"Gingrich Says Fast Track, Funding for IMF on Fall Agenda," National Journal's Congress Daily, June 25, 1998, available in LEXIS, NEWS Library, CURNWS File.

4. ^(back)It is unclear from the House bill whether agreements authorized under § 103 that met "international economic policy objectives" set forth in § 102(c) could be approved under fast-track procedures where no change in statute was necessary. Section 102(c) does not authorize the use of fast-track procedures "to modify United States law." Were mere approval of an agreement to be considered such a modification, the use of fast track procedures to approve such an agreement would seemingly be precluded. The House bill also provides that provisions of law necessary for the operation or implementation of U.S. rights or obligations under § 103(b) agreements generally may only be included in an implementing bill subject to fast-track procedures if these provisions are directly related to the bill's principal trade negotiating objectives (see § 103(b)(3)(B)).

In the past, Congress made all changes to domestic law that it viewed were needed to implement the agreements within the implementing legislation and included in it a provision that denies domestic effect to provisions of agreements approved in the legislation that conflict with federal law. See, e.g., Uruguay Round Agreements Act (URAA), P.L. 103-465, § 102(a). As explained in the House Ways and Means Committee report on the URAA: "This treatment is ... consistent with the Congressional view that necessary changes in Federal statutes should be specifically enacted, not preempted by international agreements. Since the Uruguay Round agreements as approved by the Congress, or any subsequent amendment to those agreements, are not self-executing, any dispute settlement findings that a U.S. statute is inconsistent, with an agreement also cannot be implemented except by legislation approved by the Congress unless consistent implementation is permissible under the terms of the statute." H.Rept. 103-826, Pt. 1, at 25. Note also that S. 2400 requires the President, before an agreement is entered into, to notify Congress as to whether the agreement includes subject matter for which supplemental implementing legislation may be required which is not subject to fast-track procedures (see § 2004(b)(2)(C)).